Service Flashcards
What are the four Broad Categories of Service?
Tangible Actions
- People-processing (Barber, Health care)
- Possession-processing (Recycling, Refueling)
Intangible Actions
- Mental-stimulus processing (Education, Advertising)
- Information processing (Accounting, Banking)
Which marketing challenges posed by services do you know? State five.
- Service products can’t be inventoried
* Risk: Customers have to wait or to be turned away - Value creation is dominated by intangible elements
* Risk: hard to evaluate and compare - Services are difficult to visualize or understand
* Risk: greater risk perception & uncertainty - Customers may be involved in co-production
* Risk: poor task execution by customers influences productivity - Time factor often assumes great importance
* Customers see time as important resource; disklike wastig time
Can marketing stand alone or does it need to be intergrated with other management functions? Explain.
It needs to be integrated with Operations Managment, Marketing management, Human Resources Management with customers in the center.
What is the Servuction Model?
This model describes the part of the service organization’s physical environment that is visible and experienced by the customers
The TECHNICAL CORE is not visible to customers, but what happens back-stage can affect the quality of front-stage activities.
The SERVICE DELIVERY SYSTEM is visible to customers. It includes all the interactions that together create the service experience.
Explain the three-stage model of service consumption.
Service Consumption can be divided intp the following stages:
Pre-Purchase stage
- Awareness of needs
- Information search
- Evaluation of Altenatives
- Making a purchase decision
Service Encounter Stage (Moment of Truth)
In the service encounter stage, customers initiate, experience and consumes the service.
Post-Encounter Stage
In the post-encounter stage, customers evaluate the service performance and compare it with their prior expectations.
Describe search, experience, and credence attributes and give an example for.
Search Attributes
- are tangible characteristics customers can evaluate before purchase
- Example: style, color, taste, type of food, location
- High in search attributes: Clothing, Chair, Vehicle, Food
Experience Attributes
- cannot be evaluated before purchase, must be experienced
- Example: reliability, ease of use, customer support
- High in experience attributes: Restaurant Meals, Haircut, Entertainment
Credence ( Glaubwürdigkeit) Attributes
- product characteristics that customers find hard to evaluate, even after consumption
- Example: hygiene conditions, healthiness of kitchen
- High in Credence Attributes: Computer Repair, Education, Legal Services
Why does cunsumer perception of risk constitute an important aspect in selecting, purchasing, and using services? And how can firms reduce consumer risk perceptions?
Because of the high proportion of experience and crededence attributes services are difficult to evaluate and customers may worry about the risk of making a “wrong” purchase decision. In particular first-time users face a greater uncertainty.
Firms can reduce the risk through risk reduction strategies, such as:
- service previews through brochures, websites and videos
- offering free trials
- guarantees
How are customer expectations formed? Explain the difference between desired service, adequate service.
Service expectations are shaped by the information search and evaluation of service attributes.
The difference between desired service and adequate service is the level of expectation: whie desired service is the service customers hope/wish to receive, adequate service is the minimum level of service customers will accept.
What are moments of truth?
Moments of truth refer to **touchpoints that can make or break a customer relationship. **
Describe the difference between high-contact and low-contact services, and explain how the nature of a customer experience may differ.
High-contact services are more challenging than low-contact services, because they have many points of contact and moments of truth that have to be managed. Also high-contact services focus on people - processing. In contrast low-contact services are mostly delivered via websites, equipment (e.g. ATM), or call centers with few customer interfaces.
The customer experience differ in terms of touch points, while in high-contact industries the interactions include people, in low contact industries, the interactions mainly take place through physical distribution channels -> can be more convenient for some services (e.g. bank transactions).
Describe the relation between customer expectations and customer satisfaction.
They are closely related, because customers evaluate the service performance received and compare it to their prior shaped expectations in the post encounter stage.
As long as perceived performance falls within the zone of tolerance, that is above the adequate service level, customers will be reasonable satisfied.
As performance perceptions approac or exceed desired levels, customers will be very satisfied.
Delight occurs when positive disconfirmation is coupled with pleasure and surprise.
Why should service firms focus their efforts? Describe the basic focus strategies briefly.
Because in competitive service industries, most firms need to focus in order to achieve competitive advantage.
