Lecture 8 Flashcards
Define customer satisfaction and perceived quality
= Satsifaction is a consumer’s post-purchase evaluation of the overall service experience (process and outcome). It is affective (emotion) state or feeling reaction in which customer’s needs, desires and expectations during the course of the service experience have been met or exceeded.
= Benefits of customer satisfaction
- Insulates customers from competition
- Create sustainable advantage
- Reduce failure costs
- Encourage repeat patronage and loyalty
- Enhance/promote positive word of mouth
- Lowers costs of attracting new customers
Components of Perceived Value
- Performance (quality) value: core service quality
- Social value: enhancement of customers’ social self-concept (eg. highly regarded brand name)
- Emotional value: positive affective states that the brand generates
- Interaction vaue: derived from helpful, smiling staff
- Price: financial sacrifice
Explain the disconfirmation of expectations model.
What factors lead to (dis)satisfaction
- *They are two indepdent and separeate constructs, therefore, different factors account for each
- Motivator factor leads to satisfaction while dissatisfaction is caused by hygiene factors
- Hygiene factors must be present to avoid dissatisfaction (eg. adequate parking and security at Deakin), however, they will not lead to satisfaction unless dimensins that act as motivating factors are also present (eg. helpful staff, real-world relevance)
**Other Influences on Satisfaction
- Prior attitudes towards the brand
- Attribution theory:
:Causal -> who is to blame for satisfaction or dissaisfaction
:Control -> is the cause of dissatisfaction in the control of the company
:Stability -> is the satisfaction or dissatisfaction likely to recur
- Equity theory
:Weigh up our inputs/outputs compared to service (eg. paying $30 for a tiny steak)
- Perceived value
Explain expectations and their formation
Expectations
= provide a standard of comparison, may be subjective or based on collective previous experiences
- Types of expectations
->Desired or ideal expectations = concern the optimum level of perforamnce from a brand eg what could happen in the best circumstances
->Equitable or deserved expectations = develop from the clients feelings about what they should receive
->Predictive expectations = usually combine an ideal standard with reality of past experiences to form a realistic and acceptable level of expectation
->Adequate (minimum tolerable) expectations = relate to the lowest level of service that will be tolerated
= Formation
- Past experience
- WoM
- Advertising or promotion
- General attitude
= Managing expectations
- Dynamic and will change with new experiences and information
What is the zone of indifference
- The extent to which customers are willing to accept some degree of variation is referred to as the ‘zone of indifference’
- Is the difference between a consumers desired and just adequate (minimum) expectations
- Assimilation-contrast theory shows that when a performance is in the zone, differences between expectations and performance will be assimilated and viewed favourably ie consumers adjust their perceptions of performance to expectations or expectations to performance to avoid cognitive dissonance
= Factors affecting the zone of indifference
- Importance of the occasion
- Customers social and psychological needs
- Customers mood state
- Frequency of use
- Importance of the particular service dimension of attribute
Explain the relationship between service quality and productivity
- Quality and productivity improvement strategies must be considered jointly rather than in isolation
- Quality focuses on benefits
- Productivity focuses on costs
Why is improving productivity important to marketers?
- Helps to keep costs down which leads to higher profits or the ability to hold down prices eg. price leader
- Firms with lower costs generate higher margins
- Opportunity to secure the firms long-term future with investments in technology and research
- Improving productivity and quality will benefit customers
Measuring productivity
- Can be problematic as output may be difficult to define
->Number of patients treated per year or average bed occupancy is easy but HOW do we evalaute differences in outcomes
->How do we define the output of a bank/consulting firm
->Easier to measure fast food output
- Improve productivity by
->Controlling costs
->Staff training
= Customer-driven approaches to improve productivity
->Change the timing of customer demand eg. encourage consumers to use service outside of peak times
->Encourage use of lower-cost service delivery channels and self-service
->Ask customers to use third parties eg. travel agents, ticketek
Explain the service reliability diagram
Refer to diagram
Explain the gaps model of service quality
Gap 1: not knowing what customers expect
- Service design and delivery does not match the expectations of customers
- > Eg. not offering wine at Euro Disney, US tourists wanting to be served quickly in Aus restaurants
- Prescription => learn what customers expect
- > eg. complaint analysis, customer panels, foster upward communication
Gap 2: management fail to design service standards that meet customer expectations
- > Eg. courier customers want delivery before 10am not noon
- Prescription => establish the right service quality standards ->eg. set clear goals, standardise, measure performance, provide training, reward service quality
Gap 3: service performance that does not match specifications
- > Eg. Fedex package doesn’t arrive or arrives damaged
- Prescription => ensure that service performance meets standards
- > eg. match employees to jobs, training, reward systems, reduce role conflict and ambiguity
Gap 4: service performance falling short of promises
- > Eg. package arrives on time and in good condition, but courier wasn’t as friendly and polite as the one depicted in the ad
- Prescription => ensure that delivery matches promises eg. work with operations, ensure advertising promises reflect actual service quality, make service consistent
Gap 5: overall difference between expected and perceived service => Customer Gap
Outline examples of service guarantees
- Explicit promises made to customers about the level of service they can expect to receive
- Involve a promise and a payout
= Specific attribute guarantees
- FedEx guarantees package delivery by a certain time
- British Airways advertised ‘comfort guaranteed or you get 25000 miles’
- McDonalds advertised guarantee maximum waiting time of 60 seconds
= Benefits of service guarantees
- Force organisations to focus on what customers expect
- Set clear standards
- Require the development of systems for generating meaningful customer feedback
- Force firms to understand why they fail and to overcome fail points
- Reduce perceived risk and build long-term loyalty
