Service Marketing Reviewer copy.pdf

Service Marketing Reviewer Business services - refer to the activities that help organizations but do 1. Services are intangible, which means they cannot be touched not necessarily result in a physical commodity. This means that the...

Service Marketing Reviewer Business services - refer to the activities that help organizations but do 1. Services are intangible, which means they cannot be touched not necessarily result in a physical commodity. This means that the value or seen before. of each service is intangible. 2. In service marketing, the customer plays a significant role in Companies rely on these service providers for marketing, the delivery process. production, safety, cost and convenience purposes—especially for 3. Customer perceptions are entirely based on the actual larger companies that need to keep up with work demands. performance of a product or service. Differences between goods and service 4. Net Promoter Score (NPS) is a metric used to measure Goods: Tangible items that can be physically touched, stored, and customer loyalty and satisfaction. owned. They have a physical presence and are produced, sold, 5. Customer satisfaction scores can help businesses identify and consumed. areas of improvement. Services: Intangible activities or benefits provided by one party to 6. Transparent Communication is about what your product or another. Services do not result in ownership and are consumed at service can and cannot do. the point of production. 7. Using feedback system and market analysis to make Product: Goods are product. Then they are stored and sold. improvements and stay ahead of customer expectations is Service: Services are performed. Process of performance is tied to the one of the measures of managing customer satisfaction. product. Product - Tangibility Il. Matching type Tangible(can be touched, seen and smell) 8. Which of the following is a qualitative method to measure customer Consumption satisfaction? Can be immediate or can be used later. A. Online survey Service – Tangibility B. Focus group Intangible(can’t be touched or seen, but can be felt/experience) C. Customer satisfaction score Consumption D. Net Promoter Score Immediate/instantaneous. Can’t be preserved for the future/can’t 9. What is the primary goal of measuring customer satisfaction? be stored A. To determine the effectiveness of marketing campaigns B. To assess the profitability of a business Product – Skills C. To understand customer needs and improve service quality Skills not as important D. To monitor employee productivity Cost 10. Which of the following is a common method used to measure Comparatively inexpensive customer satisfaction? Ex. Food cost of banquet A. Profit margin analysis Service – Skills B. Customer surveys Skills in providing services are very important/critical (ref C. Employee performance reviews inseparability) D. Inventory turnover rates Cost 11. What is a key factor that shapes customer perceptions? Expensive A. The price of the product alone B. The quality of advertising C. The customer's direct experience with the product or service Product – Variability D. The company's market share Standardized 12. Which of the following best defines customer expectations? Consistent A. The customer's perceived worth of a product. Perishability B. The standards or benchmarks that customers use to evaluate Can be stored has a longer life a product or service. and hence revenue can be deferred but not lost C. The actual experience a customer has with a product or Service – Variability service. Owing to human delivery element, may vary. D. The emotional response of a customer after purchasing a Inconsistent product. Difficult to standardize 13. What is the primary challenge of marketing services compared to Perishability goods? Immediate/instantaneous A. Identifying the right target market Can’t be preserved for the future/can’t be stored B. Managing the intangible nature of services C. Setting the right price Scope of Service D. Choosing the right distribution channels A scope of services sets out precisely what services a consultant 14. The characteristic that services cannot be touched or seen before will be performing on a project. Scopes of services may also be purchase. prepared for contractors where they are carrying out design work, A. Intangibility or for consultants appointed by contractors on design and build B. Heterogeneity projects. C. Perishability D. Inseparability Services marketing is a form of marketing businesses that provide a 15. Is the difference between what the customer expected and what they service to their customers use to increase brand awareness and sales. perceived was delivered to them. It focuses on advertising intangible transactions that provide value to A. GAP Model customers. B. Knowledge Gap is described as “the built-in machine of commercial enterprise C. Service Gap activities designed to plan, price, promote and distribute D. Delivery Gap fantastic offerings for the gain of current and practicable customers to gain organizational objectives”. Service - is an act or performance offered by one party to another that essentially intangible and does not normally result in ownership of Service marketing triangle is a framework that defines relationships anything. with companies, their customers, their vendors and their systems. defined as "activities, benefits, and satisfactions offered for sale or provided in connection with the sale of goods" and "all economic Three types of marketing with in the triangle activities whose output is not a physical product or construction, 1. Internal marketing refers to the process by which a company and provides added value in forms (such as convenience, aligns, motivates, and empowers its employees to deliver a positive amusement, timeliness, comfort, or health) that are essentially service experience that matches the company's external brand intangible concerns of its first purchaser. promise. are non-physical items that can be provided by businesses and paid for by consumers. 