Services Marketing

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Services Marketing

Chapter 1:! New Perspectives On! !Marketing in the! ! !Service Economy!

Slide © 2010 by Lovelock & Wirtz

Services Marketing 7/e

Chapter 1 – Page 1

Overview of Chapter 1!
Services Marketing

  Why Study Services?!   What are Services?!   Marketing Challenges Posed by Services!   Extended Marketing Mix Required for Services!   Integration of Marketing with Other Management Functions!   Developing Effective Service Marketing Strategies! Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 2

Services Marketing

Why Study Services? !

Slide © 2010 by Lovelock & Wirtz

Services Marketing 7/e

Chapter 1 – Page 3

Why Study Services?!
Services Marketing

  Services dominate most economies and are growing rapidly:! !  Services account for more than 60% of GDP worldwide! !  Almost all economies have a substantial service sector! !  Most new employment is provided by services ! !  Strongest growth area for marketing! !

  Understanding services offers you a personal competitive advantage!

Slide © 2010 by Lovelock & Wirtz

Services Marketing 7/e

Chapter 1 – Page 4

Services Dominate the Global Economy!

Services Marketing

Contribution of Service Industries to GDP Globally !

Manufacturing 32% "

Services 64% " Agriculture 4% "

Source: The World Factbook 2008, Central Intelligence Agency" ! Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 5

Estimated Size of Service Sector
 in Selected Countries"
Jersey (97%), Cayman Islands (95%), Hong Kong (92%)! Bahamas (90%), Bermuda ( 89%), Luxembourg (86%)! USA (79%), Fiji (78%), Barbados (78%), France (77%), U.K. (76%)! Japan (72%), Taiwan (71%), Australia (71%), Italy (71%)! Canada (70%), Germany (69%), Israel (67%) ! South Africa (65%), Brazil (66%), Poland (66%)! Turkey (63%), Mexico (62%) Argentina (57%), Russia (55%)! Malaysia (46%), Chile (45%) Indonesia (41%), China (40%)! Saudi Arabia (35%)! 10

Slide © 2010 by Lovelock & Wirtz

Services Marketing

Services as Percent of GDP

20

30

40

50

60

70

80

90
Chapter 1 – Page 6

Source: The World Factbook 2008, Central Intelligence Agency" !

Services Marketing 7/e

Value Added by Service Industry 
 Categories to U.S. GDP! Business Services 12% "

Services Marketing

Transport, Utilities & Communications " 9% " "

SERVICES !

Wholesale & Retail Trade 12% "

Source: US Bureau of Economic Analysis, Industry Economics Accounts, 2007 " ! Services Marketing 7/e Slide © 2010 by Lovelock & Wirtz

Chapter 1 – Page 7

NAICS: New Way to Classify &
 Analyze the Service Economy "

Services Marketing

 NAICS—North American Industry Classification System! !  Classifies industries in the economic statistics of USA, Canada & Mexico! !  Replaces old SIC codes in USA! !  Captures huge array of new service industries, each with its own NAICS code!

 NAPCS—North American Product Classification System! !  Assigns codes to thousands of service products! !  Particularly useful for looking at rented goods services! !

Slide © 2010 by Lovelock & Wirtz

Services Marketing 7/e

Chapter 1 – Page 8

NAICS Codes of Newer Service
 Industries Not Profiled By SIC! "  Casino Hotels" "  Continuing Care Retirement Communities" "  Diagnostic Imaging Centers"

Services Marketing

"  HMO Medical Centers" "  Industrial Design Services" "  Investment Banking and Securities Dealing"

"  Diet and Weight Reducing Centers" "  Management Consulting Services" "  Environmental Consulting" "  Golf Courses, Country Clubs" "  Hazardous Waste Collection" "  Satellite Telecommunications" "  Telemarketing Bureaus" "  Temporary Help Services"

Slide © 2010 by Lovelock & Wirtz

Services Marketing 7/e

Chapter 1 – Page 9

Why Study Services? !
Services Marketing

  Most new jobs are generated by services!
!  Fastest growth expected in knowledge-based industries! !  Significant training...
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