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Flashcards in Service marketing Deck (34)
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1
Q

Why is service marketing important?

A

Every organisation that aims to deliver value should & will do it through a service. Firms should have some service element to their offerings, as this is where most of the value is created. Services may include: delivery service, sales (people who communicate the value offering), call centers, and improved consumer knowledge of a product through online services.

2
Q

What are some of the contextual factors that contributed to the growing interest in services marketing?

A
  • The relative growth of service industries to other sectors of the economy
  • The deregulation of many service industries.
  • Intensification of competition in service industries
  • Changing demographic and socio-economic profiles of society
  • The increase in firms use of the co-creation business model
3
Q

What are the 4 intrinsic factors/properties of services that physical goods don’t have?

A
  1. intangibility
  2. inseparability
  3. variability
  4. perishability
4
Q

What is intangibility?

A

The core offering of a service company - its performances - are intangible, not tangible objects. Service is a performance. We cannot see, feel or touch services. Services are evaluated or perceived subjectively prior to the purchase of a good (looking at previous experience, other people’s experience, or credence attributes). Whereas, goods are evaluated objectively prior to its purchase, through aspects of consumer behaviour such as search, experience and credence properties (e.g. test before you buy).

5
Q

What is inseparability?

A

Refers to the inseparability of production and consumption. Services are first sold (or bought), then produced and consumed simultaneously (“in-the-moment”). Whereas, physical goods are first produced, then sold and then consumed.

6
Q

What is variability?

A

There is increased/high degree of variability and inconsistency in service, as there is a high degree of human interaction and intangibility. There will be variability and inconsistency from the same service employee at different points in time, from one service employee to another, and from one customer to another. There may be some days that an employee is a better service provider than others. Firms would like to reduce variability, and some attempt to manage and reduce variability through pre-determined scripts.

7
Q

What is perishability?

A

Services cannot be saved or inventoried. An employee’s potential for service cannot be locked away for another day. There are fluctuations in demand, but almost no fluctuations in the supply.

8
Q

What are the augmented toolkit of service marketing that helps in solving problems that physical goods don’t have?

A
  1. physical evidence
  2. participants
  3. process
9
Q

What is physical evidence?

A

environment in which the service is assembled or administered, and where the firm and the customer interact. The physical attributes of the retail space is hugely powerful. It drives the perception of the quality or value of the service.

10
Q

What is participants/people?

A

includes all human actors (employees and customers) who play an essential role in service delivery. Employees and customers’ expertise and emotional intelligence.

11
Q

What is the traditional mind set for service organisation?

A

where there are set guidelines in terms of how employees deliver service to customers. This reflects inflexibility, and results in lower employee satisfaction, which will in turn reflect lower customer satisfaction.

12
Q

What is market-focused mind set for service quality and recovery?

A

where managers are supporting, facilitating, enabling and empowering employees to make decisions on the boundary. This is a better way, because employees are on the boundary of customer service, whereas those higher up in the organisation are not (they don’t deal with them directly on a day-to-day basis) - “frontline” or “boundary spanning” employees. Thus, employees seem to be more important in the organisational hierarchy - they (not managers) are responsible for & responsive to customers’ value perception of service.

13
Q

What is process?

A

Processes includes actual procedures, mechanisms and flow of activities by which the service is delivered. Processes help to reduce variability by directly dealing with it.

14
Q

What is a service blueprint?

A

a consultant technique used for services marketing when service is failing and customer satisfaction is low (due to a fundamental breakdown in the way service occurs). Firms can map the service process in terms of the interface (boundaries). These linkages help diagnose and prevent breakdowns in service. Managers should focus their attention on fixing these breakdowns, and eliminating unnecessary steps & stages.

15
Q

How do we bring employees into the marketing process in service context?

A

It is employees who deliver the value/service. They are involved in interactive marketing (responsible for delivering the promise), as well as internal marketing (responsible for enabling the promise). So firms must rely heavily on employees, more than they rely on physical goods manufactured.

16
Q

What is service quality judged on?

A

Service quality is judged relative to customer expectations.

17
Q

What are the 2 key drivers of service quality and evaluation (from customer expectations)?

