May 9. 2009 21:19

technology sometimes can be used too much. Then how can we define that whether we use technology too much when designing service process?

Qian Huan Huo

May 9. 2009 23:37

•  Marketing services is done in a different way than marketing goods because of the certain characteristics that only services have.  These are seen in the 8Ps of marketing rather than the 4 Ps; the additional Ps being physical setting, people in services, process of balancing demand and supply, and productivity, quality, and guarantee.  

•  It also depends on how tangibly dominant and intangibly dominant the service is. The more intangibly dominant the service is, the more emphasis is placed on the additional 4Ps, and are more easily recognizable.  

•  The different frameworks should also be considered when marketing a service to see what the company is focusing on for that particular service. For example, if a company is using a theatre framework, they would want to focus their marketing on the experience and interaction between people.

•  The factors that affect the evolution of services should also be considered as services adapt to new standards (such as world-class standards) and so the marketing used for these services should reflect any changes in services.

•  Technology can help to allow customers to feel and be more empowered when using a service. It can allow for customization, and ease of use, and can also allow for more data to be stored and accessed quickly.

Jeannie Arnold

May 10. 2009 02:43

•  As a result of four forces (globalization, liberalization, privatization, and IT) services have become the dominant driving force in today’s economy. Consumers in the 21st century have an abundance of physical resources and goods and as a result have evolved from simply wanting to purchase goods to wanting the experience, and convenience that services provide.
•  When marketing services companies should be aware of these forces and how they place a role amongst consumers. Globalization has brought upon world class standards, liberalization has increased the amount of choice consumers have, privatization has created accountability for service providers and IT has increased the speed at which consumers and companies can communicate globally. If service providers ignore the impact of these forces they will not live up to consumer standards and will fail in their industry.
•  Companies must also be aware that marketing a service is different than marketing goods. When marketing goods there is the traditional 4Ps of marketing (price, product, place and promotion), however when marketing services we add another 4Ps (physical setting; people in services; productivity, quality and guarantee; and process of balancing demand/supply). These other four elements must be included to add value to services for they are essentially intangible.
•  Some challenges that are encountered with marketing services are the face that they are essentially intangible, it is difficult for consumers to evaluate a service before consumption, and the consumer themselves are part of the consumption process for much of services is reliant on the consumers interaction with the service provider.
•  When taking all of these factors into consideration marketing services in today’s world is essential for not only service providers but also goods providers. Many retail stores are now in the business of serving the customer even though they are not in the service industry. They are wanting to sell an experience (something intangible) to customers not just a physical product.

Gabriela Rosales

May 10. 2009 08:07

- Service industry has been the biggest industry in virtually all developed nations, and letting the manufacturing and agriculture industry as the competitive advantage of developing countries.
- There are four forces of service marketing that we have discussed in the class that is; first, globalisations meaning to have a world class standard to strive to become competitive, second , liberalization meaning less government intervention and eventually create more options for the market, third, privatization meaning freedom for the market to operate, and lastly, Information Technology (IT)meaning the breakthrough of IT has enabled virtually every aspect in our lives has became more productive and efficient. These four forces are basically derived from the essence of economic free market not essentially only for service marketing.
- We've noticed four characteristic of a service; first, intangibility which basically say that service is not a physical product, but there are a few level of tangibility it self, second, inseparability which says that unlike tangible product service can't be separated from its production, third, variability, meaning service is harder to be standardize and vary depending on a few conditions, and the fourth, perishability meaning service can't be stored and once it's not used it's gone forever. All this characteristic of service marketing will mostly cover the characteristic of services, the more intangible the service is the more the 4 characteristics will apply.
- From introduction of marketing we've learned of 4P (Product, price, Promotion, and Place). In service marketing it has been extended by 3 more Ps which is Physical setting, People in service, and Productivity.The expansion of the three Ps have completed the essential part of the foundation of making strategy in service marketing, this 3 Ps is one of 3 framework is service marketing which enable marketer to control the marketing strategy, the second framework servuction will rely the service to the costumer and , the last one service theater will let the frontline employee to take control. By knowing this frameworks will allow marketer to identify their product/service into the right criteria and apply the right strategy to deal with it, on the other hand without knowing the basic of service marketing marketers will be lost and could apply strategy that is not effective into their product/service.
- The use of IT has became inevitable in most of the industry, it is no longer just a mean to become competitive but also a basic requirement to stay in the business. Dependency of IT is depending on the nature of the business it self.

Ghana Galindra

May 10. 2009 18:58

- Service industry has been the biggest industry in virtually all developed nations, and letting the manufacturing and agriculture industry as the competitive advantage of developing countries.

- There are four forces of service marketing that we have discussed in the class that is; first, globalizations meaning to have a world class standard to strive to become competitive, second , liberalization meaning less government intervention and eventually create more options for the market, third, privatization meaning freedom for the market to operate, and lastly, Information Technology (IT)meaning the breakthrough of IT has enabled virtually every aspect in our lives has became more productive and efficient. These four forces are basically derived from the essence of economic free market not essentially only for service marketing.

- We've noticed four characteristic of a service; first, intangibility which basically say that service is not a physical product, but there are a few level of tangibility it self, second, inseparability which says that unlike tangible product service can't be separated from its production, third, variability, meaning service is harder to be standardize and vary depending on a few conditions, and the fourth, perishability meaning service can't be stored and once it's not used it's gone forever. All this characteristic of service marketing will mostly cover the characteristic of services, the more intangible the service is the more the 4 characteristics will apply.

- From introduction of marketing we've learned of 4P (Product, price, Promotion, and Place). In service marketing it has been extended by 3 more Ps which is Physical setting, People in service, and Productivity.The expansion of the three Ps have completed the essential part of the foundation of making strategy in service marketing, this 3 Ps is one of 3 framework is service marketing which enable marketer to control the marketing strategy, the second framework servuction will rely the service to the costumer and , the last one service theater will let the frontline employee to take control. By knowing this frameworks will allow marketer to identify their product/service into the right criteria and apply the right strategy to deal with it, on the other hand without knowing the basic of service marketing marketers will be lost and could apply strategy that is not effective into their product/service.

- The use of IT has become inevitable in most of the industry; it is no longer just a mean to become competitive but also a basic requirement to stay in the business. Dependency of IT is depending on the nature of the business it self.

Ghana Galindra

May 10. 2009 23:49

-4 Ps can be explained as a push strategy. Product is made first, and then based on the cost of the product, a price is named. Later on, through advertisements and certain promotion activities, the product is distributed to proper selling locations. In the process of selling, the manufacturer persuades its customers to buy as many products as they can.

-4 Cs can be described as a pull strategy. First, manufacturer discovers an existing problem customers have, and then manufactures a product to resolve the problem at reasonable cost. Once the product is produced, it is delivered to convenience of target customers. Instead of convincing customers to buy the product, manufacturer demonstrates how the product is going to help customers out with the problem. The entire process is driven by customer demand.

-4 Ps is most likely practiced with existing products or brands. Customers know the products well, the function, usage, and so on. The market of the products is comparatively competitive. If it is a necessary product, the price is essential, because customers’ loyalty can be hard to establish. If it is a luxury product, the promotion is crucial, because brand name and customers’ loyalty is the key of success.

-4 Cs is applied to brand new products most frequently. When a product is produced, manufacturer has to educate customer first, the product function, usage and so on. The market is not yet competitive, but uncertainty of market acceptance is high. Therefore, a test market is generally required. It is much safer to begin sale at a relatively lesser influential market than sell the product directly to the major markets.

-Choose the proper strategy, then sell.

JUEXI ZHU

May 11. 2009 01:46

After the first week of "Price strategy", I've learned 5 relevent points of pricing.
1)The goal of marketing is to konw what customers want,satisfy their wants, and creat a long-term relationship. Therefore, it is important for marketers to set a right price which could not only bring profit to them,but also help to bulid a long-term relationship with customers.
2) Marketing Mix -Four Ps vs.4Cs are product vs.customer solution,price vs. customers cost,promotion vs.communication,and place vs.convenience. A price setting procedure does not only involve considerring production cost, but also the cost of promotion and the cost of bringing products to places which is most convenient to consumers. Therefore, the concept of  price should be the "sum of all valuable resources" that consumers exchange to buy and use a product.
3)Strategice pricing-the 3Cs which are cost,competition, and customers.The element of cost is emphasized in cost-based pricing strategy, which is that after products are manufactured, marketers set price based on their production costs,and promote goods to the market and trying to make consumers understand the value of the goods. The element of customers is primarily emphasized in value-based pricing strategy, which put customers in the first priority. Based on the value-based pricing strategy, marketers first find out who are their customers and what value of goods that their target customers want to receive, then set prices, and determine cost based on the price, lastly produce goods. The element of competition could affect both strategies. If maketers are competing on price, no matter what strategy they adopt, they have to lower their cost in order to lower the price.
4) Every product has the characters of price elastic and price inelastic. There is no product that it completely price inelastic. The demand elastic product is any item that you can do without it, such as convenience product and luxuries. Products that are relatively price inelastic are essential products.
5) Factors affecting pricing decisions include internal factors and external factors. Internal factors usually are markeing objectives, such as target,and market share, and costs and strategies. External factors usually are comptition, environmental factors,such as ecomomy, government and regulations, and nature of maket and demand. Organizations usually have little control on the external factors.      

Tingting Sun

May 11. 2009 04:09

- Services are becoming the cornerstone of our economy. There is no doubt that our entire world is becoming service-oriented. Not only are there a wide range of innovative offerings but companies are including them into their product mix in order to stay competitive.

- There are four forces that have contributed to the growth of services and have improved overall quality in the industry:

•  Globalization has created world class standards
•  Liberalization has encouraged the formation of multiple service providers, increasing the number of choices for consumers
•  Privatization gave freedom from government regulation and greater accountability to businesses
•  Information technology has increased the speed of service delivery.

- To attract new customers as well as keep and grow current customers, it is necessary to understand the difference between the marketing of products and services. Product characteristics differ greatly from those attached to services, so it is crucial for marketers to consider these distinctions.

- The services marketing mix adds four Ps to the traditional mix: physical setting; people in services; productivity, quality and guarantee; and process of balancing demand/supply. These tools help in achieving a service provider’s marketing goals.

- Every service has four components that play a significant role in the customer experience: workers, setting, customers, and process. Their degree of importance may vary due to the different types available. It is crucial to determine which framework a service fits into so that organizations can focus their marketing efforts effectively.

Pablo Schor

May 11. 2009 08:25

1st week in the class srv. marketing has been interesting, good format, differentiation in what makes up a service and the 'intangibility' of services was a foreign concept but is now becoming more entrenched into my brain. Looking forward to a 2nd week of presentations

Marius Scott

May 11. 2009 18:58

•  Service is an act or performance offered by one party to another. That is intangible, inseparable, perishable and variable. Service has a profound effect on the marketing nowadays. As the development of society, the need of information improves so that service becomes an important part. And also, service is added on to a physical product. In marketing, people exchange goods and value with others, while exchanging products, service also happened.
•  Marketing is occurred when customers have needs, wants and demand. Then the goods are produced, service is provided. The most point is that manufacture wants to satisfy customer, then exchange and transact goods, they also want to keep good relationship with customers, and finally they can obtain a good profit.
•  The modern vehicles of service value in the marketing is: productizing service is designed to meet the need of customers what they want; physical setting also can attract customer about the styles; people in service mean that worker and customer participate in marketing; pricing in service can help manufacture predict sales and the customer’ needs; promotion can also improve the products and let customer aware of the product; placement, productivity, quality and guarantee, process of balancing demand/supply are also important point in services marketing.
•  Services theater framework is like that actors (workers) provide service to audience (customers), setting is action performance, and then performance is interacted.
•  IT in service change the market to meet the customer’s need, for example, the self serve baking appear.

Yingni Wang

May 11. 2009 19:15

Pricing Strategy

- Pricing is generally over looked in marketing, and yet it is the only revenue producing factor for a business. More emphasis on strategically pricing products and services should be brought out more in marketing classes. The price of a good reflects all other aspects of the marketing mix, and they should all be coordinating together as a sound unit to represent the product correctly.  

- A deeper look into the strategic pricing aspect of a product can help marketers in other aspects of their jobs, such as understanding customers. Realizing what a customer views as value and what they are willing to pay for that value is the first step in creating a profitable product/service. Changing the 4 P's into the 4 C's is a valuable tool that gives the producer a customers view point.

- Truly understanding value is important. Marketers must be open minded and not think in their best interests but the markets. Price and value go hand in hand, you can't sell a low grade good, which is cheap in a customers mind at a premium price. Customers values also change with factors such as income, economic situations, family size, and competition. Understanding a change in price is essential to understanding the bottom line.

- Pricing strategies - Customer, Cost, and Competition  is a very important framework. It helped me understand why companies position themselves  and price themselves in the market. A company can't be focused on profit but on creating a valuable product that is priced to achieve one of these positions. 'Marketers should never lose customers for profit, but can lose profit for customers.

- The pricing pyramid showed the importance of backing up the final market price of a good of service. The price shouldn't just be picked at random or estimated based on what YOU would pay for it. Customers are paying for your goods (time, effort, money, emotions) make it worth all these factors.

Sean Gutheil

May 11. 2009 19:17

   This is the last business class I need to take in order to meet the requirement, I am glad to take service marketing because it's very interesting course. It's a different kind of course, students are involved more during the class and the prof is very nice and funny.
   Our group just finished the presentation on servicescape today,and I learned the key design considerations in servicescapes and designing  cyberescape.
   My country in China, in some reason, it's not showed in the option, that's why I put Canada in there, because I am living in Canada right now.

Tingting Li

May 11. 2009 19:23

•  Service marketing is essentially intangible. That is a performance or act provided by a party. Therefore, that is non-physical product. We cannot touch or hold it, Such as teaching. Besides, service cannot be separated between production and consumption.  Moreover, they cannot be stored unless when individuals or groups consume. For consumers and producers, it is also heterogeneity and is not easy to standardize.
•  Service marketing is different then traditional marketing. There is four more Ps than traditional. We should also focus on physical setting, people in services, productivity, quality and guarantee, and a process to balance demand and supply. Therefore, individuals and groups can make better service to stay customers and attract new customers. Service marketing is avoidable in modern society.
•  There are four forces of service marketing, such as Globalization, liberalization, privatization, and information technology. Globalization means they are more competitive from having a world class standard. Liberalization means choices. They can do what they want without government control.  Privatization means freedom and information technology has direct impact of service marketing. such as making services easy and fast.
•  Services theatre framework is more often used than before nowadays. Actors provide services to audience in the setting which is service environment, such as Disney Island. This is a good way to attract customers.
•  Information technology is important for service marketing. Providers can satisfy what customers want very well. Moreover, it also reduces the service steps for providers and reduces cost. Thus organizations can more profits. Moreover, service marketing is more and more important with the development of industry. Therefore, information technology is common in the society, such as online banking.  Although there are some constraints, advantages are over them.  

Jing Ding

May 11. 2009 20:10

•  Service is included in our lives on the day to day basis. We take the buses, go to the restaurants, and check out the weather forecasting on the internet or on TV, etc. We are receiving or providing the services. With the four forces of the service marketing which are globalization, liberalization, privatization and information technology, the expectation of service increased. Now, in most countries, services add more economic value than agriculture, raw materials and manufacturing combined. In US, Services contribute about 77% for the economy.
•  By definition, Service is essentially intangible. For example, credit card itself won’t provide the service unless there is a service included such as using it to by a computer. Characteristics include in the service is intangibility, inseparability, variability and perishability. Those are the fundamental differences between the goods and services.
•  Services have different degree of tangibility,  tangible dominant services are physical products which involve less “add on” to the physical products, on the other hand, intangible dominant service include people providing the services and there is less physical products involved.
•  There are 8Ps involved in the modern vehicles of service value. They are productizing service, physical setting, people in services, pricing in services, promotion, placement, productivity quality and guarantee, process of balancing demand and supply. Participants, process and physical setting are very important to the service marketing. It is one of the frameworks in the service industry which gives the marketer most control. The other two frameworks are servuction and services theatre which has less control because of customer participation.

Beiyun Geng

May 11. 2009 20:21

Before studying the course of marketing service, I thought that, service, customer service and serving a customer are the same thing. Indeed, they are totally different.
1)  Service is essentiality intangible. People have to pay for it when they want it. For example, when a customer wants to transfer the money to another bank, this customer has to pay for the transaction fee. Therefore, this transaction is service because customers have to pay for it.
2)  Customer service is used to support the main decision and add value to the main service. It is not directly paid for. The service providers have the options to offer the service or not. For example, the companies have the choices to e-mail or not e-mail their customers when they will deliver a product to their customers. It is not necessary for them to give this information. Moreover, customer service can help the company improve competition and improve quality. However, when customers find out any problems or mistakes in the customer service, they can never sue the company
3)  Serving a customer is an attitude. Everyone is in the business of serving the customer even if they are not in the service industry. It helps the goals of selling products to their customers.

qian yanhuo

May 11. 2009 20:22

So far I'm really enjoying this class.  In my previous recreation management classes I have learned about aspects of marketing services, however I took these classes before I experienced actual marketing classes. I never really fully understood the scope of marketing services, or products for that matter, before taking these marketing courses.  This class has help me blend the recreation information and the marketing information that I have attained over my time at the U of M.  Later this year when I hopefully venture out to attain a position within an organization that markets recreation and sport to the public I will take what I learned from this class and apply it to this position!  =)

damara g

May 11. 2009 20:41

marketing of services:
As we can see in Canada, services is a significant business field and cover high percentage of employment. We cannot image that today can satisfy their extra needs without those service providers, and companies can get better advantage position in such high competion, without providing extra services to customers. Even the traditional business, they start to provide additional services.(so more business are kind of combining goods and services together).
4 characteristics of a service1) intangibility: services cannot be touched and felt. for example, the tour company cannot provide cusomers how the tours physically look like. people can only experience it and say whether the company provide a good service.so the company has to advertist and create a good image and brand to compete with others in the same industry.(2) inseparability. without the tour company, we cannot say that the tour company provide us a worth and wonderful tour service.(3) perishability. the service cannot be stored. the tour company cannot store their tour service to customers before they join in the tour activities later.(4) variability,even the company has a good image, if the tour guide does not show nice and do not provide enough information for the customers as other tour guide in the company, then the customers might not have the same experience with this comapny. as a result, training and instructment for the job are important to the company.

