Service Marketing Basics

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Questions and Answers

What are the five key dimensions of service quality?

Tangibles, reliability, responsiveness, assurance, and empathy.

According to the reading, what does service quality require?

Service quality requires that you experience the service.

What is one method restaurants can use to speed up table turnover?

Playing fast-tempo music.

What is the definition of a 'service' as provided in the text?

<p>An act, performance, or experience that one party can offer to another.</p> Signup and view all the answers

Name three of the four categories of service.

<p>People processing, possession processing, mental stimulus processing, and information processing.</p> Signup and view all the answers

What is the flower of service model and how does it describe services?

<p>The flower of service model describes the core service surrounded by supplementary services.</p> Signup and view all the answers

What are determinant attributes in the context of service evaluation?

<p>Service attributes that influence buyers' final choice between competing offerings.</p> Signup and view all the answers

Briefly describe the concept of positioning in marketing.

<p>Positioning is the placement of a product or service in the minds of target consumers relative to competing brands.</p> Signup and view all the answers

What is the difference between 'Points of Parity' (POPs) and 'Points of Difference' (PODs)?

<p>POPs are attributes shared with competitors, while PODs are unique attributes that differentiate a brand.</p> Signup and view all the answers

Define what is meant by service blueprinting.

<p>Service blueprinting is flowcharting a new or revised service process that includes front stage and backstage activities.</p> Signup and view all the answers

What are the three foundations of a pricing strategy, known as the pricing tripod?

<p>Costs, competition, and value to the customer.</p> Signup and view all the answers

How do "Guarantees" support quality?

<p>Guarantees reduce perceived risk and set clear standards.</p> Signup and view all the answers

How do services differ from goods in terms of perishability?

<p>Services cannot be held in stock; an unsold service cannot be sold later.</p> Signup and view all the answers

What is the purpose of market segmentation?

<p>To divide a broad consumer base into sub-groups of consumers based on shared characteristics.</p> Signup and view all the answers

Describe what is meant by a service's "Importance attributes".

<p>Attributes or benefits that are seen by consumers as being the same when comparing brands and its competitors.</p> Signup and view all the answers

What is the role of Internal Marketing Communications?

<p>To create a cohesive, customer focused culture that can be conveyed by the company's employees.</p> Signup and view all the answers

List three of the actions involved in Facilitating Supplementary Services.

<p>Information, order taking, billing and payments.</p> Signup and view all the answers

What are the potential benefits of customers developing a postive relationship for a company.

<p>Insulates customers from competition and encourages repeat patronage and loyalty.</p> Signup and view all the answers

Outline what is encapsulated as environmental stimuli and how may affect a customer.

<p>Sensations or feelings from their surroundings which may cause a response behavior. E.g. lighting, music and colour.</p> Signup and view all the answers

How does value relate to price from the Customer's point of view?

<p>Value = expected benefits minus perceived cost of acquiring the service</p> Signup and view all the answers

What is the purpose behind running trials and surveys to gather Marketing Research data?

<p>Past data helps guide any potential repositioning. Reports and surveys can be collected from travel agents &amp; Interviews can be conducted with hotel staff.</p> Signup and view all the answers

How does a customer's expectations relate to the Zone of Indifference?

<p>Service performance is likely to vary from one occasion to the next. Customers have a ‘zone of indifference, which is the range between their desired and minimum expectations</p> Signup and view all the answers

What is meant by 'Price Elasticity'?

<p>Sensitivity of demand to price changes.</p> Signup and view all the answers

How do firms typically manage 'Price and product discrimination'?

<p>Firms build rate fences between buyers so that high-value buyers can't take advantage of low prices.</p> Signup and view all the answers

What factors could firms consider to adjust to match product demand?

<p>Staffing, Downtime, Flexible capacity and additional equipment were all highlighted.</p> Signup and view all the answers

What are some strategies a firm can take to stimulate positive comments from customers?

