Chp 10: services: the intangible product

Question 1

define service

Answer 1

any intangible offering that cannot be physically possessed

Question 2

define customer service

Answer 2

specifically refers to human or mechanical activities firms undertake to help satisfy their customer’s needs and wants

Question 3

what does good customer service do?

Answer 3

adds value to products and can be used to maintain sustainable competitive advantage

Question 4

explain service product continuum with example

Answer 4

1) service dominant to product dominant
2) Doctor -> hotel -> dry cleaners -> restaurant -> apparel speciality store -> grocery store
3) Restaurants offer product with an embedded service element

Question 5

3 reasons canadian economy depending on services

Answer 5

1) service production to goods production in canada increased over time because goods are often manufactured for cheap in less developed countries
2) consumers place high value on convenience and leisure time and are willing to pay someone for this
3) people demanding for specialized services as world is more complex like massage therapists, lawyers

Question 6

4 unique characteristics affecting service

Answer 6

1) inseparable from providers
2) inconsistent (variable)
3) inventory (cannot be held in inventory, perishable)
4) intangible

Question 7

define intangible

Answer 7

cannot be touched, tasted or seen like pure product can

Question 8

2 points to intangible characteristic of service

Answer 8

1) Can be difficult to convey benefits of services. Providers offer cues to help customers experience and perceive service more positively like tv sets in waiting rooms, upscale beverages, comfortable chairs, free wifi to appeal to target market
2) Use symbols and images to promote and sell services that can’t be shown
Ex. disney with mickey mouse evoking images of happy families
Ex. images in waiting rooms of doctors doing jobs with happy patients

Question 9

define inseparable

Answer 9

service is produced and consumed at same time - service and consumption are inseparable

Question 10

2 points to inseparable as service characteristic

Answer 10

1) Provide opportunities for consumers to get involved in service
2) Because of this, consumers don’t have opportunity to try service before purchasing, so may offer extended warranties or 100% satisfaction guarantees

Question 11

define inconsistent

Answer 11

quality may vary because it is provided by humans

Question 12

problem with inconsistent as service characteristic

Answer 12

Low quality service can’t be recalled and often damage is already done

Question 13

3 things you can do for inconsistent service characteristic

Answer 13

1) training + standardization
2) replace people with machines
3) internet enabled kiosks

Question 14

inconsistent: 3 points to training + standardization solution

Answer 14

1) Reduces inconsistency
2) Like greetings in same personalized way. Create smooth and pleasant service transaction.
3) Can be to firm advantage - micromarketing segmentation can customize service to meet customer needs exactly.

Question 15

inconsistent: 4 points to replace people with machines

Answer 15

1) Example: self checkout machines
2) Watch for tech that does not perform adequate and causes customer dissatisfaction and queuing problems
3) Machines can be quicker, more convenient, and less variable than humans
4) Can increase customer loyalty for customers who want to move quickly

Question 16

inconsistent: 4 points to internet enabled kiosks

Answer 16

1) Can order goods not available in store, can provide customer service, freeing employees to deal with more demanding customer problems and reducing service variability
2) Can be used to see if specific goods are available in store
3) Can be used to automate existing store services like gift registry management, rain checks, credit applications, film drop offs. Preorders
4) Internet in general has reduced service inconsistency

Question 17

define inventory

Answer 17

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

Question 18

3 points to inventory service characteristic

Answer 18

1) Cannot perfectly match demand and supply, but can stimulate demand on off peak seasons like by offering promotional pricing
2) Excess demand may mean turning away customers since can’t be stockpiled
3) Excess capacity can mean less desirable expense to revenue ratios (some people still need to be paid without customers like rent)
- > Deal with this by charging forgotten appointments, reminder calling

Question 19

intention of Gaps model

Answer 19

designed to highlight areas where customers believe they are getting fewer or poorer service (service gap) than they expect and how the gaps can be closed

Question 20

define service gap

Answer 20

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

Question 21

4 service gaps

Answer 21

knowledge gap, standards gap, delivery gap, communication gap

Question 22

5 steps in gaps model

Answer 22

1) customer expectations for service quality
2) management perceptions of customer expectations
3) standards specifying service to be delivered
4) actual service delivered
5) retailer communications about service quality

Question 23

define knowledge gap

Answer 23

reflects the differences between customer’s expectations and firm’s perceptions of those expectations

Question 24

how to close knowledge gap

Answer 24

Can close gap by matching customer expectations with actual service through research

Question 25

2 steps for knowledge gap

Answer 25

1) understanding consumer expectations

2) evaluating service quality by using well established marketing metrics

Question 26

knowledge gap: 3 points to understanding consumer expectations

Answer 26

1) Customer expectations are based on knowledge and experiences
2) Expectations vary according to type of service (for higher end hotel expectations are higher)
3) Expectations vary depending on situation (for wedding you have higher expectations than business trip)

Question 27

define service quality

Answer 27

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

Question 28

5 building blocks of service quality

Answer 28

1) reliability
2) responsiveness
3) assurance
4) empathy
5) tangibles

Question 29

define reliability

Answer 29

Ability to perform service dependably + accurately

Question 30

define responsiveness

Answer 30

Willingness to help customers + provide prompt service

Question 31

define assurance

Answer 31

Knowledge of and courtesy by employees and their ability to convey trust + confidence

