Ch 13. The Intangible Product PDF

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I took my own notes and added what the professor said was important during class.
It helped me to get an A in the class....

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service - any intangible offering that involves a deed, performance, or effort that cannot be phy sically possessed; intangible customer benefits that are produced by people or machi nes and cannot be separated from the producer customer service - human or mechanical activities firms undertake to help satisfy their customers’ needs and wants Economies of developed countries such as of the US have become increasingly dependent on services. This dependence and the growth of service-oriented economics have emerged f or several reasons. - Service is generally less expensive for firms to manufacture their products in less dev eloped 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 4 core differences between services and goods - intangible a. a characteristic of a service; it cannot be touched, tasted, or seen like a pure product can - inseparable a. a characteristic of a service; it is produced and consumed at the same time b. ex) haircut c. Because the service is inseparable from its consumption, customers rarely ha ve the opportunity to try the service before they purchase it. And after the serv ice has been performed, it can’t be returned. - heterogeneous a. as it refers to the differences between the marketing of products and services, the delivery of services is more variable - perishable a. a characteristic of a service; it cannot be stored for use in the future Providing Great Service: The Service Gaps Model service gap - results when a service fails to meet the expectations that customers have about how it should be delivered Service Gaps Model - a managerial tool designed to encourage the systematic examination of all aspects of the service delivery process and prescribes the steps needed to develop an optimal s ervice strategy 4 service gaps - knowledge gap a. a type of service gap; reflects the difference between customers’ expectations and the firm’s perception of those expectations b. An important early step in providing good service is knowing what the custom er wants. To reduce the gap, it is necessary for the firms to understand what c ustomers expect from them, which is based on their knowledge and experienc

es. c. service quality i. customers’ perceptions of how well a service meets or exceeds their e xpectations ii. 5 distinct service dimensions to determine overall service quality 1. reliability: the ability to perform the service dependably and acc urately 2. responsiveness: the willingness to help customers and provide prompt service 3. assurance: the knowledge of and courtesy by employees and t heir ability to convey trust and confidence 4. empathy: the caring, individualized attention provided to custo mers 5. tangibles: the appearance of physical facilities, equipment, per sonnel, and communication materials d. voice-of-customer (VOC) program i. an ongoing marketing research system that collects customer inputs a nd integrates them into managerial decisions e. zone of tolerance i. the area between customers’ expectations regarding their desired serv ice and the minimum level of accepted service - that is, the difference between what the customer really wants and what he or she will accep t before going elsewhere - standards gap a. a type of service gap; pertains to the difference between the firm’s perception s of customers’ expectations and the service standards it sets - delivery gap a. a type of service gap; the difference between the firm’s service standards and the actual service it provides to customers b. empowerment i. in the context of service delivery, means allowing employees to make decisions about how service is provided to customers c. support and incentives for employees i. emotional support 1. concern for others’ well-being and support of their decisions in a job setting ii. instrumental support 1. providing the equipment or systems needed to perform a task i n a job setting iii. providing rewards to employees for their excellent service d. Using technology to facilitate service delivery can provide many benefits, suc h as access to a wider variety of services, a greater degree of control by the c ustomers over the services, and the ability to obtain information. It also impro ves the service provider’s efficiency and reduces service costs. - communication gap a. a type of service gap; the difference between the actual service provided to c ustomers and the service that the firm’s promotion program promises By either minimizing or eliminating any service gaps, the firms can keep their customers loya

l to them. Service Recovery Despite a service failure, effective service recovery efforts can significantly increase custome r satisfaction, purchase intentions, and positive word of mouth. Effective service recovery demands - listening to the customers and involving them in the service recovery a. Firms often don’t find out about service failures until a customer complains. - providing a fair solution a. When service failure occurs, customers want to be treated fairly. i. distributive fairness 1. a customer’s perception of the benefits he or she received com pared with the costs (inconvenience or loss) that resulted from a service failure ii. procedural fairness 1. the customer’s perception of the fairness of the process used t o resolve complaints about service - resolving the problem quickly a. The longer it takes to resolve a service failure, the more irritated the customer will become and the more people he or she is likely to tell about the problem....