MKT202 - Essay Test Practice

Ch.4 — Core product

The fundamental benefit the customer truly buys (e.g., a hotel room to sleep in).

Ch.4 — Supplementary services

Add-on services that surround the core product to add value and differentiate it.

Ch.4 — Delivery processes

The methods by which the core and supplementary services are delivered to the customer.

Ch.4 — Flower of Service

A model showing the core product surrounded by facilitating and enhancing supplementary services as petals.

Ch.4 — Facilitating supplementary services

Services required to deliver or use the core product: Information, Order-taking, Billing, Payment (I-O-B-P).

Ch.4 — Enhancing supplementary services

Services that add extra value and appeal but are not essential: Consultation, Hospitality, Safekeeping, Exceptions (C-H-S-E).

Ch.4 — Information petal

Facilitating petal: giving customers details such as directions, schedules, prices and conditions.

Ch.4 — Order-taking petal

Facilitating petal: accepting applications, orders, reservations and bookings.

Ch.4 — Billing petal

Facilitating petal: giving customers clear, accurate and timely statements of what they owe.

Ch.4 — Payment petal

Facilitating petal: enabling customers to pay easily through various methods.

Ch.4 — Consultation petal

Enhancing petal: advising and tailoring solutions to the customer's needs.

Ch.4 — Hospitality petal

Enhancing petal: treating customers as welcome guests with lounges, refreshments and courtesy.

Ch.4 — Safekeeping petal

Enhancing petal: looking after customers' possessions such as parking, baggage and storage.

Ch.4 — Exceptions petal

Enhancing petal: handling special requests, problem solving, complaints/compliments and restitution.

Ch.4 — Restitution

Compensation given to customers for a service failure, such as a refund, repair or free service.

Ch.4 — Branding tiers order

Branded house, then Sub-brands, then Endorsed brands, then House of brands.

Ch.4 — Brand equity

The added value a brand name gives to a service in customers' minds.

Ch.4 — Major service innovations

The highest level of new service development: brand-new core products for markets not previously defined.

Ch.4 — New-service success factors (MOM)

Market synergy, Organizational factors, and Market research factors.

Ch.6 — Pricing tripod

The three bases of pricing: cost-based, competition-based and value-based.

Ch.6 — Cost-based pricing

Setting price by adding a margin above fixed, variable and semi-variable costs.

Ch.6 — Competition-based pricing

Setting price relative to competitors' market prices.

Ch.6 — Value-based pricing

Setting price according to the value customers perceive they receive.

Ch.6 — Net value

Perceived benefits minus perceived costs.

Ch.6 — Non-monetary costs

Non-money costs customers bear: time, physical and mental effort, and sensory costs.

Ch.6 — Revenue (yield) management

Selling the right capacity to the right customer at the right price at the right time to maximize revenue.

Ch.6 — Conditions for revenue management

Fixed perishable capacity, high fixed costs, fluctuating demand, and segments with different price sensitivity.

Ch.6 — Price elasticity of demand

The percentage change in demand divided by the percentage change in price.

Ch.6 — Elastic demand

Demand that is highly sensitive to price changes.

Ch.6 — Inelastic demand

Demand that is barely affected by price changes.

Ch.6 — Rate fences

Justifiable conditions that allow a firm to charge different customers different prices.

Ch.6 — Physical (tangible) rate fences

Fences based on tangible product differences such as room class or seat location.

Ch.6 — Non-physical rate fences

Fences based on transaction characteristics such as booking time, cancellation terms or customer group.

Ch.6 — Seven pricing questions

How much, what basis, who collects, where, when, how to pay, and how to communicate.

Ch.8 — Flowcharting

Mapping the sequence of steps customers experience to understand the service process.

Ch.8 — Four processing types

People, possession, mental stimulus, and information processing.

Ch.8 — People processing

Services directed at customers' bodies, such as a haircut or medical treatment.

Ch.8 — Possession processing

Services directed at customers' physical possessions, such as car repair or laundry.

Ch.8 — Mental stimulus processing

Services directed at customers' minds, such as education or entertainment.

Ch.8 — Information processing

Services directed at intangible assets, such as banking or insurance.

Ch.8 — Service blueprint

A detailed map of the service process that distinguishes frontstage from backstage activities.

Ch.8 — Frontstage

The parts of the service the customer sees and experiences.

Ch.8 — Backstage

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

Ch.8 — Line of interaction

The line separating the customer from frontstage contact staff.

Ch.8 — Line of visibility

The line separating frontstage (visible) from backstage (invisible) activities.

Ch.8 — Line of internal interaction

The line separating frontstage staff from backstage support staff.

Ch.8 — Fail point

A step in the process where errors are likely to occur.

Ch.8 — Wait point

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

Ch.8 — Poka-yoke

A fail-safe mechanism designed to prevent errors in the service process.

Ch.8 — Service process redesign goals

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

Ch.8 — Customers as co-creators

Customers who contribute effort, information or skill to produce the service, at low, medium or high levels.

Ch.8 — Self-Service Technologies (SST)

Technologies that let customers produce a service themselves without staff, such as ATMs, kiosks and apps.

Ch.8 — Three SST test questions

Is it reliable, is it better than the staffed option, and can it recover from failure?

Ch.8 — Service recovery

The actions taken to fix a service failure and retain the customer; SST's main weakness is lacking it.

Ch.9 — Productive capacity

The resources or assets a firm uses to create service output.

Ch.9 — Excess demand

Demand exceeds capacity, so business is lost.

Ch.9 — Demand exceeds optimum capacity

Demand is too high, causing overload and falling quality.

Ch.9 — Optimum capacity

The balanced level where supply meets demand and quality is maintained.

Ch.9 — Excess capacity

Demand is below capacity, wasting resources.

Ch.9 — Maximum vs optimum capacity

Maximum is the absolute limit; optimum is the best level that still maintains quality, and they are not equal.

Ch.9 — Stretch capacity

Temporarily expanding capacity, such as allowing standing room or extending hours.

Ch.9 — Adjust capacity

Changing capacity to match demand through cross-training, part-timers or scheduling maintenance in lulls.

Ch.9 — Cross-training

Training employees to perform multiple roles so capacity can flex where needed.

Ch.9 — Five demand-management strategies

Take no action, reduce demand, increase demand, inventory demand by queuing, and inventory demand by reservation.

Ch.9 — Tools to reshape demand

Price, product elements, place/time, and promotion & 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 book in advance.

Ch.9 — Queue allocation bases

Urgency, duration of transaction, premium price, and importance of the customer.

Ch.9 — Virtual queue

A system that holds a customer's place in line without physically waiting.

Ch.9 — Maister's waiting principle

Perceived waiting time matters more than actual time; waits feel longer when unoccupied, solo, unexplained or unfair.

Ch.9 — Overbooking

Accepting more reservations than capacity to offset no-shows, compensating any bumped customers.

Ch.9 — Yield

Revenue earned per available capacity unit; managing it means not selling cheap today if higher-paying demand may come.