MKT 100 Chapter 7

What are the four key characteristics that differentiate services from goods?

1. Intangibility
2. Inseparability
3. Inconsistency (Variability)
4. Inventory (Perishability)

What is intangibility in services?

Services cannot be touched, seen, or stored. Customers rely on tangible cues like logos, environments, or branding to assess quality.

What is inseparability in services?

Services are produced and consumed at the same time. The customer is part of the delivery process (e.g., haircut, doctor visit).

What is inconsistency (variability) in services?

Service quality varies based on the provider, time, and place. Standardization and training are needed to maintain consistency.

What is perishability (inventory) in services?

Services cannot be stored. If unused, they perish (e.g., an empty airline seat). Firms use yield management to manage supply and demand.

What are the four categories of service processes?

1. People processing

2. Possession processing

3. Mental stimulus processing

4. Information processing

What is people processing?

Services that require the customer to be physically present, such as healthcare, salons, or education.

What is possession processing?

Services applied to physical possessions like auto repair, dry cleaning, or lawn care.

What is mental stimulus processing?

Services targeting the mind, such as entertainment, education, or news.

What is information processing?

Services using data to serve customers, e.g., banking, insurance, or consulting.

What is the Service Gap Model?

A model that identifies gaps between customer expectations and actual service. Larger gaps = lower satisfaction and quality perception.

What are the 7 Ps of the extended marketing mix for services?

• Product

• Price

• Place

• Promotion

• People

• Physical Evidence

• Process

What does 'people' refer to in the 7 Ps?

Everyone involved in delivering the service — staff, customers, and other participants who influence service quality.

What does 'physical evidence' mean in services?

Tangible elements that communicate service quality, like décor, uniforms, layout, and materials.

What does 'process' refer to in services?

The actual flow and system of how a service is delivered — including steps, procedures, and customer interaction.

What is mass customization in services?

Using technology to deliver personalized services to a large audience (e.g., customizing phone plans, insurance options).

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What is relationship marketing in services?

A strategy that focuses on long-term engagement and loyalty through programs like memberships or personalized outreach.

What is yield management?

A pricing strategy used to maximize revenue by adjusting prices based on demand (common in airlines, hotels).

What’s the difference between standardized and customized service?

Standardized services are consistent and cost-efficient. Customized services are flexible but higher-cost and more tailored.