Service Marketing

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CHAPTER 1

Services Marketing

Introduction to

Slide © by Lovelock, Wirtz and Chew 2009

Essentials of Services Marketing

Chapter 1 - Page 1

Overview of Chapter 1 Why study services? Powerful forces that are transforming service P f lf th t t f i i Markets What are services? Four broad categories of services Challenges posed by services Expanded marketing mix for services Framework for effective services marketing strategies

Slide © by Lovelock, Wirtz and Chew 2009

Essentials of Services Marketing

Chapter 1 - Page 2

Why Study Services?

Slide © by Lovelock, Wirtz and Chew 2009

Essentials of Services Marketing

Chapter 1 - Page 3

Why Study Services?

Services Dominate Economy in Most Nations Most New Jobs are Generated by Services Fastest Growth Expected in Knowledge-Based Industries Many New Jobs are Well-Paid Positions Requiring Good Educational Qualifications

Slide © by Lovelock, Wirtz and Chew 2009

Essentials of Services Marketing

Chapter 1 - Page 4

Contribution of Services Industries to Global GDP

Slide © by Lovelock, Wirtz and Chew 2009

Essentials of Services Marketing

Chapter 1 - Page 5

Estimated Size of Service Sector in Selected Countries

Slide © by Lovelock, Wirtz and Chew 2009

Essentials of Services Marketing

Chapter 1 - Page 6

Powerful Forces Are Transforming Service T f i S i Markets

Slide © by Lovelock, Wirtz and Chew 2009

Essentials of Services Marketing

Chapter 1 - Page 7

Forces Transforming the Service Economy
Social Changes Government Policies Business Trends Advances in IT Globalization

● New markets and product categories ● Increase in demand for services ● More intense competition

Innovation in service products & delivery systems, stimulated by better technology

Customers have more choices and exercise more power p

Success hinges on: ● Understanding customers and competitors ● Viable business models ● Creation of value for customers and firm Slide © by Lovelock, Wirtz and Chew 2009 Essentials of Services Marketing Chapter 1 - Page 8

Forces Transforming the Service Economy (1)
Social Changes Government Policies Business Trends Advances in IT Globalization

● Changes in regulations ● Privatization ● New rules to protect customers,

employees, and the environment

● New agreement on trade in services
Slide © by Lovelock, Wirtz and Chew 2009 Essentials of Services Marketing Chapter 1 - Page 9

Forces Transforming the Service Economy (2)
Social Changes Government Policies
Rising t ti ● Ri i consumer expectations ● More affluence ● Personal Outsourcing ● Increased desire for buying experiences vs. things

Business Trends

Advances in IT Globalization

● Rising consumer ownership of high tech
equipment

● Easier access to more information ● Immigration ● Growing but aging population Slide © by Lovelock, Wirtz and Chew 2009 Essentials of Services Marketing Chapter 1 - Page 10

Forces Transforming the Service Economy (3)
Social Changes Government Policies Business Trends Advances in IT Globalization

● Push to increase shareholder value ● Emphasis on productivity and cost savings ● Manufacturers add value through service and sell services

● More strategic alliances ● Focus on quality and customer satisfaction ● Growth of franchising Marketing h i b fit ● M k ti emphasis by nonprofits Slide © by Lovelock, Wirtz and Chew 2009 Essentials of Services Marketing Chapter 1 - Page 11

Forces Transforming the Service Economy (4)
Social Changes Government Policies Business Trends Advances in IT Globalization

● Growth of Internet ● Greater bandwidth ● Compact mobile equipment ● Wireless networking ● Faster, more powerful software ● Digitization of text, graphics, audio, video Slide © by Lovelock, Wirtz and Chew 2009 Essentials of Services Marketing Chapter 1 - Page 12

Forces Transforming the Service Economy (5)
Social Changes Government Policies Business Trends Advances in...
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