MKT202 - Quiz 3 Practice Set

Chapter 8 - 12

Ch.8 — Service process

The underlying method and sequence of steps by which a service is created and delivered to customers.

Ch.8 — Flowcharting

A technique that displays the nature and sequence of the steps involved in delivering a service to customers.

Ch.8 — Four processing categories

People processing, possession processing, mental stimulus processing, and information processing.

Ch.8 — People processing

Services directed at customers' bodies that require the customer to be physically present (haircut, healthcare, passenger transport).

Ch.8 — Possession processing

Services directed at customers' physical possessions (car repair, laundry, freight transport).

Ch.8 — Mental stimulus processing

Services directed at customers' minds (education, entertainment, consulting).

Ch.8 — Information processing

Services directed at customers' intangible assets such as data (banking, insurance, accounting).

Ch.8 — Service blueprint

A detailed map of the service process that distinguishes frontstage from backstage and shows how each step links.

Ch.8 — Frontstage

The parts of service production that customers see and experience.

Ch.8 — Backstage

The parts of service production that are hidden from the customer.

Ch.8 — Line of interaction

Separates the customer from the frontstage contact employees.

Ch.8 — Line of visibility

Separates visible frontstage actions from invisible backstage actions.

Ch.8 — Line of internal interaction

Separates frontstage contact employees from backstage support staff and processes.

Ch.8 — Physical evidence

The tangible cues customers encounter at each step of the service process.

Ch.8 — Fail point

A step in the process where there is a risk of things going wrong and quality being compromised.

Ch.8 — Wait point

A step in the process where customers are likely to have to wait.

Ch.8 — Poka-yoke

Fail-safe methods built into a process to prevent errors by employees or customers (e.g., an ATM holding the card until cash is taken).

Ch.8 — Blueprint key components

The nine components: front-stage standards, physical evidence, main customer actions, line of interaction, frontstage contact-employee actions, line of visibility, backstage contact-employee actions, support processes by other staff, and support processes involving IT.

Ch.8 — Three-act performance

Blueprinting a service as theater: Act 1 introductory scenes, Act 2 delivery of the core product, and Act 3 the drama concludes.

Ch.8 — Setting service standards

Translate service attributes into process indicators, then process standards, then performance targets (e.g., approve 80% of applications within 24 hours).

Ch.8 — Service process redesign

Revitalizing service processes that have become outdated or inefficient ("institutional rust").

Ch.8 — Process redesign approaches

Examine the blueprint with key stakeholders, eliminate non-value-adding steps, and shift to self-service.

Ch.8 — Service process redesign goals

Reduce service failures, reduce cycle time, increase productivity, and increase customer satisfaction.

Ch.8 — Customers as co-creators

Customers contribute effort, information, and skills as "partial employees" in service production.

Ch.8 — Levels of customer participation

Low (staff/systems do the work), medium (customer provides some inputs), and high (customer actively co-produces, e.g., weight-loss programs).

Ch.8 — Self-Service Technologies (SST)

Technologies that let customers produce a service themselves without service employees (ATMs, kiosks, apps); the highest level of participation.

Ch.8 — Three SST test questions

Does it work reliably? Is it better than the interpersonal alternative? If it fails, is there a service recovery mechanism?

Ch.8 — SST main weakness

A lack of service recovery mechanisms when something goes wrong.

Ch.9 — Productive capacity

The resources or assets a firm uses to create output, including facilities, equipment, labor, and infrastructure.

Ch.9 — Forms of productive capacity

Facilities to contain customers, facilities to store/process goods, physical equipment, labor, and infrastructure.

Ch.9 — Four capacity-demand situations

Excess demand, demand exceeds optimum capacity, optimum capacity, and excess capacity.

Ch.9 — Excess demand

Demand exceeds maximum capacity, so some customers are turned away and business is lost.

Ch.9 — Demand exceeds optimum capacity

Demand is too high; the facility is overcrowded and service quality declines.

Ch.9 — Optimum capacity

Demand and supply are well matched and customers receive good-quality service.

Ch.9 — Excess capacity

Demand is below optimum capacity, so resources are underused and wasted.

