Service Marketing Overview
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Questions and Answers

Which is a primary goal of customer profitability systems?

  • Reducing costs associated with customer service
  • Targeting customers who can be profitably served long-term (correct)
  • Maximizing the number of customers served
  • Identifying low-maintenance customers

What technology is used to recognize a customer's telephone number and improve service delivery?

  • System integration technologies
  • Help-desk systems
  • Caller identification technology (correct)
  • SMS services

Which tool in Operational CRM facilitates customer inquiries and order placements?

  • Help-desk systems
  • Web casting
  • Call centres (correct)
  • Caller identification technology

What is the main benefit of system integration technologies in CRM?

<p>Allowing technologies to communicate and share information (A)</p> Signup and view all the answers

What advantage does web casting provide in customer relationship management?

<p>Cost-effective way to maintain continuous contact with many customers (A)</p> Signup and view all the answers

What is likely to happen if customers believe service failures were due to factors beyond the organization’s control?

<p>Dissatisfaction levels will not be severe. (B)</p> Signup and view all the answers

What primarily influences customer loyalty to a service provider?

<p>The enjoyment of the interaction with the service provider (C)</p> Signup and view all the answers

What is one consequence of having 1 unhappy customer?

<p>They will usually tell 10-11 other customers. (C)</p> Signup and view all the answers

Which factor contributes to customer loyalty according to the content?

<p>Satisfaction from quality service (D)</p> Signup and view all the answers

Which of the following types of qualities are evaluated during and after the consumption process?

<p>Experience qualities (C)</p> Signup and view all the answers

Which loyalty group is characterized by purchasing from multiple brands?

<p>Split (C)</p> Signup and view all the answers

What is a key element that differentiates organizations in their service delivery systems?

<p>The ability to design systems from the customer’s point of view (C)</p> Signup and view all the answers

What is a fundamental premise of relationship marketing?

<p>It is more costly to recruit a new customer than to retain an existing one. (B)</p> Signup and view all the answers

Which quality is often difficult to evaluate even after consuming the service?

<p>Credence qualities (D)</p> Signup and view all the answers

What is NOT typically a component of the value that customers derive from services?

<p>The aesthetics of the service environment (A)</p> Signup and view all the answers

What is the primary purpose of loyalty programs?

<p>To reward customers and encourage repeat purchase. (D)</p> Signup and view all the answers

Which behavior is NOT typically associated with loyal customers?

<p>Constantly switching brands. (C)</p> Signup and view all the answers

What action is least likely to encourage customer loyalty?

<p>Increasing product prices without value justification. (B)</p> Signup and view all the answers

What is a key benefit of effective positioning in service marketing?

<p>Provides a compelling reason for the target segment to buy a service (B)</p> Signup and view all the answers

Which of the following is NOT a criterion for effective service positioning?

<p>Exclusively low-cost (A)</p> Signup and view all the answers

During which phase of the service life cycle do promotional costs typically remain high while profits are limited or non-existent?

<p>Introduction phase (C)</p> Signup and view all the answers

Which component of the service marketing mix refers to a combination of all individual service items and related service lines?

<p>Service mix (A)</p> Signup and view all the answers

Which of the following is a difficulty associated with the service life cycle?

<p>Identifying the exact phase of a service in the life cycle can be challenging (C)</p> Signup and view all the answers

What is indicated by expectations being greater than perceptions in service quality?

<p>Poor perceived service quality (A)</p> Signup and view all the answers

What characteristic defines customer loyalty?

<p>Commitment to repurchase from the same supplier (B)</p> Signup and view all the answers

Which of the following is a criticism of the SERVQUAL instrument?

<p>It has lengthy questionnaires (D)</p> Signup and view all the answers

How does perceived value relate to customer expectations?

<p>It is the difference between perceived benefits and perceived costs (B)</p> Signup and view all the answers

What is the purpose of the South African Customer Satisfaction Index (SAcsi)?

<p>To rank satisfaction with goods &amp; services nationally &amp; internationally (B)</p> Signup and view all the answers

In what way does technology benefit Customer Relationship Management (CRM)?

<p>By enabling organizations to know customers better and faster (B)</p> Signup and view all the answers

Which option best describes customer expectations?

<p>Beliefs prior to service encounters (A)</p> Signup and view all the answers

What is a primary benefit of using CRM technology for businesses?

<p>Improved customer satisfaction and retention (A)</p> Signup and view all the answers

What is the first step when a service is determined to be unprofitable?

<p>Immediate elimination (C)</p> Signup and view all the answers

Which of the following best describes 'market penetration'?

<p>Increasing sales and consumption through better marketing (B)</p> Signup and view all the answers

Which sign indicates that a service may need to be eliminated?

<p>Irregular demand and decreased profitability (A)</p> Signup and view all the answers

What is a characteristic of a 'major service innovation'?

