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Questions and Answers
Which strategy enhances customer satisfaction by creating packages of services?
Which strategy enhances customer satisfaction by creating packages of services?
What is a significant benefit of self-service in a service environment?
What is a significant benefit of self-service in a service environment?
How can Auto World reduce service failures effectively?
How can Auto World reduce service failures effectively?
In what way can customers act as co-producers in service delivery?
In what way can customers act as co-producers in service delivery?
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Which of the following strategies is most likely to reinforce customer loyalty?
Which of the following strategies is most likely to reinforce customer loyalty?
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Which aspect of Relationship Marketing focuses primarily on ongoing customer engagement rather than just individual transactions?
Which aspect of Relationship Marketing focuses primarily on ongoing customer engagement rather than just individual transactions?
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What is a primary benefit of treating customers as co-producers in the Relationship Marketing framework?
What is a primary benefit of treating customers as co-producers in the Relationship Marketing framework?
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How does Relationship Marketing aim to reduce service failures?
How does Relationship Marketing aim to reduce service failures?
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Bundling services in the context of Relationship Marketing primarily aims at achieving what?
Bundling services in the context of Relationship Marketing primarily aims at achieving what?
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What role do customers play in Relationship Marketing that differs from traditional marketing approaches?
What role do customers play in Relationship Marketing that differs from traditional marketing approaches?
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What is the key difference in time scale focus between Transactional Marketing and Relationship Marketing?
What is the key difference in time scale focus between Transactional Marketing and Relationship Marketing?
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How does Relationship Marketing define the commitment to customer expectations compared to Transactional Marketing?
How does Relationship Marketing define the commitment to customer expectations compared to Transactional Marketing?
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Which dimension of Relationship Marketing involves the cooperation between buyers and sellers for mutual benefit?
Which dimension of Relationship Marketing involves the cooperation between buyers and sellers for mutual benefit?
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What is a significant weakness of self-service technologies (SSTs) mentioned in the content?
What is a significant weakness of self-service technologies (SSTs) mentioned in the content?
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Which of the following is a key aspect of Customer Relationship Management (CRM)?
Which of the following is a key aspect of Customer Relationship Management (CRM)?
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What must firms ensure regarding the reliability of self-service technologies?
What must firms ensure regarding the reliability of self-service technologies?
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What defines the successful interaction in a Customer Relationship Management strategy?
What defines the successful interaction in a Customer Relationship Management strategy?
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Which factor influences customers' choice to use self-service technologies over interpersonal alternatives?
Which factor influences customers' choice to use self-service technologies over interpersonal alternatives?
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How does Customer Relationship Management aim to improve corporate profitability?
How does Customer Relationship Management aim to improve corporate profitability?
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What is a critical consideration for firms when a self-service technology fails?
What is a critical consideration for firms when a self-service technology fails?
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What role does information technology play in Customer Relationship Management?
What role does information technology play in Customer Relationship Management?
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Which of these is NOT an objective of Customer Relationship Management?
Which of these is NOT an objective of Customer Relationship Management?
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What should companies ensure about self-service technologies for them to be favorable among users?
What should companies ensure about self-service technologies for them to be favorable among users?
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Study Notes
Customer Management Services
- Presentation date: November 14, 2024
- Presenter: Fara Carvalhinhos
- Email: [email protected]
Announcements
- Class rescheduled to Monday, November 25th (instead of Thursday, November 28th)
- Exam date: December 5th
- Simulation date: December 12th
Case Study
- Case Study: Sullivan's Auto World
Case Study Questions
- Question 1: Explain whether Sullivan's Auto World has a transactional or relational marketing strategy. Support your answer using concepts from class. (2 points)
- Question 2: Identify which of the seven elements of the service marketing mix are addressed in this case, and give an example of each. (3 points)
- Question 3: There are 9 distinguishing characteristics for services. Discuss these in relation to Auto World. Which of these should Carol focus on and why? (4 points)
- Question 4: Explain how Auto World's service facility influences its service delivery. (3 points)
- Question 5: What switching costs would be applicable to Auto World and its customers? Does Auto World do anything to minimize these? What more could they do to acquire and retain customers? (3 points)
- Question 6: Using the theatre metaphor, describe Auto World's operations. Who are the characters, the audience? What is done on stage vs. backstage? (2 points)
- Question 7: Utilizing the "flower of service" model, identify and explain the core and supplementary elements of Sullivan's Auto World. What elements should Carol improve upon and how? (3 points)
The New Marketing Concept
- Transactional Marketing: Focuses on a single sale, sporadic customer contact, product features, short-term customer service, limited commitment to customer expectations, and quality viewed as the concern of production staff.
- Relationship Marketing: Focuses on customer retention, continuous customer contact, customer value, long-term customer service, high commitment to meeting customer expectations, and quality as a concern of all staff.
Six Dimensions of Relationship Marketing
- RM creates new value and shares it with customers.
- RM recognizes customers' role in co-creating value.
- RM aligns processes, communication, technology, and people around customer value.
- RM represents continuous cooperative effort between buyers and sellers.