Qian Huan Huo

May 11. 2009 21:53

-It is evident that services play a vital role in society. As mentioned in class, services add more economic value than agriculture, raw materials and manufacturing combined making the marketing of services vital for any business.
-There are four factors that play a key role in services marketing. They are globalization, liberalization, privatization, and IT. Globalization is creating world class standards. Liberalization gives individuals choices and no government control. Privatization allows more freedom and greater accountability, and IT increases the use of technology.
-There are four characteristics and challenges in marketing services. Intangibility (the service cannot be seen or touched), simultaneity (services are inseparable between production and consumption), perishability (service cannot be produced or stored before consumption), and heterogeneity (services are hard to standardize).
-When dealing with services, marketing is very important as mentioned above. This is where individuals obtain what they want through creating and exchanging products and value with others. Every business has a goal of making its client list larger. This can be done by promising the customer superior value by all means.
-This is where the 4ps are vital. The four Ps include product, price, promotion, and place. However, this has its limitations because marketing is integrated into organizations and many businesses have a wider variety of products and markets. This is why an additional 4ps are added to the list. They are, physical, people, productivity, and process.  Also, service experience involves workers, customers, process and setting. Therefore, it is evident that the marketing of services is vital for any business.  

Surinder Sarpal

May 11. 2009 22:44

•Pricing helps create a sense of value in products and services.  Goods or services valuable to customers are reflected in the prices; prices decide whether or not a customer is willing to pay for that particular good or service.

•Pricing is the only “P” that creates cash inflows for any company.  The other P’s: product, promotion, and place all result in cash outflows.  Determining the right price for the products and services helps create adequate revenue to cover the associated costs and maintain a profit.

•Reducing prices is an effective marketing mechanism that can generate more sales for the company by attracting more customers.  When customers perceive value in a particular good or service and see an advertisement pertaining to the reduction in the cost, it enhances their perceived value and therefore increases their willingness to pay for the product.

•The prices of products and services are based on the overall value of the product.  The higher the price, the higher the value perceived by the customer.  For example: hotel accommodations of a five star hotel are much higher than the price per night at a motel due to the options included in the package price.  Customers are willing to pay much for due to the value of the product.

•Pricing is relevant to retain customers by considering long term profitability rather than short term.

Vanessa de Leon

May 11. 2009 23:47

Nowadays, Services are becoming major part of economic in many different countries. For example, services contributed about 77%of the economic in U.S..  The four forces globalization, liberalization, privatization and IT are helping to facilitate service increase.
We also talked about the four characteristics of a service: intangibility, inseparability, variability and perishability.
Marketing goal is attracting new customers by promising superior value and keep and grow the current customers by delivering.  Compared with old 4p’s customer value, the modern vehicles of service value has 8p’s productizing service, physical setting, people in service, pricing in service, promotion, placement, productivity quality and guarantee, and process of supply are providing more which can help dealing with different services.
Go through the three service frameworks: the additional 3Ps framework, servuction, services theater. The additional 3Ps framework participants, process, and physical setting which did an essential and completely description about service marketing.  Servuction includes inanimate environment and the contact personnel. And the services theater frame model set up a performance with connection between actors and audience.

Liu Yang

May 12. 2009 00:12

MKT 3240 - Pricing Strategy

- The modern goals of marketing are to satisfy the customer, and to create a satisfying relationship with your customers. Marketing's goal is to connect and stay connected. This will in-turn, maximize a company's long-term profitability.
- When narrowly defined, price is viewed as just the amount of money used to purchase a good or service. Expanding, price is not only reflected in the monetary value, but is also paid in time, efforts, emotions, etc.
- There are three types of strategic pricing used to maximize long-term profitability that include cost-based pricing, competition-based pricing, and customer-based pricing, all which have different benefits and costs to them. Cost-based pricing is usually focused on certain markups on products. Competition-based pricing focuses on using a competitive-referenced price. Customer-based pricing reflects customer's willingness to pay.
- Price is the most overlooked aspect when discussing the four P's of the marketing mix. It is however, the only one of the four P's that bring in revenue for a company. Price should be studied and focused on more since it plays such an essential and important function in if a business will succeed or not.
- Value-based pricing can be a more successful tool than Cost-based pricing. Value-based pricing is as follows: consumers -> value -> price -> cost -> product. The inverse would be Cost-based pricing. Value-based pricing allows you to focus more on what a consumer wants and needs, and then putting a price on that value. It has been working well in China and is something that should be focused on more often.

Jeremy Jay Espiritu

May 12. 2009 00:14

during the first week of pricing strategies i have learnt

- The use of value based pricing strategies can be more effective as they represent what customers are willing to pay. The value based strategy starts with the customers value of the product. Traditional methods start with the costs and then derive at price.
-The use of bundled opportunites as not to miss out on sales. Having the same base product with different features priced differently can allow you to get more out of customers that are willing to spend more while selling to customers that are not
- I learnt that when sales are down cutting the price is not allways the only way too boost sales. Communicating the value of your product to your customers will justify the price for the value they are recieving from that product.
- Traditional segmentation segments to things like gender and age etc. whereas value based segmentation segments and compares based on value drivers and economic value estimation. An example of a value based segmentation will be on things like features when referrin to the automotive industry.
- Price is one of the most underused strategies in business and traditional methods can lead to a companies poor performance. Often businesses just cut prices to increase sales when it is not nevcessarily the right thing to do.

Darren Thomas

May 12. 2009 00:18

During my first week of pricing strategies I have learnt:
-About the 3 pricing strategies and how they relate to different types of business, such as international and monopolies, and how certain business have no choice in which strategies they must follow.
-How the four P's of marketing (product, price, promotion, and place) can be looked at as the four C's of marketing through the customer’s perspective. These for C's are customer solution, customer cost, communication, and convenience. Using the four C's a marketer better understands the product relationship with the customer.
-How the pricing strategy pyramid is a very important tool and concept to understand when setting price.  It shows that the actual price of a product is only the "tip of the iceberg" within the pricing strategy.
-With value-based pricing, first - customers are identified, second - what value they desire, third - price is identified, forth - costs are calculated, finally the product is made.  This is completely backwards from the traditional cost-based pricing, which designs a product then figures cost, price, value, and communicates it with customers.
-Another important point is to let price dictate expectations not let expectations dictate price. This is important because people have different expectations for price levels and money may be left on the table as a result.

Tyson Morris

May 12. 2009 00:45

Nowadays, services have add more economic values than other working industries combined. Serivces are everywhere around people's life.
The four forces that effect the world's economy which are Globalization(bring the world class standard services to customers and increse the competition in the industry), liberalization(let customers have more choices to choose they prederred services), privatization(more freedom and accoutability), and the last one is the IT(the development of the technology to improve the productivity).
Since the development of the expection of customers, the old 4p's can no longer satify the customers' needs, therefore, the modern vehicles of service value brings more ideas to service providers. They are productizing service, physical setting, people in services, pricing in services, promotion, placement, productivity quality and guarantee, and process of balancing demand/supply.
Designing services are also imporatant. There involves four stages to design a service.Formulating the basics service, supplementing the service, differentiating the serivce, and also customizing the service. following these four steps would help marketer to design and build more comfortable and high standard services for customers to use.

Shuxin Lu

May 12. 2009 01:03

•  The marketing of services is relevant to a variety of industries.  It facilitates the exchange process in the free market environment.
•  The process of marketing  services is also relevant to customer wants and needs.  By purchasing a service, customers are fulfilling their unsatisfied wants and needs.  Thus, marketing creates value in the mind of the customer.
•  Without marketing, there would be no manner in which value is communicated to the customers.  There would be no way in which service offerings could be differentiated from one another and customers would purchase solely based on price.
•  Services marketing is also relevant to businesses.  By conducting market research to discover customer desires, service providers are able to develop better service offerings as well as collect valuable customer information.  
•  Services marketing is also relevant to the economy as it represents the highest source of employment in developed nations.  It also creates more revenues for countries than agriculture, and manufacturing combined.
•  Services marketing is also relevant to customers.  By providing valuable information to businesses about their purchase and personal behaviors, they are able to benefit from more customized service offerings, lower prices, better quality goods and services, and a more fulfilling service experience.
•  The bottom line is, everything we purchase has a service component, however small or large it may be.  Thus, the sheer pervasiveness of the service offering in itself indicates its continued relevance in today’s society.

Gillian Dow

May 12. 2009 01:31

Relevance of Pricing

•  With respect to the marketing mix, pricing is the element of the four P’s that actually bring in any form of money to the company. Whereas the other P’s product, promotion, and place, causes outflow of money. In turn it is important to price strategically to gain revenue.
•  Although price is the amount of money charged for selling a product or service, price also includes the perceived valuable resources that customers are willing to exchange to buy or use that product. Valuable resources that include their time, effort, etc.
•  Understanding what customers value most is integral in terms of pricing. Customers who value certain products or services as high are most likely willing to pay with a higher price; with the notion that you pay for what you get.  Especially if that high end product already has built great value within its customers already.
•  Pricing strategies include looking at costs, customers, and competition. By first analyzing the environment and the market in which a company wishes to enter, it must first determine what type of market they will be entering in. Whether it’s in a highly competitive market, a monopolized market, or a customer driven market, the company can then work from there to decide on which pricing strategy to choose from. In the end, the overall goal is to maximize for long run profitability.
•  Majority of customers are sensitive to price. Particularly when there are many changes happening in one’s life.  Therefore, as a company, understanding the changes that can occur is important when dealing with prices.  

Daisy Munoz

May 12. 2009 01:36

-I find that as a marketing major, services tend to be one of the hardest things to market to the general public. It’s hard to accurately establish a proper standard for all services to follow therefore the leaders in each category tend to establish this standard for others to follow.

-As a consumer marketing is a huge part of any service being truly successful because I want to know why I should choose one service over another in the same category. What makes your service better than the service being offered down the road for a cheaper price? Marketing needs to answer this question.

-Services tend to be extremely heterogonous therefore since there is no consistency across similar services the marketing for a company needs to establish to some extent that the service they provide will be consistent in quality, quantity and so forth.

-When properly marketing a service, one must establish to the consumer what makes their service better than the rest and establish their service as being the best in order to attract new customers. The marketing for services tends to be quite different than marketing a tangible product.

-Lastly the usual channels for marketing don’t tend to be quite as effective when it comes to marketing services, rather consumers tend to want to experience the service before committing to it.

Tavita Sawh

May 12. 2009 02:33

-For a service, customers need to know what they are getting themselves into because they can not return a service. Once a customer purchases a service, they can't go back. So, businesses need to put the best informative information forward when marketing their service.
-For service marketing a company needs to go beyond the 4P's and expand into 8P's. For example, when I get onto a bus I want the guarantee that I am going to be driven to my destination and have somewhere to be able to seat or stand comfortably.
-A company has to make sure they sell their service because they can not just store it away. For example, as we talked in class, an airline can't store away a seat that has not been filled on a flight. Once that plane takes off, that seat stay’s empty.
-Knowing that the US total economy is driven by services, shows how important services are to this world we live in. We can’t live without services. For example, people get sick and or hurt, so they need a place to go to get help at anytime; which is the hospital.
-You have to remember customers play a role too. For example, as we discussed in class when there are participation marks on the line to get marks (in a classroom) students are going to participate more. And when certain students notice other students participating, they will participate more as well.

Tiffany Monkman

May 12. 2009 03:31

After the first week of MKT 3340, I have learned:

-Services make up over 3/4 of the gross domestic product of the United States. Liberalization, privatization, and globalization (as well as advances in information technology) have increased the service supply over time. As well, services account for an increasing percentage of jobs available.

-The service experience involves:
(1) Service workers (both those directly supplying the service and those working behind the scenes).
(2) The customers who receive the service, as well as those who share the service setting with them. Those sharing the service setting may or may not have an effect on the first customer's experience, and can effect their overall satisfaction with the service. This presents a unique challenge to the marketer.
(3) The service process or sequence of events necessary for delivering the service.
(4) The service setting, which includes both the areas visible to the customer and those not visible. The areas visible to the customer should be carefully designed to enhance the customer's experience.

-The characteristics of services present a number of challenges in marketing:
(1) Services are, by nature, essentially intangible; therefore they cannot be seen, heard, or felt before purchase. It is then the marketer's job to  differentiate the service from similar services available, and reduce the perceived risk to the consumer.
(2) Services cannot be separated from the person/equipment providing the service (production and consumption are simultaneous).
(3) Their quality is variable, as it depends on who provides the services, as well as the variables when, where and how. The marketer can use this variability as an opportunity for customizing the product to suit the needs of the customer. As well, adequate training of frontline employees is required to make service delivery more standardized.
(4) Services are also perishable- they cannot be produced and stored for use later, the way that goods can. The marketer must ensure that the service is available when the customer is ready to purchase, otherwise the opportunity for generating revenue is lost.

-Lastly, in services, technology can empower the customer by putting them in control of the service to use at their convenience (for example, internet banking). It can either be part of the core service, or offered as a supplement or support tool to an existing service (for example, a professor posting his notes and practice tests online).

Marieke Breakey

May 12. 2009 04:41

Prior to Services Marketing I thought products and services were essentially the same thing. Now, I understand that a Service is something that is essentially intangible and does not result in the actual ownership of anything. Where as a product is something that is essentially tangible.
-Services have become a huge part of the economy and it is very important to understand how to create a service that draws the customer in and retains the customers over a long period of time. As a marketer, it is very important to obtain repeat business from customers.
-The characteristics of a service involve four factors; Intangibility, Inseparability, Variability, and Perishability
-There are 8P’s that explain Service value; Productizing service, Physical setting, People in services, Pricing in services, Promotion, Placement, Productivity, Process of balancing demand/supply.
-The course so far as been very relevant to the current job I have now (work at a restaurant). I have been able to think about things in new ways and I hope I can become a better server as a result of this.

Leanne Kisil

May 12. 2009 05:01

What I’ve learned so far in Pricing Strategies:
- The most important part of marketing is managing long-term customer relationships.
- Four P’s vs Four C’s
      - Product --- Customer Solution
      - Price ------- Customer Cost
      - Promotion --- Communication
      - Place ------- Convenience
- Price is defined as the sum of a customers money, time, efforts and emotions.
- I understand that prices should cover a company’s costs and earn a reasonable profit.
      - Prices should reflect the customer’s willingness to pay
      - Price cutting helps with an increase in sales
      - Good marketing helps to avoid competition in price.
- Three different pricing strategies: Cost, Customer, Competitor
- When pricing a new product based on customer-driven pricing, sometimes you can ask them to       choose their own price and take the price that most customers choose.
- Manitoba Hydro’s pricing objective: To offer affordable energy to all, responsible consumption and to have surplus for the future.

Leanne Kisil

May 12. 2009 05:37

What has really sparked my interest is Designing the Service:

Formulating the Basic Service
  Know what your business is; for instance if you are in the car rental business, the core product or benefit for customer is simply transportation. Or if the restaurant industry, food.

Establish Supplementary Product
  Great additions to add to the car rental business may include courtesy pick up and drop off of customers. However, some might argue pick up/drop are part of the core service, and is necessary in the transportation business (good point). Other examples can include price guarantee, or quality guarantee of vehicles for rent.

Differentiating the Service
  This is probably the greatest challenge the service industry faces, because it seems there is no exact formula for getting it right. I personally think leveraging employees should be the ultimate goal to service differentiation. The idea is making service transaction into in an interaction where possible. And other reward systems can follow, like different privileges or features of reward. There is definitely more to be said on the subject.

Customizing the Service
  For customization to be possible it is important that customer needs or wants are being recognized and the service provider has a great deal of skills and technical support to enhance the service experience and perception of service quality. For car rental it can be customer profile cards for specific car preference.  

Jose Xec-Sop

May 12. 2009 07:13

what I have leared from this week are:

- The definition of service and its 4 attribution.(intangibility, inseparability, variability, and perishability)
  Diference between service, customer service and serving a customer.
  Classification of service.
- Go beyond the traditional 4 Ps,(price, product, place and promotion) we have additional 4 Ps in service markting.(process, physical setting, people and productivity)
- The relationship between service and technology involve in it.(core or supplementary)
  Technology improves the service quatity by facilitating the people providing service and in turn satisfying the people receiving the service.
- Service design and its 4 stages.(basic service, supplementing the basic service, differenciating the service and customizing the service)

Lu Dai

May 12. 2009 07:44

-Services comprise a huge portion of the global economy, so it is important to understand how to effectively market them in order to have our economy prosper. Additionally, as most new job creation is in the service sector, understanding how to best to undertake the service to maximize customer satisfaction is very important
-Since services are intangible, it is important to inform the potential customer what it is they are getting by purchasing the service that you are marketing. This includes effectively managing expectations
-Because of globalization, goods have become very cheap to purchase, and they can be had very quickly. Service marketing is very important to allow businesses to differentiate between one another and to gain a competitive advantage
-In response to the increasing technological advancement in the market, it is important to keep up, in order to bring competitive advantages, or to keep up with competition. Technology also facilitates marketing of services, such as through the internet
-Technology further facilitates marketing as it allows consumers to have a more direct link to marketers, allowing the services to be better tailored to consumer interests.

Ryan Grant

May 12. 2009 07:48

MKT 3240 - Pricing Strategy

Pricing is especially relevant in the modern global environment for various reasons:
-  in order to maintain a competitive advantage in a constantly changing marketplace an organization has to have a sustainable marketing strategy, pricing is a vital part of an effective marketing strategy.
-  Pricing in the overall organizational context, is the only means of maximizing long-term profitability since it is the only marketing mix element out of the four P’s (product, price, promotion and place) that directly brings in revenue to the organization. This is in contrast to other marketing mix elements that might add value to the product or service, but do increase operating expenses without directly bringing in revenue.
-  An effective organization has to correlate organizational strategy and pricing strategy, if pricing is not developed within the framework of the organization the business will not be as profitable as a result.
-  Pricing is a useful and effective marketing tool that can be used for various purposes, like gaining market share, improving perceived quality, differentiation, market segmentation, etc.
-  Pricing, as a tool of sustainability enables the company to act proactively and influence its environment, instead of acting reactively to its external environment. This, along with a fully integrated organizational strategy will ensure profitability regardless of changing environmental factors.

