Chp 10: services: the intangible product Flashcards
define service
any intangible offering that cannot be physically possessed
define customer service
specifically refers to human or mechanical activities firms undertake to help satisfy their customer’s needs and wants
what does good customer service do?
adds value to products and can be used to maintain sustainable competitive advantage
explain service product continuum with example
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
3 reasons canadian economy depending on services
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
4 unique characteristics affecting service
1) inseparable from providers
2) inconsistent (variable)
3) inventory (cannot be held in inventory, perishable)
4) intangible
define intangible
cannot be touched, tasted or seen like pure product can
2 points to intangible characteristic of service
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
define inseparable
service is produced and consumed at same time - service and consumption are inseparable
2 points to inseparable as service characteristic
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
define inconsistent
quality may vary because it is provided by humans
problem with inconsistent as service characteristic
Low quality service can’t be recalled and often damage is already done
3 things you can do for inconsistent service characteristic
1) training + standardization
2) replace people with machines
3) internet enabled kiosks
inconsistent: 3 points to training + standardization solution
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.
inconsistent: 4 points to replace people with machines
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
inconsistent: 4 points to internet enabled kiosks
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
define inventory
service is perishable and cannot be stored in inventory for future use
3 points to inventory service characteristic
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
intention of Gaps model
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
define service gap
results when service fails to meet expectations that customers have about how it should be delivered
4 service gaps
knowledge gap, standards gap, delivery gap, communication gap
5 steps in gaps model
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
define knowledge gap
reflects the differences between customer’s expectations and firm’s perceptions of those expectations
how to close knowledge gap
Can close gap by matching customer expectations with actual service through research
2 steps for knowledge gap
1) understanding consumer expectations
2) evaluating service quality by using well established marketing metrics
knowledge gap: 3 points to understanding consumer expectations
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)
define service quality
customers perceptions of how well a service meets or exceeds their expectations
5 building blocks of service quality
1) reliability
2) responsiveness
3) assurance
4) empathy
5) tangibles
define reliability
Ability to perform service dependably + accurately
define responsiveness
Willingness to help customers + provide prompt service
define assurance
Knowledge of and courtesy by employees and their ability to convey trust + confidence
define empathy
Caring, individualized attention provided to customers
define tangible
Appearance of physical facilities, equipment, personnel and communication materials
define zone of tolerance
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
questions to define zone of tolerance
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
how can firm get consumer perceptions of how well service performs
firm can ask through surveys, at time of purchase, calling customers later, walking around and listening to customers as they shop
define voice of customer program
ongoing marketing research system that collects customer insights and intelligence to influence and drive business decisions
how can we use voice of customer program
Can be used to understand customer expectations
examples of voice of customer programs
Example: reading customer emails, online surveys
define standards gap
difference between firm’s perceptions of customer expectations and service standards it sets
how to close standards gap
Can close gap by setting appropriate service standards and measuring service performance
2 things to do for standards gap
1) achieve service goals through training
2) commitment to service quality
2 points in standards gap: achieve service goals through training
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
2 points in standards gap: commitment to service quality
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
define delivery gap
difference between firm’s service standards and actual service it provides to customers
how to close delivery gap
Can close gap by getting employees to meet or exceed service expectations
3 steps for delivery gap
1) empowering service providers
2) providing support and incentives
3) using tech
delivery gap: 3 points to empowering service providers
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
define empowerment
allowing employees to make decisions about how service is provided to customers
delivery gap: 4 points to providing support and incentives
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
delivery gap: 4 points to using tech
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
define communication gap
differences between actual service provided to customer and service that firm’s promotion program promises
how to close communication gap
Can close gap by being more realistic about services they can provide and manage customer expectations effectively
4 points to communication gap
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.
explain 3 evaluations after service
customer satisfaction, post purchase dissonance, customer loyalty.
what happens if customers don’t experience service gaps
they will be satisfied and may have loyal customers. Customers will continue wanting the superior service and won’t go elsewhere.
what can effective service recovery do
can increase customer satisfaction, purchase intentions, positive word of mouth
3 service recovery strategies
1) listening to customer
2) finding fair solution
3) resolving problems quickly
2 points to recovery: listening to customer
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
3 points to recovery: finding fair solution
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
2 points to recovery: resolving problems quickly
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
