Understanding Service Products, Consumers and Markets.

Question 1

Name 5 factors that affect the service economy

Answer 1

Government Policies (laws)

Social Changes (affluence, access to info)

Business Trends (CSR, Outsourcing)

Advances in IT (Software, digitization, growth)

Globalisation (foreign competitors, importing)

Question 2

Name 8 Differences, Implications, and Marketing-Related Tasks between services and products

Answer 2

Differences

1. Most service products cannot be inventoried
2. Intangible elements dominate value creation
3. Services difficult to visualize & understand
4. Customers may be involved in co- production
5. People may be part of service experience
6. Operational inputs and outputs tend to vary more widely
7. Time factor often assumes great importance
8. Non-physical channels

Implification

1. Customers may be turned away or have to wait
2. Harder to evaluate service & distinguish from competitors
3. greater risk & uncertainty perceived
4. Interaction between customer & provider; poor task execution could affect satisfaction
5. Behavior of service personnel & customers can affect satisfaction
6. Hard to maintain quality,consistency, reliability Difficult to shield customers from failures
7. customers want service at convenient times
8. Electronic channels

Tasks

1. Use pricing, promotion, reservations to increase demand
2. Emphasize physical clues, images in advertising
3. Educate customers on making good choices; offer guarantees
4. Develop user-friendly equipment, facilities & systems; train customers,provide good support
5. Recruit, train employees to reinforce service concept Shape customer behavior
6. Redesign for simplicity and failure proofing
7. Find ways to compete on speed of delivery; offer extended hours
8. Free tel. Good website

Question 3

Name the 3 main service attributes

Answer 3

1. Search attributes (type of food, location, price)
2. Experience attributes (can only evaluate post purchase)
3. Credence attributes (impossible to evaluate even after eg:clean kitchen)

Question 4

4 Factors influencing customer service expectations and zone

Answer 4

Question 5

Name 3 important aspects of the service encounter stage

Answer 5

1. Moments of truth, magic and misery
2. Low-contact model (little contact, electronic, new technoligies)
3. High contact model (visits to facility, active contact, most people processing)
4. Stage metaphor (facilities, personnel, roles, scipts)

Question 6

Basic Focus Strategies for Services

Answer 6

1. Fully focused

• develop expertise
• allows for preimuim pricing

but

• Market may be too small
• competetion from alternatives
• economic downturn

2. Market focused

• ​Narrow Market , wide array services
• Needs operational capacity
• understand the consumer
  think mansions, pa’s

_3. Service Focused _

• Reasonable market, lighting services
• As new segments get added so must capabilities

4. Unfocussed

• Many markets and services
• master of none.

Question 7

Service Attributes and levels

Answer 7

_Important attributes _

• important in the minds of consumers for all services in a category.
• E.g.toothpaste might include price, cleaning teeth, and making breath smell better.
• Regardless of segment, consumers will be looking for a product that satisfies these basic attributes.

_Determinant attributes _

• Those characteristics of a service that affect a consumer’s decision to purchase one over another.
• possible determinant attributes could include teeth whitening, cavity protection.
• Every product should have at least one determinant attribute, some will have more than one, but most don’t have any.

Question 8

Developing a position strategy

Answer 8

Analyze the market, Define segments

Internal Analysis, Select segments, define postion, select benefits

Competitive analysis, Possibilitites for differentiation.

Question 9

The 4x4 petals of the flower for service

Answer 9

Facilitating elelments.

1. Informtaion
2. Payment
3. Billing
4. Order-taking.

Enhancing elements

1. Consultation
2. Safe-keeping
3. Hospitality
4. Exceptions

Question 10

Hierarchy of service categories.

Answer 10

1. Major Service Innovations
2. Major process innovations
3. Product line extensions
4. Process-line extensions
5. Supplementary innovations
6. Service improvements
7. Style Changes

Question 11

The three elements of distribution

Answer 11

_1. Information and promotion flow _
To get customer interested in buying the service

2. Negotiation flow
To sell the right to use a service

3. Product flow
To develop a network of local sites

Question 12

Six Options For Service Delivery

Answer 12

Customer goes to organization
Orginization goes to customer
Transact remotely

all can have either single and multipe locations

Question 13

Advantages and disadvantages of using intermediares

Answer 13

_Advantages: _
Expand delivery without a high level of monetary investment
Intermediaries are invested and ensure good service and high-quality operations.
Disadvantages of franchising
Loss of control over delivery system and how customers experience actual service
Effective quality control is difficult
Conflict between franchisees may arise especially as they gain experience

Question 14

Effective pricing as a central feature of financial success

Answer 14

Revenue and Profit Objectives

• Seek profit
• Cover costs

Patronage and User-Based Objectives

• Build demand, Getting a full house
• Build a user base, Increase market share

Question 15

Three main pricing strategies

Answer 15

Cost-based pricing (CBP, ABC)
Value-based pricing (Relate to consumers perception)
Competition based pricing (prices leaders ect.)