1. Chapter 1: New Perspectives on Marketing in the Service Economy

3. Why Study Services?

6. Estimated Size of Service Sector in Selected Countries (Fig 1.2—updated 10/06) Services as Percent of GDP Poland (66%), South Africa (65%) Japan (74%), France (73%), U.K. (73%), Canada (71%) Saudi Arabia (33%) China (40%) India (48%) Argentina (53%), Brazil (51%) Panama (80%), USA (79%) Luxembourg (83%) Cayman Islands (95%), Jersey (93%) Bahamas (90%), Bermuda ( 89%) Mexico (69%), Australia (68%), Germany (68%) Israel (60%), Russia (58%), S. Korea (56%) 30 40 50 60 70 80 90 20 10

7. Value Added by Service Industry Categories to U.S. GDP in 2004 Source: Bureau of Economic Analysis, Survey of Current Business, May 2005, Table 1 Other (except government) 3.6% Accommodation and food services 4.0% Arts, entertainment, and recreation 1.5% Healthcare and social assistance 10.4% Educational services 1.3% Professional and business services 17.3% Wholesale trade 8.9% Retail trade 10.3% Transportation and warehousing 4.4% Information 7.1% Finance and insurance 12.6% Real estate and rental and leasing 18.7%

11. Changing Structure of Employment as Economic Development Evolves Industry Services Agriculture Time, per Capita Income Share of Employment Source: IMF, 1997

19. What Are Services?

24. Challenges Posed by Services

28. Value Added by Physical, Intangible Elements Helps Distinguish Goods and Services (Fig 1.6) Physical Elements High Low Intangible Elements High Internet Banking Source; Adapted from Lynn Shostack Salt Detergents CD Player Wine Golf Clubs New Car Tailored clothing Fast-Food Restaurant Plumbing Repair Health Club Airline Flight Landscape Maintenance Consulting Life Insurance

29. Progressive and REI: Two Types of Website Reflecting Core Product ( Fig 1.8) … REI’s camping gear must be delivered through physical channels to customers after they have used the website to make choices, order, and pay Websites can deliver info-based services like Progressive’s car insurance but …

30. Expanded Marketing Mix for Services

41. Marketing Must Be Integrated with Other Management Functions

43. A Framework for Developing Effective Service Marketing Strategies (Fig 1.11)

44. A Framework For Developing Effective Service Marketing Strategies: Overview Understanding Customer Needs, Decision Making, and Behavior in Service Encounters Chapter 2 Building the Service Model Part II: Chapters 3-7 Managing the Customer Interface Part III: Chapters 8-11 Implementing Profitable Service Strategies Part IV: Chapters 12-15

45. Framework for Developing Effective Service Marketing Strategies: Part I I: Understanding Customer Needs, Decision Making, and Behavior in Service Encounters Differences among Services Affect Customer Behavior Three-Stage Model of Service Consumption (Chapter 2) Prepurchase Stage: Search, evaluation of alternatives, decision Service Encounter Stage: Role in high-contact vs. low-contact delivery Post-Encounter Stage: Evaluation against expectations, future intentions

46. Framework for Developing Effective Service Marketing Strategies: Part II Building The Service Model Part II: Chapters 3-7 Develop service concept: core & supplementary elements Select physical & electronic channels for service delivery Set prices with reference to costs, competition & value Value Exchange The Value Proposition The Business Model Educate customers & promote the value proposition Position the value proposition against competing alternatives

47. Framework for Developing Effective Service Marketing Strategies: Part III III: Managing the Customer Interface (Chapters 8-11) Design and manage service processes Balance demand against productivity capacity Plan the service environment Manage service employees for competitive advantage

48. Framework for Developing Effective Service Marketing Strategies: Part IV IV: Implementing Profitable Service Strategies (Chapters 12-15) Create customer relationship and build loyalty Plan for service recovery and create customer feedback systems Continuously improve service quality and productivity Organize for change management and service leadership