Learning Outcomes And Group Projects Flashcards
What are the key takeaways from: Journal article: “New Marketing Mix Stresses Service”, by David Collier, in The Journal of Business Strategy, 1991.
• The original model included the four P’s (Product, Price, Place, Promotion), three additional P’s were added (Physical evidence, Participants, and process) to the service sector. This addition can help a company gain and sustain competitve advantage.
◦ The Journal article presents Benetton “Winning with the 7 P’s” as they were able to focus on cost efficiencies, flexible production capacity, and quick delivery time. Physical Evidence (used stores as showplace of colour, music and signage), Process (Supply cycle and computerized procedures) and participant (well trained sales people) were all incorporated for success.
◦ The article then presents company A, “Losing with the Traditional Four Ps “, and how they experienced difficulties around brand recognition, customer complaint resolutions and smooth service delivery as they did not focus on all seven P’s.
Discuss: Group 1 - Intangibility: The Problem and Solutions
(What is intangibility? What are the four unique elements of service? What is the continuum of evaluation? What are the three problems with intangibility?)
• Something that exists but cannot be touch, difficult to describe, understand or measure. Not a physical thing but still valuable to a company. Linked to services ex. anti-virus software or theatre tickets.
◦ The unique elements of services (four I’s): Intangibility (lack of recognizable features that can help buyers justify why they buy the products they do, uncertainty), Inconsistency (provided by humans), Inseparability (product cannot be separated from the service provider), and Inventory (stocking the tools to be used in the process)
◦ The Continuum of Evaluation for Different Types of Products arranges products and services in order of difficulty to evaluate. On the left you have “High in Search Quality” products like clothing, in the middle you have have “High in Experience Quality” products like restaurant meals, and on the right you have “High in Credence Qualities” products like auto repair.
◦ Problem #1 - lack of evidence as tangible features tend to validate buying decisions and without it there can be uncertainty. This can be addressed by creating tangibility in the service or using testimonials.
◦ Problem #2 - Increased importance of customer perceptions. Perceptions carry a very heavy weight because of diminished quality of information about of perceived risk is expected to by higher. Solution: Create an avenue for reviews, testimonials or calculate net promoter score to gauge customer loyalty.
◦ Problem #3 - Pricing. Hard to communicate value of intangible services. Solution: use demand-based pricing because it takes into account customers’ perceptions of value and willingness to pay. Customer -focused pricing, allows for higher profit margins. In order to do this must quantify or create tangibility from all aspects of the service offering. Customer should know what they are receiving so they can value it.
Discuss: Group 2 - The Services GAP Model: Understanding the Theory
(What is the model? How do customer evaluate services? What are the five gaps? How can they be closed?
• The model illustrates the difference areas in the service delivery process in which gaps between service provider and customer are related. Customers evaluate the quality of service based on: reliability (most important, dependability of service), responsiveness (timeliness), assurance (trust), empathy (care of emotions), and tangibles.
◦ Gap #1 - Knowledge Gap. The difference between what customers expect and what the company thinks they expect. Arises from a disconnect in the companies understanding of what customers expect (depending on past experiences, personal wants and needs, WOM) and grows the more the service provider neglects the gap. Solution: market research, service provider must keep up to date with customer needs and wants. Conducting surveys - primary research or Secondary research about the industry. Example : hotel thinks guests wanted dinner menu changes, but they were actually upset about room internet speed and cleanses.
◦ Gap #2 - Standards Gap - Management envisions doesn’t align with the instructions given to employees. Service delivery specifications should be provided. Arises when turning customer expectations into clear guidelines for employees becomes a challenge or management hasn’t provided specific service design and standard. Solution - management must establish clear policies and procedures for service delivery. Measuring performance and employees training. Example: restaurants management wants top-notch customer service but hasn’t communicated clear protocols to staff
◦ Gap #3 - Delivery Gap - Mismatch between agreed service standard and what the customer actually experiences. Even if the first two gaps are addressed, the delivery gap persists if employees face obstacles in delivery the service required. Could be due to lack of necessary tools or inadequate feedback. Solution: comprehensive approach involving employee training, providing the right tools and implementing a structured feedback system. Example: online store promising quick delivery, but employees face logistical challenges or lack necessary resources, causing delays and dissatisfaction.
