All questions Flashcards
How can loyalty be measured within a service context ?
1) repurchase intention
2) positive WOM
3) lower price sensitivity
Describe the Service Dominant Logic perspective for services. Link this to the value-in-use creation model and explain!
Service dominant logic = A way of looking at services = Every company provides a service in some way (e.g. microwave producer). Value is not simply created and delivered to the customer, the value is co-created in a process that requires the active participation of the producer, and the consumer.
Value in use = value is not created at the time of the exchange between the producer and the consumer but when the customer integrates, applies and uses the resources of a particular producer.
–> In service dominant logic we learn that customer needs to participate and in value in use we learn that in order to get value that the customer needs to do this as well.
Discuss the framework of the service profit chain and its integrating elements ? What is the main philosophy underlying this framework ?
Service profit chain = Profit and growth are stimulated primarily by customer loyalty. Loyalty is a direct result of customer satisfaction. Satisfaction is largely influenced by the value of services provided to customers. Value is created by satisfied, loyal, and productive employees. Employee satisfaction, in turn, results primarily from high-quality support services and policies that enable employees to deliver results to customers.
–> We have to look at the employee as an internal customer as well and satisfy them as well. This means that internal marketing is also very important.
Discuss the service quality model according to Grönroos !
The Grönroos model is a framework that tries to explain how perceived service quality comes about. The perceived service quality depends on the expected service and the experienced service.
It is influenced by:
- Technical qualities of the service = what is delivered? This is the minimal required basis of what needs to be delivered.
- Functional qualities of the service = how is it delivered? Based on this quality, the firm will be able to differentiate them.
- Image of the firm (which is influenced by technical qualities, functional qualities, and the marketing mix elements of the firm).
Discuss the so-called service triangle in services marketing : what different types of marketing exist ? Who are the actors ? Explain!
Service triangle = depicts the three actors that are relevant in the service delivery process and the different types of marketing that occurs between these actors.
Actors:
- Customer
- Company
- Employee
Different types of marketing:
- External marketing = company – customer
- Internal marketing = company – employee
- Interactive marketing = employee – customer
Elaborate on the traditional marketing mix for services ! What marketing instrument deserve attention and what are the extra marketing mix elements that are added in the case of services ?
The traditional marketing mix for services consists of 4 elements:
- Product – Service = Innovation and quality management are very important aspects
- Promotion = Word-of-mouth and personal selling (= employee sells and makes up for the intangible nature of the service)
- Price = used as a quality indicator and is used to manage demand to match the capacity.
- Place = Decentralization of service production, since production and consumption are inseparable with services.
There are 3 additional marketing mix elements for services:
- Participants = co-creation is very important in the service delivery process, which means that all participants play an important role: employees, as well as customers.
- Physical evidence = material environment or anything that makes the service more tangible.
- Process = procedures and steps that are undertaken to deliver the service.
Provide the model that approaches services from a relationship marketing perspective ! What are the critical components ?
Relationship marketing model should be used besides the service marketing mix. The model goes as follows:
- Overall satisfaction is something we want to achieve in order to instill trust so that risk perception is lowered.
- Higher trust = higher commitment/involvement/engagement
- This creates higher loyalty
Summarized: critical components:
- Satisfaction
- Trust
- Commitment
- Loyalty
What are the most important service characteristics as well as the internal and external marketing implications?
The main service characteristics are:
- Intangibility
- Heterogeneity
- Perishability
- Inseparability
Internal marketing implications of intangibility:
- No valid output measures
- Role ambiguity/role conflict
External marketing implications of intangibility:
- Increased risk perception
Internal marketing implications of inseparability:
- Managing client-organizational interface
- Increased functional interdependencies
External marketing implications of inseparability:
- Visibility of production
- Customer participation
Internal marketing implications of heterogeneity:
- Technical & personal input interdependencies
External marketing implications of heterogeneity:
- Uncertainty service quality
Internal marketing implications of perishability:
- Capacity management
External marketing implications of perishability:
- Waiting lines/reservation systems
What is meant by credence qualities ? Explain and provide examples within a services context !
= services have attributes buyers cannot confidently evaluate, even after one or more purchases.
Example: surgery (high) versus hairdresser (low)
What is meant by experience qualities ? Explain and provide examples within a services context !