<p>Create exciting sales promotions, Use social platforms to encourage participation and sharing &amp; Develop referral incentive schemes.</p> Signup and view all the answers

What are the main goals of a Servicescape?

<p>Shape customer's expectations, behaviour and service experience. Convey the firm's brand image and signal and facilitates the quality &amp; brand.</p> Signup and view all the answers

List two ways that Ambience can affect a service business.

<p>Fast-tempo music can increase arousal levels and speed up restaurant table turnover, Slow-tempo music can increase impulse spending in supermarkets</p> Signup and view all the answers

How can colour impact a service providing business?

<p>Some colours radiate warmth (e.g. orange, red, yellow), others are perceived as being cold (e.g. blue, green).</p> Signup and view all the answers

What considerations are important when designing service evironments from a customer's perspective?

<p>Design with a holistic view, Address Environmental aspects that irritate shoppers &amp; consider ambient conditions</p> Signup and view all the answers

Describe Service Redesign and Service Innovation.

<p>Redesign is a modest change while Innovation brings more improved or newly facilitating aspects.</p> Signup and view all the answers

Explain a scenario in which customers may be less tolerant to service deliver.

<p>Customers are less tolerant of core service underperformance (&quot;outcome&quot;) than they are for supplementary service underperformance (“process”)</p> Signup and view all the answers

How does time relate to managing wait lines for customers?

<p>Unoccupied time feels longer than occupied time.</p> Signup and view all the answers

Provide an example of a service that provides a intangible service in the digital marketplace.

<p>Setting up an advertising campaign through Google or Facebook.</p> Signup and view all the answers

What should firms do to include fairness into revenue management systems?

<p>Price schedules and fences should be clear, logical and fair/ Communicate the consumer benefits of revenue management..</p> Signup and view all the answers

Flashcards

What is a 'Service'?

An act, performance, or experience one party offers another; intangible, providing value like time, place, form or problem-solving

Service Percentage

Purely a product (e.g., salt), hybrid (tailored suit), service-dominant (teaching), or balanced (fast food restaurant).

Services vs. Goods (PITCH)

Perishable, intangible, timing-sensitive, co-produced, heterogeneous.

What makes Services Perishable?

It cannot be held in stock.

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People Processing

Action to alter a customer's body; requires physical presence and cooperation.

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Possession Processing

Action to alter a customer's possessions (e.g., car repairs).

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Mental Stimulus Processing

Action to alter a customer's mind/thinking (e.g., seminars, online lessons).

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Information Processing

Action directed at digital assets (e.g., setting up ad campaigns on Google or Facebook).

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People (in marketing mix)

All direct and indirect contact between employees and customers contributes to the perceived quality.

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Physical Evidence (in marketing mix)

Tangible cues suggesting service quality (e.g., salon decor, brand mascot).

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Process of Service Production

Steps to produce and deliver a service (e.g., informing travelers of flight delays).

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Core Service

The benefit a consumer gets from the basic service.

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Supplementary Service

Value-adding services that supplements the core.

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Delivery Process

How a service is delivered (on-site, online, etc.).

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Flower Service Model

Diagramming the core service surrounded by potential supplementary services.

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Facilitating Supplementary Services

Services that facilitates service delivery or helps use the core service.

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Enhancing Supplementary Services

Services that adds extra value to the customer's experience

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Service 'Exceptions'

Unexpected services made to surprise and delight the prospect

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Service Brand

Reflects consumer experiences and perceptions; acts as proxy.

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Importance Attributes

Attributes that meet basic service requirements (e.g., safety in air travel).

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Determinant Attributes

Attributes influencing buyers' final choice between offerings.

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Positioning

Placement of a product or service in consumer's mind relative to competitors.

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Points of Parity (POPs)

Service attributes seen as the same across competitors.

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Points of Contention (POCs)

Service attributes that consumers cannot agree to differentiate a brand.