Question 32

define empathy

Answer 32

Caring, individualized attention provided to customers

Question 33

define tangible

Answer 33

Appearance of physical facilities, equipment, personnel and communication materials

Question 34

define zone of tolerance

Answer 34

area between customers expectations regarding desired service and minimum level of acceptable service - difference between what customer really wants and what she will accept before going elsewhere

Question 35

questions to define zone of tolerance

Answer 35

1) Desired + expected level of service for each dimension
2) Customers perceptions of how well focal service performs and well competitive service performs
3) Importance of each service quality dimension

Question 36

how can firm get consumer perceptions of how well service performs

Answer 36

firm can ask through surveys, at time of purchase, calling customers later, walking around and listening to customers as they shop

Question 37

define voice of customer program

Answer 37

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

Question 38

how can we use voice of customer program

Answer 38

Can be used to understand customer expectations

Question 39

examples of voice of customer programs

Answer 39

Example: reading customer emails, online surveys

Question 40

define standards gap

Answer 40

difference between firm’s perceptions of customer expectations and service standards it sets

Question 41

how to close standards gap

Answer 41

Can close gap by setting appropriate service standards and measuring service performance

Question 42

2 things to do for standards gap

Answer 42

1) achieve service goals through training

2) commitment to service quality

Question 43

2 points in standards gap: achieve service goals through training

Answer 43

1) Employees need to know what is expected of them and be shown exactly what to do
2) Manager needs to set high service standards to permeate through org

Question 44

2 points in standards gap: commitment to service quality

Answer 44

1) Employees take cue from management, they need to set example
2) Profit sharing plan can help by giving employees reasons to ensure high levels of service quality by making them owners

Question 45

define delivery gap

Answer 45

difference between firm’s service standards and actual service it provides to customers

Question 46

how to close delivery gap

Answer 46

Can close gap by getting employees to meet or exceed service expectations

Question 47

3 steps for delivery gap

Answer 47

1) empowering service providers
2) providing support and incentives
3) using tech

Question 48

delivery gap: 3 points to empowering service providers

Answer 48

1) Employees need to be empowered to act in customers and firms best interest when problems are experienced
2) Making employees involved means they are happier and treat customers better
3) Empowerment becomes more important when price points are high and service more individualized

Question 49

define empowerment

Answer 49

allowing employees to make decisions about how service is provided to customers

Question 50

delivery gap: 4 points to providing support and incentives

Answer 50

overall: Support employees and give them incentives
1) Provide emotional support by demonstrating concern for well being and stand behind their decisions
2) Provide instrumental support (systems + equipment needs to deliver service properly)
3) support must be consistent throughout org (no conflicting goals of being busy but giving each customer attention)
4) provide rewards for employees for excellent service

Question 51

delivery gap: 4 points to using tech

Answer 51

1) Tech is important to facilitate delivery of services
2) Tech can enable customers to buy more quickly, more easily and with more info. Reduces inconsistency of providing service
4) Ex kiosks and self checkout machines
5) Can reduce costs and can develop competitive advantage for firm

Question 52

define communication gap

Answer 52

differences between actual service provided to customer and service that firm’s promotion program promises

Question 53

how to close communication gap

Answer 53

Can close gap by being more realistic about services they can provide and manage customer expectations effectively

Question 54

4 points to communication gap

Answer 54

1) An ad may lure customer but if service doesn’t deliver, customer may never return and spread negative word of mouth
2) Manage customer expectations by coordinating with those responsible for service delivery and marketing. Consider time expectation is created and time service is provided.
3) Expectations created through promotions
4) Can also warn customers that there may be limited supplies due to busy season and to shop early. People don’t like surprises and will be reasonable if warned.

Question 55

explain 3 evaluations after service

Answer 55

customer satisfaction, post purchase dissonance, customer loyalty.

Question 56

what happens if customers don’t experience service gaps

Answer 56

they will be satisfied and may have loyal customers. Customers will continue wanting the superior service and won’t go elsewhere.

Question 57

what can effective service recovery do

Answer 57

can increase customer satisfaction, purchase intentions, positive word of mouth

Question 58

3 service recovery strategies

Answer 58

1) listening to customer
2) finding fair solution
3) resolving problems quickly

Question 59

2 points to recovery: listening to customer

Answer 59

1) Firm must be sympathetic, listen to customer complaints, and appear anxious to rectify the situation to ensure it doesn’t happen again
2) Having customers participate in resolution results in more positive outcome because you want best solution for the customer

Question 60

3 points to recovery: finding fair solution

Answer 60

1) Customer’s perception of what fair means is based on previous experience with other firms, how they have seen other customers treated, and past experiences
2) Fairness relates to consumer’s perception of benefits they receive compared with costs (inconvenience or loss)
3) Consumers want tangible restitution, if that can’t happen then assure customer steps are being taken to prevent failure from reoccurring

Question 61

2 points to recovery: resolving problems quickly

Answer 61

1) To resolve problems quickly, firms need clear policies, adequate training, empowered employees
2) If you don’t resolve problems quickly consumers will be upset and be more likely to spread negative word of mouth