= can be evaluated only after purchase, such as dinner in a new restaurant, a concert or theater performance, a new movie, or a hairstyle. The customer cannot pass judgment on value until after he or she has experienced the service.
Example: jewelry (low) versus vacation (high)
What is meant by search qualities ? Explain and provide examples within a services context !
= How easy is it to find and compare different options? (has to do with tangibility and not with availability of information) –> High for products.
Example: furniture store (high) vs insurance (low)
What type of qualities exist to distinguish products from services ? Explain and elaborate with specific examples !
There are 3 types of qualities to distinguish products from services:
- Credence qualities = services have attributes buyers cannot confidently evaluate, even after one or more purchases. Example: surgery (high) versus hairdresser (low)
- Experience qualities = can be evaluated only after purchase, such as dinner in a new restaurant, a concert or theater performance, a new movie, or a hairstyle. The customer cannot pass judgment on value until after he or she has experienced the service. Example: jewelry (low) versus vacation (high)
- Search qualities = How easy is it to find and compare different options? (has to do with tangibility and not with availability of information) High for products. Example: furniture store (high) vs insurance (low)
Most goods are high in search qualities, while most services are high in credence qualities.
Goods are easier to evaluate than services.
Explain the GAP-model of Zeithaml et. al. (1985) and specify the main determinants that cause these gaps !
The GAP-model is a framework that identifies 5 gaps in the service quality management of a firm that companies should manage and minimize:
- GAP 1 = Knowledge gap = the distance between what customers expect and what managers think they expect
- GAP 2 = Poor service design = the distance between management perception of expectations and the (customer driven) service designs and standards (= experience specification)
- GAP 3 = Delivery/Performance gap = the distance between service designs and standards and the service delivery
- GAP 4 = Communication gap = the distance between the delivery of the service and what is communicated to customers.
- GAP 5 = Customer gap = the distance between the expected service by customers and the perceived service (quality) by customers.
Gap 1 is caused by:
- Inadequate marketing research orientation
- Inadequate use of marketing research
- Insufficient relationship focus
Gap 2 is caused by:
- Poor service design = not always technical spec problem, sometimes it is simply impossible to develop or integrate certain processes
- Absence of customer-driven standards = companies should develop realistic, customer centric standards
- Inappropriate physical evidence and servicescape
Gap 3 is caused by:
- Deficiencies in human resource policies
- Customers who do not fulfil roles = co-creation and participation is essential
- Problems with service intermediaries
- Capacity management = failure to match supply and demand
- Inadequate service recovery
Gap 4 is caused by:
- Lack of integrated marketing communications
- Ineffective management of customer expectations
- Over-promising
- Inadequate horizontal communications (bad internal communications)
Gap 5 is affected by the 5 dimensions of service quality:
- Reliability
- Responsiveness
- Assurance
- Empathy
- Tangibles
What are the dimensions of service quality?
- Reliability: ability to perform the promised service dependably and accurately
- Responsiveness: willingness to help customers and provide prompt service
- Assurance: employees knowledge and courtesy and their ability to inspire trust and confidence
- Empathy: caring, individual attention given to customers
- Tangibles: appaerance of physical facilities, equipment, personnel and written materials
Discuss the different stages of the consumer decision process ! What are the typical criteria that play an important role within a services context ?
The customer decision process consists of 5 different stages:
1. Need recognition = Maslow’s hierarchy
2. Information search = find information and past experiences of users bundeled online to find information and evaluate alternatives.
3. Evaluation of alternatives = find information and past experiences of users bundeled online to find information and evaluate alternatives.
4. Purchase & consumption = service is a process Evaluate it over time
5. Postpurchase evaluation = customer assessing their satisfaction (if high loyalty and positive WOM)
Since a service is a process, there are many factors that can influence it over time:
- Moods & emotions
- Service provision itself
- Service roles and scripts (employees are an important part and should play their role and follow certain scripts)
- Compatibility of service and customers
- Customer co-production
What different types of services expectations exist. Demonstrate with (an) example(s)!
There are 5 different types of service expectations (example: restaurant):
1. Ideal expectations or desires = highest level of expectation
2. Normative expectations = how the service should be
3. Experienced based norms = very good service, but there are some flaws
4. Acceptable expectations = good service, nothing more, nothing less
5. Minimum tolerable expectations = lowest service level that you are willing to accept.
Between the highest and lowest expectation levels is the zone of tolerance of service quality that you accept. Anything below this zone of tolerance is inadequate.
