Chapter 10 Services: The Intangible Product PDF

Chapter 10 Services: The Intangible Product © 2023 McGraw Hill Limited 10-1  Chapter 10: Services: The Intangible Product LEARNING OBJECTIVES LO1 Describe how marketing a service differs from marketing a product by applying the p...

Chapter 10 Services: The Intangible Product © 2023 McGraw Hill Limited 10-1  Chapter 10: Services: The Intangible Product LEARNING OBJECTIVES LO1 Describe how marketing a service differs from marketing a product by applying the principles of intangibility, inseparability, inconsistency, and inventory LO2 Outline the four gaps in the Gaps model used to understand and manage customer expectations LO3 Describe strategies that firms can use to help employees provide better service LO4 Identify three service recovery strategies © 2023 McGraw Hill Limited 10-2  Cowbell Brewing Co – Supporting a Local Community l Revitalizing a small community l Unique service offering - build it and they will come l Design and operations based on being service based business © 2023 McGraw Hill Limited 10-3  Service By providing good customer service, firms add value to their products and services. Specialized services like personal training are thriving. © 2023 McGraw Hill Limited 10-4  The Service-Product Continuum Most offerings lie somewhere in the middle © 2023 McGraw Hill Limited 10-5 Economic Importance Of Service Household maintenance became more specialized Developed economies are increasingly service oriented economies High value Production was placed on cheaper in convenience other countries and leisure © 2023 McGraw Hill Limited 10-6  Test Your Knowledge Which of the following is NOT a reason for the emerging growth and dependence of service-oriented economies in developing countries? A) It is generally less expensive for firms to manufacture their products in less-developed countries. B) Household maintenance activities have become quite specialized. C) Canadian workers are retiring at an earlier age. D) People place a high value on convenience and leisure. © 2023 McGraw Hill Limited 10-7  Test Your Knowledge Which of the following is NOT a reason for the emerging growth and dependence of service-oriented economies in developing countries? A) It is generally less expensive for firms to manufacture their products in less-developed countries. B) Household maintenance activities have become quite specialized. C) Canadian workers are retiring at an earlier age. D) People place a high value on convenience and leisure. © 2023 McGraw Hill Limited 10-8 Services Marketing Differs From Product Marketing © 2023 McGraw Hill Limited 10-9  Intangible Cannot be touched, tasted or seen Requires using cues to aid customers Atmosphere is important to convey value Images are used to convey benefit of value At Starbucks, customers can have a drink, meet with friends, and surf the Internet by using the stores’ free Wi-Fi access. © 2023 McGraw Hill Limited 10-10  Inseparable Production and Consumption Production & consumption are simultaneous Little opportunity to test a service before use Lower risk by offering guarantees or warranties © 2023 McGraw Hill Limited 10-11  Inconsistent Training & standardization Customized services to meet specific needs Bundled packages Replace people with machines Self-service technology Enterprise Rent-a-Car reduces its service inconsistency through training and standardization. You get the same great service everywhere you go. The Internet © 2023 McGraw Hill Limited 10-12  Ways to Reduce Variability Training & Internet- Standardizatio Enabled Kiosks n Replace People with Machines © 2023 McGraw Hill Limited 10-13  Reducing Variability Through Self- check Out Machines l Increasing use of self-checkout machines l Consumers enjoy faster checkout l Retailers save on labour and training costs Do self-checkout machines increase or reduce consumers’ perception of service? © 2023 McGraw Hill Limited 10-14  Test Your Knowledge In addition to training and technology, what is another way firms can reduce service variability? A) offer better employee benefits B) standardization C) micromanaging D) hire geeks © 2023 McGraw Hill Limited 10-15  Test Your Knowledge In addition to training and technology, what is another way firms can reduce service variability? A) offer better employee benefits B) standardization C) micromanaging D) hire geeks © 2023 McGraw Hill Limited 10-16  Inventory How is this service perishable? Since services are perishable, service providers such as ski areas offer less expensive tickets at night to stimulate demand. © 2023 McGraw Hill Limited 10-17 Providing Great Service: The Gaps Model © 2023 McGraw Hill Limited 10-18 The Knowledge Gap: Knowing What Customers Want Marketing research: understanding customers The Knowledge Gap Understanding Evaluating