Value Co-creation, Balancing Demand & Capacity, Waiting Lines & Reservations, + TB Chapter 9

Question 1

Value Co-creation (VCC)

Answer 1

Offers a path that can lead to sustainable value and growth

Question 2

2 types of value co-creation (VCC) behaviour

Answer 2

Customer participation dimensions
Customer citizenship behaviour dimensions

Question 3

Customer participation dimension

Answer 3

Info seeking, info sharing, responsible behaviour, and personal interaction

Question 4

Customer citizenship behaviour dimensions

Answer 4

Feedback, advocacy, helping, tolerance

Question 5

VCC based on DART model

Answer 5

Dialogue
Access
Risk/Benefit
Transparency

To create value together

Question 6

Dialogue (DART)

Answer 6

Entails profound and dynamic engagement and interaction that lead to the co-creation of experience
Better the quality of the dialogue, the more valuable the co-created experience
eg: hotels that want to offer unique experiences must have a variety of channels and opportunities for dialogue to occur

Question 7

Access (DART)

Answer 7

Firms provide access to tools and information for the
customers to co-create the value experience
Access also juxtaposes ownership by providing access to lifestyles and disregarding the need to “own” them
eg: hotels provide ways to access tools and info, such as reservation systems, social media accounts etc

Question 8

Risk assessment (DART)

Answer 8

Risk assessment of the co-creation outcome must be made by all the actors involved in the VCC
Firms should communicate not only the benefits, but also the risks of their proposals to help customers make informed decisions and boost trust

Question 9

Transparency (DART)

Answer 9

Concerns the “symmetry of information during interactions, which enables the rise of strategic information and trust capital for both partners
Facilitates trust, equality, and discussion

Question 11

Effort vs money in customer cocreation

Answer 11

Not all consumers are motivated to engage in the effort required
Consumers are likely to evaluate such options by price vs effort
eg: valet parking vs self-parking

Question 12

Considerations for companies trading effort for money

Answer 12

Companies that pursue strategies that offer both full service and DIY service options:
Consider fit of such options with the positioning of the brand
Identify appropriate consumer segments that would be favourably disposed

Question 13

4 conditions potentially faced by fixed-capacity services

Answer 13

Excess demand
Demand exceeds optimum capacity
Optimum capacity
Excess capacity

Question 14

Productive capacity forms in services

Answer 14

Physical facilities designed to contain customers
Physical facilities designed for storing or processing goods
Physical equipment used to process people, possessions, or information
Labour
Infrastructure

Question 15

Ways to manage capacity

Answer 15

Level the capacity
Stretch and shrink

Question 16

Stretch and shrink

Answer 16

Offer inferior extra capacity at peaks
Use facilities for longer/shorter periods
Reduce amount of time spent in process by minimizing slack time

Question 17

Other ways of managing capacity

Answer 17

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
Rent or share extra facilities and equipment

Question 18

Predictable demand and their underlying causes

Answer 18

Predictable demand in timeframes: days, weeks, months, etc
Underlying causes of cyclical variations:
Employment
Billing/tax payments
Pay days
School hours
Seasonal climate

Question 19

Ways to manage demand

Answer 19

Take no action and let customers sort it out
Reduce demand
Increase demand
Inventory demand by formalized queueing
Inventory demand by reservation system

Question 20

Ways to reduce demand

Answer 20

Higher prices
Communication encouraging use of other time slots

Question 21

Ways to increase demand (insufficient demand)

Answer 21

Lower prices
Communication, including promotional incentives
Vary product features to increase desirability
More convenient delivery times and places

Question 22

Managing demand in non-monetary ways

Answer 22

Change product elements
Modify place and time of delivery
Promotion and education

Question 23

Queueing systems when demand exceeds supply

Answer 23

Asking customers to wait in line, usually on first-come first-served basis
Offering customers the opportunity to reserve or book capacity in advance

Question 24

Different queuing systems and waiting lines

Answer 24

Single line
Single line with sequential stages
Parallel lines to multiple servers
Designated lines to designated servers
Single line to multiple servers (snake)
Take a number (single or multiple servers)

Question 25

Virtual waits

Answer 25

Wasting customers’ time
Virtual queues can eliminate need to wait- customers register their place in line on a computer, which estimates the time they need to reach the front of the virtual line, customers then return later to claim their place

Question 26

Ways to make waits more tolerable

Answer 26

Group waits
Comfortable waits
Explained waits
Fair waits
People have more tolerance when waiting for a more valuable service

Question 27

Benefits of reservation systems

Answer 27

Avoid customer dissatisfaction due to excessive waits
Controls and smooths demand
Allows implementation of revenue management and preselling of service to different customer segments
Data captured helps organizations (prepare financial projections, plan operations and staffing levels)

Question 28

Yield analysis

Answer 28

Helps managers recognize opportunity cost of allocating capacity to one customer/segment when another segment might yield a higher rate later
When firms overbook to increase yield, victims of over-booking should be compensated to preserve the relationship

Question 29

Create alternative use for otherwise wasted capacity

Answer 29

Use capacity for service differentiation
Reward your best customers and build loyalty
Customer and channel development
Reward employees
Barter free capacity