BEM 120 Chapter 2 Class Notes PDF

2024/07/29 Chapter 2 Service Marketing in Perspective 1 Learning Outcomes After studying this chapter, you should be able to: 1. Explain the benefits that an organisation can expect from providing the quality of service customer expect. 2. Def...

2024/07/29 Chapter 2 Service Marketing in Perspective 1 Learning Outcomes After studying this chapter, you should be able to: 1. Explain the benefits that an organisation can expect from providing the quality of service customer expect. 2. Define ‘value’ on two separate levels of evaluation. 3. List and explain the three categories of evaluation qualities. 4. Explain the concept of ‘customer service systems’. 5. List the ten customer service commandments. 6. Define ‘service quality’. Grasping Service Marketing. 3rd Edition. 2 1  2024/07/29 Learning Outcomes 7. Briefly discuss the two constructs that shape customers’ perceptions of service quality, namely customer expectations and customer perceptions. 8. Explore the importance of understanding customer expectations. 9. Explain the link between service quality and customer satisfaction. 10. Discuss the implications of customer loyalty as well as the most important drivers of loyalty. 11. Provide practical examples to illustrate any of the theoretical issues discussed in this chapter. 12. Provide service management related solutions to any marketing problems discussed in this chapter. Grasping Service Marketing. 3rd Edition. 3 INTRODUC TION 4 2  2024/07/29 Introduction 5 Introduction KEYWORDS IN MODERN MARKETING Quality Service Value 6 3  2024/07/29 Benefits of Providing Better Service Improved services offer organisations competitive edge. Improve services serve as differentiating factor, especially where organisations offer similar services Grasping Service Marketing. 3rd Edition. 7 Benefits of Providing Better Service Increased market share Improved value proposition Financial impact To gain marketing benefits 8 4  2024/07/29 Benefits of Providing Better Service Increased market share Improved service can entire competitor’s customers to ‘switch’ It’s difficult to match superior service Grasping Service Marketing. 3rd Edition. 9 Benefits of Providing Better Service Improved value proposition Addition of superior customer service to a technically superior service product increase perceived value. Financial impact Improved profitability from repeat business There are costs involved in poor service delivery Grasping Service Marketing. 3rd Edition. 10 5  2024/07/29 Benefits of Providing Better Service To gain marketing benefits Quality accreditation or awards are used by service organisation to substantiate marketing communication. 11 Increasing Value Defined as the difference between the customer’s perception benefits received from purchasing and consuming the service, and the customer’s perception of the costs incurred in exchange for the service. Grasping Service Marketing. 3rd Edition. 12 6  2024/07/29 Customers will buy when: Benefits of the exchange exceed cost of exchange Service offers superior value compared to other in the market 13 Increasing Value Value can be defined as: Benefits Customers’ Costs received Perceptions incurred Benefits of A > Costs of A Benefits of A > Benefits of B, C, D Grasping Service Marketing. 3rd Edition. 14 7  2024/07/29 Value Levels Value can be described in two levels: Value derived from the service itself Value derived from the quality of the supporting service act Value = (Service Itself + Service Act) > Customer Expectations Grasping Service Marketing. 3rd Edition. 15 Service The Service Human interaction Act (Functional) HOW we deliver the service Core service (Technical) WHAT we do The Service Grasping Service Marketing. 3rd Itself Edition. 16 8  2024/07/29 Elements in customer satisfaction and loyalty Grasping Service Marketing. 3rd Edition. 17 Total The Service The Service Perceived = Itself + Act Value > Customer Expectations = Value 18 9  2024/07/29 Benefits of Providing Better Service Improved services offer organisations competitive edge. Improve services serve as differentiating factor, especially where organisations offer similar services Grasping Service Marketing. 3rd Edition. 19 Total perceived value = Grasping Service Marketing. 3rd Edition. The Service The Service Itself + Act (WHAT) (HOW) > Customer Expectations = Value 20 10  2024/07/29 Evaluation qualities Search qualities Experience qualities Credence qualities 21 Evaluation qualities Search qualities Attributes evaluated before service purchasing service including colour, feel, and smell. Tangible products: 22 11  2024/07/29 Evaluation qualities Experience qualities Attributes that can be evaluated during and after consumption process. Includes Catering Services, surgery Customers rely on expectations of how they want to feel 23 Evaluation qualities Credence qualities Attributes that are difficult to evaluate even after consumption. Customers wont know if the service was good or poor quality Includes tax services, education. 24 12  2024/07/29 Customer Value Systems Credence qualities Attributes that are difficult to evaluate even after consumption. Customers wont know if the service was good or poor quality Includes tax services, education. 25 Customer Value Systems A B Not Customer- Customer-centred centred Works from customer’s Focused on what is point of view easiest for employees and organisation 26 13  2024/07/29 The Role of Customer Service in Value Creation Guidelines to develop a customer-centred culture: Customer Service Systems Design service delivery systems from a customer’s point of view Customer Service Commandments 10 “commandments” to explain great customer service Grasping Service Marketing. 3rd Edition. 27 10 Customer Service Commandments 1. Ask customers what they want? 2. Have effective systems in place 3. Under-promise and over-deliver 4. The answer is always YES! 5. All employees to have the authority to handle complaints Grasping Service Marketing. 3rd Edition. 28 14  2024/07/29 10 Customer Service Commandments 6. Encourage customers to communicate when service delivery goes wrong 7. Measure everything that influences the customer 8. Incentivise staff according to their performance 9. Show respect at all times and be polite 10. Learn from other successful organisations It is all about … ATTITUDE Grasping Service Marketing. 3rd Edition. 29 3 Levels of Value … From the Customer’s Perspective Perceived quality of the service delivered Expectations about the characteristics of the service Perceptions of the actual service delivered Grasping Service Marketing. 3rd Edition. 30 15  2024/07/29 Customer Customer Customer Satisfaction = Perceptions + Expectations ☺ 31 Disconfirmation paradigm Performance Expectations Comparison p>e p=e p