Deborah Simons

May 12. 2009 07:54

-Businesses need to understand what value their customers see in their product/services pricing in this way can allow companies to build long term connections with their customers if they both have a common understanding of what a product/service is worth.
-Different pricing strategies are needed depending on which market or market segment you are trying to attract and the external factors associated with those markets. (competition, consumer, cost)
-At times you need to create value for your product/ service and communicate that value to your consumers in a way that will attract them enter into a relationship with you. eg. the apple ipod
-from a personal stand point, pricing has taught me about why certain businesses price their products the way they do and I can maybe make smarter purchase decisions by seeing if the price of a product aligns with its value to me.
-pricing is also relevant in that the price you set for a product or service can set expectations for the consumers you serve. eg. hotel prices can dictate the quality of service and experience you will recieve.

Jonathan Sandberg

May 12. 2009 08:02

Pricing Strategy
- The modern goals of marketing are to satisfy the customer and create a satisfying relationship with those customers
- The 4 Ps, product, price, promotion, and places are seller oriented, meaning that they are in the sellers control.  The seller has to follow the 4 Ps in order to satisfy the customer and create lasting relationships.
- The 4Cs, customer satisfaction, customer cost, communication, and convenience are all customer oriented and is very important for marketers to understand.  In order to satisfy the customer, the marketers must be able to see what the customer values and what they are willing to pay for the product or service. Understanding the 4Cs will only help marketers create better relationships.
- Three types of pricing strategies are cost-based pricing, competition-based pricing, and customer-based pricing.  Each alternative has its own benefits depending on the product, service, and market in which it is being offered.  Cost-based pricing is good in high cost businesses, whereas customer-based pricing is good for new innovative products.  Competition-based pricing is good for products which are tried and have been around for a while.
- Even though pricing is the only one of the 4Ps that brings in revenue, it seems to be the P that is most overlooked.  The rest of the Ps are all cash outflows, yet they are the ones that are most talked about in marketing classes.  There should be more emphasis placed on price and it should be talked about earlier on in some of the other marketing classes.

Jeff Fung

May 12. 2009 08:43

-So far in this course we have learned just how important services are, services are essentially intangible and do not result in the ownership of anything. Services add more economic value than agriculture, raw materials and manufacturing.

-We have also learned of the four forces of services marketing, they are globalization, liberalization, privatization, and IT. Globalization has lead to world class standards, liberalization has lead to greater choices, privatization has lead to more freedom and greater accountability, while IT involves greater use of technology.

-We learned about the characteristics of services, which are intangibility, inseperability, variability, and perishabilty. Intangibility refers to the fact that services cannot be seen, tasted, felt, heard, or smelled before purchase. Inseparability refers to how services cannot be separated from their providers. Variability has to do with how the quality of services is dependant upon who provides them as well as when, where and how the services are provided. Perishability refers to how unlike many goods services cannot be stored for later sales or use.

-We have distinguished between the three most common confusions, service, customer service, and serving a customer. A service is anything that is essentially intangble, like a textbook. Customer service is anything which is in addition to the main product, such as special delivery of the textbook. Serving a customer is the mindset, the attitude while assisting a customer.

-The relevance of marketing of services is to relate to and connect with customers and stay connected with them. This is done by creating value for the customer and this value creation must be consistent. This value creation is done through the 8Ps. The 8Ps include the following, productizing service, physical setting, people in service, pricing in services, Promotion, Placement, Productivity, quality and guarantee, and lastly the Process of balancing demand ans supply.

Anisha Talwar

May 12. 2009 09:19

I first want to say that your class is definitely to me, a breath of a fresh air you could say. I would never have come close to learning the things in Econ classes that I have so far in your course yet at the same time, some stuff has related. Obviously you can't go through an econ major without hearing about globalisation and deregulation of markets. Since starting this class, I have found myself really thinking about alot of the examples your saying; especially when we talked about internet banking. I have seriously been praising the convenience of online banking and brokering for maybe 2 years now but never thought to stop and think of it as a service, I just sort of expect companies to now reach me through the internet automatically nowadays. The thing, despite all my praises I still know people who feel they have to drive down to the branch for every little item they need done!

And honestly, your outlook on the financial crisis and relating it back to greed was one of the better views I've ever heard on the subject. So far that has probably been my most enjoyable class but for the most part, they're all enjoyable.

Srephen Needham

May 12. 2009 16:26

1. how to defined service
2. 8ps
3.characteristics of service
4.components of the service
4. service design

Jiaoheng Liu

May 12. 2009 17:02

The role of marketing in services is:

- to educate society about the service and the importance of the service

-to plan and creatively introduce the service to the market/customers

-the customization of the service to each customer, to ensure that they are satisfied

-to provide a overall successful experience


Sony Mankoo

Sony Mankoo

May 12. 2009 19:39

I'm surprised that Service Marketing is not more prominent in our studies at University. If more and more of the world is continuing to expand the services they offer, you would think that this would also increase the importance of service marketing.

I find this class quite enjoyable. I am fond of an environment that fosters learning through discussion and interaction.

Musette Fowke

May 12. 2009 19:54

1 Price is the only component of the marketing mix that brings in revenue for a company.  The price is the amount of revenue the company makes per product sold.  All the other Ps requires an outlay of cash.

2  Price is not just the amount paid.  For consumers price is the total amount of all resources spent to buy a product.  These resources could be money, emotions, effort and time.

3 There are 3 types of pricing strategies.  They are the cost, customer and competition based price strategies.  An organization can use just one, or a combination of all three.

4 Factors that affect pricing decisions include internal factors like Marketing objects, the Marketing mix strategy and costs.  They're also affected by external factors like Competition, and environmental factors like the economy, government concerns and resellers.

5 The goal of pricing strategies should be to maximize the long term profitability of an organization.  In order to maintain the long term profitability of a company, they should strive to secure long term relations with their customers.  Long term relations with their customers helps lock in a steady flow of cash.  If the organization does not manage to secure long term relations, they may have trouble to continue staying in business.

andre man

May 12. 2009 20:45

The goal of marketing is to connect with desired customers and stays connected, Keep the connection with customers and provide value.

4Ps-Product, Price, Promotion, and places are seller oriented, The seller has to follow the 4 Ps in order to satisfy the customer and to stay connected with customers.While 4Cs-Customer solution, Customer cost, Communication and Convenience are customers oriented.

Pricing Strategy are competition based,customers based and costs based. they are situational depends on how the market is segmented. A company can use a single pricing strategy or a combination of 2.

Competition based strategy, a company sets its prices by determining what other companies competing in the market charge.

Customers based strategy require company to price their products according to customers' needs and expectations, in all, their willingness to pay.

Cost based strategy involves the determination of all fixed and variable costs associated with a product or service. the goal is to cover all the costs incurred in order to increase sales and acheive profits.

Sisi Wu

May 13. 2009 02:48

Pricing Strategy 3240

The relevance of pricing is that it is of huge importance to make sure that a satisfying relationship continues to evolve and grow so to satisfy a customer rather than trying to persuade them. First figuring out the relevant wants, needs, and demand is the first critical step in being able to understand the idea and principles behind pricing.

Pricing is relevant in that it controls demand. In that the demand for a good is solely based on the customer’s willingness to pay. If the willingness to pay is not there then the pricing of the good is irrelevant.

Pricing is also important in that it is found in the four P’s, where price makes up for the only inflow of cash and the notion that price affects everything within the mix. Pricing a product is not just as simple as slapping a price on something but rather it involves a complex combination of the product you are selling, the promotion or communication and also the place or convenience.

Lastly all companies must deal with pricing and the strategy that goes with there product/ company the best. Business people must price products on the basis of customers, competition, or costs but in most cases is a combination of all three strategies, with varying emphasis changing from product to product and service to service. It is also relevant to keep in mind that increase prices do not always mean greater profits and you may incur lower volumes of sales that the higher price will not make up for.

Michael Price

May 13. 2009 05:34

The major goal of marketing is to create and satisfy the customers needs, wants and demands and to build lasting relationships and repeat business. Therefore, you stay connected by meeting the customers standards and exceeding their expectations.

By creating a value for the customer, you show them the benefits of their needs and wants. With value, the price of the product/ services is validated and you and your customers are happy.

The 4 P's in the Marketing Mix: Product affects the other P's, but Price is the only part of the mix that creates revenue for the company.

When you convert the 4 P's in the 4 C's, it improves your marketing plan. The 4 C's are customer oriented. Product -converts to customer solution. Price - coverts to customer cost. Promotion - converts to customer communication. Place - converts to convenience. This builds an understanding and allows better communication with the customer and there needs and wants.

There are four consierations when dealing with a fixed price. Cost considerations, social considerations, economic context and environmental considerations. Understanding and applying these considerations will allow you to price your product/ service better.

Alycia Maskiew

May 13. 2009 20:35

The relevance of pricing is of great importance in marketing. It can be defined as the ‘sum of all valuable resources’(such as money, time, & emotions) that consumers exchange to buy or use a product.

Pricing is affected by both internal and external factors, such as marketing objectives, costs, nature of the market and demand, and competition. It is the only element of the marketing mix that brings in revenue to the marketer so the main goal of a pricing strategy would be to maximize long term profitability. This can be done through 3 strategies, cost-based pricing, competition-based pricing, and customer-based pricing. Businesses can use one or a combination of all three strategies depending on the type of product they are selling.

A major object of pricing is to capture the value created for customers. Value-based pricing starts with the customer and their perception of the product. Based on how they value the product a price is then set and cost is calculated around the price.

There are 2 types of values that can be created, value for money and value for feeling. Prices must be set to influence expectations and not react to them. When a company charges a higher price, they create a certain image and expectations from customers.

This class is very interesting as it helps me to understand the strategies that organizations are using when marketing their products to someone like myself. By evaluating the value that I will receive from those products, I can determine if it is a sensible purchase or not.

Kara Latiff

May 13. 2009 22:58

    I have to say that the class is very interesting. I learn a lot during the class, specially the way the class is designed with having small quizzes every day. That way students motivated  to learn and listen in class material better and in more details.

Yuliana Evseev

Yuliana Evseev

May 14. 2009 07:48

Prior to taking the course, Services Marketing, I was somewhat familiar with the topic as I have taken many marketing courses throughout my University education, and I was familiar with the intangibility and perishability aspects, such as relating to the tourism industry as learnt in a Leisure Travel course. However, I was not aware of the scope of marketing services, and how many different aspects there actually are as compared to goods. In many ways marketing services almost seems more important and complex than the marketing of goods since it is a personal interaction with the customer that may or may not change with each individual customer.

It has been interesting to learn that services, customer service, and serving a customer are all very different, yet initially may seem one of the same. Once learning about this it was easier to see as relating to everyday life and the services we encounter, from a visit to the grocery store to our university education.

It seems that every marketing course adds new P's to the framework. I could definitely see how participants, physical setting, and the process are relevant within services. However, it almost seems as though 'participants' should have been included in the original 4 P's framework as participants seem relevant to the use of goods too.

I would have never thought of the service industry as a theater performance but it was interesting to see it compared in that sense.

I also find the team presentations useful to relate to each chapter as it provides a greater understanding and more elaborate example than given in 1 or 2 slides of lecture material.

Shannon Hill

May 19. 2009 00:58

Value communication and pricing policy have been the topics covered during this last week. Important concepts that I have learned about these topics include:

-Value communication is intended to inform the customer of the value they are receiving in order to justify the price or the product or the difference in price from a competitor.  Relative cost of search and type of benefits are the two factors that should be examined when trying to influence buyers perceptions of value. These two factors can be subdivided into two categories each: Cost of search can be low (search goods) or high (experience goods), and type of benefits fall under either economical or psychological.  The four possible combination's that can be made, lead to four different strategies for communicating value.

-Price policy is the rules and regulations which a company follows. It is important to follow a price policy because every offer made by your company creates expectations for future offers not only for that customer, but other customers who learn of the offer.  The pricing policy will create trust and integrity for all stakeholders, which include; employees, customers, the brand, business partners such as suppliers and distributors, competitors, as well as socially influential people.

Tyson Morris

May 19. 2009 02:42

The eight important elements for service marketing include: productizing service, physical setting,people in service, pricing in service, promotion, placement, productivity, quailty and guarantee, and process of balancing demand/supply.
Suggestion for prof: I prefer go through the powerpoint during the class with additional examples, rather than just use sample to explain the materials. It helps a lot.

Tingting Li

May 19. 2009 04:18

Course Progress Diary 2

Pricing is set to reflect the products relative or perceived value.  It is important that consumers understand the values reflected in the price.  There are 4 strategies that can be used to communicate the value to the consumers:

1. Economic value communication – communicate the objective information that justifies the value of the product in relation to its ability to generate income.

2. Economic value assurance – assuring the customer of the value of the product in relation to its ability to generate income.

3. Psychological End-Benefit Framing – communicating the benefits perceived by the customer to justify the value of the product.

4. Psychological End-Benefit Assurance – assuring the customer that the total psychological value justifies the pricing.

These strategies are categorized into two different types of goods: search goods and experience goods.  Search goods are those goods that consumers have the tendency to research prior to purchase; whereas experience goods are all other goods that consumers must purchase prior to experiencing the value or end-benefits of the product.  Depending on the type of goods being purchased, the consumers may perceive the value of the products quite differently from one another.

Vanessa de Leon

May 19. 2009 05:32

Diary #2
-Traditional way of thinking is that what a product can do is the main component of the product value. Now, instead of focusing the value on the physical and actual function of a product, companies are more interested in selling the psychological value of a product to customers.
-Unlike physical value of a product, the psychological value of a product is difficult to be measured. Rather than measured in units and in specific quantity, it is the customer willingness that is taking into account.
-When it comes to the time of communicating psychological value to customers, companies often come up with their own unique tactics. For instant, luxury brands often require their sale representative wear black suits in store in order to build a prestige image. The cost of manufacturing a product may be $200, but the prestige image behind the product may “worth” $2000.
-Some customers believe that price of a product should only be determined by its physical value. For this segment of customers, it is very difficult to make them consider the price of a product can also be determined by its psychological value.
-Some customers can be communicated into believing that price of a product can be determined by its psychological value. Companies should often profile the characteristics of this segment of customers in order to come up with some efficient ways of value communicating.

JUEXI ZHU

May 19. 2009 05:37

Pricing Strategy: Diary #2
The main focus of second week study is "the strategic pricing pyramid".
(1) The first stage is value creation. It is to estimate the economic value of product by understanding customer economics and value drivers, and estimating differetial value.
(2) The second stage is price structure. This stage involves understanding "metrics", which is the elements that consumers pay for, "fences", which is the price level ,and "control" means limits.
(3) The third stage is value communication. This stage involves how to communicate product value with your customers.
(4) The forth stage is pricing policy. The benefits of pricing policy are consistency,mitigating ad-hoc discounting, forcing trade-offs and value recognition, price integrity, and efficient selling process.
(5) The last stage is price level. This stage involves indentifing fixed cost, varible cost, manufacturing overhead cost, and calculate the price based on those costs and desired profit.  

Tingting Sun

May 19. 2009 05:58

This week, we learned value communication and price policy.
There are 4 ways to evaluate that:
1.Economic value communication:
Communicate objective information that differential economic value justifies pricing
2.Economic Value
Assurance communicate assurances that differential economic value justifies pricing
3.Psychological End-Benefit
Framing Associate differential performance with subjective psychological value that justifies pricing
4.Psychological End-Benefit
Assurance communicate assurances that total psychological value justifies pricing

Sisi Wu

May 19. 2009 06:12

COURSE DIARY #2
-  Since the old marketing mix was constructed for the purpose of  giving costumer value of the product they buy, this mix need to be extended for the service industry since this industry  has a few differences from goods industry such as, service industry is normally people intensive, also required a good ambiance to build experience, and need method to maintain productivity of people which is vary from day-to-day. Thus, by implementing extended method and apply it effectively it will increase costumer satisfaction.
-  Since we know that even people in one geographic area have a lot of differences ranging from ages, genders, socioeconomic, ethnicity, to name a few. It is beneficial for both parties (marketer and consumer) if marketer is aware of the important of marketing mix, because since different people have difference needs, and desires and by segmenting their costumer marketer could serve their costumer better, at the same time costumer will be satisfied where their needs meet.
-  As service industry is hard to be standardized, the service today might not be the same for tomorrow even with the same organization and the same employee. Therefore extended marketing mix has offered “guarantee” under the productivity point which is to ensure that service is delivered at the same standard every time. This will result a more enduring consumer value.
-  One purpose of managing marketing mix is to ensure costumer-to-costumer relationship by for example using costumer script and costumer education. Because for service industry that rely on servuction framework which process rely on costumer to costumer relationship, this relationship is essential to keep the industry strive, hence at the same time costumer also value the service better by having a desirable experience during the service.
-  Unless goods marketing which prioritize to find the most effective place/ shelf to make their product visible to costumer, the extended marketing mix has different goal which is to make a good ambiance and experience for their costumer while buying their service, so marketing mix and extended marketing mix actually has different goal and objectives.

Ghana Galindra

May 19. 2009 06:28

The level of a price is set to reflect a product's value.  Value communication is to educate the customers that the value they get from buying a product is justified by the price they pay.  The relative cost of search and types of benefits should be paid close attention when trying to persuade customers of a certain level of value.

When selling a product, there is more to it than just the typical function of product when it comes to determining the price.  Companies are shifting to add psychological values to a product.  Although these psychological values are hard to measure empirically, luxury brands have been able to mark up a considerable amount of money onto a product that did not cost a lot to create.

Another thing I picked up from the class is that an organization must follow it is pricing policy rather closely.  It needs to be followed in such a way because expectations about the company's pricing create an image about the organization for everyone involved with it.  Thus if they follow their policy with customer A, and customer B, then people will see consistency with the organization and create a favourable image for the company.

andre man

May 19. 2009 07:03

Service Marketing Dairy 2

The marketing mix is the combination of marketing activities that an organization engages in so as to best meet the needs of its targeted market.Extended Marketing Mix (EMM) consists of four traditional Ps which are product, price, place, promotion and three extra 'service mix' Ps, which are Provision of customer service, processes, physical evidence.  

Customer values are defined as the 'bundle of benefits' delivered to the customers.The benefit needs to change instantaneously as the customer's need changes.

