Service Marketing Exam 1

tangibility spectrum

• determines if products are purlely tangible or not

intangibility

• Goods are tangible while services are intangible

• Results:

  • Services can’t be inventoried

  • Services cannot be easily patened

  • Services cannot be readily displayed/communicated

  • Pricing is difficult

heterogeneity

• Goods are standardized and services are heterogeneous

• Results:

  • Service delivery and customer satisfaction depend on employee/customer actions

  • service quality depends on many uncontrollable factors

  • there is no sure knowledge that the service delivered matches what was planned and promoted

Simultaneous Production and Consumption

• Goods are Production separate from consumption and Services are simultaneous production and consumption

• Results

  • Customers participate in and affect the transaction

  • Customers affect each other

  • Employees affect the service outcome

  • Decentralization may be essential

  • Mass production

perishability

• Goods are nonperishable and services are perishable

• Results

  • It’s difficult to synchronize supply and demand with services

  • Services cannot be returned or resold

  • Services for any given time period cannot be sold or delivered at a later date

Marketing Mix

the elements as organization controls that can be used to satisfy or communicate with customers

7 Ps

• product, place, promotion, and price, people, physical evidence, and process

people

• all human actors who play a part in service delivery and thus influence the buyer’s perceptions: namely the firm’s personnel, the customer, and other customers in the service environment

physical evidence

the physical and virtual environment in which the service is delivered and where the firm and customer interact, as well as any tangible components that facilitate performance or communication of the service

process

the procedures, mechanisms, and flow of activities by which the service is cocreated, delivered, and/or consumed—the service delivery and operating systems

Product Examples

• Physical good features

• Quality level

• Accessories

• Packaging

• Warranties

• Product lines

• Branding

• Product support services

place examples

• Channel types

• Exposeure

• Intermediaries

• Outlet locations

• Transportation

• Storage

• Managing channels

promotion examples

• Promotion blend

• Salespeople (selection/training/incentives)

• Advertising (media types/types of ads)

• Sales promotion

• Publicity

• Internet/web strategy

price example

• Flexibility

• Price level

• Terms

• Differentiation

• Discounts

• Allowances

people example

• employees (recruiting/training/motivation/rewards/team work)

• customers (acquisition/education/training/motivation/rewards)

physical evidence example

• Facility design

• Equipment

• Signage

• Employee dress

• Web pages

• Other tangibles (reports/business cards/statements/guarantees)

process example

• Flow of activities (standardized/customized)

• Number of steps (simple/complex)

• Customer involvement (low/medium/high)

Gaps Model Goal

Closing the gap between what customers expect and what they perceive is critical to delivering quality service

customer gap

the difference between customer expectations and perceptions

listening gap

• the difference between customer expectations of service and a company’s understanding of those expectations

  • Inadequate customer research orientation

  • Lack of upward communication

  • Insufficient relationship focus

  • Inadequate service recovery

service performance gap

• the difference between company understanding of customer expectations and the development of customer driven service designs and standards to match these customer expectations

  • Poor service design

  • Absence of customer driven standards

  • Inappropriate physical evidence and servicescape

the service performance gap

• the discrepancy between the development of customer driven service standards and actual service performance by the company

  • Deficiencies in human resource policies

  • Customer not fulfilling roles

  • Problems with service intermediaries

  • Failure to match supply and demand

the communication gap

• the difference between the actual service delivery and the service provider’s external communications

  • Lack of integrated services marketing communications

  • Ineffective management of customer expectations

  • Overpromising

  • Inadequate horizontal communications

  • Inappropriate pricing

desired service

the level of service the customer hopes to receive-the “wished for” level of performance. Blend of what customers believes “can be” and “should be” provided.

