Test 1

Question 1

IHIP (O)

Answer 1

Intangibility
Heterogeneity
Inseparability
Perishability
Ownership

Question 2

When a product is high in the characteristic of Intangibility….

Answer 2

…it lacks the tactile quality of goods

Question 3

When a product is high in the characteristic of Heterogeneity….

Answer 3

…it is different across customers

Question 4

When a product is high in the characteristic of Inseparability….

Answer 4

…it is produced and consumed at the same time

Question 5

When a product is high in the characteristic of Perishability….

Answer 5

….it cannot be produced ahead of time or returned

Question 6

When a product is high in the characteristic of Ownership….

Answer 6

…it has a part or outcome that involves the transfer of ownership between the seller and buyer.

Question 7

What does Intangibility mean to marketing

Answer 7

Intangible products are harder to assess. Benefits of intangible products must be made tangible. Tangible products often push intangible benefits to take advantage of the lasting power of abstract concepts in memory. Also, assessing the cost of a “unit of service” is difficult.

Question 8

What does Heterogeneity mean to marketing

Answer 8

A heterogeneous product cannot be standardized.
Because the product cannot be standardized it is harder to take advantage of economies of scale.
Also, a heterogeneous product has greater FLE and customer input and therefore quality is harder to control.

Question 9

What does Inseparability mean to marketing

Answer 9

An inseparable product must be produced at the time of order often in front of and along with customers.
Quality is hard to achieve and assess for the organization. Also, the customer must be accommodated within the servicescape creating capacity issues. Demand must be forecast accurately to properly facilitate production. Mass production and economy of scale is difficult to obtain. And customers impact each other.

Question 10

What does Perishability mean to marketing

Answer 10

A perishable product cannot be inventoried. This means the product cannot be produced ahead of time. A perishable product cannot be returned for a comparable product and therefore, additional remedies must be offered.

Question 11

What does ownership mean to marketing

Answer 11

Products will often be judged based on the quality of the transferred object. The object will often be considered the core product whereas everything else is periphery. When there is no ownership transfer, other things start to become more relevant such as relationships and tangible cues.

Question 12

Examples of service high / low in Intangibility

Answer 12

Education, psychotherapy / car rental, restaurant, air travel

Question 13

Examples of service high / low in heterogeneity

Answer 13

Consulting, interior design / credit monitoring, storage

Question 14

Examples of service high / low in Inseparability

Answer 14

Operation, haircut / dry cleaning, car repair, movie rental

Question 15

Examples of service high / low in Perishability

Answer 15

Haircut, legal counsel / restaurant, painting

Question 16

Examples of service high / low in Ownership

Answer 16

Lawn maintenance, daycare, typing service, restaurant, home builder

Question 17

Search attributes

Answer 17

….quality can be assessed before consumption.

Question 18

Experiential attributes

Answer 18

…quality can only be assessed after consumption

Question 19

Credence attributes

Answer 19

…quality cannot be assessed even after consumption.

Question 20

What does Search attributes mean in regards to marketing?

Answer 20

Because quality can be assessed beforehand, customers rely less on external reviews and WOM. Also, these products are typically price elastic (i.e., customers are price sensitive).

Question 21

What does Experiential attributes mean in regards to marketing?

Answer 21

Because quality can be assessed after consumption, service guarantees tend to play a bigger role. Cues of quality play a prominent role (i.e., price, brand).

Question 22

What does Credence attributes mean in regards to marketing?

Answer 22

Cues of quality (i.e., price, brand) are even more prominent.
Though price is used as a cue for quality, credence products tend to be price inelastic. Credence products carry a lot of risk and therefore testimonials, WOM, and service guarantees are extremely important.

Question 23

Example of Search attributes

Answer 23

Most goods (e.g., car, house, computer, diamond)

Question 24

Example of Experiential attributes

Answer 24

Restaurants, amusement parks, haircut

Question 25

Example of Credence attributes

Answer 25

Car repair, education

Question 26

9 THINGS TO KNOW ABOUT SERVICE

Answer 26

1. Service makes up a majority of our economy
2. Service is harder which is why service typically stinks
3. Service is co-created by the employees and customers
4. Service is very hard to patent
5. So good service becomes a point of differentiation
6. Service is also usually easier to find new revenue streams
7. Products have core and periphery elements
8. All goods can be considered a service
9. The Ps become even more linked together

Question 27

The cost of service failure

Answer 27

Companies who provide bad service have 47% of their customers stop spending with the company.

Companies lose $83 billion annually from bad customer service.

Question 28

Service failure recovery process

Answer 28

Service failure -> 
Recovery expectations -> 
Complaint behavior->
Service recovery ->
Outcome

Question 29

Complaint ice burg stats

Answer 29

1-4% of people complain to management

45% complain to FLE

50%+ do not complain

Question 30

Interactional

Answer 30

Interactional justice refers to the treatment that an individual receives as decisions are made and can be promoted by providing explanations for decisions and delivering the news with sensitivity and respect (Bies & Moag, 1986).

Question 31

Procedural

Answer 31

Procedural justice is defined as the fairness of the processes that lead to outcomes. When individuals feel that they have a voice in the process or that the process involves characteristics such as consistency, accuracy, ethicality, and lack of bias then procedural justice is enhanced (Leventhal, 1980).

Question 32

Distributive

Answer 32

Distributive justice is conceptualized as the fairness associated with decision outcomes and distribution of resources. The outcomes or resources distributed may be tangible (e.g., pay) or intangible (e.g., praise). Perceptions of distributive justice can be fostered when outcomes are perceived to be equally applied (Adams, 1965).

Question 33

Service recovery paradox

Answer 33

“A good recovery can turn angry, frustrated customers into loyal ones. ..can, in fact, create more goodwill than if things had gone smoothly in the first place.” (Hart et al.)

Question 34

Problems with service recovery paradox

Answer 34

-only a small percent of customers complain

• service recovery must be SUPERLATIVE
• only with tangible rewards and empathy/courtesy
• only with tangible rewards
• even though service recovery can improve satisfaction, it has not been found to increase purchase intentions, perceptions of the brand, or overall
• service recovery is expensive

Question 35

The service recovery paradox is more likely to occur when:

Answer 35

the failure is not considered by the customer to be severe

• the customer has not experienced prior failures with the firm (double deviation)
• the cause of the failure is viewed as unstable by the customer
• the customer perceives that the locus of control is external

Question 36

People prefer

Answer 36

service that is decently good all the time