- The traditional four Ps are controllable variables and they are linked and supposed to support each other. Manufacturers should carefully make product desicions such as the brand, quality and features. These will give customer more options and more willing to purchase the products.
- Manufactures should use pricing strategies such as penetration, skimming, competition, product line, bundle, psychological. These strategies make their products generate the maximum income.
- Manufacturers should concern promotional mix such as advertising, public relations, direct marketing and internet/e-commerce. The goal is to target the customers and communicate with them.
- Manufactures should choose places and make multiple products outlets available to the customer to enhance the sales.
- Customer service lies at the heart of modern service industries. It shows how the company cares about the customer and makes a fairly significant expression.
- Processes for handling customer complaints, processes for identifying customer needs and
requirements, processes for handling order etc are just important as part of or an addition to the customer service.
- Physical evidence should be consistent through the customer's entire experience. It is especially important when the customer is purchasing an intangible service.

In closing, the EMM plays a big role in adding on customer's value. The 7Ps affect the customer's value in different aspects and reflect the fact that marketing strategies are extremely important in nowadays purchasing activities.

Liu Yang

May 19. 2009 07:11

MKT 3240 – Pricing Strategy

Pricing is set for a more enduring consumer value by:

- Segmenting your products by use of “fences.” Fences allow different product variations and the customer gets what he/she pays for. In other words, there are different benefits for different consumers. For example, how Microsoft sells different variations of their products at different prices for “home use,” or “business use,” etc.
- Segmenting your price through “metrics.” In this case, it is the prices that vary from consumer to consumer. Metrics looks to capture different value differences. For example, instead of charging for an engine, you can charge the consumer for how long he/she uses the engine.
- Being able to recognize consumers’ motivations that drive their willingness-to-pay. You must be able to communicate the value of your product. You must be able to communicate the economic and psychological benefits in order to validate why your price is what it is.
- Additional items such as after-purchase guarantees and post-purchase service can go a long way in enduring consumer value. Peace of mind is very valuable to the consumer. If one product is cheaper yet you offer these additional items, consumers may still choose your product.
- The rules and regulations in which you set your price play a big part in enduring consumer value. Policy-driven pricing provides many benefits that include consistency across your customer base, value recognition, increased perceptions of price integrity, and a more efficient selling process that saves times and resources. A good policy goes a long in way in consumer value.

Jeremy Jay Espiritu

May 19. 2009 08:09

MKT 3340 Service marketing Diary #2
•  Customer mix means the array of people of different ages, genders, socioeconomic backgrounds, knowledge or experience, ethnicity, and so on who patronize a service organization.
•  Traditional customer management includes segment, targeting, profile and educate. Segment means what kind of customers will come. Targeting includes what kind of customers the businesses want to serve. Profile requires business know what kind of customers they are having. Educate customers is important because it can benefit both customers and the business. Modern customer mix management includes Co-opt which means to co-produce between the business and the customers. Reward is allowing customers get discount and create desires.
•  To have better customer services, the ideal customer-employee interactions should be friendly. Unfriendly interactions can be highly disruptive and too friendly interaction can delay the services.
•  When we select the customer mix, we have to check customer compatibility which means select appropriate customer mix in order to gain enough customer diversity and then satisfy customer relationships.
•  Business should pay close attention to have the appropriate customer mix because it can help the businesses enhance their level of customer services. It is an extended marketing mix stage that in the long-run, ensuring customer value. Business fail to select the appropriate customer mix will lose the business and discourage customers to receive the service.

Beiyun Geng

May 19. 2009 15:00

Service Marketing Dairy 2

The marketing mix is the combination of marketing activities that an organization engages in so as to best meet the needs of its targeted market. Extended Marketing Mix (EMM) consists of four traditional Ps which are product, price, place, promotion and three extra 'service mix' Ps, which are Provision of customer service, processes, physical evidence.  

Customer values are defined as the 'bundle of benefits' delivered to the customers. The benefit needs to change instantaneously as the customer's need changes.

- The traditional four Ps are controllable variables and they are linked and supposed to support each other. Manufacturers should carefully make product decisions such as the brand, quality and features. These will give customer more options and more willing to purchase the products.
- Manufactures should use pricing strategies such as penetration, skimming, competition, product line, bundle, psychological. These strategies make their products generate the maximum income.
- Manufacturers should concern promotional mix such as advertising, public relations, direct marketing and internet/e-commerce. The goal is to target the customers and communicate with them.
- Manufactures should choose places and make multiple products outlets available to the customer to enhance the sales.
- Customer service lies at the heart of modern service industries. It shows how the company cares about the customer and makes a fairly significant expression.
- Processes for handling customer complaints, processes for identifying customer needs and
requirements, processes for handling order etc are just important as part of or an addition to the customer service.
- Physical evidence should be consistent through the customer's entire experience. It is especially important when the customer is purchasing an intangible service.

In closing, the EMM plays a big role in adding on customer's value. The 7Ps affect the customer's value in different aspects and reflect the fact that marketing strategies are extremely important in nowadays purchasing activities.

Liu Yang

May 19. 2009 16:42

Course Progress Diary #2

•  Customers do not know the true value delivered by the products they purchase unless the seller informs them. Thus, communicating value is integral in informing customers of all the value they receive, and explaining the extra price being charged. Communicating the price is also important to raise the customer`s willingness to pay. The same price, paid in return for the same value, can create different effect depending on how it is presented and perceived.

•  Value communication works when the product or services creates value that is important to customers. This is only effective when customers see the price as economically important for getting the most out of their money.

•  When setting a price, a company should recognize the different motivations that drive the willingness of a customer to pay. These factors include the size of expenditure, shared costs, switching costs, perceived risk, importance of the end-benefits, and price-quality perceptions.

•  Four strategies to communicate value:
1. Economic Value Communication
2. Economic Value Assurance
3. Psychological End-Benefit Framing
4. Psychological End-Benefit Assurance

•  Segmenting prices through methods such as fencing and value-based pricing metrics, as well as understanding and keeping with their pricing policy, allows for long-lasting customer value. Fencing allows for different product variations to be priced differently; it offers different benefits to customers who value different products and services. Whereas in metrics, prices vary from customer to customer; depending on the usage of the product or service.

Daisy Munoz

May 19. 2009 20:12

Marketing 3340      diary #2
•  Services marketing mix includes product, price, promotion and placement. That can let customers to value services. Value is an assessment of the benefits of a service versus the costs associated with it. Customers always value their services from cost and benefit analysis, they want benefit exceed the cost they pay.
•  This also means participants that involve customers and workers in service production, for example, providers can let customers’ self-services. They always influence each other.
•  Physical evidence is the service environment and other tangible aspects of the service that facilitate or communicate the nature of the service; they can carry out the services and let customers evaluate this service from the tangible environment.
•   Process of service assembly is procedures and kinds of activities to deliver the services. During these process providers can use promotion strategies to let customers aware their services, such as vivify, this can ask people understand what the services want, finally they can use the service very well in marketing environment.
•  In fact, we know marketing use different strategies in order that customers use their services and know their products. Pricing strategies is also an important part when providers want to attract the customers, for example, providers can give customers discount or gifts.

Yingni Wang

May 19. 2009 20:13

"extended marketing mix" stage a more enduring consumer value to customers.
1) the marketing mix provides more economic value into the service than their expectation. the productizing service makes the service different than others clearly. Also, the customers can value the quality of service from different aspects such as the physical settings.Those tangible settings can make customers to have impression that can stay in the future. 2) the extended marketing mix makes the customers have confortable feeling and confident value into their decion making. when the customers purchase a service which is intangible and hard to evaluate its value, the extended marketing mix makes customers feel more confortable with the purchased service. From price and people in services, the consumers can consider whether the quality match the price. 3)the extended marketing mix stages conntection between the service providers and consumers, which is social value. From purchasing service, the consuemrs can feel how the service providers want to create connection between them, how they want to invove consumers into the service. This social value can be continuted in the future even the consumers do not using their service.(4) the extended marketing mix stages extended satisfatied value with the servie providers, not only on the service itself. this can build higher loyalty.(5) the marketing mix provides experience value to consumers that the consumers can evaluate and memorize in the future, which other industries are hard to create such  endured consumer value, compared with service.

Qian Huan Huo

May 19. 2009 20:42

Marketing mix is the marketing activities that an organization tends to meet the needs of its diversity target market. The traditional marketing mix model, which includes price, product, place, and promotion, was primarily directed and useful for tangible products. Currently, it has added the following 4 additional Ps to the original marketing mix, which is physical setting, people in service, productivity, quality and guarantee, and process of balancing demand/ supply. Therefore, the marketing mix provides are more valuable for services.
  It lets the organization produce different high quality products to meet the needs of different ages, genders, socioeconomic backgrounds, and knowledge or experience groups.
  Its physical setting where the service is delivered becomes very important for the marketing services, which also helps to communicate and perform the services. For example, the students went to school not only expected the teaching quality of the professors, but also be concern about the class environment.
  People in service are also to be considered importantly that the marketing people have to be accounted and considered during the marketing process. All people including employees, consumers and other customers around the service environment are directly and indirectly involved in the consumption of services. It will also how the customers evaluate the quality of the service.
  The process of the employees delivering the service also help an organization added more value to the service and product. It can help identify the needs and wants of the customers and try to meet their needs.
   Moreover, people are not only concern the quality and the process of the service, but also the guarantee and promise of post-purchase. Therefore, marketing mix added the value to satisfy customers’ need.

qian yan huo

May 19. 2009 20:52

Diary two
•  Marketing mix is different from the traditional industry and service industry. Service marketing mix includes extra four Ps: participants, physical evidence, process of service and productivity besides traditional four Ps. Extending marketing mix make customers buy and stay with  organization
•  Customers who have different ages, genders, socioeconomic backgrounds, knowledge or experience, ethnicity are in one organization. Therefore, organizations should recognize the mix and have some strategies to satisfy different customers’ want. That enduring the customer value.
•  Value is an assessment of the benefits of a service versus the costs associated with it. Customers and employees are involved in the service production. They should have ideal interaction in the service market.
•  The service environment and other tangible aspects of the service that facilitate or communicate the nature of the service should be focused. Extending marketing mix, the customers are different. Organizations focus what customers like and what they are different to attract different customers to increase customer value.
•  Extended marketing mix can make customers can compare products easily and save their time. And procedures and flow of activities that contribute to the delivery of the service is important part in the services marketing mix. the process makes customers comfortable to buy and use it.

Jing Ding

May 19. 2009 21:05

Pricing Strategy:
-Pricing is the amount of money charged for selling a product.  it is an exchange consideration, usually in monetary terms.
-Challenges of service pricing include; no ownership, high ratio of fixed to variable costs, variability of inputs and outputs, many services hard for customers to evaluate, importance of time factor, and use of physical or electronic channels.
-There are 3 different pricing approaches; cost-based, customer-based, and competition-based.
-Some alternative pricing orientations include; revenue oriented, operations oriented, patronage oriented, pricing strategies to reduce uncertainty, and relationship pricing.
-Price bundling is used reduce the cost of production.  Although, one bad experience with one section of a bundle, could change the customers perception towards the whole bundle.

Sony Mankoo

May 19. 2009 21:20

Pricing Strategy Diary #2

- With the use of Fences and Metrics you can segment the value of your product to specific customers. This shows the customer that the price is set to meet the desired value from the product to the customer. Fences allow you to price your products according to a number of different factors, such as quantity purchased, and the place of purchase.
-Your price has to reflect your brand image and place in the market. If your a premium brand customers see this and are willing to pay a premium price. It is important to understand how your customers view your brand and the price of your products, willingness to pay must match value of the product.
- Bundling products at a reduced price can entice new customers and solidify existing ones buy meeting two demands at once. Use techniques such as bundling and quantity discounts shows appreciation to the customers business and ads value and fairness in the customers minds.
- Setting the price of a product is a very small portion of the real work required. Creating and communicating value to back up the set price is a very important aspect of a solid product launch.
- Setting different products at different prices customizes different segments experience with products. Knowing these segments and their willingness to pay is crucial. Meeting demand with a valuable product is better then aiming for profit or market share.

Sean Gutheil

May 19. 2009 21:38

Diary #2

•  It allows services to be recognized as being unique from goods by incorporating their differences into the marketing of a service
•  The additional P’s take into consideration the specific differences of services such as their physical setting, productizing the service, productivity, quality and guarantee, and process of balancing supply and demand.
•  By marketing using the additional four p’s it allows for the consumer to better understand a particular service and it also makes the service more tangible as well as less of a threat.
•  The additional four p’s also diminish the ambiguity of services and deals with the challenges that services face (intangibility, perishability, heterogeneity, inseparability)

Jeannie Arnold

May 19. 2009 22:24

Diary #2

- Marketing Goal is defined as, attracting new customers by promising superior value and growing and keeping current customers by delivering customer value. The traditional vehicles of customer value are; product, price, place and promotion. However, there are a extended marketing mix (EMM) that provide better customer value.

-People: This is all the people who are involved in services such as customers, employees and management. They play a vital role in customer value because knowledge of workers and customers add value to the service being provided.

-Physical setting: The environment in which the service is being delivered is important because it helps communicate and perform the service better. This adds value to the service. This can also be referred to as the experience of using a service.

-Process: This is the method and process of providing a service. This adds value because it is important to know whether or not the services being provided are helpful to customers or not.

-Productivity, Quality, and Guarantee: This is very important because services are variable. Service quality is how well the service meets or exceeds expectations, and guarantee is a promise to compensate customers if the service delivery fails to meet established standards.

Therefore, it is evident that the original 4 vehicles are important in providing customer value, however, altogether the 8 Ps are vital in customer value. Also, every business needs to have the appropriate customer mix because this can make or break your business.

Surinder Sarpal

May 20. 2009 00:03

Services Marketing Course Progress Diary: Week 2

•  The eight Ps of the extended services marketing mix are as follows: Productizing service, Physical setting, People in services, Pricing in services, Promotion, Placement, Productivity, Quality and Guarantee, and Process of Balancing Demand/ Supply.  All of which lead to more enduring customer value.

•  The first P Productizing service is the most important aspect of services marketing.  This is due to the challenge of intangibility of the service offering.  The marketer has the difficult task of tangibilizing or vivifying the service, so that the customer is able to differentiate the service from other market offerings and is able to evaluate product quality.

•  Physical setting also adds enduring customer value, as it represents another method in which the service offering becomes more tangible.

•  People in services also adds value as they provide tangibility, service quality cues, and Friendly customer interaction enhancing the evaluation of the service.

•  Pricing in services adds value when the customer value pricing approach to services is used.  This pricing method prices the service according to the value customers gain from purchasing the service.

•  Promotion and Placement are the means and channels through which consumer value is communicated to the customer.  Value is enduring when an integrated marketing communications approach is used.

•  Finally, Productivity, Quality, Guarantee and Process of Balancing Demand/Supply are the Ps in the marketing mix that deliver the service itself.  Value is created when the service experience meets expectations.

Gillian Dow

May 20. 2009 01:25

Pricing Strategy
- I learnt two new ways of segmenting markets, using fences or metrics. Under fence segmenting a customer gets what they pay for. An example would be how microsoft sell different versions of their microsoft office program
- Metrics would be changing how you price ffor different customers. for example in the sale of an engine you could charge for hours used instead of a flat fee for the engine.
-I also learnt about the different strategies of value communication for the different properties of goods. The four strategies are Economic Value Communication and Eonomic Value Assurance for economic benfits and Psychological end benefit framing and psychological en benefit assurance for psychological benefits. The use of the different strategies depends on whether theya are high or low search goods.
- A useful financial analysis involves accurate identification of true costs and determining profitability amongst changes in sales. True costs are all relevent costs ie not sunk costs

Darren Thomas

May 20. 2009 01:52

Diary # 2
The extended marketing mix helps a service provider deliver greater value to the customer in the following ways:

Productizing the Service consists of determining the primary benefit of the service for the customer.  Service providers can create better value by attaching additional features that enhance the main offering and allow for a higher quality service. Customization helps a firm better understand needs and offer a service that is more customer focused.

Physical Setting creates tangibility and allows the company to communicate its image and values. Designing an attractive and functional servicescape will create an approach environment.

People in Services: Employees and customers are indispensable assets to the service industry. Effectively hiring, training and managing employees will ensure that company standards are met and will allow for service excellence. Understanding, training and managing the customer mix will help create a better service experience not only for the customer but also for the employee.

Pricing in Services: A firm must choose a pricing approach that is appropriate for its industry and that fits with the business strategy. Additional pricing options, like guarantees, can make the service more attractive and also satisfy other customer needs. In the case of Dominoes’ “30 minutes or the pizza is free” guarantee, it satisfies the need to be fed in a timely manner and not have to wait.

Promotion raises brand awareness and helps tangibilize the service, creating customer interest that will ultimately lead to the purchase of the service.

Service Productivity, Quality & Guarantee: Quality and productivity in services can be very variable. Measuring them allows a company to asses its service and helps determine how they can be improved and managed in order to create the most value. Service guarantees are a great way to bring about consistency.

Pablo Schor

May 20. 2009 03:11

Dariy #2
1. I learned how to price the market and market promotion.
2. For service productivity, Quality & Guarantee, I learned it from the presentation.
3. The relationship of customers and employees.
4. Physical setting for service.
5. Productizing service is the primay benefit for service customers.

Jiaoheng Liu

May 20. 2009 03:24

Diary #2- MKT 3340
- I find it interesting to look closely at all the different elements of the service setting that are part of the customer's service experience, even though they may not realize it. Everything from the architecture, aromas, employee appearances, and many other components have a profound effect on how the customer views the actual service that they are purchasing. Even though the service itself may be flawless, it can be overshadowed by the items outlined above. Service organizations must then pay careful attention to making the environment comfortable and enjoyable for the customer in order to create a positive service experience and encourage customers to return.

- I also thought that the section involving FMS cycles was a good illustration of how employee training and empowerment can affect the customer's service experience.  For example, if the service employees are poorly trained, they are less able to accommodate customer requests which may differ from the typical service offering. The employee inflexibility can lead to customer satisfaction. As well, because of poor training and narrow job design, employee dissatisfaction, boredom, and absenteeism is greater. This can further contribute to customer dissatisfaction for some services, because there is no opportunity to develop a relationship with constantly changing personnel. Also, with high staff turnover, loyalty of repeat customers may not be recognized or rewarded, resulting in a high customer turnover rate. Conversely, if service employees are trained in various areas and given the power to "think outside of the box" when making decisions, the result is a higher quality of service. Also experienced will be greater lower employee turnover, and customer loyalty (and therefore, higher profits).