What variables influence expectations patterns within a services context ? Clearly distinguish between the different expectations levels that exist for services!
There are factors that are uncontrollable for the company:
1. Those that influence the desired service level:
- Lasting service intensifiers = stable factors that won’t change (ex. Personality, values, character, …)
- Personal needs
2. Those that influence the adequate service level:
- Perceived service alternatives = How many alternatives are available
- Self-perceived service role = if a customer perceives their role as important in the process, their adequate service level will be higher as well.
- Situational factors = your adequate service level changes based on the situation (ex. Behavior of insurer when you are in an accident).
- Temporary service intensifiers = occurrences that make people focus more on a certain type of service.
There are also factors that are controllable for the company that influence the desired and adequate service:
- Explicit service promises = communication through advertising
- Implicit service promises = tangibles surrounding a service (ex. high price = expected high quality).
- Online and offline WoM = not fully controllable, but good quality = good WoM.
- Past experiences = company can control this by consistently providing high quality services and providing good past experiences that way.
Discuss the major determinants of customer satisfaction for services ! What sources of (dis)satisfaction are distinguished for different service encounters?
There are several determinants in order to get satisfied customers:
- Features = all characteristics, benefits, … of the service and how well they cover the needs and expectations of the customers.
- Emotions = The emotional state or mood of the customer can determine how the service is perceived and experienced and can therefore influence the satisfaction of said customer.
- Attributions for service failure and success = Will the customer attribute the success or failure of the service delivery to themselves or the service provider? For example: You buy a closet in Ikea, but you are really bad at putting it together and you make a total mess. Then there are 2 types of reactions: you either attribute the failure to yourself and acknowledge that you simply suck at it OR you attribute the failure to Ikea because their manuals are unclear, their materials suck, … These two types of customers will have completely different levels of satisfaction of the Ikea closet.
- Perceptions of equity & fairness = If something goes wrong, customers want to be understood and helped in a fair and equitable manner. This is a very delicate matter, especially when there are other customers that are also being helped. For example: airport, missed flight and all customers before you are being helped and booked to other flights while you are not. Customer satisfaction will be totally different in these cases.
- Consumers, family members & coworkers = people’s judgement heavily depends on the word of mouth of people in their network.
Explain the concept of the Net Promotor Score!
A single survey question asking respondents to rate the likelihood that they would recommend a company, product, or a service to a friend or colleague.
The NPS assumes a subdivision of respondents into “Promoters” who provide ratings of 9 or 10, “Passives” who provide ratings of 7 or 8, and “Detractors” who provide ratings of 6 or lower. Usually, users of the NPS perform a calculation that involves subtracting the proportion of Detractors from the proportion of Promoters collected by the survey item.
Explain the major sources of pleasure and displeasure in Service encounters?
There are 4 common sources of (dis)pleasure in service encounters:
- Recovery = How do employees deal with system failures in the service delivery process?
- Adaptability = To what extent is the service provider able to address the needs of the customer?
- Coping = How employees deal with customers that have experienced issues (= angry customers)?
- Spontaneity = How do employees respond to unforeseen circumstances?
How do satisfaction and service quality relate to one another ? How do they finally relate to profitability and what are their major antecedents ?
Customer (dis)satisfaction is influenced by 5 factors:
- Service quality and all its dimensions (reliability, tangibility, responsiveness, assurance and empathy)
- Product quality = quality of the tangible elements surrounding the service
- Price = the price sets the expectation level and when the service delivery is better or worse than expected, the customer can be satisfied or dissatisfied (resp.).
- Situational factors = who did the service delivery? Was it too busy? Too warm? …
- Personal factors = how well did they co-operate? How well is the fit between customer and service? …
Satisfied customers become loyal customers and loyal customers tend to be more profitable.
What are the 5 quality dimensions found by Zeithaml et. al. following their Servqual-research ? Explain ?
