Marketing and Service Economy Flashcards

This set of vocabulary flashcards covers key concepts from the 'New Marketing Perspectives in a Service Economy' and 'Customer Behavior in Service Interactions' chapters, focusing on service characteristics, the marketing mix, and risk management.

Service

An intangible economic activity that is produced and consumed simultaneously, involves no transfer of ownership of a physical good, and creates value by satisfying a need.

Intangibility

A characteristic of services meaning they cannot be touched, seen, or stored before consumption, causing customers to buy a promise rather than a physical object.

Inseparability

The characteristic of services where production and consumption usually occur at the same time.

Variability (Heterogeneity)

The characteristic of services where quality may vary depending on the people, time, and location involved in the delivery.

Perishability

The characteristic of services meaning they cannot be stored for later use, resulting in lost capacity if not utilized (e.g., an empty bus seat).

People (7Ps)

A component of the extended services marketing mix referring to the employees and customers involved in the service delivery.

Process (7Ps)

A component of the extended services marketing mix referring to the specific procedures and flow of activities used to deliver a service.

Physical Evidence (7Ps)

A component of the extended services marketing mix consisting of the servicescape and tangible cues that shape customer perceptions of quality.

Service Co-creation

The process where customers act as active participants, contributing directly or indirectly to both the production and quality of the service.

Service Encounter

Any contact between the customer and the organization during service delivery, frequently referred to as a "moment of truth."

Customer as a Productive Resource

A role where customers perform tasks traditionally done by employees, such as self-service or online booking, to reduce costs and increase efficiency.

Zone of Tolerance

The range of service performance that a customer considers acceptable, situated between the "desired service" and "adequate service" levels.

Disconfirmation Model

A post-purchase evaluation concept where satisfaction is determined by comparing pre-purchase expectations against actual service performance.

Perceived Risk

A customer's subjective expectation of potential loss when making a purchase decision, which is amplified in services due to intangibility.

Performance Risk

The uncertainty regarding whether a service will provide the intended outcome, which cannot be easily verified before consumption.

Credence Risk

The risk that occurs when a customer is unable to evaluate the quality of a service even after consumption (e.g., medical expertise).

Servicescape

The physical environment and surroundings where a service is delivered, used by firms as physical evidence to signal quality.

Process Visibility

A strategic design approach where service processes are made transparent (e.g., real-time tracking) to reduce customer uncertainty and observe competence.