Services Marketing Flashcards
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.
Why is service process redesign sometimes useful?
Because revitalizes process that have become outdated, changes in customer needs, technology, etc «institutional trust».
What is Productive Capacity?
Productive Capacity: Resources that a firm can employ to create goods and services.
In a service context productive capacity can take several forms
- Physical facilities to contain customers
- Physical facilities to store/process goods
- Equipment to process people, possessions or information
- Labor
- Infrastructure
How can we manage capacity in a service environment?
- Schedule downtime during periods of low demand
- Cross train employees
- Use part-time employees
- Invite customers to perform self service
- Ask customers to share
- Create flexible capacity
What are the analyzing patterns of demand?
Analyzing Patterns are:
- Demand varies by market segment
- Understand Patterns of Demand Key Questions:
- Do demand levels follow a predictable cycle?
- What are the underlying causes of these cyclical variations?
- Do demand levels change randomly?
- Can demand be disaggregated my market segments?
How can we manage demand?
By using the elements of the Marketing Mix:
- Price is most obvious price changes quantity like the demand curves show: complication..there are different demand curves for different segments
- Product element changes: When changes in price don’t matter..skier will not ski if there’s no snow regardless of price
- Place..offering a service in a new location…tailoring on site at an office or department store, traveling libraries, medical care in vans
- Promotion/Education: «Mail early for Christmas»,
Customers perceive waiting times in various forms. What are those?
- People think they wait longer than they actually do
- Unoccupied time is longer than occupied time
- Solo waits feel longer than group waits
- Physically uncomfortable waits feel longer than comfortable ones
- Pre & process waits feel longer than in-process waits
- Unfair waits are longer than equitable waits
- Unfamiliar waits seem longer than familiar ones
- Unexplained waits are longer than explained ones
- Anxiety makes waiting longer
Why are frontline employees are important in service processess and should not be underestimated?
Frontline Employees are very important because they…
- are a core part of the product
- are the service firm
- are the brand
- affect sales
- determine productivity
Is Empowerment always appropriate?
Empowerment is most appropriate when:
- Firm’s business strategy is based on personalized, customized service, and competitive differentiation
- Emphasis on extended relationships rather than short-term transactions
- Use of complex and non-routine technologies
- Service failures are non-routine
- Business environment is unpredictable
- Managers are comfortable letting employees work independently for benefit of firm and customers
- Employees seek to deepen skills and have good interpersonal and group process skills
What are the managerial implications of the Flower of Service?
The Flower of Service can serve as a checklist when searching for new service offerings or to augment core products. All of the elements in each petal should receive care and attention needed to consistently meet defined service standards - so the flower will alsways have a fresh and appealing appearance.
What are possible pricing strategies for services?
- Activity-based pricing
- Value-based pricing
- Competition based pricing
What is the role of marketing communications in a service environment?
The role of marcom in a service environment is to:
- Position & Differentiate the Service
- Westin transformed chaotic transportation hubs into oasis of calm
- Promote the Contribution of Service Personnel & Backstage Operations
- Zappos
- Add Value through Communication Content
- 2 pills can provide all day pain relief”
- Faciliate Customer Involvement in Service Production
- by showing the service in action - Google glass
- Stimulate or Dampen Demand to Match Capacity
- Advertising & sales promotions to change the timing
What are possible challenges of Services Communication and how can you overcome them?
The biggest challenge is the intangibility, which creates four problems:
- Generality
- Abstractness
- Nonsearchability
- Mental Impalpability
But you can overcome them by:
- Providing tangible clues
- Providing Methapors
Where is the value in customer loyalty?
- Increased purchases
- Reduced operations costs
- Referral of new customers
- Price premiums
However…loyal customers aren’t always more profitable. They may expect perks of loyalty.
What are the objectives of CRM management?
- Data Collection
- Data analysis
- Sales force automation
- Marketing automation
- Call center automation
What are the pro’s and con’s of CRM?
Failures of CRM
- Service firms often equate installing CRM systems with having a customer relationship strategy
- Common reasons for failures
- Viewing CRM as a technology initiative
- Lack of customer focus
- Insufficient appreciation of customer lifetime value (CLV)
- Inadequate support from top management
- Failure to reengineer business processes
- Underestimating the challenges in date integration
Pros: all data in one place, customer insights, etc
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Which questions you should answer when defining a CRM Strategy?
- How should our value proposition change to increase customer loyalty?
- How much customization or one-to-one marketing and service delivery is appropriate and profitable?
- What is incremental profit potential of increasing share-of-wallet with current customers? How much does this vary by customer tier and/or segment?
- How much time and resources can we allocate to CRM right now?
- If we believe in customer relationship management, why haven’t we taken more steps in that direction in the past?
- What can we do today to develop customer relationships without spending on technology?
Why do customers complain?
Vent anger, obtain compensation, help to improve the service, altruistic
How many unhappy customers complain?
5-10 %
Why don’t people complain?
Time, nothing will change, perception of low power
What are the 4 common service recovery mistakes?
- Managers disregard evidence that shows how service recovery provides large financial returns.
- Firms don’t invest enough in actions to prevent service issues.
- Customer service employees fail to display good attitudes.
