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Part ThreeProductDecisions13Services MarketingCopyright ? Houghton Mifflin Company. All rights reserved.PowerPoint Presentation by Charlie CookChapter Learning ObjectivesTo understand the nature and importance of servicesTo identify the characteristics of services that differentiate them from goodsTo describe how the characteristics of services influence the development of marketing mixes for servicesTo understand the importance of service quality and explain how to deliver exceptional service qualityTo explore the nature of nonprofit marketingChapter OutlineThe Nature and Importance of ServicesCharacteristics of ServicesDeveloping and Managing Marketing Mixes for ServicesService QualityNonprofit MarketingThe Nature and Importance of ServicesServiceAn intangible product involving a deed, performance, or effort that cannot be physically possessedApplication of human and/or mechanical efforts directed at people or objectsService Facts (U.S.)Service industries account for over 50% of GDP.Service industries employ 80% of nonfarm workers.More than half of new businesses are service firms.Services have increased in tandem with the long-term growth of the U.S. economy.Characteristics of ServicesIntangibilityServices are actions that have no permanent physical qualities as opposed to goods which can be touched and possessed over time.Inseparability of Production and ConsumptionThe production of a service cannot be separated from its consumption by the customer.Services are produced, sold, and consumed all at the same time.PerishabilityServices cannot be produced ahead of time and stored until needed.The Tangibility Continuum FIGURE 13.1Characteristics of Services (cont’d)HeterogeneityVariation in the quality of services delivered by individuals and organizationsClient-Based RelationshipsInteractions that result in satisfied customers who use a service repeatedly over timeCharacteristics of Services (cont’d)Customer ContactThe level of interaction between the service provide