◦ Gap #4 - Communication Gap - The way a service provider communicates their service quality and the quality of the actual service delivered. **most frustrating from a consumer’s point of view as it can only be closed from the provider’s end. It is when advertising or social media does not accurately communicate the actual service. Solution: staying honest when communicating quality of service. Highlight attainable and realistic qualities. Example: Disney is known to communicate their theme parks as the happiest place on earth. So if you buy tickets and half the rides are closed and it’s dirty and bad environment you would be dissatisfied.
◦ Gap #5 - Expectation Gap - Customers expectation going into the service and how they perceive the service after receiving it. Most challenging gap for service providers to deal with because there is no way to regulate how a customer perceives something as positive or negative, will be different for everyone. Arises when customers come in with high expectations and then after receiving the service leave with either +ve or -ve perceptions and create an expectation gap. Solution - need to advertise level of service accurately and update market research to stay in the know about what their customers are looking for.
Discuss: Group 3 - Applying the GAP Model to Soft SQ Measurement (SERVQUAL, SERVPERF, etc.)
(What is the gap model? What does Gap Analysis do? What is SERVQUAL and SERVPERF? How can we use soft measurement to close gaps? What are the steps?
• The GAP Model : tool that monitors service quality and satisfaction. Knowledge Gap, Standards Gap: (policy) Gap, Delivery Gap, Communication Gap, Perception Gap
• The GAP model analysis: assesses the current position of an organization and the desired positon. Allows for an organization to find the gap ad take the steps to correct mistake and meet the goals
• SERVQUAL: 44 questions, 22 - perceived quality and 22 - expected quality. Evaluation of gaps across five dimensions. SERVQUAL is best paired with GAP model analysis as it provides a more holistic report.
• SERVPERF: service performance and quality measurement tool. Considers the company’s performance. 22 items across five dimensions, simpler line of questioning and it is ideal for understanding overall customer satisfaction and company performance.
• Soft Measurement of Service Quality: measures that are intangible or non-physical. Qualitative measures are “soft” and quantitative measure are “hard”. An example of a soft measurement would be how welcoming the host is when greeting restaurant goers. Hard measurements are objective and tangible, such as revenue growth.
◦ Customer feedback is a way to close gaps using soft meausres to better understand needs and expectations, developing clear training and expectations of employees, and providing accurate information.
◦ Applying the GAP model to Soft Measurement
• 1. Define the service quality dimensions and criteria (based on existing models such as SERVQUAL and SERVPERF)
• 2. Collect and analyze the data on the service quality gaps (can be gathered from customer, employee, manager and competitor feedback can be qualitative or quantitative)
• 3. Create and implement the steps to close the gaps
• 4. Monitor results of the steps used to close the gaps and look for indicators of customer satisfaction, evaluate whether the problems have been corrected.
Discuss: Group 4 - Hard SQ Measurement: Measures and Tools
(What is service quality and the five dimensions? What qualities fall under the soft category? What are some soft tools? What qualities fall under the hard category? What are hard tools and examples?)
Service quality is a measure of how well an organization delivers its services compared to the expectations of customers. (five dimensions tangibles , reliability, responsiveness, assurance, and empathy.)
Qualities that fall under the “soft” category are responsiveness, assurance and empathy. Soft Tools: associated with management concepts such as leadership, employee empowerment and culture
Qualities under the “hard” category are tangibles and reliability. They are quantifiable attributes of service, maximizes performance and outcomes of service delivery based on predefined standards. Hard Tools: Service Level Agreements, KPIs benchmarking, flow charts, relations diagrams, scatter diagrams, control charts. Ex. uptime, error rate, response time, resolution time, average recovery time, first call resolution rate, abandonment rate, business results, response times.
Discuss: Group 5 - Service Blueprinting: Components, Reading and Using Blueprints.
(What can service blueprinting help with? What are the five components? How do we read service blueprints? What is sequential flow? Who should use service blueprints?)
• Service blueprinting pinpoints were corrections can be made, where things went wrong, understand actors in service, or help company’s innovate their service design to increase customer satisfaction.
◦ 5 components - 1. physical evidence, 2. customer actions, 3. front stage interactions, 4. back stage interactions, 5. support process.
• Reading Service Blueprints: three main lines: the line of interaction - where the customer acts with employees and the service, The line of visibility - organizational processes or the employee becomes invisible to the customer, and The line of internal action - where partners who don’t have contact with the customer get involved in the service support process.