- Organizations fail to make it easy for customers to complain or give feedback.
What are the three dimensions of perceived fairness in service recovery process?
- Procedural Justice
- Interactional Justice
- Outcome Justice
All three lead to satisfaction or disatisfaction.
What makes a good guarantee?
- It’s Unconditional
- Easy to Understand & Communicate
- Meaningful to Customer
- Easy to Invoke
- Easy to Collect on
- Believable
Does Every Firm Need a Guarantee?
NO…
- Companies that already have a strong reputation
- Firms whose service is currently poor
- Service firms whose quality is uncontrollable due to external circumstances – e.g. AMTRAK and unpunctual train service
- In a market where consumers see little risk associated with the purchasing or using the service.
How Do You Measure & Improve Service Quality?
Soft Measures
- Not easily observed, must be collected by talking to customers, employees or others
- Provide direction, guidance and feedback to employees on ways to achieve customer satisfaction
- Can be quantified by measuring customer perceptions and beliefs
- e.g., SERVQUAL, surveys, and customer advisory panel
Hard Measures
- Can be counted, timed, or measured through audits
- Typically operational processes or outcomes
- Standards often set with reference to percentage of occasions on which a particular measure is achieved
- e.g. KPI’s initial response time, time to resolution
What are tools to analyze and address Service Quality problems?
- Root Cause Analysis: Fishbone Diagram: Identifies all the possible reasons of a failure
- Pareto Analysis: Analyzes the impact each reason has on delays
- Blueprinting: Identifying fail points or drilling down deeper
Why does service productivity go hand in hand with service quality?
Productivity measures the amount of output produced relative to the amount of inputs used. Connected with quality it means that its all about efficiency.
What’s an input in a service context?
It varies but may include:
- labor
- materials
- energy
- capital (financial assets as well as land, buildings, equipment, information systems)
How do you measure Service productivity?
Productivity: involves financial valuation of outputs to inputs
Efficiency: involves comparison to a standard which is usually time-based
Effectiveness: is about the outcomes or achieving of goals.
How can youe improve productivity?
Generic Productivity Improvement Strategies:
- Controlling costs
- reducing waste
- matching productive capacity to average levels of demand vs. peak levels
- machines vs. workers
- giving employees tools to help them work faster
- broadening the tasks of a service worker
Customer-Driven Approaches to Improve Productivity:
- Change the timing of customer demand
- encourage use of alternative delivery channels & self-service
How can we reduce interfunctional conflicts?
- through avoiding the creation of “functional silos” (High-value creating enterprises should be thinking in terms of activities, not functions)
- through establishing clear imperatives for each function that defines how a specific function contributes to the overall mission
- Interfunctional transfers will provide a holistic perspective for individuals
- Establishing integrated project teams
- Having interfunctional service delivery teams
- Appointing formally designated individuals to integrate objectives
- Internal marketing and training
- Commitment of top management
What Leadership qqualities do you know?
- Excitement for the business
- Seeing service quality as the foundation for competitiveness
- Knowing & being driven by your core values
- Ease with communication with different audiences
- Getting answers through excellent questions.
- Being able to reset decisions & goals
- Walk the talk…when talking about company values & strategy
What ist Customer Experience Management?
Customer Experience is the sum-totality of how customers engage with your company and brand, not just in a snapshot in time, but throughout the entire arc of being a customer.
Creating a great customer experience does not require knowledge of magical incantations. Instead, customer experiences spring from concrete, controllable elements — the touchpoints. These can be numerous and diverse, but they can be identified, crafted, and integrated. Most of these touchpoints are directly under the control of a company.
Why does Customer Experience matter?
- Customer Experience drives value
- Companies with higher user satisfaction show more growth
- Experiences are the ultimate differentiator
How is a customer journey defined?
Customer Journey is defined as a holistic description and presentation of the event and experience chain of customers,
when interacting with a product or service of a company over a **certain time period **from the perspective of the customers.
What are the core elemts of a customer journey?
The Customer Journeys core elements are_
- the Touchpoints between the company and the customer
- the associated incidents
- the customer’s experiences, emotions and underlying needs
What is a Persona?
Personas document the user motivations, expectations, tasks and goals, and bring users to life by giving them names, personalities and often a picture.
What motives (cause of emotions) do you know?
- Autonomy (doing my own thing)
- Competence (my actions are effective)
- Relatedness (i’m close to others)
- Self-Esteem (i’m important)
- Safety (i want some order and predictability in my live)
What are the benefits of using Personas?
- Users’ tasks, goals and needs become a common point of focus for the team.
- The team can concentrate on designing for a manageable set of personas knowing that they represent the needs of many users.
- They help avoiding the trap of building what users ask for rather than what they actually need and use
- Design efforts can be prioritized based on the personas.
- Disagreements over design decisions can be sorted out by referring back to the personas.
- Designs can be constantly evaluated against personas, reducing the frequency of large and expensive usability tests.
What are the benefits of using Customer Journeys?
Show us:
- What are the steps that the customers perceive when using an offer? Contrasts to in-house perspectives are not rare…
- How do customers experience each of these steps - and why this way?
Implementing measures to improve customer experiences
- at the right place and
- in the right way
