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Services Marketing > Test 2 > Flashcards

Test 2 Flashcards

1
Q

Maximum capacity

A

The absolute limit of service availability.

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2
Q

Optimum Capacity

A

Resources are fully employed but not overused and customers are receiving timely service in a quality manner.

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3
Q

Low utilization ( may send bad signals)

A

Excess capacity (wasted resources)

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4
Q

Optimum capacity ( well balanced supply and demand)

A

Ideal use

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5
Q

Maximum capacity available

A

Demand exceeds optimum capacity (quality declines)

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6
Q

Capacity utilized

A

Demand excess capacity (Business is lost)

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7
Q

Ways to alter demand

A
  • Pricing
  • Developing non-peak demand
  • Complementary services
  • Reservation system
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8
Q

Ways to alter capacity

A
  • Using part-time employees
  • Maximizing efficiency
  • Increase customer participation
  • Sharing capacity
  • Expansion ante
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9
Q

When you Alter demand

chase/level capacity

A
  • High labor skill required
    - High job discretion
    - High training
  • High compensation
  • Low turnover
  • Low error rate
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10
Q

When you Alter capacity

chase demand

A
  • Low labor skill required
    - Low job discretion
    - Low training
  • Low compensation
  • High turnover
  • High error rate
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11
Q

Maister’s Propositions

A
  1. Occupied time feels shorter than unoccupied time.
  2. People want to get started.
  3. Anxiety makes waits seem longer.
  4. Uncertain waits are longer than known, finite waits.
  5. Unexplained waits are longer than explained waits.
  6. Unfair waits are longer than fair waits.
  7. The more valuable the service, the longer the customer will wait.
  8. Solo waits feel longer than group waits.
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12
Q

Pricing: three common methods

A

Costs
competition
value

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13
Q

Service capacity

A

the extent that you can house customers and demand

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14
Q

The _________ process is easier because you can forcast demand, and if you fall short you either can open more ___ or increase ______

A

Manufacturing, plants, efficency

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15
Q

What is the underlying issue with managing service capacity?

A

Inseparability you have to house the people in facility

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16
Q

sometimes it will be dead, not really efficient for the company because its not always filled

A

Maximum ex) classroom

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17
Q

Peak demand can regularly be met;

Large demand fluctuation

A

Electricity
Police & fire emergencies
Internet

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18
Q

Peak demand can regularly be met;

Small demand fluctuation

A

Insurance / legal
Banking
Dry cleaning

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19
Q

Peak demand regularly exceeds capacity

Large demand fluctuation

A 
Tax service
Pass. transportation
Hotels
Restaurants
ER
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20
Q

Two ways to meet service capacity

A

Trying to change demand or change capacity

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21
Q

Alter demand:

Pricing

A

Offer lower prices at non- peak times

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22
Q

Alter demand:

Developing non- peak times

A

Offer incentive

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23
Q

Alter demand:

Complementary services

A

Offer something to by their time if they are coming during peak
ex) Gym classes
Amusement parks offer shows as a distraction so you aren’t just waiting in line

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24
Q

Altering demand:

Reservation system

A

offer a reservation

ex) Disney fast pass

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25
Q

Capacity: Using part time employees

A

Hire people for peak demand

26
Q

Capacity: Maximize efficiency

A

coming up with some way to better utilize for demand coming through

27
Q

Capacity:

increased customer participation

A

get the customer to participate

Ex) self checkout

28
Q

Capacity:

sharing capacity

A

work with others to complement each others peak and valley times
ex) dunkin and baskin robins

29
Q

Expansion ante

A

If you’re going to expand, expand greater than you need now. Build for the future customer base and forecast future demand.

30
Q

Example of altering demand

A

Doctors office- you make and appointment

31
Q

Example of altering capacity

A

Bring in part time employees, make people work overtime

32
Q

restaurants:

A

alter capacity

33
Q

Tax service during tax season

A

alter capacity hire part time

34
Q

Er:

A

Alter demand; developing non- peak times

ex) billboard with how long of a wait

35
Q

Which wait time matters most?

A

Perceptual

36
Q

why is value pricing difficult

A

Because you have to figure out the perception of value

37
Q

what methods inherently use value method:

A

ebay, investors, tips

38
Q

Pricing for “access services”

A

Flat fee
Usage
Two part tariff

39
Q

Flat fee example

A

Internet

40
Q

Usage

A

data plans

41
Q

Two part tariff

A

Combo of usage and flat fee

Fair- you pay an entrance fee and then you pay per ride

42
Q

Which pricing method is the best depends on:

A

1) If light or heavy users are more valuable

2) Whether there is “excess capacity”

43
Q

Excess capacity

A

stuff sitting around

44
Q

light users

A

Large number people who kind of use it

ex) me at the gym

45
Q

Heavy users

A

people who use it a lot

ex) Josh at gym

46
Q

More valuable=

A

pay more money

want them to pay more money= value

47
Q

______ user is more valuable, unless ______ user is willing to pay more because then they would be more valuable

A

Light; Heavy

48
Q

Pricing for “access services”

If light users are more valuable

A
  • Excess capacity (unconstrained): Low flat fee
  • No excess capacity (constrained): two part tariff
  • NEVER give a signing bonus
49
Q

Pricing for “access services”

if heavy users are more valuable

A
  • Usage or high flat fee

- Potential signing bonus

50
Q

Per Unit service

A

Not complete unrestricted access

51
Q

Yield management

A

Holding onto it to get the best price possible

price discrimination

52
Q

______ and ______ are really good at yield management

A

Hotels and airlines

53
Q

Two most common approaches to the capacity/ demand problem

A

Dynamic pricing

overbooking

54
Q

yield management definition

A

The practice of pricing to maximize the amount of revenue received per unit sold. It is commonly associated with the pricing practices of airlines, hotels, and other sellers of “perishable” products

Also called “perishable asset revenue management” or just “revenue management”

55
Q

Overbooking

A

Firms report 2-5% revenue increase

56
Q

When firms practice YMS

A
  • It is expensive or impossible to store excess resource
  • Commitments need to be made when future demand is uncertain
  • The firm can differentiate among customer segments and each has a different demand curve
  • The same unit of capacity can be used to deliver many different products or services.
  • Producers are profit-oriented and have broad freedom of action
57
Q

YMS works when ______________ customers arrive earlier than price insensitive customers. Otherwise, there is no reason to offer a discounted price.

A

price-sensitive

58
Q

When do price-insensitive customers arrive early?

A

Concerts

59
Q

Booking limit:

A

Maximum # of rooms that can be sold at a discount price

60
Q

Protection level (Q):

A

The number of rooms that will not be sold to PS customers so they can be sold to PI customers

61
Q

The protection level (Q) depends on

A

The relative price for the two segments

The demand for the full price

Services Marketing (2 decks)

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