Badm 320 ch 13 - notes from online lecture PDF

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notes from online lecture...

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Service: any intangible offering that involves a deed, performance, or effort that cannot be physically possessed Customer service: refers to human or mechanical activities firms undertake to help satisfy their customers’ needs and wants The dependence and growth of service-oriented economies in developed countries have emerged for several reasons - It is generally less expensive for firms to manufacture their products in less developed countries - People place a high value on convenience and leisure - As the world has become more complicated, people are demanding more specialized services Services marketing differs from product marketing - Intangible: cannot be touched, tasted, or seen like a pure product can - Difficult to convey the benefits of services - A service that cannot be shown directly to potential customers also is more difficult to promote - Marketers must actively employ symbols and images to promote and sell services - Inseparable production and consumption - Inseparable: services are produced and consumed at the same time - Because they are inseparable, customers rarely have the opportunity to try the service before they purchase it - Heterogeneous - Heterogeneity: variability in the service’s quality - The more humans are needed to provide a service, the more likely there is to be heterogeneity - Marketers can use the variable nature of services to their advantage - A micromarketing segmentation strategy can customize a service to meet customers’ needs exactly - Perishable: services cannot be stored for use in the future - As long as the demand for and supply of the service match closely, there is no problem, but unfortunately this perfect matching rarely occurs Providing great service: the service gaps model - Service gap: results when the delivery of that service fails to meet customer expectations - Service gaps model: designed to encourage the systematic examination of all aspects of the service delivery process and prescribe the steps needed to develop an optimal service strategy

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Knowledge gap: reflects the difference between customers’ expectations and the firm’s perception of those customer expectations - Firms can close this gap by determining what customers really want by doing research using marketing metrics - Standards gap: pertains to the difference between the firm’s perceptions of customers’ expectations and the service standards it sets - Firms can close this gap by setting appropriate service standards, training employees to meet and exceed those standards, and measuring service performance - Delivery gap: the difference between the firm’s service standards and the actual service it provides to customers - This gap can be closed by getting employees to meet or exceed service standards when the service is being delivered by empowering service providers, providing support and incentives, and using technology when appropriate - Communication gap: the difference between the actual service provided to customers and the service that the firm’s promotion program promises - Can close this gap by being realistic about the services they can provide and manage customer expectations effectively at the same time The knowledge gap: understanding customer expectations - It doesn’t pay to invest in services that don’t improve customer satisfaction - Firms must undertake customer research and increase the interaction and communication between managers and employees to understand customer expectations - Evaluating service quality using well-established marketing metrics - Service quality: customers’ perceptions of how well a service meets or exceeds their expectations - Dimensions of service quality - Reliability: the ability to perform the service dependably and accurately - Responsiveness: the willingness to help customers and provide prompt service - Assurance: the knowledge of and courtesy by employees and their ability to convey trust and confidence - Empathy: the caring, individualized attention provided to customers

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Tangibles: the appearance of physical facilities, equipment, personnel, and communication materials - Voice-of-customer (VOC) program: collects customer inputs and integrates them into managerial decisions - Zone of tolerance: refers to the area between customers’ expectations regarding their desired service and the minimum level of acceptable service - Firms ask a series of questions to define the zone of tolerance - The desired and expected level of service for each dimension, from low to high - Customers’ perceptions of how well the focal service performs and how well a competitive service performs, from low to high - The importance of each service quality dimension The standards gap: setting service standards - The next step is to set its service standards accordingly and develop systems to meet the customers’ service expectations - Service providers generally want to do a good job as long as they know what is expected of them - The employees must be thoroughly trained not only to complete their specific tasks but also how to treat guests, and the manager needs to set an example of high service standards, which will penetrate through the organization The delivery gap: delivering service quality - Empowering service providers - Empowerment: allowing employees to make decisions about how service is provided to customers - Becomes more important when the service is individualized - When frontline employees are authorized to make decisions to help their customers, service quality generally improves - Support and incentives for employees - Employees need to feel supported in order for service to be delivered correctly - Managers and coworkers should provide emotional support to service providers by demonstrating a concern for their well-being and standing behind their decisions - Service providers require instrumental support

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Instrumental support: the systems and equipment to deliver the service properly - The support that managers provide must be consistent and coherent throughout the organization - A key part of any customer service program is providing rewards to employees for their excellent service - Use of technology - Using technology to facilitate service delivery can provide many benefits, such as access to a wider variety of services, a greater degree of control by the customer over the services, and the ability to easily obtain information - The integration of technologies into service settings, in turn, alters the elements that distinguish services from products - The communication gap: communicating the service promise - Poor communication between marketers and their customers can result in a mismatch between an ad campaign’s or a salesperson’s promises and the service the firm can actually offer - The gap can be reduced by managing customer expectations and by promising only what you can deliver, or possible even a little less - A way to manage customer expectations is to coordinate how the expectation is created and the way the service is provided - Can be managed when the service is delivered - Service quality and customer satisfaction and loyalty - The evaluation after the purchase may produce 3 outcomes: satisfaction, dissonance, and loyalty - If a firm not only minimizes but also eliminates any service gaps, customers are likely to exhibit significant loyalty to it Service recovery - When service providers fail to meet customer expectations, the best course of action is to attempt to make amends with the customer and learn from the experience - Effective service recovery can significantly increase customer satisfaction, purchase intentions, and positive word of mouth, though customers’ postcovery satisfaction levels usually fall lower than their satisfaction level prior to the service failure - Listening to the customers and involving them in the service recovery - Firms don’t often find out about service failures until a customer complaints

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Customers can become very emotional about a service failure, whether it is major or minor Finding a fair solution - Distributive fairness: pertains to a customer’s perception of the benefits he/she received compared with the costs (inconvenience or loss) - The key is listening carefully to the customer - Customers want to be compensated a fair amount for a perceived loss that resulted from a service failure - Procedural fairness: refers to the perceived fairness of the process used to resolve them - Customers want efficient complaint procedures over whose outcomes they have some influence Resolving problems quickly - The longer it takes to resolve a service failure, the more irritated the customer will become and the more people he/she is likely to tell about the problem...