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Health/Safety/Security Issues: most lighters have a child-resistant safety latchoCost Reduction: 80% of packaging material consists of paper, plastics, and glass. As the costs of these rise, companies struggle to find innovative ways to cut costsChapter 12: Services Marketing•The Four I’s of ServicesoIntangibility– services are intangible, can’t be held/touched/seen before the purchase decision (In return, Amex offers tangible products such as Rewards Points)oInconsistency – makes developing, pricing, promoting, and delivering services challenging; more of a problem in services than with tangible goods (Phillies win 10-0 one day, then lose 10-0 the next day)oInseparability – usually the consumer cannot (and does not) separate the deliverer of the service from the service itself (haircuts require full consumer participation; dry cleaning partial participation; banking requires no face-to-face interaction)oInventory – problems exist with goods b/c many items are perishable and b/c there are costs associated with handling inventory; with services, carrying costs are more subjective/specific (costs are high for airlines due to high salaries and expensive equipments; costs are low for hair salons, they work on commission, little equipment)•Five Dimensions of Service QualityoReliability– ability to perform the promised service dependable/accurately (Is my flight on time?)oTangibles – appearance of physical facilities, equipment, personnel, and communication materials (Are the gate/plane/baggage areas clean?)oResponsiveness – willingness to help customers and provide prompt service (Are the flight attendants willing to answer my questions?)oAssurance – knowledge/courtesy of employees and their ability to convey trust and confidence (Are the flight attendants/pilots knowledgeable about their jobs?)oEmpathy – caring, individualized attention provided to customers (Do the employees determine if I have special seating, meal/baggage/transfer/rebooking needs?)•Four P’s of Service (4 minors are People, Physical environment, Process, and Productivity)oProduct (Service) – managers must design product concepts with the features and benefits desired by customers (branding is very important)oPrice – hospitals use charges, lawyers/accountants use fees, airlines use fares, hotels use rates, colleges use tuition; often perceived as an indicator of product qualityoPlace (Distribution) – major factor in developing a service marketing strategy b/c of its inseparability of services from the producer; distribution site is a tangible component
oPromotion – shows consumers the benefits of purchasing a service; valuable to show availability, location, consistent quality, efficient service, and a physical representationChapters 13 and 14: Pricing•Price– money or other considerations (products/services) exchanged for the ownership or use of a product/service•Barter – exchanging products/services for other products/services rather than money•Six Step Pricing Processo