Basic Strategies:
- Fully focused: providing limited range of services (perhaps only 1) to a narrow target segment
- Market focused: providing wide range of service to a narrow market segment
- Service focused: narrow range of service to a fairly broad market
- Unfocused: not advisable to firms
What are the six questions for developing an effective positioning?
- What does our firm currently stands for in the minds of current and prospective customers?
- What customers do we serve now, and which one’s would we like to target in the future?
- What is the value proposition for EACH of our service offerings and what market segment does each of those target?
- How does each of our service offering differ from competitor ones?
- How well do customers in the chosesen target segments perceive our service offerings as meeting their needs?
- What changes do we need to make in order to strengthen our competitive position within our target segments?
What are the steps to develop an effective positioning strategey?
What are key questions to ask when analysing the market?
- What is the overall level & trend of demand?
- Is demand increasing or decreasing?
- Are there regional or international difference in demand?
- Alternative ways of segmenting the market should be considered.
- More reseach needed on customer needs & preferences?
- More research needed on how the customer perceives your competition?
What are key questions to ask when analysing your firm?
- What kind of resources do we have?
- What kind of repuation do we have?
- What limitations/constraints are there?
- What are the firm’s goals?
- What are our core values?
Describe what is meant by positioning srategy and how do market analysis, internal analysis and competitive analysis relate to positioning strategy.
Positioning strategy is based on establishing and maintaining a distinctive place in the market for an organization and/or its individual product offerings. It answers the question: How do we want to be seen in the eyes of our customers.
In order to positioning itself effectively a firm is required to link market and competitor analysis to internal corporate analysis. The outcome of these is the posiion statement that describes the desired position of the firms offering.
How can positioning maps help managers better understand and respond to competitive dynamics?
Positioning maps help to:
- visualize competitive positioning
- map developments over time
- develop scenarios of potential competitor responses
How does flowcharting help us to understand the difference between people-, possession-, mental and information processing services?
Using flowcharting helps firms to get a better understanding to what degree the roles/involment of customers can vary among each of the four categories.
While people- and possession processing services involve physical processes and customers can make advance judgements on tangible actions , mental-stimulus and information processing services are based on the information a customer receives what are mainly intangible actions.
How does blueprnting help in designing, managing, and re-designing service processes?
Because blueprinting is more detailed than flowcharting and typically shows front-stage and back-stage processes, as well as required supplies, and information you need to fullfill each step.
Through evaluating the blueprint managers can identify fail points where things can go wrong.
Fail-safe methods can then be designed to prevent and/or recover such failures for both customers and employees.
How does the creation and evaluation of service blueprint help managers understand the role of time in service delivery?
Because you can add the time to completion for each task, as well as the acceptable wait time for customers.
Why is periodic process redesign is necessary, and what are he main types of service process re-design?
Service process redesign revitalizes processes that have become outdated due to changes in technology, customer needs, added service features, etc.
The five main types are:
- Eelimination of nonvalue-adding steps (streamlining)
- Shifting to self-service
- Delivering direct service
- Bundling services
- Redesign of physical aspects (service environment and equipment)
Why does the customers role as a co-producer need to be designed into service processes? What are the implications of considering customers as partial employees?
Because firms need to understand
- the role of the customer in service delivery
- the extent of contact between them and service providers.
- if the customer is a passive recipient or is actively involved in creating & producing the service.
The implications of considering customers as partial employees are that customers can influence the productivity and quality of service outputs.
Explain what factors make customers like and dislike self-servive technologies.
Like
- increased convenience (more locations, 24/7 availability, faster service
- better control and information
- customization
Dislike
- poorly designed technology
- user makes mistakes, but there is no help
- no service recovery
What is Flowcharting?
Flowcharting is a technique that helps to understand the relation between a firms internal service processes and the experience customers perceive out of this interactions.
What are common elements of a blueprint?
Front stage activities
- that map the overall customer experience
- desired inputs
- service delivery sequences of the outputs
- time to completion
- acceptable wait time (customers perspective)
Back-stage activities that must be performed to support a particular front-stage step.
Required Supplies that need to be made available for both front- and back-stage steps.
Information needed at each point in the stepp (typically provided by Information systems).
Service standards, that should be established for each activity, reflecting customer expectations.