Ch.9 — Maximum vs optimum capacity

Maximum is the absolute upper limit; optimum is the best level that still preserves quality; the two are not the same.

Ch.9 — Stretch capacity

Temporarily expanding capacity at the same level (accepting standees, using facilities longer, shortening service time).

Ch.9 — Adjust capacity

Flexibly matching capacity to demand via off-peak maintenance, cross-training, part-time staff, customer self-service, and renting/sharing facilities.

Ch.9 — Cross-training

Training employees in multiple tasks so they can be shifted to where capacity is needed.

Ch.9 — Patterns of demand

Demand often follows predictable cycles (daily, weekly, seasonal) driven by pay, work, and school cycles; some demand is random.

Ch.9 — Causes of random demand

Largely unpredictable drivers such as weather, health problems, accidents, fires, crime, and natural disasters.

Ch.9 — Disaggregating demand

Breaking demand down by market segment to understand and manage it.

Ch.9 — Five demand-management strategies

Take no action, reduce demand in peaks, increase demand in off-peaks, inventory demand by queuing, and inventory demand by reservation.

Ch.9 — Tools to reshape demand

Price and other user costs, product elements, place and time, and promotion and education.

Ch.9 — Inventory demand by queuing

Holding excess demand in a waiting line.

Ch.9 — Inventory demand by reservation

Holding demand by having customers reserve capacity in advance.

Ch.9 — Queue configurations

Different waiting-line designs such as single line, parallel lines, designated lines, and take-a-number systems.

Ch.9 — Queue allocation bases

Priority rules: urgency of the job, duration of the transaction, payment of a premium, and importance of the customer.

Ch.9 — Virtual queue

A system that reserves a customer's place in line without requiring physical waiting.

Ch.9 — Maister's perception of waiting

Perceived waiting time matters more than actual time. Waits feel longer when unoccupied, solo, physically uncomfortable, pre/post-process, unexplained, unfamiliar, uncertain, unfair, or anxious — and people will wait longer for more valuable services.

Ch.9 — Reservation benefits

Avoid waiting, smooth demand, pre-sell to segments, and support forecasting and staffing.

Ch.9 — Overbooking

Accepting more reservations than capacity to offset no-shows; customers denied service should be compensated.

Ch.9 — Yield management

Maximizing revenue per available capacity unit by weighing the opportunity cost of selling now versus later.

Ch.10 — Servicescape

The physical environment in which a service is delivered and where the firm and customer interact.

Ch.10 — Purposes of servicescape

Shapes experience and behavior, signals image/positioning/differentiation, forms part of the value proposition, and aids productivity.

Ch.10 — Three roles of servicescape

Message-creating medium, attention-creating medium, and effect-creating medium.

Ch.10 — Message-creating medium

Uses symbolic cues to communicate the firm's positioning and quality.

Ch.10 — Attention-creating medium

Makes the servicescape stand out and attract target customers.

Ch.10 — Effect-creating medium

Uses colors, textures, sounds, scents, and spatial design to enhance the appeal of the service experience.

Ch.10 — Mehrabian–Russell Stimulus–Response model

Environments arouse feelings that drive behavior; emotions, not cognition, lead to approach or avoidance.

Ch.10 — Approach vs avoidance

The two behavioral responses to an environment: moving toward (stay, explore, spend) or moving away.

Ch.10 — Arousal–pleasure interaction

Arousal amplifies the effect of pleasure: in a pleasant environment higher arousal creates excitement, while in an unpleasant one it pushes customers into distress.

Ch.10 — Russell Model of Affect

Emotional responses are mapped on two axes: pleasure and arousal.

Ch.10 — Bitner's Servicescape Model

An integrative model with three dimensions perceived holistically: ambient conditions; spatial layout & functionality; signs, symbols & artifacts.

Ch.10 — Ambient conditions

Background characteristics such as lighting, color, music, scent, temperature, and noise.

Ch.10 — Spatial layout & functionality

The arrangement of furnishings, equipment, and space and their ability to facilitate service.