A
  1. technical outcome (what is delivered)

2. functional outcome (how it is delivered)

18
Q

What is technical outcome?

A

The key elements of the product are delivered. The quality of the technical service will contribute to customer loyalty.

19
Q

What are the 2 dimensions of technical outcomes of service quality?

A
  1. Reliability: the ability to perform the promised service dependently and accurately.
  2. Responsiveness: the willingness to help customers and provide prompt service.
20
Q

What is functional outcome?

A

Notions of efficiency, empathy, friendliness and communication. Links to product search, credence and experience (e.g. was I treated with respect, was I waiting in a cue, was the service professional?). The quality of the functional service will also contribute to customer loyalty.

21
Q

What are the 3 dimensions of function outcome of service quality?

A
  1. Assurance: employees’ knowledge, courtesy, and their ability to inspire trust and confidence (e.g. are competent).
  2. Empathy: caring individualised attention given to customers.
  3. Tangibles: the appearance of physical facilities, equipment, personnel and written materials – physical evidence, high in credence property (e.g. office looks good, clean, comfortable)
22
Q

Do technical and functional quality relate to all levels of organisation or just employees?

A

both.

23
Q

What is service failure and recovery?

A

Service failure is inevitable (and emotional), and can be extremely detrimental & damaging to a firm’s growth. Bad service quality often results in negative referrals and word-of-mouth, negative public perception & brand image, no customers (loss of long-term customers/relationships), and hence no profits. Therefore, firms must be prepared to solve any problems that emerge.

24
Q

Persistent and unresolved failures lead to what?

A

Detractors & limits the firm’s growth.

25
Q

What are examples of detractors?

A
  • Customers will find way to get even/seek revenge
  • Customers will drive up costs by reporting their problems
  • Customers will demoralize employees with complaints and spread negative word-of-mouth
  • Customers will decrease their business & back off their relationship with the company
26
Q

What are examples of limits growth?

A
  • The firm’s brand will be tarnished
  • The firm’s ability to find new customers will be affected
  • The firm will find it difficult to increase spending among existing customers
  • The firm’s ability to recruit the best employees of diminished
27
Q

What is the upside to service recovery?

A

The upside to service recovery is that businesses can retain their business by responding/resolving to complaints. Fixing their problems gives customers a reason not to switch (reducing switching costs). Service recovery is an indicator of good service.

28
Q

How do firms fix failure?

A

By treating customers fairly. At the heart of every effective service recovery framework is the notion of justice and the active involvement of frontline service employees.

29
Q

What is the one dimension of service recovery?

A

fairness

30
Q

What are the 3 types of fairness?

A
  1. Distributive Justice: Was I compensated fairly? It is fair if the company compensates me what I lost
  2. Procedural Justice: Were the company’s policies and practices fair? Was it easy to complain? Fairness of the processes used to resolve disputes.
  3. Interactional Justice: Was I treated well by the company’s employees? The degree to which customers affected by the firm’s service are treated with dignity and respect.
31
Q

What are the 4 frameworks for detecting and correcting service failure?

A
  1. Identify service failures
  2. Resolve customer problems, which leads to individual customer & employee satisfaction, and increases customer and employee loyalty ➔ profit
  3. Communicate & classify service failures
  4. Integrate data & improve overall service, which improves the service system, leads to overall customer and employee satisfaction, and increases customer and employee loyalty ➔ profit
32
Q

How does creating ownership contribute to service recovery?

A

Firms can work towards getting employees involved in service recovery process, as they play a key role in ongoing service recovery. This goes beyond the rules, procedures and contracts, and instead, creates ownership.

33
Q

How does firms develop and remunerate service employees? (6)

A
  1. Gather customer information
  2. Measure their own performance
  3. Identify unhappy customers
  4. Find the root causes of value delivery problems
  5. Improve service delivery processes
  6. Identify and eliminate low priority tasks
34
Q

How do companies re-organise to cure the cycle of failure?

A
  1. Providing increase latitude for front-line service workers (within specified limits)
  2. Recruit people who respond well to enfranchisement
  3. Involve employees in the selection of co-workers
  4. Compensation paid for performance, rather than effort.