<p>New core services in a new market (B)</p> Signup and view all the answers

What role does branding primarily serve for an organization?

<p>To identify services as belonging to the organization (B)</p> Signup and view all the answers

Which option is not a part of service elimination strategies?

<p>Increase marketing (D)</p> Signup and view all the answers

Which function of branding helps in reducing customer risk?

<p>Reduction function (D)</p> Signup and view all the answers

What is a potential outcome of service development?

<p>Modification or addition of products for the current market (D)</p> Signup and view all the answers

Flashcards

Value Levels

Value a customer gets from a service, combined from the technical service component and supporting service acts. It's more than the service itself, considering customer service quality.

Evaluation Qualities

Different types of service qualities that affect the customer's perception of a service, categorized into search(e.g. price), experience(e.g. catering), and credence(e.g. education).

Customer Service Role in Value

Customer loyalty often comes from how employees make the customer feel during service interactions, rather than just the product itself.

Customer Service Systems

Companies that can create service delivery systems from a customer's perspective, are better at value creation.

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Customer Perception of Value

Customers may not always understand differences between services, but focus on how they feel during interactions with the organisation.

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Customer Profitability Systems

Tools to identify profitable customer segments for targeting and retention.

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Operational CRM

Technologies enhancing a company's competitive advantage by creating a differentiated customer experience.

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Help-desk Systems

Systems providing customer support through knowledge bases and various channels (phone, email).

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Call Centers

Advanced help-desks offering customer assistance, order placement, account inquiries, and scheduling.

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Caller Identification

Technology linking customer phone numbers to databases for personalized service, speeding up call handling.

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Customer Service Failure Controllability

Customer dissatisfaction depends on whether they believe a service failure was within the service provider's control. If controllable, dissatisfaction is high; otherwise, it's lower.

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Customer Complaint Rate

Only a small percentage of unhappy customers complain directly. Most take their business elsewhere or spread negative word-of-mouth.

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Cost of Dissatisfaction

The negative impact on a business resulting from unhappy customers.

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Customer Loyalty Benefits

Loyal customers lead to higher profit margins due to repeat purchases, willingness to try new offerings, and positive referrals.

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Customer Loyalty Groups

Different customer groupings based on purchasing behavior and brand loyalty (hard-core, split, shifting, switchers).

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Relationship Marketing

A marketing approach focusing on long-term customer relationships to maximize profitability for all parties.

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Loyalty Programs

Strategies to reward customers for repeat business to increase repurchase likelihood.

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Customer Retention Cost

It is more expensive to acquire new customers than to retain existing ones.

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Empathy in customer service

Personalized attention provided by an organization to its customers.

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SERVQUAL Instrument Criticism

Issues with SERVQUAL include lengthy questionnaires, questionable validity of service quality dimensions, and limited predictive power focused on perceptions only.

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Customer Satisfaction Formula

Customer expectations exceeding perceptions lead to poor service, satisfaction exceeding expectations leads to top-notch service, and equal expectations and perceptions resulting in technical satisfaction.

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Customer Expectations

Pre-service beliefs customers have about the service they'll receive, used to gauge actual service performance.

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Perceived Quality

Evaluation of recent experience, matching actual service to customer expectations.

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Perceived Value

Difference between customer-perceived benefits and costs.

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Customer Loyalty

Customer's commitment to repurchase from the same supplier in future.

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CRM Technology Benefits

Improved profits, reduced costs, access to new customers, development of new business, improved customer satisfaction, and improved employee satisfaction.

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Service Positioning

Creating a unique image/identity in the target market to stand out from competitors.

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Service Life Cycle

The stages of sales for a service, from introduction to decline.

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Service Positioning Criteria

Qualities a service positioning must possess (meaningful, believable, differentiated, sustainable).

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Service Mix

The combination of all service items and service lines offered by a business.

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Service Life Cycle Stages

Stages of service sales (introduction, growth, maturity, decline).

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Service Innovation Types

Different ways to innovate in service offerings, categorized by their scope and impact, ranging from minor style changes to major process or core service innovations.

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Service Elimination Signs

Indicators that a service is no longer financially viable and should be discontinued, including declining profitability, frequent price changes, and high management time.

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Service Elimination Options

Strategies for removing unprofitable services, ranging from immediate closure to gradual phasing out with customer communication and resource reallocation

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Market Penetration

A service strategy focused on increasing sales and consumption within the existing target market through enhanced marketing efforts

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Market Extension

Expanding your service's reach to new markets, requiring careful market research and understanding of different customer segments

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Service Development

Creating new or modified services to cater to the current market, often involving improving features or adding new offerings

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Diversification

A growth strategy that involves entering new markets with NEW service offerings, potentially targeting a wider customer base

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Branding Functions

The roles branding plays in a service offering, from communication and risk reduction to differentiation and building emotional connections with customers

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Study Notes

Service Marketing in Perspective

  • Consumers exchange money for services if they perceive value. Otherwise, they take their business elsewhere.
  • Market exchange is a complex process where organizations identify target market expectations and develop innovative solutions to meet those needs.
  • Resource constraints, changing market trends (rising petrol, interest rates, lower disposable income), and increased demand influence service marketing.