Ch.10 — Signs, symbols & artifacts

Explicit and implicit signals that communicate the firm's image and guide customers.

Ch.10 — Color dimensions

Hue, value, and chroma; warm colors stimulate and suit impulse decisions, while cool colors suit deliberate decisions.

Ch.10 — Music effects

Fast tempo and high volume raise arousal; slow tempo can make customers stay longer.

Ch.10 — Scent

Ambient smell that influences mood, perceptions, and behavior, often without conscious awareness.

Ch.10 — People as part of the environment

The appearance and behavior of both service employees and other customers shape the servicescape.

Ch.10 — Holistic design

Designing the servicescape as a whole and from the customer's viewpoint, using observation, photo audits, field experiments, and blueprinting.

Ch.11 — Importance of frontline

To customers, contact employees are a core part of the product, the firm, and the brand.

Ch.11 — Service-profit chain

Links satisfied, productive employees to value creation, then to customer satisfaction and loyalty, and finally to profit and growth.

Ch.11 — Boundary spanners

Frontline employees who link the inside of the organization to its outside customers.

Ch.11 — Three role stresses

Person vs role, organization vs client, and client vs client conflicts.

Ch.11 — Emotional labor

Displaying socially expected emotions during service regardless of true feelings, which can cause stress and burnout.

Ch.11 — Cycle of Failure

Low pay and minimal hiring and training with narrow jobs lead to poor service and high employee and customer turnover.

Ch.11 — Cycle of Mediocrity

Bureaucratic, rule-bound organizations with little incentive to improve; customers stay only for lack of choice.

Ch.11 — Cycle of Success

Investing in people through good hiring, training, empowerment, and pay leads to loyal employees and customers.

Ch.11 — Service Talent Cycle

Hire the right people, enable them (train and empower), and motivate and retain them.

Ch.11 — Hire the right people

Compete for "share of talent," be a preferred employer, select for attitude and skill, and use structured interviews and realistic job previews.

Ch.11 — Three levels of empowerment

Suggestion involvement, job involvement, and high involvement.

Ch.11 — Motivating service employees

Use the full range of rewards — pay, bonuses, interesting job content, feedback, recognition, and goal achievement — not money alone.

Ch.11 — Service culture & leadership

Building a strong service culture and climate in which leaders at all levels model and inspire service excellence.

Ch.11 — Inverted pyramid

An organizational view placing frontline staff and customers at the top, with management supporting them.

Ch.12 — Why loyalty is profitable

Loyal customers buy more, cost less to serve, give referrals, and pay price premiums over time.

Ch.12 — Loyalty is not automatic

Not all loyal customers are profitable, so firms must measure profitability rather than assume it.

Ch.12 — Customer Lifetime Value (CLV)

The net present value of the future profit stream from a customer relationship, including referral value.

Ch.12 — Three loyalty benefits for customers

Confidence benefits, social benefits, and special-treatment benefits.

Ch.12 — Wheel of Loyalty

Three stages: build a foundation for loyalty, create loyalty bonds, and reduce churn drivers.

Ch.12 — Building the loyalty foundation

Target the right customers, tier the service, and strengthen the satisfaction–loyalty link through service quality.

Ch.12 — Value not volume

Acquiring the right customers who fit the firm's capabilities rather than maximizing the number of customers.

Ch.12 — Customer Pyramid tiers

Platinum, Gold, Iron, and Lead, with resources focused on high-value tiers.

Ch.12 — Four loyalty bonds

Reward-based, social, customization, and structural bonds (R-S-C-S).

Ch.12 — Reward-based bond

Financial and non-financial incentives such as points, discounts, and tiers; easily copied by competitors.

Ch.12 — Social bond

Personal relationships and a sense of familiarity; hard to build and hard for rivals to imitate.

Ch.12 — Customization bond

Personalizing the service to each customer so that switching feels costly.

Ch.12 — Structural bond

Integrating processes and systems (often B2B) so it is hard for competitors to lure the customer away.

Ch.12 — Reducing churn

Analyze churn drivers, monitor declining accounts, address root causes, and use a save team for at-risk customers.