2. External marketing involves the strategies and activities a with it. These expectations can be based on past experiences, word-of- company uses to communicate with its target market to create mouth, marketing communications, and brand reputation. awareness, shape perceptions, and generate demand for its Types of Expectations: products or services. Explicit Expectations: Clearly stated or advertised promises, 3. Interactive marketing focuses on the direct interactions between such as “30-day money-back guarantee.” employees and customers during the service delivery process. Implicit Expectations: Assumptions based on industry standards, such as expecting a hotel room to be clean and comfortable. Characteristics of Service Marketing Static Expectations: Long-held beliefs about a brand or product 1. Intangibility – A service is not a physical product that you can that remain consistent over time. touch or see, felt, tasted, heard or smelled before buying. A service Dynamic Expectations: Evolving expectations based on changing can be experienced by the buyer or the receiver. Also, you can not market conditions, technological advancements, or trends. judge the quality of the service before consumption. 2. Inconsistency – “lack of consistency and measures how much 2. Customer Perceptions: The Reality of Experience data or experiences vary”. There can be no perfect standardization Customer perceptions are the opinions or attitudes that customers of services. Even if the service provider remains the same, the form after interacting with a product, service, or brand. These quality of the service may differ from time to time. perceptions are shaped by the actual experience compared to their 3. Inseparability - is “the quality or state of being incapable of being expectations. separated or divided. ”Unlike with goods/products the Formation of Perceptions: manufacturing and the consumption of services cannot be Interaction Quality: How well the product or service meets the separated by storage. customer’s needs. 4. Perishability. Perishable goods refer to products and services that Service Environment: The physical and digital environments in have an expiration date. Services, like foods, are perishable, which the interaction takes place. meaning that services can not be stored for later use. Foods may Customer Service: The quality of support and assistance provided go bad if they are not consumed in a certain period, the same during the customer journey. applies to some services. (ex. Movie tickets) Marketing and Communication: How the brand’s message aligns with the actual experience 3. The Expectation-Perception Gap Service Gap: The difference between customer expectations and perceptions is often referred to as the expectation-perception gap. This gap can lead to either customer satisfaction or dissatisfaction. Positive Gap: When perceptions exceed expectations, leading to customer delight. Negative Gap: When perceptions fall short of expectations, leading to dissatisfaction and potential brand damage. GAP MODEL of Service Quality GAP Model creates a roadmap for the overall service delivery process and identifies the gap between the processes so that the complete model works efficiently and effectively. The GAP Model of Service quality helps to identify the gaps between the perceived service and the expected service. The gap model of services marketing is a framework authorities use to analyze customer satisfaction and become aware of areas for improvement. Service Gap – is the difference between what the customer expected and what they perceived was delivered to them. The significance of the services marketing to economic system 1. Generation of employment opportunities 2. Optimum utilization of resources 3. Capital formation 4. Increased preferred of living 5. Use of environment-friendly technology Lesson 2: UNDERSTANDING CUSTOMER EXPECTATIONS AND PERCEPTIONS 1. Customer expectations – are the preconceived notion or beliefs customers have about a product, service, or brand before interacting Classification of Gap Model Proactive Service: Anticipate customer needs and address issues before they escalate. Gap 1: Knowledge Gap Emotional Connection: Create a brand narrative that resonates The knowledge gap is the difference between the customer’s emotionally with customers, fostering a deeper connection. expectations of the service and the company’s provision of that service. Lack of management and customer interaction Measuring Customer Satisfaction Lack of communication