Environmental Scanning

  • Micro-environment: Organizational mission, vision, abilities, objectives, markets, competitors, suppliers, and intermediaries.
  • Macro-environment: Changes in economic, political, legal, social, technological, and international environments.

SWOT Analysis

  • Strengths, Weaknesses, Opportunities, and Threats.

Service Marketing Mix (7 Ps)

  • Product: Technical outcome (tangible/intangible).
  • Physical Evidence: Tangible aspects of the service.
  • People: Staff and customers, crucial in service delivery.
  • Process: Customer experience during service provision.
  • Place: Distribution strategy.
  • Pricing: Covering costs and generating profit.
  • Promotion: Marketing communication strategy to highlight service benefits.

Expectations of Successful Service Marketing

  • Alignment of service delivery with communication and promises.
  • Customer education regarding their roles.
  • Emotional, intellectual, behavioral, relational, and sensory experiences.
  • Minimized customer effort.
  • Balanced supply and demand.
  • Efficient exception management.

Service Tangibility

  • Service is intangible, doesn't involve ownership.
  • Degrees of tangibility range from pure tangible goods to pure services.
  • Pure tangible goods (salt, toothpaste).
  • Hybrid service offers (car with a maintenance plan).
  • Core service with accompanying goods (airline-meals).
  • Pure services (medical care, legal advice).

Classification of Services

  • Lev1: Delivery methods (automated, unskilled, skilled).
  • Level 2: Customer presence required (medical surgery, car repair).
  • Level 3: Use (personal or business).

Inability to store service, intangibility and other features

  • Inability to store services, patent them, or determine costs beforehand.
  • Communication challenges due to intangibility.
  • Important role of word-of-mouth and employee communication.
  • Inseparability necessitates interaction between provider and customer.

Service Value Creation

  • Customer satisfaction is a combination of factors, including customer perspectives, organizational offerings, and overall customer perception.
  • Customers primarily evaluate the service delivery process considering how they feel during the process and with the organization.

Value Levels

  • Value customers derive from the service itself (technical component).
  • Value customers derive from service supporting actions (functional component).
  • Value = Service itself + Service act > Customer expectations.

Evaluation Qualities

  • Search qualities (observable before purchase).
  • Experience qualities (observable only during/after).
  • Credence qualities (difficult to evaluate even after consumption).

Customer Value Systems

  • Customer-centered vs. employee-focused approach.

Customer Service Systems

  • Importance of designing systems from a customer perspective.
  • Examples include airline services, car rentals.
  • Customer satisfaction.
  • Employee/customer interaction.

Increasing Satisfaction

  • Understanding customer needs and expectations is key.
  • Quality service involves consistent service delivery aligned with customer expectations.

Customer Expectations

  • Five levels: Ideal, desired, predicted, zone of tolerance, and adequate.
  • Customer expectations are pre-service beliefs and compared to the actual service performance.

Measuring Service Quality

  • SERVQUAL: Tool to evaluate and measure service quality perceptions.
  • Dimensions: Tangibility, reliability, responsiveness, assurance, and empathy.

Customer Satisfaction Index (SAcsi)

  • Used to quantitatively measure consumer satisfaction.
  • Encompasses various aspects like perceptions of quality, overall value, and feelings of loyalty.
  • Provides national and international benchmarks for comparison.

Service Products in Perspective

  • Service products: core aspects and strategies.
  • Segmentation and targeting strategies for specific customer groups.
  • Service positioning: creating a distinct identity for service offerings.

Service Product Strategies

  • Includes service items, lines and mixes; service depth and width.
  • Evaluating the different stages of the product lifecycle: Introduction, Growth, Maturity, Decline.
  • Key strategies for product/market, branding and communication strategies.

Service Life Cycle

  • Introduction phase, growth phase, maturity phase, and decline phase.
  • Implications of service life cycle strategies in relation to product/market strategies and branding.

Service Elimination

  • Reasons for eliminating a service (e.g., irregular demand, poor profitability).
  • Options for managing service elimination (e.g., price increase, reduction of promotion).

Marketing Mix

  • Purpose of a marketing mix, specific strategies and examples

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BEM Semester Test 1 PDF

Description

Explore the key concepts of service marketing, including consumer value perception, market exchange processes, and the impact of environmental factors. This quiz also covers SWOT analysis and the service marketing mix, focusing on the 7 Ps essential for success in service industries.

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