Lecture 1: Introduction to Service Flashcards
What is the definition of services & relationship marketing?
Services Marketing is the study and practice of delivering (building relationships with customers over time through) valued deeds, processes and performances
What are the 4 characteristics of services?
Intangibility.
Heterogeneity.
Inseparability.
Perishability.
What is the definition of Intangibility? Use and example to explain challenges for marketing managers & solutions.
Definition: Cannot be seen, touched, tasted
Challenge: Reducing perceived risk
Example: Using Personal Selling (mention customers of a similar background who were satisfied) or Testimonials
What is the definition of Heterogeneity? Use and example to explain challenges for marketing managers & solutions.
Definition: Difference in results as humans have slightly different performance
Challenge: Motivating/training staff to reach uniform levels of service provision (or replacing human resources with technology, e.g. ATM)
Solution: Training via script theory.
What is the definition of Inseparability? Use and example to explain challenges for marketing managers & solutions.
Definition: Difficult to separate the service from the person who performs the act
Challenge:
Motivating/socialising customers to follow their scripts, as other customers directly affect service perception
Solution: Make sure both customer and service personnel follow their script through clear instructions
What is the definition of Perishability? Use and example to explain challenges for marketing managers & solutions.
Definition: Services cannot be owned stored, cannot be returned after purchase
Challenge:
Estimating demand, collaborate with human resources and operations
Solution: ??
Classify services based on 3 level of contact, and provide examples for each of them.
Low - an absence of, or limited physical contact between service personnel and customer. Often takes place remotely.
Example: Online pizza delivery
Medium - some contact between the customer and service personnel, usually at the initiation or conclusion of the service encounter
Example: Coffee shop
High - active engagement between the customer and service personnel for the duration of the service delivery
Example: Surgery, consultancy
How does SD-logic define service, and how do value differ in traditional marketing logic and service-dominant logic?
The application of specialized competences (skills and knowledge) through deeds, processes, and performances for the benefit of another entity / the entity itself (self-service )??
Haeckel (1999) suggested to “move from make-and-sell strategy to sense-and-respond strategy”. What does this mean? Explain.
To move from goods-centered view / traditional marketing logic, where value is embedded in output and service provider is not involved in the consumption process (value destruction), to the service-centered view / SD-logic where value is defined and co-created with the consumer.
If, as Lusch, Vargo, & OBrien mentioned in their Foundational Premise 6 that “there is no value until an offering is used”, what can service firms provide their customers with? How can customers evaluate the actual value of the service provided? Mention 2 factors essential to customers’ value determination.
Service firms provide their customers with value proposition that constitute experience/solutions, and customers evaluate the actual value through interactive co-creation process.
The 2 factors essential to customers’ value determination are experience and perception.
“Marketing needs to simply distribute ready-made value to customers”. Based on your understanding of SD-logic, how would you correct this statement?
Rather than focusing on value distribution (distributing ready-made value to customers), marketing should focus on value co-creation that facilitates and supports customers’ value-creating processes.
What is the definition of value co-creation?
??
What is the best way to co-create value? What kind of value that this strategy will provide customers, and how will it affect them? Provide example for a break-up service.
The best way to co-create value is by focusing on customers’ experiences, which will provide intrinsic value that offers a state which customers try to maintain and seek to repeat (loyalty, behavioural intentions).
Example: Whenever a service has been completed, a customer is asked for feedback on how the serviced could have been improved and in the future, these changes will shape the services offered. In large businesses, collecting feedback is common but implementing the feedback and frequently co-creating service value with customers is a challenge.
**Contrast the understanding of “value”, taking a traditional marketing approach compared with a service dominant logic for marketing
With traditional marketing, value is assumed to be embedded in the product, no matter the customer’s experience with the product.
Marketers see it as their job to add value or create value, but with the S-D logic it is recognized that no value is created unless the customer experiences such, regardless of the product’s attributes.
Therefore marketing role is to facilitate value creation for the customer and the customer always co-creates value by integrating their resources with those offered by the brand/service provider.
**The sixth foundational premise of the service dominant logic refers to co-creation. Explain in your own words what it is.
The customer is always a co-creator of value
Firms only provide a value proposition and provide resources so that value can be facilitated for the customer
There is no value until the customer perceives such and this is normally when the offering is used/consumed.
Value perceptions are affected by the customer’s unique situation/context
