Chapter 10 - Services: The intangible product

Question 1

Service

Answer 1

any intangible offering that involves an act, performance, or effort that cannot be physically possessed

Question 2

Customer Service

Answer 2

refers to human and mechanical activities firms undertake to help satisfy their customers’ need and wants - adds value

Question 3

The dependence and the growth of service-oriented economics in developed countries have emerged because:

Answer 3

generally less expensive for firms to manufacture their products in less-developed countries.
people place a high value on convenience and leisure.
the world becomes more complicated, people are demanding more specialized services.

Question 4

Services Marketing Differs from Product Marketing - 4 I’s

Answer 4

Intangible, Inseparable, Inconsistent, Inventory

Question 5

Intangible - 4 I’s

Answer 5

Products cannot be touched, tasted, or seen like a pure product can.
Describing experiences can be hard.
Needs to reinforce value - depends heavily on perceptions of their integrity and trustworthiness.

Question 6

Inseparable (Product and Consumption) - 4 I’s

Answer 6

it is produced and consumed at the same time - that is, service and consumption are inseparable.
Unable to try product before purchases and service provider has an important impact for perception.

Question 7

Inconsistent (Variable) - 4 I’s

Answer 7

its quality may vary because it is provided by humans.
Training and Standardization - reduces inconsistency
Inconsistency can be used to their advantage - customize a service to each customer
Replace People with Machines - Some services tackle the inconsistency issue by replacing people with machines. (Sometimes the technology does not work adequately resulting in dissatisfaction)
Self-checkouts can be successful and increase customer loyalty.
Internet-Enabled Kiosks - Provides the opportunity to order merchandise not available in store and can provide routine customer service

Question 8

Inventory (Perishable) - 4 I’s

Answer 8

it is perishable and cannot be stored in inventory for future use.
makes marketing challenging for services.

Question 9

The Gaps Model

Answer 9

designed to highlight those areas where customers believe they are getting fewer or poorer services than they expected (the gaps) and how they can be closed.

Question 10

Service Gaps

Answer 10

when the delivery of a service fails to meet customer expectations.
4 Service Gaps: Knowledge, Standard, Delivery, Communications

Question 11

Knowledge Gap - Service Gaps

Answer 11

difference between customers’ expectations and the firm’s perception of those customer expectations. Can be closed by matching customer expectation with actual service through research
Best time to collect consumer perception of service quality is at time of sale.
Should make effective use of customer complaint behaviour.
Managers should occasionally be in the front line.

Question 12

Standards Gap - Service Gaps

Answer 12

difference between firm’s perception of customers’ expectations and the service standards it sets. Can be narrowed by setting appropriate service standard and measuring performance.
Can achieve service goals through training and managers must be a good example to follow

Question 13

Delivery Gap - Service Gaps

Answer 13

difference between the firm’s service standards and the actual service it provides to the customers. Closed by getting employees to meet or exceed standards.
reduce gaps by: Empowerment, providing support and incentives, using technology

Question 14

Communication Gaps - Service Gaps

Answer 14

difference between the actual service provided to customers and the service that the firm’s promotion program promises. Closed if they are more realistic about the services they can provide and manage customer expectations.
Don’t over promise and under deliver, do not allow fake reviews, people are generally reasonable when they have realistic expectations.

Question 15

Service Quality

Answer 15

customers’ perception of how well a service meets or exceeds their expectations

Question 16

5 Distinct Service Dimensions to Determine Overall Service Quality

Answer 16

Reliability, responsiveness, assurance, empathy, and tangibles.

Question 17

voice-of-customer (VOC) program

Answer 17

collects customers insights and intelligence to influence and drive business decisions. - helps assess meeting customer expectations

Question 18

Zone of Tolerance

Answer 18

important marketing metric to evaluate how well firms perform on the five service quality dimensions. Refers to the area between customers’ expectations regarding their desired service and the minimum level if acceptable service - that is difference between what the customer really wants and what he or she will accept before going elsewhere.
Desired and expected level of service for each dimension from low-high
Customers perceptions of how well the focal service performs and how well a competitive service performance from low-high
Importance of each service quality dimension

Question 19

Empowerment

Answer 19

means employees are supported in their efforts so they can do their job effectively. Allowing employees to make decisions about how service is provided to customers.

Question 20

Service Recovery

Answer 20

1. Listen to the customer - listen to complaints, let customers “get it out of their system”, work with the customer on a resolution
2. Finding a fair solution - fairness relates to a customer’s perception of the benefits they received compared with the costs, customers want to be compensated a fair amount, reassure customers that the failure won’t happen again
3. Resolving problems quickly - firms need clear policies, adequate training and empowered employees, 56-70% of complaining customers will come back if their complaint is resolved and 96% if its resolved quickly