Chapter 10 - Services: The Intangible Product

Question 1

Customer service

Answer 1

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

Question 2

Services Marketing Differs from Product Marketing

Answer 2

The marketing of services from product marketing because of four fundamental differences unique to services: they are intangible, inseparable, variable (inconsistent), and perishable (inventory)

Question 3

Four I’s

Answer 3

• intangible
• inseparable
• in consisted
• inventory

Question 4

Intangible

Answer 4

They cannot be touched, tasted, or seen like a product can
Difficult to convey the benefits of services

Question 5

Inseparable Product Consumption

Answer 5

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

Question 6

Inconsistent

Answer 6

• variable
• the quality may vary because it is provided by humans

Question 7

Avoid inconsistencies

Answer 7

• 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

Question 8

Inventory

Answer 8

It is perishable and cannot be stored in inventory for future use

Question 9

Providing Great Service: The Gaps Model

Answer 9

• service gap
• knowledge gap
• standards gap
• delivery gap
• communication gap

Question 10

Service gap

Answer 10

results when a service fails to meet the expectations that customers have about how it should be delivered

Question 11

Knowledge gap

Answer 11

• 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

Question 12

Standards gap -

Answer 12

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

Question 13

Delivery gap

Answer 13

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

Question 14

Communication gap

Answer 14

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

Question 15

The Knowledge Gap: Knowing What Customers Want
- understanding customer expectations

Answer 15

based on knowledge and experiences
- Vary according to the type of service, expectations depend on the situation

Question 16

Evaluating service quality by using well-established marketing metrics -
- service quality

Answer 16

customers perceptions of how well a service meets or exceeds their expectations

Question 17

Reliability

Answer 17

the ability to perform the service dependably and accurately

Question 18

Responsiveness

Answer 18

• the willingness to help customers and provide prompt service

Question 19

Assurance

Answer 19

the knowledge of and courtesy by employees and their ability to convey trust and confidence

Question 20

Empathy

Answer 20

• the caring, individualized attention provided to customers

Question 21

Tangibles -

Answer 21

the appearance of physical facilities, equipment, personnel, and communication materials

Question 22

Voice of customer (VOC) program -

Answer 22

an ongoing marketing research system that collects customer insights and intelligence to influence and drive business decisions

Question 23

Zone of tolerance -

Answer 23

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

Question 24

The Standards Gap: Setting Service Standards
- achieving service goals through training

Answer 24

Firms must set specific, measurable goals
Important in high stress situations - working at the airport

Question 25

Commitment to service quality

Answer 25

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

Question 26

The Delivery Gap: Delivering Service Quality

Answer 26

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

Question 27

Methods to Reduce Delivery Gaps
- Empowering Service Providers

Answer 27

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

Question 28

Providing Support and Incentives -

Answer 28

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

Question 29

Using technology

Answer 29

Important means of facilitating the delivery of services
Electronic kiosks

Question 30

Low tech, low effort -

Answer 30

traditional service delivery provided by atms, self-serve kiosk

Question 31

Low tech, high effort

Answer 31

• humans have a strong presence but the role of technology is less

Question 32

High tech, low effort

Answer 32

technology is extremely prominent, but less human effort

Question 33

High tech, high effort -

Answer 33

represents situations in which both human effort and technology are critical

Question 34

The Communication Gap: Communicating the Service Promise

Answer 34

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

Question 35

Service Quality and Customer Satisfaction and Loyalty

Answer 35

Good service quality leads to satisfied and loyal customers
Post Purchase evaluation - customer satisfaction, post purchase dissonance, and customer loyalty

Question 36

Service Recovery

Answer 36

Effective service recovery efforts can significantly increase customer satisfaction, purchase intentions, and positive word-of-mouth

Question 37

Listening to the Customer

Answer 37

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

Question 38

Finding a Fair Solution

Answer 38

• 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

Question 39

Resolving Problems Quickly

Answer 39

• 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