Chapter 13 (New Unit) Flashcards
Service:
Intangible product that involves a deed, performance, or effort not physically possessed, human/mechanical efforts directed at people or objects, service is not the same as customer service.
Service is important in the U.S:
World’s first service economy, long-term economic growth and lifestyle changes have encouraged service sector expansion, business services have grown as environment becomes more complex.
Service characteristics:
Intangibility, inseparability of production and service, perishability, heterogeneity, client-based relationships, close customer contact.
Intangibility (service characteristic):
Not physical good, cannot perceive without senses, cannot be physically possessed, branding gives cues about quality, tangibility continuum.
Inseparability of production and service (service characteristics):
Service product cannot be separated from service provider producing it and consumer consuming it, simultaneous production and consumption, providers and consumers must be present, co-creation of value.
Perishability (service characteristics):
Unused service cannot be stored, once its gone its gone, scheduling techniques, scheduling and inventorying techniques to balance supply/demand.
Heterogeneity (service characteristic):
Variation in quality, variation from person to person firm to firm, employee training helps, equipment-based service more consistent.
Client-based relationships (service characteristic):
Customers use service repeatedly, close long-term relationships, ongoing basis, word-of-mouth is important, build trust loyalty.
Close customer contact (service characteristics):
Level of interaction, high (people) low (technology), facility appearance, employee satisfaction training and empowerment.
Intangibility (marketing challenges):
Difficult for customers to evaluate, customer does not take physical possession, difficult to advertise and display, difficult to set and justify prices, service process is usually not protected by patents.
Inseparability of production/consumption (marketing challenge):
Service provider cannot mass produce services, customer must participate in production, other customers affect service outcomes, services are difficult to distribute.
Perishability (marketing challenge):
Services cannot be stored, balancing supply and demand is very difficult, unused capacity is lost forever, demand may be very time sensitive.
Heterogeneity (marketing challenge):
Service quality is difficult to control, service delivery is difficult to standardize.
Client-based relationships (marketing challenge):
Success depends on satisfying and keeping customers over the long term, generating repeat business is challenging, relationship marketing becomes difficult.
Customer contact (marketing challenge):
Service providers are critical to delivery, requires high levels of service employee training and motivation, changing from high to low contact difficult to achieve without reducing satisfaction.
