Guido

Question 1

Name the 4 competitive strategies by Porter

Answer 1

1. Cost leadership (ability to design, produce and market a comparable product more efficiently than competitors)
2. Differentiation (ability to provide unique and superior value to the buyer in terms of product quality, special features or after-sales service)
3. Broad target (Aim at the middle of the mass market)
4. Narrow target (Aim at a market niche)

Question 2

What happens if you don’t achieve 1 of 4 strategies by Porter?

Answer 2

1. You’re stuck in the middle, no competitive advantage.

2. Below-average financial performance

Question 3

What does the service quality-productivity profit triangle do and consist of?

Answer 3

It consists of:

1. Service quality
2. Productivity
3. Profit

If one goes up, the others go as well. This works the same way if it goes down.

Question 4

The dimensions of customer loyalty.

What happens if you have a positive buying pattern + a positive attitude?

Answer 4

A true loyal customer

Question 5

How much more does it cost to gain new customers instead of keeping the current ones satisfied?

Answer 5

Up to 5x

Question 6

How many customers does an average company lose per year?

Answer 6

10%

Question 7

Name the 3 parts of the wheel of loyalty

Answer 7

1. Build a foundation for loyalty

Deliver quality service
Manage the customer base via effective tiering of service
Segment the market to match customer needs

2. Create loyalty bonds

Give loyalty rewards
Deepen the relationship via bonding

3 Reduce churn drivers (people who stop buying)

Put effective complaint handling
Monitor churning customers

Question 8

Name the 7 P’s of marketing

Answer 8

1. Product/service
2. Price
3. Promotion
4. Place
5. Physical environment
6. Process
7. People

Question 9

Of which 3 components consist ‘Product/Service’?

Answer 9

1. Core product = What the customer is fundamentally buying
2. Supplementary services = Important for differentiation
3. Delivery processes = How is it delivered to the customer?

Question 10

How can you manage capacity in the ‘Process’ stage?

Answer 10

1. E.g. use part-time employees
2. Design capacity to be flexible
3. Invite customers to-do self-service

Question 11

How can you manage demand in the ‘Process’ stage?

Answer 11

Insufficient capacity:

1. Raise prices
2. Queing system

Insufficient demand:

1. Lower prices
2. Promotion
3. Reward employees
4. Reward loyal customers

Question 12

When does waiting feel longer?

Answer 12

1. Unoccupied time
2. Unfamiliar waits
3. Uncertain waits

Question 13

What is the cost of waiting?

Answer 13

Relationship between: waiting time, customer satisfaction and return behavior.

E.g.: Each minute a customer has to wait, costs $18

Question 14

What is the cost of additional capacity?

Answer 14

Adding more personnel paid at e.g. $7.50/hour

Question 15

What are the question asked for when placing a service in the ‘Place’ stage?

Answer 15

1. What - What flows through the channels?
2. How - How should a service reach a customer?
3. Where - Where should a service be delivered?
4. When - When should services be delivered?

Question 16

What are intermediaries?

Answer 16

People between services and customers.

E.g. A hotel that uses a booking site to reach people

Question 17

What does the Service Talent Cycle consist of?

Answer 17

1. Hire the right people
2. Enable your people (training team, make good teams)
3. Motivatie & energize your people

Question 18

What is an empowerment approach?

Answer 18

• Simplified tasks
• Clear division of labor
• Little decision-making discretion
• Splitting up the tasks like in a factory-like process

Question 19

What are the pros of empowerment?

Answer 19

1. It can involve quicker online responses to customer demands during service delivery or when problems arise.
2. It can lead to higher levels of employee satisfaction, a better quality of customer interaction and higher levels of commitment.

This all results in employee involvement, quality improvement, and innovation.

Question 20

What are the cons of empowerment?

Answer 20

1. It requires greater investments in selection and training, resulting in higher labor costs.
2. It can lead to customers’ impressions of not being treated correctly (because they are being treated in a non-standardized way).
3. It implies the risks of ‘give-aways’ and bad decisions by frontline employees.

Question 21

What is the Servicescape model (developed by Bloom and Bitner) in the ‘Physical Environment’ stage?

Answer 21

It’s developed to emphasize and understand the impact of the physical environment in which a service process takes place.

E.g. the physical environment of a retail store for a customer.

Question 22

What are ambient conditions?

Answer 22

Observable stimuli such as:

Air temperature
Lightning
Noise
Music

It influences consumers their behavior.

E.g.: Using uptempo music causes a faster traffic flow in a retail store.

Question 23

What is the meaning of approach within the Servicescape model?

Answer 23

It refers to how customers use the space, during and after the service encounter.

Question 24

What is a moderator in the ‘Physical Environment’ stage?

Answer 24

Any variable with the potential to change the relationship between a dependent, and an independent variable.

Moderating variables describe what effects will hold in certain conditions.

Question 25

What is a mediator in the ‘Physical Environment’ stage?

Answer 25

An inventing variable, that helps to explain the relationship between two variables.

Question 26

What is the price floor?

Answer 26

No profits below this price

Question 27

What is the price ceiling?

Answer 27

No demand above this price

Question 28

What other factors are there in the ‘Pricing’ stage?

Answer 28

Competition and other external factors:

• Competitors’ strategies and prices.
• Marketing strategies

Question 29

What are the 4 key categories of rate fences?

Answer 29

1. Basic product (Size of car, class of travel, etc)
2. Amenities (Valet parking, free breakfast, other complementary services).
3. Service level (Personal butler, priority boarding).
4. Other physical characteristics (extra legroom, seat location in a theatre).