7.3 Services Marketing

Question 1

How do governments offer services?

Answer 1

Governments offer services through courts, employment services, hospitals, military services, police and fire departments, the postal service, and schools.

Question 2

What do private not-for-profit organizations offer services therough?

Answer 2

Private not-for-profit organizations offer services through museums, charities, churches, colleges, foundations, and hospitals.

Question 3

A company must consider four special service characteristics when designing marketing programs. What are they?

Answer 3

Intangibility, inseparability, variability, and perishability

Question 4

Definition of Service intangibility

Answer 4

Service intangibility:

Services cannot be seen, tasted, felt, heard, or smelled before they are bought.

Question 5

Definition of Service inseparabiliy

Answer 5

Service inseparability:

Services are produced and consumed at the same time and cannot be separated from their providers.

Question 6

Definition of Service variability.

Answer 6

Service variability:

The quality of services may vary greatly depending on who provides them and when, where, and how they are provided.

Question 7

Definition of Service perishability

Answer 7

Service perishability:

Services cannot be stored for later sale or use.

Question 8

Definition of Service profit chain.

Answer 8

Service profit chain:

The chain that links service firm profits with employee and customer satisfaction.

Question 9

What are the five lings of the Service Profit Chain?

Answer 9

Question 10

Definition of Internal Marketing

Answer 10

Internal marketing:

Orienting and motivating customer-contact employees and supporting service employees to work as a team to provide customer satisfaction.

In fact, internal marketing must precede external marketing.

Question 11

Definition of Interactive marketing.

Answer 11

Interactive marketing:

Training service employees in the fine art of interacting with customers to satisfy their needs.

Question 12

Figure 7.4 Three Types of Services Marketing

Answer 12

Question 13

Service companies face three major marketing tasks:

Answer 13

They want to increase their
Service differentiation
Service quality
Service productivity

Question 14

What is the solution to price competition?

Answer 14

The solution to price competition is to develop a differentiated offer, delivery, and image.

The offer can include innovative features that set one company’s offer apart from competitors’ offers.

Service companies can differentiate their service delivery by having more able and reliable customer-contact people, developing a superior physical environment in which the service product is delivered, or designing a superior delivery process.

Finally, service companies also can work on differentiating their images through symbols and branding.

Question 15

How can a service firm differentiate itself?

Answer 15

A service firm can differentiate itself by delivering consistently higher quality than its competitors provide.

Like manufacturers before them, most service industries have now joined the customer-driven quality movement.

And like product marketers, service providers need to identify what target customers expect in regard to service quality.

Question 16

What is the challenge with service quality compared to product quality?

Answer 16

Unfortunately, service quality is harder to define and judge than product quality.

Question 17

How can a service product recover from a bad experience with a customer?

Answer 17

Good service recovery can turn angry customers into loyal ones.

In fact, good recovery can win more customer purchasing and loyalty than if things had gone well in the first place.

Question 18

What is the process of service recovery? LATTE

Answer 18

LATTE stands for Listen to the customer, Acknowledge their complaint,
Take action by solving the problem,
Thank them, and then
Explain why the problem occurred.

By listening and taking positive action, Starbucks employees can often turn upset customers into delighted ones.

Question 19

What is a relativly new tool that companies can use to root out and remedy customer dissastisfaction?

Answer 19

These days, social media such as Facebook, Instagram, and Twitter can help companies root out and remedy customer dissatisfaction with service. As discussed in Chapter 4, companies now monitor the digital space to spot customer issues quickly and respond in real time.

Question 20

What are some ways a company can raise service productivity?

Answer 20

They can train current employees better or hire new ones who will work harder or more skilfully.

Or they can increase the quantity of their service by giving up some quality.

Finally, a service provider can harness the power of technology. Although we often think of technology’s power to save time and costs in manufacturing companies, it also has great—and often untapped—potential to make service workers more productive.

Question 21

What is an important thing to keep in mind when trying to raise service productivity?

Answer 21

Companies must avoid pushing productivity so hard that doing so reduces quality.

Attempts to streamline a service or cut costs can make a service company more efficient in the short run.

But that can also reduce its longer-run ability to innovate, maintain service quality, or respond to consumer needs and desires.

Question 22

What must companies be mindful of when trying to raise service productivity?

Answer 22

In attempting to improve service productivity, companies must be mindful of how they create and deliver customer value.

They should be careful not to take service out of the service.

In fact, a company may purposely lower service productivity to improve service quality, in turn allowing it to maintain higher prices and profit margins.