Chapter 10 - Services: The Intangible Product Flashcards
Customer service
refers to human or mechanical activities firms undertake to help satisfy their customers needs and wants
- Providing good customer service adds value to the firm
Services Marketing Differs from Product Marketing
The marketing of services from product marketing because of four fundamental differences unique to services: they are intangible, inseparable, variable (inconsistent), and perishable (inventory)
Four I’s
- intangible
- inseparable
- in consisted
- inventory
Intangible
They cannot be touched, tasted, or seen like a product can
Difficult to convey the benefits of services
Inseparable Product Consumption
A characteristic of a service: it is produced and consumed at the same time – that is, service and consumption are inseparable
Due to the purchase risk in these scenarios sometimes services provide extended warranties
Inconsistent
- variable
- the quality may vary because it is provided by humans
Avoid inconsistencies
- Training and standardization - reduce inconsistency, micromarketing segmentation strategy can customize a service to meet customers needs exactly
- Replace people with machines - ATM, self checkout machines
- Internet-enables kiosks - provide routine customer service, freeing employees to deal with more demanding customer requests and problems and reducing service variability
Inventory
It is perishable and cannot be stored in inventory for future use
Providing Great Service: The Gaps Model
- service gap
- knowledge gap
- standards gap
- delivery gap
- communication gap
Service gap
results when a service fails to meet the expectations that customers have about how it should be delivered
Knowledge gap
- reflects the difference between customers expectations and the firms perception of those customer expectations - can close the gap by matching customer expectations with actual service through research
Standards gap -
pertains to the difference between the firms perceptions of customer service standards it sets. Firms can narrow this gap by setting appropriate service and measuring service performance
Delivery gap
the difference between the firms service standards and the actual service it provides to customers, this gap can be closed by getting employees to meet or exceed service standards
Communication gap
refers to the difference between the actual service provided to customers and the service that the firms promotion program promises - firms can close this gap if they are more realistic about the services they can provide and manage customer expectations effectively
The Knowledge Gap: Knowing What Customers Want
- understanding customer expectations
based on knowledge and experiences
- Vary according to the type of service, expectations depend on the situation
Evaluating service quality by using well-established marketing metrics -
- service quality
customers perceptions of how well a service meets or exceeds their expectations
Reliability
the ability to perform the service dependably and accurately
Responsiveness
- the willingness to help customers and provide prompt service
Assurance
the knowledge of and courtesy by employees and their ability to convey trust and confidence
Empathy
- the caring, individualized attention provided to customers
Tangibles -
the appearance of physical facilities, equipment, personnel, and communication materials
Voice of customer (VOC) program -
an ongoing marketing research system that collects customer insights and intelligence to influence and drive business decisions
Zone of tolerance -
the area between customers expectations regarding their desired service and the minimum level of acceptable service – that is, the difference between what the customers really wants and what they will accept before going elsewhere
The Standards Gap: Setting Service Standards
- achieving service goals through training
Firms must set specific, measurable goals
Important in high stress situations - working at the airport
Commitment to service quality
Service providers take their cues from management, if management strives for excellent service, treat their customers well, and demand the same attitudes form everyone in the organization, it is likely employees will do the same
The Delivery Gap: Delivering Service Quality
Where the customer directly interacts with the service provider, even if there are no gaps, a delivery gap always results in a service failure
- Can be reduced when employees are empowered to spontaneously act in the customers’ and the firms best interests when problems or crises are experienced
Methods to Reduce Delivery Gaps
- Empowering Service Providers
Empowerment - allowing employees to make decisions about how service is provided to customers
Can be difficult and costly
Becomes more important when price points edge higher and services are more individualized
Providing Support and Incentives -
Customer service can be difficult especially when customers are unpleasant of less than reasonable
- To ensure that service is delivered properly, management needs to support service providers and give them incentives - provide emotional support and instrumental support - deliver service properly
Using technology
Important means of facilitating the delivery of services
Electronic kiosks
Low tech, low effort -
traditional service delivery provided by atms, self-serve kiosk
Low tech, high effort
- humans have a strong presence but the role of technology is less
High tech, low effort
technology is extremely prominent, but less human effort
High tech, high effort -
represents situations in which both human effort and technology are critical
The Communication Gap: Communicating the Service Promise
Poor communication between marketers and their customers can result in a mismatch between an ad campaigns or a salesperson promises and the service the firm can actually offer
- Can be reduced by managing customer expectations - through promotion
Service Quality and Customer Satisfaction and Loyalty
Good service quality leads to satisfied and loyal customers
Post Purchase evaluation - customer satisfaction, post purchase dissonance, and customer loyalty
Service Recovery
Effective service recovery efforts can significantly increase customer satisfaction, purchase intentions, and positive word-of-mouth
Listening to the Customer
Service providers should welcome the opportunity to be a sympathetic ear, listen carefully, and appear eager to to rectify the situation to ensure it does not happen again
Finding a Fair Solution
- Their perception of what fair means is based on previous experiences with other firms, how they have seen other customers treated, material they have read, and stories recounted by their friends
- Fairness relates to a customer’s perception of the benefits they receive compared with the costs (inconvenience or loss) - customers want to be compensated a fair amount for perceived loss
- Key is to listen carefully
Resolving Problems Quickly
- Longer it takes to solve a problem, the more irritated the customer will become and the more people they are likely to tell about the problem
- To resolve issues quickly firms need clear policies, adequate training for their employees, and empowered employees
- Companies should welcome complaints and make it easy for customers to provide feedback, and listen carefully about what customers have to say
