MAR3231 Ex2 Ch8

Challenges in describing good Customer Service:

• Service evaluations are heavily influenced by the expectations one brings into the experience

  • EX: Expectations for going to goodwill vs nordstrom, or a 

• “Quality” Service is subjective

expected customer service:

• the basic service level that customers want to receive from any retailer 

  • EX: basic employee courtesy

    • presence does not provide satisfaction; meaning there is no comparative advantage since it is expected.

Augmented customer service:

• activities that enhance the shopping experience. I.e. going “above and beyond”

  • EX: free delivery, customization

    • provides a competitive advantage

service characteristics:

• Intangibility

• Inseparability

• Perishability

• Variability

Which of the following is an example of a tangible component provided by WalMart?

None of the above

Which of the following statements describes a marketing implication that results from inseparability of services within retail?

Customers may become loyal to the employee instead of the retailer

_____ is the discrepancy between the development of customer-driven service standards and actual service performance by company employees.

Gap 3 - Service Performance Gap

Walmart can close provider Gap 4 (Communication Gap) by doing which of the following?

Avoiding over-promising in advertising

Challenges due to intangibility:

• Patent protection is not possible

• displaying/communicating service benefits is difficult

• Quality judgment is subjective

• Some services involve performances/experiences 

Challenges due to inseparability:

• Consumer may be involved in service production

•  Centralized mass production difficult

•  Consumer loyalty may rest with employees

Challenges due to perishability:

• Services cannot be inventoried

• Lost revenues from unsold services are lost forever

• Effects of seasonality can be severe

• Planning employee schedules can be complex

• Need to balance supply and demand 

Challenges due to variability:

• Standardization and quality control hard to achieve

• Customers may perceive variability even when it does not actually occur

• Need to industrialize/mechanize/service blueprint services to factor out variability

We have different options for determining “fit-ness” based on the type of purchase:

• Search qualities

• Experience qualities

• Credence qualities

search quantities:

• Purchases that are high in search qualities can be evaluated prior to purchase

  • EX: for products: color, size of a shirt. Services have few to no search qualities, however one could be a rude employee at the front desk

experience quantities:

• Products/services high in experience qualities can’t be evaluated prior to purchase. Customers form an opinion after or during consumption

  • EX: concerts, hair dressers, college classes

credence quantities:

• Extremely difficult to evaluate even after consumption

  • EX: accountants, doctors, dentist

    • You don’t have a lot of knowledge on the service you are paying for, so you don’t know how good the service your received was.

intangibility definition:

services can’t be experienced with the customer’s senses (i.e. they can’t be tasted, felt, or smelled before they are purchased).

inseparability definition:

It is impossible to separate service production from consumption (i.e. as it is being created, it is also being consumed)

perishability definition:

services can’t be stored

variability definition:

No two services will be identical

Traditional Marketing Mix:

• Carry products that people want or need

• Price them at a level that maximizes profits

• Distribute them to locations (place) where consumers are

• Promote their products in a way that is desirable to their customers

Service-based retailers also manage three other Ps:

• people

• physical evidence

• process

people:

• All human actors who play a part in service delivery and thus influence the buyer’s perceptions, including:

  • the firm’s personnel

  • the customer

  • Other customers in the service environment

physical evidence:

The environment in which the service is delivered and where the firm and customer interact. (i.e. Any tangible components that facilitate performance or communication of the service.)

process:

• The actual procedures, mechanisms, and flow of activities by which the service is delivered—the service delivery and operating systems.

  • EX: sushi conveyor belt, zoom calls/class

Gap Model of Service Quality:

• As previously mentioned, the customer’s evaluation of service quality is dependent upon the customer’s expectations

• Customers compare the service they experience with what the service they expect. If this doesn’t match, a gap arises.

The Provider Gaps:

1. The Listening Gap

2. The Service Design and Standards Gap

3. The Service Performance Gap

4. The Communication Gap

causes of Gap 1: The Listening Gap:

• Inadequate customer research orientation

• Lack of upward communication

• Insufficient relationship focus

• Inadequate service recovery

causes of Gap 2: The Service Design and Standards Gap:

• Poor service design

• Absence of customer-driven standards

• Inappropriate physical evidence

causes of Gap 3: The Service Performance Gap:

• Deficiencies in HR

• Failure to match supply and demand

• Customers not fulfilling roles

causes of Gap 4: The Communication Gap:

• Lack of integrated marketing communications

• Ineffective management of customer expectations

• Overpromising

• Inappropriate pricing

Gap 1 definition:

not knowing what customers expect

Gap 2 definition:

not having the right service designs and standards

Gap 3 definition:

not delivering to service standards

Gap 4 definition:

Not matching performance to promises

Certain restaurants offer happy hour in hopes of getting customers to come to the restaurant early. This promotion helps balance supply and demand in that certain customers will come in earlier and the restaurant can make money on tables that would have otherwise been underutilized. By implementing happy hour, the restaurant is finding a solution for which service characteristic?

perishability

“The revenues from an unrented hotel room are forever lost.” This statement refers to which characteristic of services?

perishability

Provider Gap ___ can be resolved by conducting market research to better understand your customer.

1 - listening gap