- RM recognizes customer lifetime value.
- RM builds relationships within the organization and with stakeholders like suppliers, distribution channels, intermediaries, and shareholders.
Distinguishing Characteristics of Services
- Customers don't own services.
- Services are ephemeral and cannot be inventoried.
- Intangible elements dominate value creation.
- Customers are involved in the production process.
- Other people are part of the product experience.
- Service variability exists in operational inputs and outputs.
- Services are difficult to evaluate by customers.
- Time is a critical factor in service delivery.
- Delivery systems use both electronic and physical channels.
Marketing Implications
- Ownership: Customers don't own services but have temporary access.
- Pricing: Pricing is often based on time.
- Customer Choice: Customer choice criteria might differ between renting and purchasing a service.
- Intangible Elements: Intangible elements like expertise, labor, and personnel dominate value creation.
- Service Quality: Effective HR management is critical for service quality.
- Service Evaluation: Customers may struggle evaluating services.
- Time Factor: Speed is crucial in service delivery.
- Delivery Systems: Services are delivered through electronic or physical channels.
- Service Product vs. Customer Service: Firms divide their offerings into core product and supplementary service elements. Distinguishing between marketing services (core service as the product) and marketing through service (good service enhances the core value of a physical good).
Designing the Service Factory
- Think of the service facility as a stage for customer interaction.
- Design processes around the customer.
- Choose convenient locations.
- Create a pleasing aesthetic, avoiding unwanted noises and smells.
- Consider basic customer needs such as info, parking, food, toilets, etc.
Switching Costs
- Search Costs: Time and energy spent searching for alternative sources or products.
- Learning Costs: Time and energy spent learning about a new product.
- Emotional Costs: Emotional attachments to an existing provider.
- Inertial Costs: Feeling of disinclination to change.
- Risk: Potential loss incurred by changing products.
- Social Costs: Social relationships with a supplier that make change harder.
- Financial Costs: Costs involved in switching products.
- Legal Barriers: Constraints on changing vendors.
Theatre Metaphor
- Operations are viewed as a performance, with characters (employees), the audience (customers), onstage (customer-facing activities), and backstage (support activities).
Flower of Service Model
- Core elements of service (like consultation).
- Supplementary elements supporting core experience (exception handling, payment, etc.).
- Strategic implications in choosing and enhancing supplementary services to differentiate the service.
Flowcharting Service Delivery
- Visual representation of service process steps.
- Shows different process steps involved in delivering a service to customers.
- Can illustrate how customers interact within service interactions.
Blueprint Services
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Blueprinting: A more detailed view of the entire process, from start to finish, mapping out all interactions and elements that create an experience for the customer.
- identifying key activities to create and deliver the service.
- pinpointing which areas of the process are likely to produce issues for the customer.
- identifying any issues/areas for improvement in service operations
Blueprint Advantages
- Distinguishing between "frontstage" and "backstage" activities, revealing interactions and support from behind-the-scenes.
- Identifying potential fail points in the process to develop preventive measures.
- Pinpointing stages where waiting times are common among customers.
Key Components of a Service Blueprint
- Define standards for frontline activities.
- Outline the physical evidence used in a service.
- Establish principal customer interactions.
- Show how support processes interact with the service delivery system.
- Pinpoint how failure points in backstage operations impact the customer's experience.
Improving Service Reliability
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Poka-yokes:
- mechanisms designed to help prevent mistakes, leading to more accurate and efficient service production/delivery.
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Customer Poka-yokes:
- mechanisms in place to prep the customer for a service interaction, guiding them towards the accurate and efficient completion of their transaction or participation in the service process
Service Process Redesign
- Outdated processes: Changes in technology, broader societal changes, and/or emerging opportunities create the need to update and refine existing processes.
- Internal issues: Deep-rooted procedural issues or bureaucracy may lead to the need to revise processes.
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Goal: To reduce service, improve customer satisfaction, and enhance operational efficiency.
- ways to optimize service delivery, to cut down on time-consuming steps that don't create value for the customer.
- focusing on what creates a good experience
- improving processes based on better solutions
Customer as Co-producer
- Customer participation: Customers' actions and resources shape the service production and delivery process.
- Customer involvement categories: Differentiated involvement levels of the participating customer (low, medium, high).
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SST: Self-service technologies (SSTs) can be used in various service contexts.
- increasing efficiency by assigning tasks and using technologies where appropriate
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Customer and Service Quality: Customers are now viewed as 'co-producers' within service experiences, leading to new models of engagement and expectations.
- service experience may be dependent on customer cooperation, knowledge and attitudes.
- Key Concerns: Challenges exist regarding proper design and adoption of SSTs, reliability issues, recovery capabilities when system failure occurs.
Customer Relationship Management
- Core Concept: A customer-centric business strategy aimed at understanding customers' needs/wants, building relationships, and maximizing their long-term value to the company.
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Description
Test your knowledge on the strategies and benefits of Relationship Marketing. This quiz covers customer satisfaction, co-production, and service delivery. Understand how to enhance loyalty and reduce service failures in a service-oriented environment.