Marieke Breakey

May 20. 2009 03:33

Service Marketing: Diary #2

Alright, so the extended marketing mix…

-We can’t forget about the 4 P’s that started out the marketing mix: Price, Promotion, Place, and Product. These 4 P’s are some fundamentals for getting customers to purchase a product and/or service (but mostly worked best for tangible products).  So by adding another 4 P’s: Physical setting; People in Services; Productivity, Quality, and Guarantee; and Process of balancing demand/ supply it allows businesses to better target customers to purchase services.

-As a customer myself, physical setting has a huge impact on whether I will purchase a service. If I walk into a hotel and see that the lobby is dirty, I am not going to want to stay at that hotel.

-People: Employees are the faces of the service; employees are the ones telling customers about a service. Now if an employee is rude or emotional when talking to me (customer) I am going to feel uncomfortable and want to leave.

-Productivity, Quality, and Guarantee: This is important because services vary by so much. This is where a company can shine and customers will take notice. As a customer I am going to feel that much better if I see: “100% guarantee” – it’s assuring me that I can trust this company and that this company believes in the service they are offering.

-Process: make the service process as smooth as possible for the customer. If I want to apply for a car loan, I want the least amount of stress as possible.

Tiffany Monkman

May 20. 2009 05:39

The last week of class has greatly added to my pool of marketing knowledge.  We discussed creating the servicescape, dealing with service employees, handling the mix of customers utilizing services, setting the prices for services and how to promote services.  All the team presentations were interesting and some of them were even super funny!  I really appreciate all the laughter and joking that is encouraged in the class - it makes learning fun!

damara g

May 20. 2009 06:14

Diary #2 - Service Marketing

- in the extended marketing mix, service industries in higher class indsutries can create more customer value. For example the car manufacturer BMW:

- produces products that are of the highest quality and that fit for the needs of its different groups of consumers
- offers a wide range of cars at value for money prices, depending on the market segmented they are targeted at.
- sells the cars through appropriate outlets such as dealerships and showrooms in prime locations, i.e. in the right places, and
Supports the marketing of the products through appropriate promotional and advertising activity, again geared towards pre determined sections of the population.

Class is enjoyable even though it is coming to a close

Marius Scott

May 20. 2009 07:05

Marketing Service Dairy #2

Managing customer mix is important since marketer need to know what customer need since customers are in different ages, genders, socioeconomic backgrounds, knowledge or experience, ethnicity, and so on.
When customer and employee interact with each other,they can be described as friendly, unfriendly, and too friendly.
price is not only the amount of money charged for setting a product, it is also the sum of valuable resources that cusotmers exchange to buy a product, they pays money, time, efforts, and emotion. However, the recieve of the price is always less than paid.
There still appear challenges to price the service. It is sometimes hard to measure the service; the high ratio of fixed costs than variable costs; the time issue; hard to measure the inputs and outputs for customers.
Price bundling is also a way to enrich customer's needs, privode convinent to customers, and at the same time to reduce the total costs for marekters.

Shuxin Lu

May 20. 2009 07:11

Pricing Strategy Diary #2 – Policy driven pricing provides greater consistency across customer base, reduces costs associated with ad-hoc discounting, causes trade-offs and value recognition, increases perceptions of price integrity, creates a more efficient selling process. Its important for an organization to reward loyalty and trial and not just volume.

The factors affecting price sensitivity are;
-the reference price effect: comparing the price with one the customer is thinking it should be
-difficult comparison effect: hard to compare with other like products/services
-switching costs effect: difficult to switch products (brands) since costs to switch are so high
-price-quality effect: if the cost is low than the quality must be bad
-expenditure effect: the fact that you spent money on something that you may not need
-end-benefit effect: the joy at the end of the purchase does not outweigh the original cost
-fairness effect: the price is not an acceptable amount

Leanne Kisil

May 20. 2009 07:11

Diary#2

service pricing and promotion:
- 3 approaches (customer-based, cost-based and social-based)
- orientation
- from customers perspective
- pricing consideration
- service promotion is how to advertise the service
- raise awareness and attract more customers
- publicity: other people said about advertisement rather that you(producer) said
- service quality from producer's point(meet organization objective)and from customer's point.(meet their expectation)
- SERVQUAL is a scale of service quality measurement.
- Gap is something cause the service quality failure.

Lu Dai

May 20. 2009 09:11

So after another week I find myself really observing service settings both in prior workplaces and services I use now and marveling at how well they work. However the difference is that I'm aware of it now!

My first example is when it comes to the frontstage/backstage separation and my personal experience of working at a Moxie's MTS. This Moxie's had an open kitchen depending on where you sat and was complete with fire oven for cooking. So if you ordered a pizza and were sitting in the right place, you'd see it made! So when I look back to my time working there, I never thought of how it was a decision to bring the backstage to the forefront of the service experience. I now understand better though!

My other example comes to me again about service setting and the decor of a setting helping to set a mood. Its funny because I mentioned to my group first time we met,"I love how TD bank uses woodsy colours and green in alot places, its soothing....like a forest!" They all laughed at hearing me describe my bank as soothing but now I seriously understand its probably deliberate. I feel more comfortable at TD then I have at any CIBC or SCU branch I've dealt with.

Still really enjoying the class!!

Srephen Needham

May 20. 2009 09:24

Extended Marketing Mix and Enduring Customer Value.

People in Services

Enduring consumer value cannot be had without the cooperation of the people within the service interaction.  With services being as variable as anything purchased today, the steady hand of a trained service provider dedicated to enduring consumer value can be the difference every time.  Throughout every stage of many services the provider will be the link between customer and product, and the way those two entities are linked is often what decides the difference between a pleasurable and a forgettable experience.    

Productivity, Quality and Guarantee

What says enduring more than quality and guarantee.  Productivity represents the actual in service experience while quality and guarantee are the long lasting effects of a good service.  Protecting customers through warranties and ensuring quality meets expectations will create re-peat, pleased customers.  

Physical Setting

Many services provided rely on the physical setting to communicate and deliver their service experience.  Disney World and other theatre type services leave their lasting mark with their physical setting and rely on that setting as a lasting marketing medium.  The enduring value again comes with meeting and exceeding customer expectations.

Pricing in Services

Many types of services offered are a more transparent type of cost than product based businesses.  Time and labour costs usually translate quickly into dollars for more consumers so instilling value within the service (and therefore price) becomes the challenge for marketers.

Process of Balancing Supply and Demand

One must have the means to supply a service if they are to sell it in the first place.  Arguably the first step in any service industry is ensuring that the customer demand a company works to create can be met by the needed service supply.  Marketers must work to ensure lasting consumer value by creating marketing efforts that appeal to both the supply and demand sectors of their industry.    

Kevin MacNeil

Kevin MacNeil

May 20. 2009 19:12

It is interesting to see all of the factors involved in creating a positive service experience for customers. The fact that the lighting, colour, decor, cleanliness, music, employees and location all contribute to the entire experience for a customer means that there are many different elements service marketers need to constantly be aware of.

The backstage employees are often related more to the tangible parts of the service. Where as the frontstage employees work closely with customers and it is crucial that they encompass strong interpersonal skills, positive attitudes, and enjoy interacting with customers in order to create a positive environment to customers.

It is more important for customers to have friendly interactions with other customers and employees to enhance the experience and to increase repeat business. However, too-friendly employees or customers can lead to annoyance behaviours of other customers.

Productivity, Quality and Guarantee are part of the marketing mix. Where productivity is the actual service experience (during) and quality is measured during and after the actual service. Customers will often compare with other like services and it is important that the company provides good quality at all times. Consitency is the key to quality. Guarantee allows the customer to feel at ease that service/product will be what they expect if not more, otherwise they will be reimbursed for the money spent. However, time and effort can not be reimbursed to the customer.

Leanne Kisil

May 20. 2009 19:31

The extended marketing mix consists of physical setting, people in services, productivity, quality and guarantee, and process of balancing demand and supply. The physical setting that a service is provided in contributes to consumer value of the service because it adds another degree of quality to the service if the setting it takes place in is visually appealing and stimulating. The people in services also contribute to the value consumers see in services because ultimately if the service isn’t delivered by knowledgeable, courteous people, the service will lose its value. But if it’s delivered by exceptional staff, the service will have more value to the consumer and the consumer will be more likely to use the service again. Productivity in services is also essential to the value consumers see in the service because the service must be delivered in a timely, productive manner in order for the consumer to be satisfied. Also productivity is key because it leads to a more profitable company while generating and retaining more customers. The last element is the process of balancing demand and supply which is crucial to a service organization being successful because there always has to be enough supply of the service to meet the demand whether it be during slow or peak periods.

Tavita Sawh

May 20. 2009 22:05

Rater(reliability, assurance, tangibles, empthy and responsiveness)
that agood meausre of consuner preception of service quiality that gives some knowledge, confidents for consumer and employee and its also can add some tangible facilities.\

Yuliana Evseev

May 20. 2009 22:39

* The traditional marketing mix includes only 4Ps, product, price, promotion and place. However, because services are essentially intangible the marketing mix is extended to include an additional four 4Ps, physical setting, people in services, productivity, and process of balancing supply/demand.
* Physical setting is the physical location where a service is sold or provided, for example the brick and mortar store of Safeway. Having a physical setting allows marketers to add tangibility to there services. Marketers use this physical setting to create servicespace or service setting which is the ambiance consumers associate with the service.
* People in services are the employees. Having people also creates tangibility to a service. Many service providers have an automated message system to service clients, however have a person makes it much more reliable and allows for empathy.  
* Productivity, quality, and guarantee increase the consistency of quality in services. Because services are essentially intangible marketers need to reduce the variability of there services from one consumer to the next; service guarantees are a great way for companies to reduce this variability.
* Process of balancing supply and demand, because services are dependent on so many external variables, mainly perishability of their service, they need to closely monitor their supply and demand. Many companies do this through offering discounts during low season, and through various pricing strategies.

Gabriela Rosales

May 21. 2009 08:40

Diary #2

This past week has been quite insightful with learning about pricing techniques of services, marketing, and how important the quality of the service actually is.

The extended marketing mix for services provides more enduring consumer value because these additional frameworks are most key for the service experience.
For the participants aspect, this provides a more enduring consumer value as it is the participants experiencing the service first hand and their general satisfaction with the service ultimately determines its long run success, or even existance. Also, when the exact consumer profile is known, a service experience can be more tailored to the requirements of that particular consumer.
For the process aspect, the actual steps involved in the service are evaluated and determined if they are valuable or not. Unsuccessful, or questionable, steps in the process can be altered to provide consumers with the most value for their money and help secure repeat business.
For the physical setting aspect, the atmosphere of where the service is performed is important to make the consumer feel comfortable and that they are receiving a quality service. Again, this helps the consumer feel they receiving good value in the particular service setting.

Shannon Hill

May 21. 2009 19:59

I found this course to be very detailed in terms of service marketing.  WE have covered all 8 P's in depth which I think is very valuable as a marketer.  It is common to only focus on the 4 P's but having 8 P's will alow for better customer interactions and service.  

Lately we looked a garantees, quality, productivity, etc.  As a customer I think guarantees are a good thing cause it makes me feel special and that my interests in the service are in good hands and I will be treated properly.   Assuring someone of a guaranteed service gives them confidence.  On the employer side I think this will enhance their reputation as an outstanding employer but it could be costly to have such a system of guaranteed promises.  Training the employees will be more costly, having the company eat the costs of failed services is costly, and trying to do things efficienly and quickly could be costly as talented personnel will be needed and mistakes are more likely to happen.  

Overall the comcept of service marketing has become clear and useful in future marketing situations.  In addition I will take with me the concept that the professor has on tipping a server.  I find it unfortunate to the server but I understand the concept of why it is unnecessary.  After this course I will remember this discussion and tell others of this theory.

I look forward to the last week of classes and to see how this course will be summed up.

Autumn Lamirande

May 23. 2009 03:09

The 8Ps are the modern vehicles of service value and they consist of
-Productizing service; Pricing in services; Placement; Promotion; Physical Setting; People in services; Productivity, Quality and Guarantee; Process of Balancing Demand & Supply
-It started off with the first four Ps and the extended marketing mix includes all of the above. The physical setting of a service is called the servicescape and can include social, virtual, and natural settings. A very important concept is that of ambience and how this can influence buyer behaviour and employee behaviour. Two strategies for creating a physical setting are either to create an approach environment where the customer feels comfortable and wants to spend time or an avoidance environment which the customer finds undesirable and uninviting. Both of these are considered strategies because in one service setting you may want the customer to stay awhile, while in other service setting you may just want to get them out faster. People in services refer to both the customers and the employees. We learned about the difference between front-stage and backstage employees and how both of these bring value to a service. We learned about the key skills required of service employees which are moral, organizing, social, and technical skills. Something I found quite valuable was the service worker profile and how this can help identify the type of employees you have and whether they need training or motivation.
-Next is the Productivity, Quality and Guarantee vehicle which has to do with identifying and following standards for the quality of service you’re providing in order to deliver a better service to the customer. We learned about SERVQUAL which is a scale designed to measure customer perceptions of service quality along five parameters, better known as RATER or Reliability, Assurance, Tangibles, Empathy, and Responsiveness. We also learned about service guarantees, which are when the consequence is already known to the customer, and a clear promise is given and is backed by compensation for the customer. Lastly, the process of balancing demand and supply refers to managing the mismatch of when supply is either too high or too low for the demand. The best example to explain this would be with a hotel where during peak times the demand is high and supply is low therefore the price of a room could go up. Whereas in times of low demand, the supply is too high and management would rather get some money by charging less for a room rather than loose that revenue forever.

Anisha Talwar

May 23. 2009 20:03

Service Marketing Dairy 3

The course almost finish, I really enjoy it, the pro is nice, all classmates are nice too. In this course, I study a lot about the service marketing, I understand what are the factors that can influence the services, what can I do better to improve the servics. It helps in real life situation too.

Tingting Li

May 24. 2009 17:47

Diary #3
In the last part of the course, we learn about service quality and how guarantee is different from warranty. Service Quality from the customer point of view can be seen as how well the service meets or exceeds the expectations. (It’s difficult to evaluate than goods quality). Company should also try and evaluate the 7 gap diagram and see where their failing points in order to improve their service quality.

Yuliana Evseev

May 25. 2009 04:04

Diary #3

Over the past month i have learned some valuable information about the way in which to market services as opposed to marketing goods.  It is interesting to look at the similarities and differences and how many other factors come into play because of services differing nature to goods.  

•  Services differ from goods in four main ways; they are intangible, perishable, heterogeneous, and inseparable from the service provider.

•  Services are intangible because they are hard to physically touch and/or see.  Goods however, can be held and observed by the individual directly and in this way can be assessed much easier.  With services, it depends a lot on other individual’s experiences and reactions about a service.

•  Services are perishable because they need some sort of human interaction so they cannot be stored for later use. Since goods are tangible, they are more easily stored and can be used later when demand increases or when needed.

•  Services are heterogeneous because they involve interactions and so may vary on a number of factors.  It may be a result of the service provider or the customer on which the service is being performed.  It may also be a result of other external factors that affect how the service is performed.

•  Services are inseparable from the service provider also because of the interaction that takes place.  Since services involved human interaction much more than goods do, it makes the service inseparable from the provider.  Also because services are intangible, the service provider acts as a sort of tangible aspect on which the service may be judged.

Jeannie Arnold

May 25. 2009 04:33

-Creating customer value is an important aspect of any pricing strategy. To achieve a longterm relationship with customers they have to perceive a level of fairness with the price you charge and what they are getting out of your product.
-Metrics and fences allow a company to communicate value for their product to different market segments this can broaden a companies overall customer base.
-Metrics and fences can also be used as a starting point for building a longterm customer relationship. Eg. a student sees that a cell phone provider offers a student discount. When the student graduates they may consider staying with that company because of the relationship that was built while they were still in school.
-having a consistent pricing policy also allows for more enduring customer value because customers come to expect certain prices if they stay with a company over a period of time and if prices change and the customers do not know or understand why they may wish to stop their relationship with your company. eg. they may no longer think of your prices as fair if they are constantly changing.
-Quantity discounts and other aspects of a companies pricing policy can also held create enduring value because consumers that shop at your store frequently feel that you value them as a customer and are offering them a discount based on this. It shows that your company values its customers and ensures that longterm relationships are continued and strengthened.

Jonathan Sandberg

May 25. 2009 05:25

While the class is ending next week, I have learned and had fun, great prof., great people, lots of fun. This week we had a discussion on how to gain profit in a price completion. This really is a meaningful exercise. In sport contest, eliminating competitors is the only method to achieve success. But it should never be the same when it comes to price competition. Let’s say there are indeed only 2 players in a price competition. A price war means either your business is going done, or your competitor is going done. Assume for the best, your business is strong enough survived and there is nobody in the industry to compete with you. You will dominate the market for a while for sure, but the ignorance will prevent you from achieving a bigger success and from knowing the upcoming hazardous. One day when the market for the industry is shrinking, your business will start disappearing. Globalization often speeds up this process. If you price your product too high, other businesses start innovating substitutes. If a new challenge occurs, such as new trend of doing business, you will be the only one who is facing the challenge, nobody there is going to set an example for you. On one hand, competitors steal your business, steal your customers, and steal your market share. On the other hand, competitors remind you to grow stronger, faster, help you enlarge the industry and provide you illustrations of facing challenges. So, having a integrated competitor in business environment is as good as having a good friend in real life.

