Service

Question 1

What is a service?

Answer 1

1. Management thinking can influence practice.
2. New practices can also arise spontaneously.
3. Things can work for unexpected reasons.
4. Account must be taken of formal context.
5. Account must be taken of existing practice.
6. There is always some element of choice.

Question 2

Services can be:

Answer 2

• Banking
• Education
• Insurance
• Real estate services
• Consulting
• Personal Training

Question 3

What are the types of service industries?

Answer 3

• Government
• Private not for profit organisation
• Business organisation

Question 4

What are the features of services?

Answer 4

1. Intangibility: A service is not physical, it is intangible.
2. Variability: Services are heavily dependent on the person that provides them.
3. Inseparability: A service is normally produced, consumed and evaluated simultaneously.
4. Perishability: services cannot be stored.

Question 5

What is intangibility?

Answer 5

• Service cannot be touched.
• There is no precise standardisation method for services.
• Services cannot be patented.
• There are no inventories in services.
• The consumer is part of the service process because s/he consumes the service. Thus, either the service must go to the customer or the customer has to come to the service.
• Intangibility is the virtue by which a customer cannot see the final result before actually buying and using it. There can be reviews, feedback, word of mouth about a service being good or bad but unless a customer doesn’t experience it, he or she cannot really know the quality.

Question 6

What are the solutions to intangibility?

Answer 6

• Utilise personal sources of information.
• Sources such as friends, family, and other opinion leaders that consumers use to gather information about a service.
• Create a strong organisational image.
• Utilise an activity-based costing (ABC) approach.
• Costing method that breaks down the organisation into a set of activities into tasks, which convert materials, labour, and technology into outputs.

Question 7

What is variability?

Answer 7

• Also called heterogeneity.
• Each time a service is performed, it is performed in a different way.
• Variability is defined as the changes in the quality of the same service provided by different vendors. The change varies because of the nature of the service, the person who provides the time of the year when it is provided and the method of delivery of the service.

Question 8

What are the challenges and solutions to heterogeneity?

Answer 8

• Service standardisation and quality control are difficult to achieve.
• Pursue a customisation strategy and pursue a standardisation strategy.

Question 9

What is a customisation strategy and what are the downsides?

Answer 9

• Taking advantage of the variation inherent in each service encounter by developing services that meet each customer’s exact specifications.
• The speed of service delivery may be an issue.
• Customers may not be willing to face the uncertainty.

Question 10

What is a standardisation strategy and what are the downsides?

Answer 10

• Through intensive training of providers.
• By replacing human labour with machines.

Question 11

What is perishability?

Answer 11

• Perishability is defined as the property of a good or service that prevents it from being stored for future use.
• This is an important concept because it helps businesses to determine how they should market, position, and price their perishable products and services. For example, if a product has a short shelf life, then businesses need to charge a higher price to make up for the losses they will incur when some of the unsold product expires.

Question 12

What are the solutions and possible solutions to manage supply?

Answer 12

• Utilise creative pricing strategies to shift demand.
• Implement a reservation system.
• Shift demand to complementary services.
• Use part time employees to increase supply of service.
• Share capacity with other providers.
• Prepare for expansion in advance.

Question 13

Whats the difference between a product and a service?

Answer 13

• A product is tangible, a service is intangible.
• A product can be stores for future use but a service is perishable.
• A product can be owned but a service isn’t owned by the customer.
• A product can be quantified numerically but a service cannot.

Question 14

What’s the gap model components?

Answer 14

• Knowledge gap
• Standards gap
• Delivery gap
• Communication gap

Question 15

What is the knowledge gap?

Answer 15

• Marketing research: Understanding customers
• Understanding customer expectations.
• Evaluating service quality

Question 16

What is the standards gap?

Answer 16

• Achieving service goals through training.
• Commitment to service quality.

Question 17

What is the delivery gap?

Answer 17

Empower employees, reduce delivery gaps, use technology, provide support and incentives.

Question 18

How do you reduce the delivery gap?

Answer 18

• Provide emotional support to service providers.
• Provide support necessary to deliver service.
• Consistent and coherent management.
• Reward employees for excellent service.

Question 19

What is the communication gap?

Answer 19

• Manage customer expectations.
• Promise only what you can deliver.
• Communicate service expectations.