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Points of Difference (PODs)

Service attributes consumers positively associate with your brand over competitors.

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Customer Satisfaction

Evaluation of service experience (processes, outcome) meeting needs or failing.

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Expectation

Belief about the service offering before purchase

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Disconfirmation

Situation when Performance does not equal Expectation.

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Zone of Indifference

Service performance varies; range they'll accept and still be satisfied.

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Service Quality

Consumer's judgment about overall excellence/superiority of a firm's offering.

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5 Dimensions of Service Quality

Tangibles, reliability, responsiveness, assurance, and empathy.

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Service Guarantees

Explicit promises made about the level of service provided.

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Quality-Service Gaps

Not knowing, spec standards lacking, delivery flaws, mis-communication, mismatched perceptions, and performance gaps.

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Flow Charting

Map delivery, identify weak points, plan recovery, prevent failure.

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Service Blueprinting

Chart a service process steps showing interactions.

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Customer Value

Value is expected benefit, minus perceived cost.

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Study Notes

Service Definition

  • A service is an act, performance, or experience offered by one party to another
  • Services are intangible
  • Service businesses offer processes that provide value, such as time, place, form, problem-solving, or experiential enhancements

Service Percentage

  • Purchases can be goods dominant (purely a product like salt)
  • They can be hybrid (part good, part service, as with a tailored suit)
  • They can be service dominant (purely a service, like teaching)
  • They can be balanced (equal parts service and goods, e.g., fast food)

Differences Between Services and Goods (PITCH)

  • Perishability: Services cannot be held in stock
  • Intangibility: Services are intangible
  • Timing & Urgency: Services need urgent availability sometimes as with a broken tooth
  • Co-production: Customers involved in value creation, e.g. students in education
  • Heterogeneity: Service experiences vary, even with same customer

Categories of Services

  • People Processing: Actions alter the customer’s body; physical presence + cooperation required

  • Possession Processing: Actions alter the customer’s possessions

  • Mental Stimulus Processing: Actions alter customer’s thinking, presence optional

  • Information Processing: Actions directed at digital or other intangible assets

Overlap

  • Information and mental stimulus processing may overlap

Marketing Mix for Services

  • Product
  • Place
  • Price
  • Promotion
  • People (employees)
  • Physical evidence (tangible cues)
  • Process of service production (steps to produce/deliver)

Services Product

  • Core service- benefit the consumer gets
  • Supplementary service- value-add to core
  • Delivery process - how the service is delivered

Flower Service Model

  • Core service surrounded by clusters of supplementary services
  • Facilitating supplementary services facilitate service delivery or use of core service
  • Enhancing supplementary services add value

High Contact Service Example

  • Core service: Accommodation
  • Facilitating: Billing, payment, order taking, information
  • Enhancing: Hospitality, safekeeping, exceptions (e.g., shuttle)
  • People processing is delivered physically

Low Contact Service Example

  • Core service: Financial Transactions
  • Facilitating: Billing, payment, order taking, information
  • Enhancing: Exceptions (personal banker access)
  • People processing: Electronically

Facilitating Supplementary Services - BP OI(L)

  • Information provides directions, effective use instructions, pricing, reminders, conditions, notifications, documentation, confirmation, summaries and tickets for the service
  • Order-taking includes memberships, subscriptions, pre-requisites, fulfillment, mail/phone, booking, appointments, admission
  • Billing provides statements, invoices, displays, and self-billing options
  • Payment options include self-service, staff-assisted handling, automatic deductions, and control/verification

Gaining Advantage Through Information

  • Highly informed staff
  • QR codes
  • Self-tracking
  • Feature catalogues

Importance of Correct Order Taking and Billing

  • Order Taking should be polite, fast, and accurate to avoid wasted time
  • Billing should be clear, informative, timely, accurate, and streamlined

Enhancing Supplementary Services - CHES(S)

  • Consultation includes tailored advice to customer's needs through doctors, agents etc.

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