Final Exam Study Guide
Final Exam Study Guide CONSCI 3910 - 0010
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CONSCI 3910 - 0010
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This 8 page Study Guide was uploaded by Ian Adams on Sunday April 17, 2016. The Study Guide belongs to CONSCI 3910 - 0010 at Ohio State University taught by Jay Kandampully in Fall 2015. Since its upload, it has received 178 views. For similar materials see Consumer Service and Satisfaction in Behavioral Sciences at Ohio State University.
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Date Created: 04/17/16
CONSCI 3910 Jay Kandampully Quiz Test 3 Review Week 9: Internal Marketing INTRODUCTION This week we discussed how marketing the service firm to employees is just as critical as marketing to customers KEY POINTS Internal Marketing is the concept of keeping employees happy with the firm so that they will perform their jobs better Empowering employees improves customer satisfaction Wordofmouth is the most powerful marketing tool The Marketing Service Image is comprised of customers, shareholders, service personnel, and suppliers MAIN IDEAS People, process, and physical evidence are most important of the 7P’s of the services mix (the other parts are product, place, price, and promotion) Functions of the Firm o Human Resource Management Internal Marketing: Marketing to employees so they become loyal. Then it will be easier to motivate them to perform best services possible o Operations Interactive Marketing: Delivering the firm’s promise during Moments of Truth o Marketing External marketing: Marketing to customers outside of a firm Service Promise: Firms make promises to customers that set the customers’ expectations The old way of marketing included companies trying to tell customers what they wanted instead of focusing on adapting services to suit the customer Management Implications o Support Systems The technology that impresses customers Example: Keyless hotel where you use a mobile app to open door o Empowerment Empower employees to correct complaints customers have Traditionally, employees needed to ask managers to correct mistakes Now, employees can correct mistakes without contacting managers Customers can be empowered through online communities Customers are empowered with the ability to market the firm through wordofmouth o Information and Knowledge When customers come to you, they believe you have information they cannot get on their own Employees must be knowledgeable in order to impress customers and retain their business Marketing Impacts o Referrals Customers spread their experiences with firms through wordofmouth The more referrals a firm gets, the more repeat customers a firm will have o Feedback Need clear feedback collection methods to effectively use feedback to improve firm Need to know what customers value and what they do not value o Value Firms must provide customers with value that they cannot find other places This ensures the firm will have repeat business Outcome of Experience o Today, wordofmouth can be spread easily and rapidly with the advancing digital world o Social media allows customers to quickly show their experiences with a firm to their friends and family Loyalty Programs o For employees Important so employees stay engaged with the company Example: If you work at Starbucks, you can study at Arizona State for free o For customers Important to ensure that a customer will remain with a firm for a long period of time Marketing Service Image o Represented by customers (the market), shareholders, service personnel (who directly represent the brand through customer interactions), and suppliers The higher the firm’s image, the more suppliers will want to work with the firm, and success will be greater for a longer period of time (Week 10: Spring Break) Week 11: Internal Marketing (Continued) and Relationship Marketing INTRODUCTION This week we continued our discussion of Internal Marketing and expanded on creating effective customer relationships KEY POINTS Firms with good Internal Marketing skills attract the best employees A firm must select who it wants its customers to be The cost of attracting a new customer is far greater than keeping an existing customer MAIN IDEAS Internal Marketing What is Internal Marketing? o Internal marketing to people within a firm (i.e. marketing to employees who work for your firm) o Employees are parttime marketers because they work directly with customers, and customers form opinions based on these interactions The overall objective of internal marketing is: o To ensure employees are motivated toward customeroriented and serviceminded performance and thus successfully fulfill their duties as parttime marketers o To attract and retain customeroriented and serviceminded employees Happiness outweighs salary o People leave jobs more often for a lack of happiness than a lack of money o For this reason, it is critical to keep employees satisfied Compete for talent o Attracting the best possible people to perform the service is a key factor in services o One of the main causes of poor service quality is attracting the wrong people to perform the service o Marketing is used by most firms to compete for sales market share but not talent market share o The same firms that compete intensely and imaginatively for customers compete meekly and mundanely for staff. This is a huge mistake, as the employees should feel valued and intrigued as well o The service firms that use their marketing abilities to the labor market will fare best in obtaining the most talented employees Offer a vision o A paycheck may keep a person on the job physically, but will not keep a person on the job emotionally o Companies at the top of the list of the most admired companies by employees stand for something worthwhile and they communicate this vision to employees with a passion o Leaders within a firm must work to create dignity for the business Relationship Marketing Selecting a Target Market o Marketing is the process where a firm selects its customers. o Service firms must select a target customer market Narrowing their customer base ensures long term relationships between the firm and the customer Enterprise Growth o Firms grow because of their customer base o Growth should be achieved through providing high value to the customer base, and not a focus on cheapest price Focus on cheapest price is difficult because there is a limit to how low you can price an item o For growth to happen: Increase the number of customers Increase the frequency of sale Increase the unit of sale Increase the residual value Share of the Customer o