JUEXI ZHU

May 25. 2009 05:33

COURSE DIARY #3
-  Service marketing differs from goods marketing in many aspects, the first one is Intangibility which basically says service is not physical, it can’t be smell or touch. The second one is Inseparability meaning service can’t be separated from the provider, the third one is variability meaning unlike goods, service quality is harder to be standardize it depends on who provides it, when, and where, the last one is perishability, service can’t be stored like a bottle of water, once its gone, its gone, therefore marketer has to be able to stabilize supply and demand.
-  Service is intangible on the other corner, goods is tangible. However tangibility has levels of being tangible or intangible. For example advertising agency, it consists of service to post ads, but also have tangible aspect embedded in it.
-  During the week we also learned about improving service quality. Unlike goods, service is harder to be evaluated because it’s intangible. We have SERVQUAL which is the scale designed to measure costumer perception of service quality, it consists of five aspects (RATER)Reliability, Assurance, Tangible, Empathy, Responsiveness. Each one of the is essential to be met in order to satisfy costumer.
-  Unlike goods market, service market needs to focus on costumer feeling and anxiety therefore in service marketing costumer service has became a competitive advantage to other competitors. There are two aspects in costumer service the first one is “Facilitating” function it consist of order-taking, information, payment, and billing. This function is considered core of costumer service, the second function is “Enhancing” which consists of consultation, hospitality, safekeeping exceptions. This function is functioning as the peripheral of core.
-  The challenges between goods and service are also different. In service we have six thing to worry about, first service performance, service demand to make sure demand equal supply, employee training and motivating is crucial in service business, the setting which is the tangible part of service is the representation of the organization, meeting costumer needs is crucial because in service costumer needs and wants are very sensitive, and the last one is service quality there are various technique available to measure and improve quality of service.

Ghana Galindra

May 25. 2009 18:40

Mkt 3340                                                     diary #3
   Services are different goods. There are some points that can demonstrate it.
•  Services are intangible. You can not touch services but you can feel the goods. For example, education is intangible, you can not touch that, it is a service; however, books you use that are tangible and also those are goods.
•  Services are inseparability, services can not be separated from their providers, and also we can say that services attached to the physical goods. For example, about hotels, you can not say services that no body gives you services.
•  Services are perishable; services can not be stored for later sale or use. But the goods can store warehouse for waiting for use. Goods can be stored for any longer time. For example, restaurant provides the dishes, this kind of service is a perishable action, but the dishes can be providing to another guest for a later.
•  Services are variability. Quality of services depend on who provides them and when, where, and how. For example, service can change according to environment change, customers guarantee is a service.
•  In a word, there are different points between services and goods. However, they have the close relationship between each other.

yingni Wang

May 25. 2009 19:06

Diary three
•  Services and goods are different in the industry. Service is intangible. We could not touch the service or put the service on a shelf.  But goods can be touched and put anywhere you want. In addition, we cannot see service. However, we can see the products. Such as teaching and a chair you buy.
•  Service is perishable. It cannot be produced or stored before consumption. However, goods can be produced and stored before customers buy them. For example, you order meals in the restaurant. An employee is serving you.
•  Service is variability or heterogeneity. So, services are hard to standardize.  Goods can be produced the same. However, even to the same customer, services are different according to situations.  
•  Service is inseparable that means services cannot separated from providers.  If service is exist, it should be attached to providers.
•  Service market is more complicated than goods market. Therefore, challenges are more difficult in service marketing. Service marketing should have high service quality and satisfy customers’ needs.

JING DING

May 25. 2009 19:21

Pricing Strategy: Diary #3
The lectures of last week were focusing on how companies gain profit in competitive games. There are 3 types of competitive games, such as postitive-sum, zero-sum, and negative-sum.Usually competitors in postitive-sum games are competing for benefits and funds; they learn ways of how to reduce cost from other competitors, try to increase their market share, and all of them are adding value to the society. In zero-sum games, competitors can neither loss nor gain. No matter companies increase prices or decrease the price, their market shares are not going to change. The typical example of negative-sum game is price war.
In order to win in competitive games, there are many ways that companies could adopt, such as price differentiation, and product differentiation. However, I think that price war should always be the last option for companies. Because once a price war is strated, there is no winner, only losers, and the whole industry would be hurt too.    

Tingting Sun

May 25. 2009 19:35

diary #3: difference between service and goods
Service does differ from goods.
1. service is intangible but goods are tangible. e.g. Airline company provides service which we cannot touch it; when buying a skirt, we can actually touch and see how does it looks like.
2. service is inseparability which cannot seperate the service and the service provider, but goods can be seperated with the producers. e.g. Airline company cannot provider service to customers without the company and its employees who appear in front of customers. Howerver, the clothes company does not have to stand in front of customers when the customers are purchasing and wearing the skirts.
3. service is variable which quality depends on service providers and the servicing situations, but the quality of goods can be constant and those factors do not affect how customers evaluate goods and the company. e.g. If some employees do not show smiles and not respond to customers on the airline and some employees do show nice, customers can have either negative or positive evaluation to the service of that airline company. For the clothes company, the clothes designers do not have to show nice because they do not interact with customers.
4. service is perishability which cannot be stored in later use, but goods can be stored for future demand. e.g. Air Canada cannot store the service. They can only provide service at the particular time. For clothes company, it can produce more skirts which were sold well last month, and store it in case of high demand.
5.service is hard to price but goods are much more easy, because goods can much easier to be found fundamental cost than service. e.g. For tour companies, the experience is the most important factor. it is hard for the company to decide how the experience worth. But for Sony company, it can decide its TVs based on the cost.

Qian Huan Huo

May 25. 2009 19:45

When devising a pricing strategy, creating customer value
is something every organization needs to do successfully.  
Furthermore, a company needs to create long lasting
relations with customers.  In order to do this the
customers need to think that the prices charged are fair
for what they get.  A company needs to communicate the
value of their products.  They use metrics and fences to  
convey value.  Sometimes different prices may be charged for the same
product even though 2 customers are buying the same thing.
Another segment of a successful pricing strategy is when a
company follows a consistent pricing policy.  A consistent
pricing policy allows customers to create some expectations
towards the company.  The customers will get accustomed to
paying a certain level over time, and if the prices were to
change unexpectedly, they may change their opinions on the
perceived fairness and value they are getting, and in a
worse case scenario take their business somewhere else.

andre man

May 25. 2009 20:39

SERVICES MARKETING – Diary #2

The marketing mix is the combination of marketing activities that a business engages in to meet the needs of its target market. Traditionally, the mix includes 4Ps: Product; Price; Place; and Promotion. The extended marketing mix includes the traditional 4Ps with 4 additional Ps, these are: Physical Setting; People; Productivity, Quality and Guarantee; and the Process of balancing demand/supply.

Physical Setting: This is also known as servicescape and includes all the elements of the environment that the service is provided in, such as its exterior (e.g. exterior design, surrounding environment) and interior (e.g. interior design & decor, equipment, and ambiance). This also includes other tangibles (e.g. business cards, reports, uniforms, web pages and virtual servicescape).

People: This is all the people that are directly or indirectly involved in the consumption of a service, as they add significant value to the total product/service. Consumers make judgments of the service based on the employees they interact (e.g. Hostess/waiters) with and those who contribute to the service delivery (e.g. Cooks).

Productivity, Quality, and Guarantee: Productivity is how inputs are transformed into outputs that are valued by customers, whereas quality refers to the degree to which a service satisfies customers by meeting their needs, wants, and expectations. Guarantee is a promise to compensate customers if service delivery fails to meet standards established. This is important as services are variable and applying this to the service industry will help reduce the variability, gain competitive advantage, customer loyalty, and thus create more customer value.

Process: this is the procedure and flow of activities required to deliver the service (e.g. processes for handling customer complaints, processes for identifying customer needs and requirements). It can be viewed as something that a customer participates in at different points in time. Enduring customer value is created by making processes more efficient and flaw less.

The extended marketing mix comprise the modern marketing mix that is particularly relevant in service industry, but is also relevant to any form of business where meeting the needs of customers is given priority, especially as marketing is far more customer oriented than ever before.

Kara Latiff

May 25. 2009 21:11

Developing a Marketing Strategy
-8 P's: productizing service, physical setting, people in services, pricing in services, promotion, placement, productivity/ quality/ guarantee. and process of balancing demand and supply.
-Market strategy is the process of adjusting controllable marketing factors to cope with or exploit uncontrollable environmental forces.
-Strategic challenges include performance, demand, employees, setting, customers, and service quality

Demand / Supply of Services
-Physical facility, personnel, and equipment.
-Capacity management strategies: level capacity, stretch and shrink, chase demand, flexible capacity.

Global Marketing of Services
-Reasons to go global: market, competition, technology, cost, government
-Strategies: exporting, foreign direct investment, franchising, and joint ventures
-Export patterns: Outbound service strategy, Inbound service strategy, and Teleservice export strategy
-International marketing strategy: looking at the global marketing environment -> deciding whether to go international -> deciding which markets to enter -> deciding how to enter the market -> deciding on the global marketing program -> deciding on the global marketing organization

Sony Mankoo

May 25. 2009 21:30

Progress Diary # 3

I found Pricing Strategy to be a very stimulating and challenging course; however, I believe that the materials that were taught in class is something I can take forward and use in the real world.  In this course, I have learnt:

-The modern goal of marketing is to satisfy the customer and to create a satisfying relationship to ensure repeat business.
-Four perspectives on pricing:
  1.  Prices should cover costs
  2.  Prices should reflect the customer’s willingness to pay for that particular product
  3.  Reducing prices is a great way to increase sales
  4.  Effective marketing can reduce price competition
-Pricing pyramid has five segments:
1.  Value creation:  how the company creates value in their products (ex: handmade products, customization, etc.)
2.  Price structure: pricing according to perceived value
3.  Value communication: communicating the value of the products to the customers
4.  Pricing policy: managing pricing to influence perceived expectations
5.  Price level: determining prices according to value to ensure long-term as opposed to short-term profitability
-Pricing has 3 components (3 c’s):
1.  Cost: pricing products/services to ensure that all costs associated with that product or service is covered
2.  Competition: pricing products/services in comparison to other products/services sold by other companies to maintain market share
3.  Customer: pricing the products according to the customers perceived value and expectations and their willingness to pay
-Cost structure and financial analysis is crucial in pricing in order to understand the true costs, the relevant costs associated with that product.  The goal of financial analysis is to identify the tradeoffs between the levels of price and sales volume that will increase profits.

Vanessa de Leon

May 25. 2009 22:27

Pricing a service is different then pricing a product for many reasons.
- First of all, a service is tough to cost. Mainly because it may take more time or effort with some customers compared with others. As well some features of a service may be used by some customers and not by others. Since service can continue after the point of contact between customer and provider, its cost is very different then a physical product.
- The value of a service must be examined by the provider in order to price. Some services are valued higher then others. Some people enjoy speed of service others enjoy friendliness, while others prefer low interaction with people providing the service.
- Services have to be priced with the realization that this is all the customer will take with them. With a product their is much more tangibility, but a service can have a lasting impression with a customer.
-Generally pricing of a service should match the quality, efficiency and customer satisfaction. Again valuing a service is different for all customers, realizing this value among segments is very important.
- Generally there are more services for a high end product, when a product is involved. some services are free, such as parking at a restaurant.

Sean Gutheil

May 25. 2009 22:29

Diary #3

-There are many ways in which services differ from goods. For one, service is an act or performance offered by one party to another. It is an add on to a physical product. Examples of services are: banking, health care, education, insurance, etc. Whereas goods are any physical product.
-Services intangible compared to goods. This means that services cannot be seen, tasted, felt, heard, or smelled before you purchase. They cannot be put on a shelf. Whereas, goods are tangible. An example of something that offers both goods and services is a restaurant. The food can be seen as the good whereas the whole serving process is seen as a service.
-Inseparability means that the provider of the service and the customer are part of the product.
-Heterogeneity means that the product varies across customer, provider, and for the same provider and customer from one consumption occasion to the next. Services involve people, and people are all different.
-Perishability states that the product cannot be stored and can be produced only after customer initiates. This means that services are hard to standardize. An example of this is an airline. Any unsold seats are lost.

surinderi sarpal

May 25. 2009 23:50

During last week, from the lectures and also the presentations, I have learnt:

Service pricing is to probably to balance the price and qulity of the service on the customers' perspective in which it take a fews things into consideration:
- Prices(benefit) should cover costs.(on supplier's perspective)
- Prices should set on the customer’s perspective to pay for that particular service.
- Marketing differentiation can somehow reduce price competition.

Marketer choose to go global because of its much greater opportunities which include:
- Strong market mix: difference customers vary in their buying pattern, culture and demand.
- Technology: facilitate service marketing. Virtual marketing is getting popular worldwidely.
- Reduce cost: Introduce new product or service in some country require less cost than others.

Lu Dai

May 26. 2009 00:12

Diary 3
There are many differences between services and goods.
  Goods are tangible items. For example, Television, home furniture, and other home products can be visited and touched, thus they are tangible and goods. On the other hand, services are intangible. People can not smell and touch it. Such as, house cleaning services, insurance companies and wireless services.
  Services cannot be stored for the future use and can be produced only after customer initiates. For example, professors cannot store today’s teaching class for tomorrow used. However, goods can be stored for the future use. Many retailers purchase the product in the lower price and store it for the future use.
  Services are hard to display and explain. Therefore, services are hard to be evaluated. Pricing service is also difficult. In general, service depends on customers’ perspective and expectation. Different people toward the same kind of services may have different expectation. On the other hand, product can be displayed and are easier to evaluate. A company can calculate its labor costs, resources costs and other costs to set the product price.
  According to service, production and consumption of service happed at the same time. The service provider must be physically present to deliver service. In other words, both customers and service provider must be involved in the production process. For example, the doctors must be there when the patient go to hospital. However, according to product, production should be happed earlier than consumption. The product provider and customers do not need to be involved in the production process. For example, many customers buy the products online. They don’t even have a chance see the vendors.
  The quality of service is hard to control because it varies across providers. For example, people might like the restaurant today before of a nice waiter. However, they may not like it on the other day because the waiter don’t have a good mood and serve badly. Compared to service, the quality of good can be controlled easier.

qian yan huo

May 26. 2009 00:39

SERVICES MARKETING – Diary #3

Essentially, services differ from goods in four fundamental ways:

•  Services are intangible.  Their value can only be communicated through the 8 Ps of marketing.

o  An example of the intangibility of a service is a Bruce Springsteen concert.  While I receive the tangible product of physical tickets, I only leave the concert with the experience, which is intangible.  

• Services are perishable.  They cannot be prepared in advance or stored for later use.  

o An example of the perishability of a service is an airline flight.  While I may pay for tickets in advance, the service only exists while the flight is in the air.

o Another example is booking a hotel room.  If I rent a hotel room, I only have use of it for the week that I have rented it, not before or after.

• Services are inseparable from the service provider.  In addition, in many services, the customer must co-produce the service.

o An example of the inseparability of services is advertising agencies.  In order to create a solid advertising plan for my firm, it is essential that I work as a team with the agency.

• Services are variable.  One service performance differs from another due to outside factors such as the expertise of various employees.

o An example of the variability of a service is a marketing course at the University of Manitoba.  The quality of the class varies from day to day depending on the quality of inputs from students.

Gillian Dow

May 26. 2009 00:51

Diary 3
In this service marketing course, I have learned several valuble things, and they are enhace my interesting in marketing course.
- services are intangible, perishable,inseparable from the provider.
- services can not be see dirctly see and physically touch. the service have to be with some experiences to evaluted.
- services can not stored fo future use, because they need sort of human interaction.
-the human interaction need to take place or with the provider, so service and providers are inseparatable.

Liu Yang

May 26. 2009 00:52

Diary 1
In our first week of class I have learned the driving forces of marketing. That being said I have learned the four P's of Marketing which are product, price, promotion and place. However the most important of the four is the pricing, if more firms had the knowledge they need to manage prices of their products and services we would have had more success in the business world. This class brought a complete awareness to the fact that pricing matters in so many ways, after all the way you set the price will be the driving force of your revenue, organizations image and relationship with consumers.

Olla Lussier

May 26. 2009 02:10

MKT 3240 - Pricing Strategy

How do services pricing differ from the persepective of cost, completion, and value?

- Pricing a service based on service values is much more difficult with a service vs. a good. For a service, there are many different values involved and it will be harder to distinguish which value is the main value driver. For example, when you are recieving customer service, some people may prefer friendliness over speed, quality, etc.
- It is harder to establish positive differentiation over your competitors because it is harder to explain why your service is more expensive than a competitors. For example, a consumer might notice your service is priced $10 more than your competitor. Yours is priced higher because you percieve it to be of higher quality but the consumer might not agree with your judgement.
- The cost of a service is different from the cost of a product because there are more intangibles included with a service. With a product, costs are just what is used in order to produce the good. With a service, it is tougher since there are many more things in play.
- I believe that with a service, you should use a consumer-based pricing strategy. Much of a service is based on what the consumer recieves and values, therefore a consumer-based pricing strategy should be the most efficient.
- When communicating the value of a service, you must stress the psychological benefits. Consumers do not recieve anything until they have purchased the service, so pushing psychological benefits could give you an advantage.

Jeremy Jay Espiritu

May 26. 2009 02:49

Diary 2
In this week we have learned value and prices communication which is a great topic for introducing the segmented pricing fences. I have always knew that there a certain segments that business owners base theirs pricing on. From consumers point of view the most trustworthy place to shop in would be where there is price consistency across customer base. One could argue that it is not fair to be invited to the VIP event because that's not as promotional and beneficial for the consumer, but business judges what would be more suitable from their point of view. But majority clients are more easy going and not sensitive to such matter. Majority of people feel that company is more price integrous when it works consistently and efficiently.
I found it very useful to know calculate contribution margin, Total variable cost, break even sales change and financial analysis to support pricing decisions. I think it is important to know when taking on a project what your expenses and revenues will be before jumping into business.

Olla Lussier

May 26. 2009 02:49

Pricing Blog #3
Financial analysis has taught the relationship between costs, profit, and volume. One important and interesting thing that i will take away from this section of the course will be the Break-even sales change formula.  This is the change in price divided by the new contribution margin.  This formula makes it easy to see what percent change in sales that you either need to gain or can give up in order to make the same profit depending on the price variation.  
Managing Price Competition has made me aware of the three possible out comes.  That is positive-sum, zero-sum, and negative-sum.  The positive-sum scenario sounds good in theory, but i think as our class demonstrated, it is a far reach from the way people act, especially when faced with the price fixing laws and regulations. During our class activity, there was a possible out come for all four teams to finish with plus 20 million dollars, for a total of plus 80 million.  Instead when the demonstration came to an end the teams finished with minus 55 million overall.  That is a difference of 135 million dollars overall.  Judging by the way the class went the zero-sum and negative-sum outcomes will continue thrive and outweigh the positive-sum outcome until everyone is able to disregard their negative thoughts and trust the competition, or price contracts can be negotiated legally.

