On Marketing in The: New Perspectives Service Economy
On Marketing in The: New Perspectives Service Economy
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
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 2
Services Marketing
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 3
Why Study Services?
Services Marketing
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 4
Services Dominate the Global
Economy
Services Marketing
Manufacturing 32%
Services 64%
Agriculture 4%
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 5
Estimated Size of Service Sector
in Selected Countries
Services Marketing
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%)
10 20 30 40 50 60 70 80 90
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 6
Why Study Services?
Services Marketing
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 7
Why Study Services?
Services Marketing
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 8
Transformation of the
Service Economy
Services Marketing
Social Business Advances
Changes Trends In IT
Government Globalization
Policies
New markets and product categories
Increase in demand for services
More intense competition
Government Globalization
Policies
Changes in regulations
Privatization
New rules to protect customers, employees,
and the environment
New agreement on trade in services
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 10
Factors Stimulating Transformation
of the Service Economy
Services Marketing
Social Business Advances
Changes Trends In IT
Government Globalization
Policies
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 11
Factors Stimulating Transformation
of the Service Economy
Services Marketing
Social Business Advances
Changes Trends In IT
Government Globalization
Policies
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 12
Factors Stimulating Transformation
of the Service Economy
Services Marketing
Social Business Advances
Changes Trends In IT
Government Globalization
Policies
Growth of Internet
Greater bandwidth
Compact mobile equipment
Wireless networking
Faster, more powerful software
Digitization of text, graphics, audio, video
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 13
Factors Stimulating Transformation
of the Service Economy
Services Marketing
Social Business Advances
Changes Trends In IT
Government Globalization
Policies
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 14
Services Marketing
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 15
Definition of Services
Services Marketing
Services
are economic activities offered by one party to another
most commonly employ time-based performances to bring about
desired results
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 16
Value Creation is Dominated by
Intangible Elements
Services Marketing
Physical Elements
High
Salt
Detergents
CD Player
Wine
Golf Clubs
New Car
Tailored clothing Plumbing Repair
Low High
Intangible Elements
Source; Adapted from Lynn Shostack
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 17
Service Products vs. Customer
Service & After-Sales Service
Services Marketing
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 18
Service – A Process Perspective
Services Marketing
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 19
4 Categories of Services
Services Marketing
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 20
People Processing
Services Marketing
Customers must:
physically enter the service factory
cooperate actively with the service operation
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 21
Possession Processing
Services Marketing
Involvement is limited
Less physical involvement
Production and consumption are separable
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 22
Mental Stimulus Processing
Services Marketing
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 23
Information Processing
Services Marketing
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 24
Services Marketing
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 25
Services Pose Distinctive
Marketing Challenges
Services Marketing
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 26
Differences, Implications, and
Marketing-Related Tasks
Services Marketing
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 27
Differences, Implications, and
Marketing-Related Tasks
Services Marketing
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 29
Services Require
An Extended Marketing Mix
Services Marketing
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 30
The 7Ps of Services Marketing
Services Marketing
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 31
Services Marketing
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 32
Marketing to be Integrated with
Other Management Functions
Services Marketing
Operations Marketing
Management Management
Customers
Human Resources
Management
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 33
Services Marketing
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 34
Overview of Framework
Services Marketing
Understanding Service Products, Consumers and
Markets
Part I:
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 1 – Page 35