between service employees and Customer satisfaction is a critical indicator of a business’s ability to management. meet or exceed customer expectations. Satisfied customers are more Insufficient market research. likely to return, recommend the brand to others, and contribute to long- Insufficient relationship focus. term business success. Failure to listen to customer complaints. refers to the degree to which a product or service meets or exceeds customer expectations. It is a key determinant of customer loyalty Gap 2: The Policy Gap and retention. The policy gap is the difference between management’s understanding Importance: of the customer needs and the translation of that understanding into Customer Retention: Satisfied customers are more likely to stay service delivery policies and standards. loyal to the brand. There are a number of reasons why this gap can occur: Word-of-Mouth: Satisfied customers are more likely to Lack of customer service standards. recommend the brand to others. Poorly defined service levels. Competitive Advantage: High levels of customer satisfaction can Failure to regularly update service level standards. differentiate a brand from its competitors. Financial Performance: Increased customer satisfaction often Gap 3: The Delivery Gap leads to higher revenues and profitability. The delivery gap is the difference between service delivery policies and standards and the actual delivery of the service. Why Measure Customer Satisfaction? This gap can occur for a number of reasons: Feedback for Improvement: Measuring customer satisfaction Deficiencies in human resources policies. provides direct feedback that can be used to improve products, Failure to match supply to demand. services, and customer interactions. Employee lack of knowledge of the product. Understanding Customer Needs: It helps businesses understand Lack of cohesive teamwork to deliver the product or service what their customers value most and where there might be gaps in their offerings. Gap 4: The Communication Gap Tracking Performance Over Time: Regular measurement allows The communication gap is the gap between what gets promised to businesses to track their performance over time and make customers through advertising and what gets delivered. Communication adjustments as needed. gaps lead to customer dissatisfaction. This happens because what they Identifying Areas of Strength and Weakness: Businesses can receive isn’t what they were promised. In the worst case, it may cause identify what they are doing well and what needs improvement, them to turn to an alternative supplier. allowing for targeted action. Again. there are a number of reasons why this can happen: Overpromising. Methods for Measuring Customer Satisfaction Viewing external communications as separate to what’s going on 1. Customer Satisfaction Surveys (CSAT) surveys ask customers internally. to rate their satisfaction with a product, service, or experience on a scale (e.g., 1 to 5 or 1 to 10). Insufficient communications between the operations and 2. Net Promoter Score (NPS) – measures customer loyalty by asking advertising teams. customers how likely they are to recommend a company to others on a scale of 0 to 10. Gap 5: The customer gap 3. Customer Effort Score (CES) – measures how easy it is for The customer gap is the difference between customer expectations and customers to interact with a company, whether it’s making a customer perceptions. This gap occurs because customers do not purchase, getting support, or resolving an issue. always understand what the service has done for them or they 4. Online Reviews and Social Media Monitoring. Monitoring online misinterpret the service quality. reviews and social media comments provides insights into customer satisfaction based on what customers are saying publicly. 4. Managing Customer Expectations 5. Customer Interviews and Focus Groups. Conducting interviews A. Setting Realistic Expectations: or focus groups allows businesses to gather in-depth qualitative Transparent Communication: Be clear about what your product feedback on customer satisfaction. or service can and cannot do. 6. Churn Rate Analysis. Churn rate measures the percentage of Under-Promise and Over-Deliver: Set expectations slightly lower customers who stop using a product or service over a given period. than what you can deliver to ensure customers are pleasantly A high churn rate often indicates low customer satisfaction. surprised. Consistent Messaging: Ensure that marketing, sales, and customer service teams align on the brand’s promises. B. Monitoring and Adapting: Customer Feedback: Regularly collect and analyze feedback to understand if expectations are being met. Market Trends: Stay informed about industry trends that might shift customer expectations. Continuous Improvement: Use feedback and market analysis to make improvements and stay ahead of customer expectations. 5. Enhancing Customer Perceptions Delivering on Promises: Quality Assurance: Ensure that products and services consistently meet the standards promised to customers. Customer Experience: Focus on providing a seamless, enjoyable experience across all touch points. Building Positive Perceptions: Personalization: Tailor interactions and offerings to individual customer needs and preferences.