Reliability = delivering on promises
- Providing service as promised dependably and accurately
- Dependability in handling customers’ service problems
- Performing services right the first time
- Providing services at the promised time
Assurance = inspiring trust & confidence
- Employees who inspire trust and confidence
- Making customers feel safe in their transactions
- Employees who are consistently courteous
- Employees who have the knowledge to answer customer questions
Tangibles = representing the service physically
- Modern equipment
- Visually appealing facilities
- Employees who have a neat, professional appearance
- Visually appealing physical and virtual materials associated with the service
Empathy = treating customers as individuals
- Giving customers individual attention
- Employees who deal with customers in a caring fashion
- Having the customer’s best interest at heart
- Employees who understand the needs of their customers
- Convenient business hours
Responsiveness = being willing to help
- Keeping customers informed as to when services will be performed
- Prompt service to customers
- Willingness to help customers
- Readiness to respond to customers’ requests.
What are the main service quality dimensions indicated for e-services ?
Service quality evaluation boils down to 4 core service evaluations:
- Efficiency = The ability of customers to get to the website, find products and information (e.g. is the website easily accessible and is it easy to navigate the site?)
- Fulfillment = The accuracy of service promises, having products in stock, and delivering as promised (e.g. ability of the website to live up to their promises).
- Reliability = The technical functioning of the site, the extent to which it is available and functioning properly (e.g. is the website functional?)
- Privacy = The assurance that shopping behaviour data are not shared and that the information is secure (e.g. is the website safe? Is it safe to share personal information?)
Service recovery evaluation is also important (discussed in following chapters):
- Responsiveness
- Compensation (not always money, but an apology is also good).
- Contact
What type of questions need to be asked to guarantee a successful implementation of the “critical incident technique”. Moreover, discuss the type of service encounters!
Critical incident technique = a research method in which the research participant is asked to recall and describe a time when a behavior, action, or occurrence impacted (either positively or negatively) a specified outcome (for example, the accomplishment of a given task).
Examples of questions that need to be asked in these methods:
- Think of a time when, as a customer, you had a particularly satisfying (dissatisfying) interaction with: ______________.
- When did the incident happen?
- What specific circumstances led up to this situation?
- Exactly what did the employee (or firm member) say or do?
- What resulted that made you feel the interaction was satisfying (or dissatisfying)?
- What could or should have been done differently?
What is satisfaction and what factors play a role in how satisfied customers are?
Satisfaction is the customer’s evaluation of a product or service in terms of whether that product or service has met the customer’s needs and expectations. Failure to meet needs and expectations is assumed to result in dissatisfaction with the product or service
Customer (dis)satisfaction is influenced by 5 factors:
- Service quality and all its dimensions (reliability, tangibility, responsiveness, assurance and empathy)
- Product quality = quality of the tangible elements surrounding the service
- Price = the price sets the expectation level and when the service delivery is better or worse than expected, the customer can be satisfied or dissatisfied (resp.).
- Situational factors = who did the service delivery? Was it too busy? Too warm? …
- Personal factors = how well did they co-operate? How well is the fit between customer and service? …
Discuss how the development of relationships within a services context evolves over time ! What are the major benefits of relationships both from a firm and customers´ perspective ?
Relationship marketing aims to make the customer a partner of the firm in order to optimize the co-creation process. In order to do this we follow the following steps:
1. Customer as strangers = we aim to acquire new customers
2. Customers as acquaintances = once customers are acquired, they are acquaintances. We then need to satisfy them.
3. Customers as friends = once we’ve satisfied customers, they become friends of the company, which is an important antecedent of loyalty. We then have to aim at retaining them.
4. Customers as partners = once customers are retained and loyal to us, we need to enhance the service in order to keep them loyal. In this phase, the customer will engage more with the firm, do WoM, help other customers, …
Benefits for customers:
- Confidence benefits = if a customer returns to a providers and they repeatedly satisfy the customer, then customers are more confident in the provider and anxiety is reduced.
- Social benefits = the more a customer goes to a certain provider, the more familiar he gets with it. This will make the customer feel a social support of other users. Personal aspects are important
- Special treatment benefits = customers can often partake in loyalty programs where they can gain certain special benefits that others won’t be able to get.
Benefits for company:
- Economic benefits = loyal customers spend more and generate more revenue. They are also a source of regular revenue.
- Behavioral benefits = loyal customers engage in WoM, help/monitor other customers (= co-creation), …
- Human resource management benefits = loyal customers create an easier work environment for employees, which makes them more satisfied and thus increases employee retention.