Tyson Morris

May 26. 2009 02:58

Diary 3.1
Last week was by far the most interesting topics we learned in class - managing price competition, pricing in channels of distribution and pricing over the product life cycle. I think that many consumers complain about prices, meanwhile the business owners are doing their job to not only survive in the market but to attempt expansion.  A company can gain a substantial market share advantage with lower prices in a price sensitive market. I found this week challenging yet very educational because we have used many examples that we worked through to determine if managements need to worry abotu price wars, and if there is even a potential danger of price wars.

Olla Lussier

May 26. 2009 02:59

MKT 3340
Services differ from goods in the following ways:
1) Services are perishable
- They cannot be stored for later use, so therefore supply must match consumer demand.
- Labour cannot be saved; for example, if it is a slow day in a restaurant and there are more servers then there is work for, their labour (the    "product") cannot be "saved" for times when the restaurant is busy. However, in the case of goods manufacturing, excess product can be stored in times of low demand and used to fill orders when demand increases.

2) Services are heterogeneous/variable
- They vary between customers, service workers, and from one purchase to the next.
- People providing the service are different, so the experience will be more variable; for example, when getting the opinions of 2 different stockbrokers on separate occasions- they will likely differ slightly in their recommendations for your portfolio. However, if you buy 2 packages of pens both the same brand, same style, there will likely be no visible variation. The producer of the first example is a human (stockbroker), which accounts for the greater variability of the product, whereas the producer of the second example is a machine which allows little variability unless there is a manufacturing defect.

3) Services are co-produced by producer and consumer
- Production and consumption are simultaneous and inseparable.
- For example, in the entertainment industry, live theatre performances (services) are produced by the actors and "consumed" (enjoyed, observed, etc.) by the audience at the same time. However, in the case of CDs (goods), the artist is not there when the CD is being listened to by the consumer- the CD was produced separately from the listening experience (consumption) by the consumer

4) Services are essentially intangible
- In services, the products are experiences, processes, or performances
- They also cannot be seen heard, smelled, or tasted before purchase, as is the case with education. The fees are paid in full by students, and then the instruction comes after. However, when buying a chair, it can be seen, sat in, picked up and thoroughly examined before payment is exchanged.

5) Also, because of the above distinctions, the marketing of services involves additional considerations
- The marketing of goods involves 4 P's: product, price, placement, and promotion
- Services marketing involves 3 additional P's: participants (customers and employees), process, and the physical setting (where the service takes place)

Marieke Breakey

May 26. 2009 03:41

Services Vs. Goods

Services differ from goods in many ways as far as a marketer must be concerned.   Some of the most important differences come with the tangibility or intangibility of a service, the perish ability, and the visibility or lack thereof.  Some other differences discussed will be pricing a service compared to a product and communicating a service to customers.

Tangibility
Consumers often struggle with buying products on the internet or in other non-classic forms where the ability to touch, and feel the product is not available.  The same can be said for services where parts of the service are not obvious to the consumer and therefore hold little or no value.  This becomes a task for marketers to communicate service attributes and place value on cost related factors.

Perish ability
Unlike a product, a service will expire over time or after the course of the service has completed.  When consumers buy a product the lasting ownership of the item usually holds value, services on the other hand are more short term benefit oriented.

Visibility
Much like tangibility the processes that go into producing a service that are not seen by consumers become a challenge.  Just as a products attributes must be explained in detail so must the working parts of a service that have costs attributed to them.

Pricing
Speaking of adding value to the different parts of a service goes hand in hand with pricing a service.  Because the cost adding factors of a service are sometimes much more transparent than that of a product, consumers must be educated in what makes up a service price.

Communicating a service
Communication is the final and most logical way to end this discussion.  The differences between a product and a service can be overcome be clear communication by marketers to consumers.  A service can’t always be touched or seen in full nor can it always be explained in total detail.  Sometimes consumers have to experience a service to realize its full value, and marketers must do their best to communicate sometimes unexplainable elements of a services value.


Kevin MacNeil    

Kevin MacNeil

May 26. 2009 03:42

MKT3340 Diary #3

Service quality from the provider's perspective means the degree to which the service's features conform to the organizations specifications and requirments. however, from the customer's perspective it means how well the service meets or exceeds expectations. The service quality is more difficult to evaluate than good since it is intangible. RATER (reliability, assurance, tangible, empathy, and responsiveness)is improtant fro measuring the service quality.

Customer service is also imporatant for a service. Service provider should be aware of the customers' needs and expectations. Customers are valuable assets to markters,so talk to customers in order to improve the performance, and quality.

Shuxin Lu

May 26. 2009 03:46

This week in pricing strategy was the most interesting for me. We learnt about the break even sales change percentage. This is the change in price over the contribution margin. The percentage that you get represents the percentage that your sales would be expected to drop in order to justify the price change. This is a useful tool in competitive markets.
We also learnt about effective competitive pricing. There are three different games that are played. Positive sum, zero sum and negative sum.

Darren "Dmoney" Thomas

May 26. 2009 04:26

Diary #3 For Services Marketing:

-The most repeated point in class is that services are essentially intangible and goods are tangible.
A consumer can not feel a bus ride before getting on the bus, but a consumer can feel a cooking pan before buying it.

-Another important point: Variability.
In the business of airlines there are many different types and no two airlines are exactly the same. It is harder for a consumer to compare airline services because consumers would have to go through two types of airline services(which is a lot of money) whereas if a consumer wanted to compare two different types of pencils, they would just put them beside each other and pick which one was best for them.

-Now, Inseparability. You can not separate the service and the service provider!
When you go to a bank you can’t just purchase an account and then physically take it away with you. The account is yours, but for it to work you and your account need to stay connected with the bank.

-Services are perishable.
An airline business can not store away an empty seat on a plane; once the plane takes off that empty seat is gone and can not be sold. But at a paint store, an employee can store away unsold paint.

-As a last note: By taking this course I have learned how important it is to go beyond the 4 P’s and use the extended marketing mix of 8 P’s for services.

Tiffany Monkman

May 26. 2009 04:32

Throughout the course I have learned so many different pricing techniques, that will be beneficial when it comes to applying my knowledge in the real world.

Services pricing under a cost-based pricing strategy is when the company prices its services by focusing on covering all of the costs associated with the service. An example of this would be an expensive car, such as, a Mercedes. Mercedes has higher prices since the costs of making the vehicles is more expensive. Along with the higher prices of Mercedes comes the perceived prestige and value.

Competition based pricing: This is when companies price their service based on the competitors prices. If the competitor reduces its prices, this can sometimes lead to price wars, where the company will reduce its prices as well. An example of competition based pricing is Air Canada and West Jet. Air Canada has more variety of different classes to choose from but their regular class is often the same as West Jets prices. Sometimes the companies differ but most often they will each have at least one flight time that matches in prices.

Value based pricing: This is also known as consumer-based pricing. This is where the consumers perceived price of the service is taken into consideration. The consumers will voice their willingness to pay for the particular service and companies will price within the consumers desired price levels

Leanne Kisil

May 26. 2009 04:35

Service marketing Diary#3
•  The fundamental differences between goods and services are Intangibility, inseparability, perishability and variability.
•  Intangibility means services cannot be seen, tasted, felt, heard, or smelled before purchase. This is the unique feature for service that different from goods. Service is essentially intangible. Services are different from goods because they have different degree of tangibility. Service is intangible dominant but good is tangible dominant.
•  Inseparability means services cannot be separated from their providers. It is inseparable between production and consumption.
•  Perishability means service cannot be stored for later sale or use whereas goods can be stored for later use. Because service is perishable, companies should pay close attention to supply and demand management, how to increase the demand when supply is greater than the demand or vice versa. Since both situation will result loss of profit for the company, it is very important to use some strategy such chase demand, stretch and shrink, smoothing, etc.
•  Variability means quality of services depends on who provides them and when, where and how.

Beiyun Geng

May 26. 2009 06:02

Over this past month we have learned how to distinguish goods from services on a variety of factors.
* Tangibility: Goods are tangible, they can be touched, broken, are visible to the eye and therefore consumers can evaluate them better before making a purchase. Services on the other hand are essentially intangible, meaning that they can not be seen, broken, or touched. Most services can only be evaluated after the service has been preformed.
* Perishability: Goods can be stored and sold at any time, services cannot. For example flight tickets can only be used once, airlines cannot sell seats on a plane after the plane has left. Goods however can be sold until all units are gone.
* Price: Services are very difficult to price because there are more variables to consider versus goods. When pricing services one must consider all the fixed costs, as well as multiple variable costs including: consumers time, convenience, co-production, ect. Many of these variables are not considered when pricing goods.
* Variability: When one buys a certain good, and recommends it to a friend and they chose to purchase this good they are purchasing the exact same item. However, when it comes to services this is not the case. When services are delivered they may not be the same (even if its the same service) this occurs because in services many variables exist, one main variable is the personelle delivering the service.

Gabriela Rosales

May 26. 2009 06:04

Service quality from the provider's perspective means the degree to which the service's features conform to the organizations specifications and requirments. however, from the customer's perspective it means how well the service meets or exceeds expectations. The service quality is more difficult to evaluate than good since it is intangible. RATER (reliability, assurance, tangible, empathy, and responsiveness)is improtant fro measuring the service quality.


Services are inseparable from the service provider. In addition, in many services, the customer must co-produce the service.

Jiaoheng Liu

May 26. 2009 08:16

Service Diary #3

Over the past month that services differ from goods in the fact that:

1) they can be an act or performance offered by one person to another (ex. real estate agent)
2) they can add on to a physical product (ex. cellular phone service providing service for a cellular phone)
3) services are perishable (ex. vacant airliner seats cannot be saved for a more busy flight)
4) variability which makes services hard to standardize (ex. treatment recieved at a hotel chain such as holiday inn may vary from country to country, and by person to person who is facilitating the service on behalf of holiday inn)
5) goods are tangible, whereas services are essentially intangible (ex. a customer can try out a hockey stick before using it, but may not recieve any feedback about a hockey league entered until the season is over)

Marius Scott

May 26. 2009 08:49

Course Progress Diary 3 – MKT 3240 Pricing Strategy

The cost of a service is difficult to determine because there are many factors involved, as well as the type of service the customer will be receiving.  For example, doing maintenance work on a vehicle may take a while depending on the problem in comparison to a regular oil change. Both are auto-mechanic services, but different costs are required i.e. time, effort, expertise, and tools.

In terms of competition, pricing services is not so easy, especially since you cannot copyright or patent services. Competition is much higher, in service industries because of this.  Therefore companies need to always be more innovative and be one step ahead with regards to adding value to their services; especially if it wants to gain more market share.

Like products, when pricing a service, a company should identify the motivational drivers that customers are willing to pay for that service.

However, in comparison to products, it is much more difficult to distinguish the value behind services because services are intangible and customers value different aspects of services.

Pricing a service should reflect the worth, value and competence of that service, with the customer satisfaction in mind.

Daisy Munoz

May 26. 2009 15:54

So here it is... the last day of class.  Over all I really enjoyed this course, and I will totally be recommending it to others.  At first I was nervous about how class participation made up such a huge chuck of the grade, however I was surprised with myself.  I am pretty shy by nature but during the duration of this class I think I spoke more during lectures than I have in all the classes I've taken during my university career combined.  Thanks for a great summer session experience!  =)

damara g

May 26. 2009 19:45

Diary #3.

The main differences between goods and services is that services are intangible while goods are tangible. Services are perishable while goods can be stored for later use or sale. Also services play on people's emotions in order to sell the service while goods do not. Also goods can be researched before purchase while services can't. Services are a lot more difficult to market than goods as well.

Tavita Sawh

May 26. 2009 21:49

There are four fundamental differences between goods and services.

1) Intangibility: The physical characteristics of goods allow them to be seen, touched and evaluated before purchase. On the other hand, services are essentially intangible. They do not have the physical properties that goods carry, making it impossible to evaluate the service until after it is performed.

2) Inseparability: For most services, the production and consumption of the service occur simultaneously. The provider and the customer have to interact in order for the service to be rendered. At times, the customer plays a critical role in the production of the service. Goods, on the other hand, can be purchased without the customer ever coming into contact with the producer of the product.

3) Perishability: Services cannot be produced or stored before consumption, whereas physical goods can. Services exist only when they are produced and for a limited time, creating supply and demand management problems.

4) Variability: Physical goods are easier to standardize because of their tangible characteristics.  On the other hand, services depend on the interaction between employees and customers. Service providers face a lot of uncontrollable factors that can influence the quality of the offering.

Pablo Schor

May 26. 2009 21:52

Blog # 3
6851932
As is mentioned in all marketing classes, there are 4 Ps of marketing goods, but for services this does not suffice and therefore, services require an extra 4 Ps. They are as follows: Physical setting, people in services, process of balancing demand and supply, and productivity, quality, and guarantee; all of these 8 Ps together work in such a way that extra value and guarantee is provided for the consumer and that the service provider is dependable and trustworthy.

This brings up the next difference: Services are Intangible, Perishable, Inseparable and Variable. Because the service experience can vary so drastically from one employee to the next, because services can not be inventoried (stored), because most services in and of themselves cannot be held or touched and because the service cannot be separated from the service provider, providers need to be very aware of the first impressions that they give off to customers.

Furthermore, with the continuous development of the service industry and with markets growing globally, the four forces, globalization, liberalization, privatization, and IT, have made way for a day and age in which services are a powerful force in the world economy. The importance for service providers to take these forces into account directly reflects how well the company’s particular service will survive.

Also, employees play a much bigger role in the service industry. Because customers’ perceptions of the service quality is very highly based on how they are treated from start to finish during the service experience, employees but practice empathy and interact with customers much more personally than in the goods industry (where customers evaluate the actual product more than the encounter they have with the clerk).

Tania Enns

May 27. 2009 02:34

Course Progress Diary 2 – MKT 3240 Pricing Strategy

- Pricing is a valuable marketing tool that can be used along with the other marketing tools in value creation.
- Pricing is an integral part of building a durable consumer relationship between the business and the consumer, and thus is a strategic means of creating sustainability.
- Value based pricing is preferable to the other forms of pricing (cost, competitor and customer) in building sustainability and creating revenue, since the emphasis is on developing pricing into a competitive capability and advantage.
- The best means of setting a price is to work through the steps of the pricing strategy pyramid, and to recognize that the end price is merely the "tip of the iceberg" in building a sustainable pricing strategy.
- A marketer should never assume that all customers will be ready and able to accept the price, and should thus take into account what motivations will drive their willingness to pay and how to communicate the value of the product to the customer. The marketer should also segment the market in order to operate the most profitably.
- Different situations will require different means of communicating value to the consumer depending on whether the product/service is a low search good with economic or psychological end benefits. The situation will also determine whether skim, penetration or neutral pricing will be the best strategy to follow.

Debbie Simons

May 27. 2009 03:45

Pricing 3240_Diary #2

Pricing is set for a more enduring consumer value in many ways, much of which was elaborated on in class. Such ideas that companies base there value on not what the costs are that are associated with the product but more with the perceived value on an item or even a store.

First there is the economic value communication that lets the customer understand that they are getting what they are paying for. Offering a pair of jeans for $40 needs a communication to the customer that they understand there are specific costs that go into making, distributing, selling, etc and that the same pair of jeans won’t be $30 tomorrow. There is a needed sense of trust that needs to happen and this also need to happen in part of the communication.

Next there is the issue of economic assurance which talks about the idea that people need to feel justified in paying the price for your product.  The easiest way to do this would be to show all your costs to the customer and them understand were the price is coming from, however this is not possible so next best is a good comparison and everyday knowledge that consumers know generally what for example a pair of jeans cost.

Next there is the psychological end benefit that communicates to the customer, the justification for the price. People are willing to pay huge amounts of money for L.V. or other recognizable brands because they are at that point not purchasing the product but the feeling that comes with owning it, both the prestige of others and the self worth and happiness.

Michael Price

May 27. 2009 03:58

MKT 3240_Diary #3

Firstly I’d just like to mention that this was a very interesting class, yes I think everyone one would agree it was interesting, not knowing were the class would lead you to next.

The main difference between goods and services is that services are just that, a task that is performed for the customer to benefit them in some way. Whether that is a service for them specifically like a haircut or a service on a good they own such as repairing a car. Also services although many are quick transactions that occur then are completed all in one sitting can be long term relationships such as a warranty on a car. The relationship between you and the dealer does not end when you drive off the lot. This shows how services and goods are similar in that the relationship between you and the other is usually an on going one. Also goods play on people's emotions in order to sell while services are usually needed and rather quick decisions. For example if you need a haircut, or I guess I should say if a man needs a haircut they go to were ever is closest, quickest, or cheapest…all three is great when you can find it. But buying a good like a car, or designer product is much more playing on people’s emotions and the psychological end benefit.

Michael Price

May 27. 2009 08:31

Diary #2
-I think that the people in services are one of the most important parts of the extended marketing mix in terms of enduring consumer value. Without the people performing the service, and further performing it to meet and exceed customer expectations, no value can be obtained by the customer. Since services are intangible, one of the few ways in which the customer can judge the value of the service is the quality of the personnel delivering the service
-I think that the process portion of the extended marketing mix can add significantly to enduring value for the customer. A large way this can be possible is if the service offers a great deal of flexibility in delivery. For example while a two banks may offer the same services, if one offers flexible hours to accommodate their customers, this will likely significantly increase the value to the customers.
-Physical setting can also be important in creating value for the customer. Consider two identical service locations, but one is located within a two minute walk of their target consumers, while the other is located on the other end of the city. Obviously the closer location will be more valuable to the consumer.
-Further, consider a store whose store layout makes it very difficult to navigate, in comparison to one whose layout allows customers to obtain the service they require quickly and efficiently. A perfect example of this would be efficient queuing, as opposed to a store that has a very inefficient process  

Ryan Grant

May 27. 2009 08:32

Diary #3
-Services are intangible, meaning they can’t be touched. On the other hand, goods are tangible things that you can pick up and look at. An example of this difference; a service might be something such as a waitress bringing your food. You can’t touch the act of bringing the food. On the other hand, the food itself is a good, which you can touch, see and taste.
--Services are perishable, meaning if they don’t get used right away, they cannot be stored for future use, while goods are generally much less perishable. For example, if you are running a gas station, if no one comes in on a particular day, you cannot stockpile the gas filling service, if no one comes then you can not have that exact service again. On the other hand, if you purchase a car, you can keep it in storage until the weather gets nicer.
-Services are variable, in that the same service can give vastly different experiences from one time to the next. For example, you might go to a restaurant on a Tuesday afternoon, and have Joe the server, who performs his services very well. However, if you come back on a Friday evening, Joe, who is performing the exact same service, may give a much poorer level of service. Goods on the other hand, such as computer, will all be made of very similar quality.
-A further difference is that services are much more difficult to measure with respect to quality. Because of some of the previously mentioned attributes, such as variability and intangibility, it can be hard to measure quality of a service. A good on the other hand, you can inspect, and you can test out to check for quality.