The cost of attracting or developing a new customer is 5 times higher than the cost of keeping the relationship with original customers o The profitability in retention of customers is 16 times higher than that of developing a new customer o On average, US companies lose half of their customers every five years Managing the Relationships o The more a firm gets to know a customer, the more the customer is satisfied and the mutual relationship flourishes o Relationships are built between networks of partners that a firm does business with. The more networks a business has, the greater the long term opportunities are for that firm Week 12: Internal Service System Linking Empowerment Guarantee and Recovery INTRODUCTION This week we discussed the critical elements of implementing successful employee empowerment KEY POINTS Customers are involved in the creation of value in today’s day and age Theory Y corrects Theory X by saying that managers must focus on being more involvementoriented rather than controloriented Four key parts to empowerment are performance standards, rewards, technology, and power to make decisions MAIN IDEAS Marketing is in the hands of the consumer o Interactive online brand communities increase loyalty from customers Example: My Lego Network Cocreation of value o Customers aid in the creation of the final product o Important to utilize customers in creation of product to keep them happy and engaged with the firm Example: Nike’s personalized shoes, Ben and Jerry’s “Suggest a Flavor” Firms must have strong relationships with customers and employees in order to exist o They also must build business relationships with customers, employees, suppliers, and shareholders o If a strong relationship among the firm, customers, and employees does not exist then a firm cannot have relationships with suppliers and shareholders Empowerment o Customers, people, and the organization must work together o 4 Parts People System/Structure Process Technology Theory X o People in the world are divided into 2 groups One group consists of managers, and one group is there to take orders (master and servant idea) Theory Y o By McGregor o Theory X is not valid in today’s day and age o Controloriented managers must change to be more involvementoriented with their subordinates Benefits of Involvement Orientation o Lower cost o Higher productivity o Higher quality o Higher speed in responding to customer request o Better innovation (doing something better than you have done it in the past) o Boosts employee morale Dimensions of Empowerment o Organizational empowerment Overt permission and supportive systems o Personal empowerment Provide capability and the information needed Essential parts that help empowerment to work o Performance standards need to be set for employees o Offer rewards so positive habits are reinforced o Utilize uptodate technology o Give the power to make decisions to employees and not only managers Week 13: Advantages and Disadvantages of Empowerment INTRODUCTION These notes are from the inclass assignment on 4/5 (no class on 4/7) and they expand upon employee empowerment KEY POINTS Empowering employees streamlines the transaction process with customers Managers must ensure employees do not take advantage of their empowerment Managers should hire only the best employees who are trusted and responsible Empowering employees is a marketing tool in addition to a human resources tool MAIN IDEAS Advantages of Empowering Employees o They feel more valued as assets to the company o They feel more autonomous, increasing their happiness and job satisfaction o More efficient transactions with customers since a manager is not needed to make special decisions o Customers more satisfied with streamlined process o Customers spread their satisfaction through wordofmouth, which will increase the firm’s business o Positive wordofmouth will attract high quality employees to want to work for the firm Disadvantages of Empowering Employees o Employees may abuse power and make too many special deals for customers, causing a decrease in revenue o Employees may be less likely to listen to their managers o Extra training is needed to ensure employees are suited to make these special decisions How to ensure empowering employees is successful o Managers should check on their employees and audit their transactions to make sure they are not abusing their power o Selectively choose the employees so that only the best workers are making these critical decisions for the firm o Ensure the training process for the employees is thorough and rigorous Employee Empowerment as a Marketing Tool o Empowering employees is not only a Human Resources decision o Empowering employees will increase customer satisfaction, which leads to positive wordofmouth This positive wordofmouth is critical marketing for the firm Week 14: Service Guarantees INTRODUCTION This week we discussed the beneficial nature of implementing service guarantees KEY POINTS Service guarantees must be implemented because services cannot be redone Service guarantees allow firms to improve the experience for both employees and customers The four critical parts to an effective service guarantee are that they should be easy to understand and communicate, unconditional, meaningful to the customer, and easy to invoke MAIN IDEAS In any business transaction one party takes more risk than the other party In services, customers are forced to take a relatively higher risk because: o Services cannot be pretested o Services cannot be reworked o Services cannot be returned A service guarantee enhances an firm’s ability to: o Reinforce the service promise o Indicate the level of expected service o Receive immediate customer feedback o Identify failpoints in the service system o Offer immediate rewards to customers and employees o Undertake training/education programs o Continuously assess and improve o Adopt empowerment programs o Encourage employee involvement and ownership o Enhance internal service quality o Develop structures and systems to support service A service guarantee will force an organization to do several things better than it did them before 4 Parts to an Effective Service Guarantee o Easy to understand and communicate Specific and clear, easily understood by both customers and employees o Unconditional When excuses are given, customer feels cheated o Meaningful to the customer They are more than just promotional tools. They promise something of value if the service is not delivered properly o Easy to invoke Unpleasant situations can easily be taken care of by employees
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