• “Sequential Flow” = the chronological actions of customer’s and service providers. Helps reader understand what customers feeling at the time of service, some blueprints show time to help assess efficiency and reading the blueprint can identify failures.
• Using Service Blueprints: a company who wants to improve service, gain an understanding of original service in detail, makes it possible to identify and address pain points.(Used for New and existing services).
Discuss: Group 6 - New Service Development
(What is it? What are the components of the process?)
• Activity of developing and delivering new services (Proactive, embraces creativity and adaptability). Innovating new products and services is essential for consumer interest, meet consumers needs and maintaining sales. New Services Development process:
◦ Front end planning
‣ 1. New Service Strategy - need or want of new service identified
‣ 2. Idea Generation - new service must be oriented around the organizations mission (ideas generated will depend on the nature of services). New service must also align with the organizations competencies, regulations, ethical practices, available skills and resources.
‣ 3. Concept Development - assessment of commercial feasibility (conformity to existing and future business conditions)
‣ 4. Feasibility analysis - the basis for making fundamental decisions (demand is not guaranteed). Market Research must be done at this stage. Additionally should evaluate financial situation.
◦ Implementation
‣ 5. Prototype Development and Testing (clearly define objectives and goals, and gathering feedback)
‣ 6. Market Testing (launching service on a limited scale to gather feedback, measure performance, and make adjustments before full scale launch, this process reduces risk)
‣ 7. Introduction to the Market (small launches, gather feedback and reliability and then extent to a broader launch. Goals: assess market acceptance, measure performance and refine services)
‣ 8. Post introduction evaluation (ongoing) (assessing receival of the service, service’s performance, impact, and reception after being introduced to the market, iterative process, allows company’s to make data driven decisions)
Discuss: Group 7 - The Servicescape
(What is it?, Types, and Role/Purpose)
• Servicescape the artificial and psychological landscape of the service environment. It is used to study the place a service is offered.
1. Ambient conditions: often involving the five senses ex. colour, lighting, odors can all affect perception and mood of customers.
2. Space and function: arrangement of physical elements ex. furniture, signs influencing functionality.
3. Signs, symbols and artifacts: brand representation within the store. ex. placement of logos, facilitating customer awareness through signs.
The Role of Servicescape: to enhance physical environment and strengthen tangible aspects of where service is delivered. Shapes customer expectations, differentiates, and helps reach goals. The physical environment reflects on the customers and service providers.
Discuss: Group 8 - Customer Defined Service Standards: Hard vs. Soft
(What are customer defined standards? hard vs soft? What are the three challenges?)
Standard that are defined by customers, perceptions, expectations, insures provision of service that is wanted and values. Customers are essentially helping shape standards.
◦ hard standards are quantitative and can be counted times, and observed through audits (delivery time, response time, and quantitative aspects). Ex. Hard standards for responsiveness=processing complaint, answering phone time
◦ **soft standards** are more subjective and qualitative in nature such as courtesy, trustworthy or communication. Measured through perceptual data, ex. Speaking with customers, staff or others. Soft standards are crucial for one-on-one interaction, difficult to quanify.
• The three “challenges” customer defined services face
1. Balancing hard and soft standards to create a complete service experience. Solution: Implement systems to monitor and adapt resource allocation to changing priorities and business needs.
2. Incorporating service standards into organizational culture requires constant reinforcement and leadership. Solution: Encourage employees to proactively identify service standards and recommend innovations.
3. Keeping service standards relevant and adaptable to changing dynamics. Solution: Establish service excellence as a core value of the organizational culture and recognize and reward behaviour that exemplifies these standards.
Discuss: Group 9 - Relationships and Building Loyalty I (Theory and Relevance)
(What is CRM? Does satisfaction equal to loyalty? What is customer loyalty? How can we measure customer loyalty? What is the customer loyalty ladder tool? What is customer defection?)
• Customer relationship management uses technology to engage and build customer relationships by managing customer interactions and information. 4 critical components 1. Satisfaction: 2. Fostering customer loyalty, 3. Profitability, 4. Customer Retention.
Benefits of CRM: central location, sales optimization and marketing to improve customer retention.
• Satisfaction does not equate to loyalty. Not every satisfied customer is loyal, but every loyal customer is satisfied.
• Customer loyalty refers to an ongoing positive relationship between a customer and a business. provides increased profits through repeate purchases, reduces customer acquisition costs, encourages higher CLV and long term brand engagement, customer resiliency to competitors, and WOM form satisfied customers.
