Chapter 1: framework for services Flashcards
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 perpective ! 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
How can loyalty be measured within a service context ?
1) repurchase intention
2) positive WOM
3) lower price sensitivity
What is Lovelock’s classification of services?
Lovelock defines services based on 2 dimensions:
- Tangibility of the action: tangible or intangible
- Recipient of the action: people or possessions