Ryan Grant

May 27. 2009 16:59

There are four fundamental differences between goods and services. These differences include intangibility, inseparability (simultaneity), perishability, and variability (heterogeneity). Intangibility means that a service cannot be seen, tasted, felt, heard, or smelled before purchase. Meaning that a service is not a product like a bottle of juice that you can physically pick up and buy rather a service is something being provided to you for a cost like consulting services. Inseparability says that services cannot be separated from their providers, so production and consumption of a service cannot be separated. Perishability refers to the fact that services cannot be stored for later sale or use. An example of this would be airlines; they know that if they do not sell all the seats on a flight, the revenue that could have been gained will be lost forever that is why they have seat sales! Lastly is variability which means that the quality of a service depends on who provides it as well as when, where, and how the service is provided. This means that services are hard to standardize. The quality of a service can be affected by the following, the individual who is providing the service, whether they are in a good or bad mood, the timing, whether it is on time or late, the setting, whether this coincides properly with the service, and the overall execution of the service.

Anisha Talwar

May 27. 2009 22:38

Throughout services marketing I have learned that there are some key differences between goods and services.

-Goods are considered essentially tangible and a service is considered intangible.
Although, services can have some kind of product attached to the core service. For example at a restaurant the main service is serving food to customers, and the product would be the food that the customers are eating.
-Services are perishable, which means that they can not be used after the time has past. For example, at a movie theater, if the movie is showing at a particular time and not all the seats are sold out then those seats can not be sold again for that same show.
-Services have high variability. Most of the services vary among different locations of the company, since there are various people that run the service, employees can do things very differently at different location. It is very hard to follow the exact same procedures. An example of this would be a particular hair salon throughout the city, where the cut and colours are never the same with the different stylists.

Leanne Kisil

May 28. 2009 06:01

Diary #3

Goods differ from services in four main ways:
-intangibility - for a service there is no physical product to see or touch
-inseparability - for services, production and consumption come together
-perishability - services cannot be produced or stored before consumption
-variability - quality varies on who provides them, when, where and how

Example of intangibility: real estate service from ReMax - they assist you selling your home.
Example of inseparability: attending a concert - the music is 'produced' at the same instant you are 'consuming'/listening to the sounds.
Example of perishability: flight on an airplane - once you have taken the flight the experience/service is gone forever.
Example of variability: hair cut at a salon - each stylist cuts hair slightly different

Shannon Hill

May 28. 2009 06:35

cost-based pricing strategy is when the company prices its services by focusing on covering all of the costs associated with the service. An example of this would be an expensive piece of furniture. They charge a price since the costs of making the furniture is more expensive. Along with the higher prices of the furniture comes the perceived prestige and value.

Competition based pricing is when companies price their service based on the competitors prices. If the competitor reduces its prices, this can sometimes lead to price wars, where the company will reduce its prices as well. An example of competition based pricing is blockbuster and rogers or wal-mart vs. zellers

Value based pricing is when the consumers perceived price of the service is taken into consideration. The consumers will voice their willingness to pay for the particular service and companies will price within the consumers desired price levels (like the restaurant you talked about in class where you pay what you think the meal was worth to you)

Jonathan Sandberg

May 28. 2009 07:09

PLC is a marketing decision that recognizes that every product overtime goes through a sequence of changes that attects its relationship with its market, sales and profit profiel,and that offers responses to cope with the stages of changes. PLC has 5 stages which are Innovators, Early Adopters, Early Majority, Late Majority and Laggards.

Sisi Wu

May 28. 2009 07:42

Course Progress Diary 3 – MKT 3240 Pricing Strategy


•  The price of a service is difficult to determine because unlike goods which are tangible, services are intangible and therefore it is that much harder to determine the value of the service and set a price.
•  In services many factors have to be taken into consideration in determining the cost, for example time, experience of person providing the service, complexity of the service, etc. It is therefore a lot more complicated to determine the fixed and variable costs, than in the case of tangible goods.
•  Services differ not only between companies, but each time the service is provided. Therefore, theoretically each time a service is provided the cost differs however in most cases it would not be rational to charge a different price for the “same” service.
•  Services can be more easily unbundled than goods, and therefore a company is able to use pricing fences and segmentation to capture more value and charge varying prices for different segments.
•  Services are perishable, whether a good is sold or not, it is still available for purchase and can in future contribute to covering the fixed and variable costs. If a service is not used, for example an appointment is canceled but not rescheduled, then the opportunity for profit is lost and the profit contribution to covering costs decreases.

Debbie Simons

May 29. 2009 03:00

Dairy 1

For the first week, our class has discuss about the plugging into information ages, planning and producing and the introduction of service marketing. I really like the professor, because he always charllenge people and putting people in a hot spot. Before I thought this course is extremely difficult, but he had explain well in the class.

Dairy 2

This week is group 7 presentation, I was very nervous when I was doing the presentation. But somehow, I can learn more by doing the presentation instead of just reading the testbook and the powerpoint note.


Dairy 3


Overall the class was fantastic, but summer section is very rush, it is better if the course is in september or January. And I had learn lots about service marketing, such as "setting price, customer mix, leveraging the people factor .. and so on...

Thompson Wong

May 29. 2009 07:38

SERVICES MARETING – Diary #3

Services differ from goods in several ways. Listed below are the 4 major elements that distinguish a service from a good.

Intangibility:
The degree of intangibility has been proposed as a means of distinguishing between products and services. This degree has implications for the ease with which consumers can evaluate services and products. For example, it is much easier to evaluate a good like shampoo before you purchase it however; it is much more difficult to examine a service like a haircut before the actual enactment.

Inseparability:
Inseparability is taken to reflect the simultaneous delivery and consumption of services and it can enable consumers to shape the performance and quality of the service. An example of this can be seen in a summer session course. The quality of the service, i.e. the teaching of the course is dependent on the consumer being a “co-producer”. It will be successful if the student is both cooperative and participates in the production process.

Heterogeneity:
Heterogeneity reflects the potential for high variability in service delivery. This is a problem especially for services with a high labour content, as the service performance is delivered by different people and the performance of people can vary from day to day. Heterogeneity also offers the opportunity to provide a degree of flexibility and customisation of the service. For example, at a live concert, the artist will not be the same at every venue but can customize the performance depending on their location.

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Kara Latiff

June 3. 2009 01:46

Services Marketing #1

-The relevance of services? simply put it is the backbone of our economy and in turn our way of life in north america and many other parts of the world.
Marketing services then is vital to maintaining our way of life, while striving to make it better.
- to begin with marketing of services is completely relevant and completely mandatory in compare to the marketing of goods. The simplest reason being that services are completelt intangible, it is not something we can taste or touch but it is something that can impact us in many ways on an emotional level.
- Intangibility is one of the main characteristics along with inseperability, variability, perishability and the ability of rental/ access, that seperates services from goods.
- Services marketing breaks down into the original 4 P's (price, product, place and promotion)with a mix of 4 additional P's. What these come down to are the breakdown and addition of value to said service.
- Finally, there is the services marketing triangle that envelopes the marriage of providers, organization, and customers. The links between these are internal marketing, external marketing, and interactive marketing.  

Gregory Mitchell

June 3. 2009 07:41

Service Marketing #3
There are about four main ways in which services do differ from goods. They are intangibility, perishability, variability, and inseperability.
- Intangibility: normally with a good, there is something to be seen, or touched, and is at least something of a physical nature. A service on the other hand is not able to be measured by these means, as it is more a state of being than coming into being. (ex; paying for the experience). Now this gives unlimited potential for added value but at the same time there is a chance of added risk on customers end as service can vary dramatically.
- Perishability: Services as a general rule are perishable. This being the case, services can not be made and saved up for later use, but must be use at the time of creation. Hotels are an example of this in which if the rooms have not bee filled there is an automatic loss of services for the unused rooms.
- Variability: With a good it is generally much easier to maintain a consistency among all goods and reach quality levels. With services there are many more uncontrolable variables that brought into the equation, (ex: disgruntled customer) where many issues may be taken care of and standardized, but will not necessarily fit for all customer moulds.
- Inseperability: For most services, the point of creation is the same time that the service is being used. In order for the services to happen there has to be interaction between the customer and the service provider. The physical presents of the service provider is not necessarily required, as long as the services is being administered.

On a side note, i have really enjoyed this class. I have found it informative, and it has increased my interest in all aspects of marketing.
Thanks.

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Introductory-Session
Class started with introduction of Prof and Introduction of participants as well. Prof was keen in knowing the expectations of the class. While discussing expectations some key issues were discussed like

    * If an air hostess walks straight and fast that directly means that she does not like her job.
    * Bad cop, good cop theory was discussed which is usually followed in western countries.
    * While discussing Health care industry, then its absolutely fine to tell that industry can expect and should expect its customers to come back. Since Health care industry has moved from cure to care.
    * New word coined by Mobile service providers Value Added Services -> VAS this is what all the companies is striving to retain the customers.
    * When Organization is born then ailment like Inefficiency is also born.
    * Individual contact for a customer means confusion and inefficiency would increase.

Goal of an Organization:-

Social Stake holders like society, self and people connected

Robert Bosch CEO of Bosch once mentioned that:
I don't pay good wages because I have a lot of money; I have a lot of money because I pay good wages.

Business of Business is Business -> Milton Friedman

Social Productivity increases.

Selfish <-> Mutually selfish e.g. Reuters recently launched sms services for Farmers in India which sends one sms per day on prices of agricultural products at a cost of 100Rs per month. This is helpful to farmers to negotiate the price.

Society -> Customers

Marketing Goal:

Enhancing Customer Value -> Means of Marketing

Increase Market Share:-

    * Microsoft / Indian Airlines as customers increase number of dissatisfied customer increases
    * Would increase in loss for a loss making organization like Exports of India, Public Distribution service in India, Petroleum companies in India.

Wallet Share of a customer is the key Marketing Goal.

Shortages of Yesterday:

    * Quality
    * Quantity
    * Variety or choice

E.g. Few years back only Maruthi car's lack all of above characteristics

Post of LPG-> Liberalization, Privatization and Globalization.

New Shortages

    * Time
    * Support
    * Trust
    * Clarity

Previously need was Product

Now the need is Relationship.

P Hari Prasad Rao

August 12. 2009 14:08

Goal of Marketing

  Provide customers awareness of organizations’ products and services by understanding their requirements thereby creating or enhancing a market for the organization.
  Increase Wallet share
  Old Shortage – Product / Supply
•  Cash
•  Quantity
•  Quality
•  Variety
  After LPG - Relationship
•  Time
•  Support
•  Trust
•  Clarity
Goal of organization

  Social wealth maximization
  Society
  Self
  People Connected
  Stakeholders

  Social productivity – e.g. Reuters sending SMS to farmers on the product prices, government policies

Pradeep A.P

August 12. 2009 18:34

What is goal of Marketing?

•  Wallet Share (not Market Share)
•  Enhancing Customer Values
•  Understand the customer need and communicate it to organization.
•  At the same time to communicate company product lines to customers
•  To establish and maintain the relationship


What is the org. goal?
•  To design and develop product pertaining to customer needs thereby giving them value, so that
•  Wealth maximization & creation
•  Social Productivity – Entire society should be productive, Reuter for farmers – mutual benefits  
•  Social Stakeholder
o  Society (e.g. customers) – Robert Bosch
o  Self – Business of business is business – Milton Friedman
o  People Connected

Shortage yesterday –
•  Cash
•  Quantity
•  Quality
•  Choice

Shortage today –
•  Time
•  Support
•  Trust
•  Clarity

Need Yesterday – Product -> Supply
Need Today – Relationship

LPG (Liberalization Privatization Globalization)

Manoj Salunkhe

August 13. 2009 07:10

While reviewing previous class discussions few new points were discussed:

    * One of the reason for CRM growth is Society iteself
    * Law of Diminishing returns
    * Red Ocean and Blue Ocean strategies

Additional money on ads may not get additional customers. e.g. If 100$'s is spent and acquired 30% of market share. Now, if 200$'s spend then their is no guarantee that 60% market share can be captured.

B2B was always decided by QCDS. i.e. Quality, Cost, Delivery and Service.
In name of cost reduction in out sourcing now Cost pays a major role. Most of the times its the deciding factor.

Industries need to move from Customer Orientation to Customer Relationship.

Needs, Wants and Demands.
When customer wants something and willing to pay price for a good or service then demand is created.

Starbucks branded itself as 3rd place between Home and Work.

Value = Benefit - Cost.
Satisfaction = Performance - Expectation
Quality = Compliance with Standards.

Relationship = R1, R1, R3
R1= Resell
R2=Retain
R3=Refer

Pizza Hut case was discussed:
They started operations in India in the year 1996 and they were customer oriented rather than Sales orientations.
Pizza's were according to regional preferences therefore its customer Oriented.
One important point Pizza hut missed according to the case was, Satisfaction may not evolve to Return. There is a slippage. They were "Customer Maniac", and this is a big mistake. Customers would need room and space. Over customer orientation would be dysfunctional. Customers are not gods they are humans and they can make mistakes.

Customer relationship is not customer surrender its service. Customer is only one Input for feedback not All.
It should not become like Servitude -> Like Slavery.

Recommendations for Pizza Hut:
1. Should not be over customer oriented.
2. Should find a way to build relationship with the customer even when they live their premise.
3. One of the way would be giving discounts for regular customers.

P Hari Prasad Rao

August 13. 2009 11:06

How Pizza Hut needs to evolve from a customer maniac?

a) Pizza Hut needs to be customer oriented rather than being a customer maniac. Need to give customer the personal space which he would like to have

b) Needs to concentrate more on relationship building rather than while they are in the shop.
e.g. Can keep in touch with the customers by sending cards (birthday, wedding anniversary), any new offerings in Pizza hut, promotions in Pizza hut,Discounts for regular customers etc.

c)Promote relationship building through their advertisements,spend on social awareness campaigns,health awareness campaigns etc.

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August 14. 2009 23:24

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August 15. 2009 06:22

The companies, which has accurate database has advantage over those who doesn't have it.

Efficiency – Doing things rightly - Productivity
Effectiveness – Doing things right - Goal activeness

Choose Effectiveness as its operational and Efficiency is Strategic

Levels of Retention Strategies:
1.  Financial Bonds (Best techniques in B2B marketing)
2.  Social Bonds
3.  Customization Bonds
4.  Structural Bonds

RM + IT = CRM

All Customers should not be treated equally.

Before implementing CRM technology mindset should be changed.

CRM is function of PPT (People Process and Technology)

Four Elements of CRM - IPPT (Information People Process and Technology)

Manoj Salunkhe

August 15. 2009 06:23

Take Away from Wednesday Class - Customer Retention Strategies.

There are 4 type of Bonds that can be created to retain Customer

A. Financial Bonds - This can be achieved by following:
   - Stable pricing
   - Volume and Frequency Rewards.
   - Bundling and Cross Selling.

B. Social Bonds - This can be achieved by following:
   - Continuous Relationships.
   - Personal Relationships
   - Social Bonds Among Customers

C. Customisation Bonds - - This can be achieved by following:
   - Customer Intimacy. ( Knowing customer better than information gained by social bonding)
   - Mass Customization. ( for B2B customers)
   - Anticipation/ Innovation

D. Structural Bonds - (Mainly for B2B customers)
   - Shared Processes and Equipment.
   - Joint Investments
   - Integrated Information Systems

Shantanu Saxena

August 15. 2009 07:14

Points taken away from the class

    * Difference between effectiveness and efficiency
    * Losing a customer is a crime
    * Maintaining a loyalty and building a relationship with the customer is expensive initially but as the time passes profits generated by Loyal customers is enormous.
    * One way to retain a customer is increasing discounts for increasing frequency of customer
    * Replace the word profit with care
    * In a firm does not care about the customer then customer will also not care about customer
    * Loyalty Leaders grow faster and spend less to get and retain customers
    * Discussed a lot about Levels of retention strategies

Hilton case was discussed.

    * Hilton outsourced customer loyalty program and they had restrictions on money spent
    * They never built a relationship with the customers

RM+IT = CRM
Marketing is apartheid and discrimination exists

P Hari Prasad Rao

August 15. 2009 08:21

Levels of retention strategies

  Financial Bonds
  Social bonds
  Customization bonds
  Structural Bonds

Main constituents of CRM – I-P-P-T

  Information
  People
  Process
  Technology

Pradeep A.P

August 16. 2009 03:53

Take Away of Saturdy Class:

CRM process guidlines

1-Use multiple interaction channels and applications for customer care, sales, customer contact.
2-Let knowledge management be the guide in Identifying CRM campaign messages.
3-Transit customers to the potential points for extended interactions, sales and buying actions.
4-Shift the increasingly expensive sales and customer care functions to less costly means of interaction.

Shantanu Saxena

August 16. 2009 06:59

FARM (Find Attract/Acquire Retain Monetize/ Make Money) Marketing

Marketing – Growth
•  Find More Customers – Market Share
•  With More Customers – Market Share
•  Keep More Customers – Wallet Share

Customer Value Management – Choice of customer is very important. 80-20 principle teacher 80% of sales comes from 20% customer.

Marketing Research brings information, which is know
Data Mining brings out information, which even not known

CRM Process Guidelines
•  Use multiple interaction channels and applications for customer care, sales, customer contact.
•  knowledge management be the guide in Identifying CRM campaign messages.
•  Transit customers to the potential points for extended interactions, sales and buying actions.
•  Shift the increasingly expensive sales and customer care functions to less costly means of interaction.

Right algorithm is critical in CRM.
Campaign Management can used if algorithm is used efficiently.

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