customer service quality expectations © 2023 McGraw Hill Limited 10-19 Filling the Knowledge Gap How does a college increase successful outcomes for its students? © 2023 McGraw Hill Limited 10-20 Understanding Customer Expectations Expectations are based on knowledge and experience Expectations vary according to type of service Expectations vary depending on the situation © 2023 McGraw Hill Limited 10-21  Test Your Knowledge Customer expectations are mainly based on their _______________. A) age and culture B) standards gap C) four core service dimensions D) knowledge and experience © 2023 McGraw Hill Limited 10-22  Test Your Knowledge Customer expectations are mainly based on their _______________. A) age and culture B) standards gap C) four core service dimensions D) knowledge and experience © 2023 McGraw Hill Limited 10-23 Evaluating Service Quality © 2023 McGraw Hill Limited 10-24  Zone Of Tolerance What is the desired and expected level of service for each dimension? What are the customer’s perceptions of how well the focal service performs and how well a competitive service performs? What is the importance of each service quality dimension? © 2023 McGraw Hill Limited 10-25  Lou’s Local Diner Lou’s Local Diner always rates higher than its primary competitor, Well-Known National Chain, on each service quality dimension. © 2023 McGraw Hill Limited 10-26  The Standards Gap: Setting Service Standards l Achieve service goals through training l Commitment to service quality Service providers, like this room-service delivery person at a hotel, generally want to do a good job, but they need to be trained to know exactly what a good job entails. © 2023 McGraw Hill Limited 10-27  Test Your Knowledge To deliver consistently high-quality service, firms must set specific, measurable goals based on _______________. A) employee input B) customers’ expectations C) management philosophy D) consultant recommendations © 2023 McGraw Hill Limited 10-28  Test Your Knowledge To deliver consistently high-quality service, firms must set specific, measurable goals based on _______________. A) employee input B) customers’ expectations C) management philosophy D) consultant recommendations © 2023 McGraw Hill Limited 10-29  The Delivery Gap: Delivering Service Quality © 2023 McGraw Hill Limited 10-30  Empowering Service Providers Allowing employees to make decisions about how service is provided to customers The Keg is successful, in part, because it empowers its employees to satisfy customers. © 2023 McGraw Hill Limited 10-31 Providing Support & Incentives Provide emotional Provide instrumental support to service support necessary to providers deliver service Reducing delivery gap Consistent and Reward employees for coherent management excellent service © 2023 McGraw Hill Limited 10-32  Using Technology l Technology can provide many benefits: l Access to a wider variety of services l greater degree of control by the customer l ability to obtain information Google Analytics are used to predict the success of movies, helping theatres deal with the perishability aspect of their service. © 2023 McGraw Hill Limited 10-33  How Technology is Augmenting the Human Effort © 2023 McGraw Hill Limited 10-34  The Communication Gap: Communicating the Service Promise Manage customer expectations Promise only what you can deliver Communicate service expectations © 2023 McGraw Hill Limited 10-35  Service Recovery Resolve problems quickly Listen to Provide a the fair customer solution Increase Service Recovery © 2023 McGraw Hill Limited 10-36  Listening to the Customer Customers can become very emotional about service failure Customers want to be heard When a service failure occurs, such as receiving a poor meal at a restaurant, goodwill can be recovered by giving the customer a free dessert. © 2023 McGraw Hill Limited 10-37  Finding a Fair Solution Distributive fairness Procedural fairness When handling returns or other services issues, it is important to use procedures that are perceived to be fair by the customers. © 2023 McGraw Hill Limited 10-38  Resolving Problems Quickly The longer it takes to resolve service failure the more irritated the customers It is in the firms' best interest to solve problems quickly © 2023 McGraw Hill Limited 10-39  Test Your Knowledge The key to fairness is _______________. A) meeting all customer demands, no matter how unrealistic B) providing the same compensation to all customers C) listening carefully to the customer D) never offending a customer © 2023 McGraw Hill Limited 10-40  Test Your Knowledge The key to fairness is _______________. A) meeting all customer demands, no matter how unrealistic B) providing the same compensation to all customers C) listening carefully to the customer D) never offending a customer © 2023 McGraw Hill Limited 10-41