Can be measured: 1. Customer life time value (CLV) 2. Net promoter score (NPS) or 3. Repeat purchase rate (RPR)
• The customer loyalty ladder 1. Suspects, 2. Prospects, 3. Customers, 4. Clients, 5. Supporters, 6. Advocates
• Customer Defection: when customers move purchases to another business totally or partially.
4 factors: 1. Price, 2. Service failure, 3. Inconvience, 4. Service recovery failure. Or because of competitor attractiveness.
Discuss: Group 10 - Relationships and Building Loyalty II (Tools and Applications)
(How do we build customer value? What is customer perceived value? How can we build loyalty? What do brand communities? How can we cultivate customer relationships?)
• Building Customer Value, Satisfaction and Loyalty: use the customer at the top strategy with customers at the top, next frontline people that satisfy needs directly, next middle management who support frontline workers, and finally top management who are responsible for hiring.
• Customer perceived value: be on top of customer’s wants and be aware of your companies strengths and weaknesses.
• Total customer satisfaction and measurement: surveys, indexes for satisfaction.
• Building loyalty: step 1 interact closely with customers through business activities, step 2 loyalty programs (frequency programs, club memberships) can build long term loyalty and CLV. These programs aid with sales and also act as defense so customers are less likely to switch to competitors.
• Brand communities: involve shared sense of connection, rituals and sense of duty to a community around a brand.
• Cultivating Customer Relationships: CRM, personalized marketing, customer reviews and recommendations, and customer complaints. (ways to resolve complaints - 24/7 hotline, friendly and empathetic, contact quickly and resolve to satisfy)
Discuss: Group 11 - Recovery from Service Failures (How to make it right.)
(What they are and the types? What is service recovery? Types of complaint responses?)
• Service Failures: where service does not meet the customers expectations and leads to dissatisfaction. Can occurs because of miscommunication, software bugs or uncontrollable factors. Types: core service failure (not delivered as promised), service encounter failures (interaction with employees ex. rudeness), and process service failures (breakdown in delivery).
• Service Recovery: resolve problems of dissatisfied customers. (Defensive marketing can help). Three strategies: customer recovery (converting dissatisfied customers to happy ones: apologize, fix, document, and follow up), process recovery (identification and enhancement of internal procedures to prevent future issues) and employee recovery (training employees to proactively training staff to deal with customer issues).
• Types of complaint responses: “Letter-and-free-good” addresses complaints and offers gift likely to yield highest response. “Letter-only” occurs when the company replies directly, can be early or late shows interest in consumer opinion. No response leads to failure! Complaint recovery can be costly but pivotal.
Discuss: Group 13 - Self Service Technologies: Challenges and Implications
• technological interfaces that enable customers to produce a service independent of direct service employees. ex. ATM, grocery stores self checkouts.
• Challenges: technology reliability, user interface design, security concerns, integration with existing systems.
• Implications: Customer experience, cost savings, data gathering and analysis, market differentiation
- Define what is meant by service.
• Intangible activities, benefits, or satisfaction that an organization provides to consumers in exchange for money or something else of value.
• Responsible for over 70% of canada’s total economic output.
-What constitutes good service? How do we know when we receive good service?
• We know we have had good service when we feel satisfied, if we are not satisfied then we walk away!
◦ Primary answer: “The majority and hopefully 100% of our customers, within our chosen target market, should feel satisfied with our services” (a clearly defined target market is important here)
• The three steps to quality service:
1. Develop a model of service delivery (providing service to all of our customers equitably and fairly across the board)
2. Which of the five SERVQUAL dimensions is needed to deliver superior service: ASSURANCE (with good communication this cannot be provided)
3. Create an “Eager to Serve” attitude amongst your staff. (customer care standards, customer care model that is designed around world class customer care and train your staff to deliver an “Exceptional” first impression)
- What are the inherent difficulties surrounding services?
• Services inherently face several challenges and difficulties that distinguish them from the production and delivery of tangible goods because they are: Intangible (harder to evaluate, increases uncertainty, lack of evidence and customer perceptions), Inconsistent (never delivered exactly the same because humans deliver the services and it can vary due to human error), Inseparable (cannot be separated from the service provider themselves) and Inventory (services not stored or inventoried, cannot be stockpiled for future use, need to have tools required in the process)
