Chapter 15- Services Flashcards
What is “intangibility”?
One of the differences between services and products– the inability to be tasted, felt, smelt or seen in the conventional sense.
What is “perishability”?
The deterioration over a certain time frame, rendering the service useless. Many services are time sensitive and cannot be salvaged after a certain time. i.e. plane tickets, concert tickets.
What is service capacity?
The maximum level at which a service provider is able to provide service to customers. Being aware of demand patterns is important to smooth out service and ensure that no period is under or over utilized.
What is customer involvement?
How involved is the customer in the service? Does it require a lot of their time? With services, the customer must be physically present, also meaning that the business must establish local people who are culturally aware and can better serve the customer.
What is service consistency?
How consistent is the quality of service? While the quality should always be good, each service experience is unique and too much uniformity may diminish the customer experience because there is not enough flexibility to accommodate the customer’s personal experience.
What is market transparency, and why is it important?
availability of full disclosure of information about key market factors like supply, demand, quality, service and prices. Market transparency lets the consumer make an informed decision– important that the customer trusts the company. However even with market transparency, each customer may perceive the service differently.
What is service heterogeneity?
The degree to which service experiences are the same and uniform. Services are not directly comparable which makes them difficult to compare
What is government regulation?
Government regulation is the government interference in the marketplace.
What is deregulation?
Deregulation fosters competition. Allows companies to enter previously inaccessible foreign markets. Competition stimulates lower prices.
What is the Cost of Communication?
It is the cost of communicating electronically or by phone.The internet and web (and previously fiber optic cables) have greatly reduced the cost of communication.
What are 3 justification used as barriers to entry?
1) National security- protecting the safety of its citizens and the release of information.
2) Economic security- protecting the country’s economic state. Often used to prevent competition from foreign competition and stimulate local businesses.
3) Infant industry- if an industry is new in a country, prevent foreign countries from entering in order to allow the new industry to grow and develop on its own without the competition from established companies.
What are discriminatory regulations?
When a country imposes different rules, regulations, and costs to foreign countries. Giving domestic companies an advantage. i.e. providing domestic companies subsidies, charging higher operation costs to foreign companies.
What is GATS?
General Agreement on Trade in Services. Is a legally enforceable agreement between WTO members to promote free trade in services. Includes- most-favored-nation treatment, transparency in rule making and free flow in payments and transfers. Future agreements made to improve free trade in services.
What are some of the typical international services?
1) Tourism
2) Teaching
3) Insurance
4) Consulting
5) Communication (home banking, home shopping…)
6) Engineering