adequate service

the minimum level of service the customer will accept

zone of tolerance

the extent to which customers recognize and are willing to accept this variation

different customers possess different zones of tolerance

narrow zone of tolerance requiring a smaller but higher quality range of service from providers, whereas other customers have a wider range of expectations of service

zones of tolerance vary for service dimensions

• the more important the dimension the narrower the tolerance

• customers are likely to be less tolerant about unreliable service than other service deficiencies, which means they have higher expectations for this dimension

sources of desired service expectations

personal needs, personal service philosophy, derived service expectations

personal needs

those states or conditions essential to the physical or psychological well-being of the customer

personal service philosophy

customer’s underlying generic attitude about the meaning of service and the proper conduct of service providers

derived service expectations

when the customer expectations are driven by another person or group of people

sources of adequate service expectations

• percieved service alternatives

• situational factors

percieved service alternatives

• other providers from whom customers can or perceive they can obtain service

  • People who believe they can make their own better services v. ppl who don’t think they can find better services outside of primary one

  • Customers likely to be more tolerant of service performance

situational factors include

• uncontrollable situational factors

• personal situational factors

• predicted service

uncontrollable situational factors

• includes service performance conditions that customers view as beyond the control of the service provider

  • ex. Natural disasters lowering ppls expectations of service provided from hotel staff members

personal situational factors

• of short term, individual factors that make a customer more aware of the need for service

  • Ex. Ppl in accidents being less tolerable to service being provided later than expected

predicted service

level of service customers anticipate they are likely to get

Sources of both adequate and desired service expectations

• explicit service promises

• implicit service promises

• word of mouth communications

  • past experiences

explicit service promises

• personal and nonpersonal statements about the service made by the organization to customers

  • Personal via. Salesppl

  • Nonpersonal via. Websites/ads

  • Has direct effect on desired service expectations

implicit service promises

• service related cues other than explicit promises that lead to inferences about what the service should and will be like

  • quality cues dominated by price and tangibles associated with the service

Word of mouth communication

• statements made by partiers other than the organization convey to customers what the service will be like and influence both predicted and desired service

  • Perceived as unbiased

  • Important in services difficult for customers to evaluate before purchase and before having direct experience from them

past experiences

the customer’s previous exposure to service that is relevant to the focal service

satisfaction

• generally viewed as a broader concept

  • Perceived service quality is a component of customer satisfaction

  • Influenced by perceptions of service quality, product quality, and price

service quality

• focuses specifically on dimensions of service

  • focused on evaluation that reflects the customer’s perception of reliability, assurance, responsiveness, empathy, and tangibles

service quality dimensions

• reliability

• responsiveness

• assurance

• empathy

• tangibles

reliabiltiy

• the ability to perform the promised service dependably and accurately

  • the most important determinant of perceptions

responsiveness

the willingness to help customers and provide prompt service

assurance

the employee’s knowledge and courtesy and their ability to inspire trust and confidence

empathy

the caring, individualized attention given to customers

tangibles

the appearance of physical facilities, equipment, personnel, and communication materials

what determines customer satisfaction

• Products and service features

• Perceptions of product and service quality

• Price

• Personal factors

• Customer emotions

• Attributions for service success of failure

• Perceptions of equity or fairness

• Other customers, family, coworkers

outcomes of customer satisfaction

• Customer satisfaction is an important indicator of national economic health

• Important indicator of well being

• Correlated to corporate earnings and stock value

• Linked to firm’s financial performance metrics

outside in

• determining customer expectations and then delivering to them

  • uses marketing research to understand customer and their requirements fully

customer research must…

focus on what levels of these features customers expect, and what customers think the company can and should do when problems occur in service delivery

Elements in an Effective Services Marketing Research Program

• complaint solicitatino

• critical incident studies

• post transaction surveys

• mystery shopping/unique services

• lost customer research

complaint solicitation

• To identify/attend to dissatisfied customers to identify common service failure points

• qualitative

critical incident studies

• To identify beset practices at transaction level to identify customer requirements as input for quantitative studies

• To identify common service failure points

• To identify systemic strengths and weaknesses in customer contact services

• qualitative

post transaction surveys

• To obtain immediate feedback on performance of service transactions

• Measure effectiveness of changes in service delivery

• Assess service performance of individuals and teams

• Use as input for process improvements

• Identify common service failure points

• quantitative

mystery shopping/unique to services

• Measure individual employee performance for evaluations, recognition, or rewards

• Identify systemic strengths and weaknesses in customer contact services

• quantitative

lost customer research

• Identify reasons for customer defection

• Assess gaps between customer expectations and perceptions

• qualitative