Midterm Study Guide
Midterm Study Guide MKTG 347
Popular in Services Marketing
Popular in Marketing
This 9 page Study Guide was uploaded by Kelsey Kollar on Sunday October 9, 2016. The Study Guide belongs to MKTG 347 at Towson University taught by John R. Rodman III in Fall 2016. Since its upload, it has received 77 views. For similar materials see Services Marketing in Marketing at Towson University.
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Date Created: 10/09/16
Study Guide 1 Services Marketing Service businesses and industries health care hospital, dentist, eye care professional service accounting, legal, architecture financial banking,insurance hospitality restaurant, hotel, ski resort travel airline, theme park other hair salon, pest control, plumbing, interior design, ect. Service problems intangibility services can’t be inventoried, easily patented, easily communicated or priced heterogeneity delivery and satisfaction depend on employee and customer quality depends on uncontrollable factors service may not always match promotion simultaneous production and consumption customers impact transaction and each other mass production employees affect service perishability services can’t be returned (ex: florist) comes with its own challenges quality needs to be defined, improved, and ensured designing new services consistency can be difficult with many employees accommodating fluctuating demand for different seasons motivating employees can be difficult Characteristics of services “Services include every interaction between any customer and anyone representing the company.” intangible heterogeneous simultaneous production and consumption perishable Experience qualities attributes a customer can determine after purchase or during consumption of product. Part of customer evaluation process for services. Midpoint between search qualities (attributed determined before purchase) and credence (characteristics that can’t be evaluated after consumption) reliability ability to perform promised service assurance knowledge and courtesy of employees and ability to inspire trust tangibles physical facilities, equipment, and appearance of personnel empathy caring, individualized attention provided to customers responsiveness willingness to help customers and provide prompt service The Customer Gap the difference between expected service and perceived service. Is the service better/worse than expected? The Four Gaps Avoid these 4 gaps to get good quality service: Gap 1 Listening Gap not knowing what customers expect inadequate mktg research lack of communication insufficient relationship inadequate service recovery *customer feedback is important* Gap 2 Design and Standards Gap not having right service design and standards not having customerdriven service design and standards poor service design absence of customer driven standards inappropriate physical evidence and service scape management of perceptions of customer expectations Gap 3 Performance Gap not delivering services standards deficiencies in human resources failure to match supply and demand customers not fulfilling roles problems with service intermediaries employes have a large impact on customer service sometimes the are not motivated because: lack of empowerment burnt out sabotage make sure employees are empowered to make customers happy Gap 4 Communication not matching promises lack of integrated services marketing (keep yo promises) ineffective management of customer expectations overpromising access how you’re meeting customer expectations look for strengths and weaknesses find boundaries between price and customer service “Put it all together close the gaps!!” Service Expectations High Ideal expectations are most ideal for fancy restaurants Normative “should” expectations Experiencebased norms Acceptable expectations Low Minimum tolerable expectations terrible services but very low prices Zone of Tolerance Area between desired and adequate service. can be widened or narrowed change over time varies among individuals varies among product Factors that influence customer expectations Desired service can be affected by personal needs or want for lasting service Adequate service affected by want for temporary service, perceived service alternatives, selfperceived service, situations Predicted service is affected by explicit and implicit service promises, word of mouth (WOM), past experiences Service Quality The gap between expected service and perceived service. Reliability ability to perform service dependably Assurance knowledge and courtesy of employees & ability to inspire trust Tangibles physical facilities, equipment, ect. Empathy caring, individualized attention to customers Responsiveness willingness to provide prompt service and help Service Dimensions Customer satisfaction is determined by: 1. Service quality reliability responsiveness assurance empathy tangibles 2. Product quality 3. Price 4. Situational & personal factors Leads to customer loyalty Service encounters the “moment of truth” that determines customer loyalty occurs any time the customer interacts with the firm can be potentially critical in determining customer satisfaction and loyalty can be through phone, facetoface, or remote is an opportunity to build trust, reinforce quality, build brand identity, & increase loyalty Customer research customer complaint solicitation relationship surveys posttransaction surveys customer focus groups mystery shopping employee surveys lost customer research critical service encounters research Find out by: asking customers directly mail, phone, facetoface, online, in groups observing customers anthropological tools, qualitative depth get information from employees and front line service providers database marketing research use customer information files, capture behavior through data analysis Customer perceptions of service Process operational flow of activities, steps in process, flexibility vs standard, technology vs human People contact employees, customer and other customers Physical evidence tangible communication, servicescape, guarantees, technology, website Critical incident studies Goal: understand actual events and behaviors causing customer dis/satisfaction in service encounters Method: critical incident technique ex: think of a time when, as a customer, you had a particularly dis/satisfying interaction with an employee. When did it happen? What circumstances led to the situation? What was said and done? What resulted that made you feel dis/satisfied? Data: stories from customers and employees Output: identification of themes underlying dis/satisfaction with service encounters Relationship surveys Mystery shopping Visit a store and evaluate based on the time and date of the visit. is the store and the areas around it clean? are you greeted promptly and in a friendly manner? is merchandise clearly priced? employees neatly dressed? offered specials? is your order rung up correctly and quickly? were you thanked and asked to come again? if food, do employees wash hands? is product fresh? food prepared efficiently and as requested? Relationship marketing is a business strategy that focuses improving relationships with current customers. Does not emphasize on finding new customers. Usually cheaper for the company to keep current customers than to find new ones. Evolution of customer relationships Acquiring > Satisfying > Retaining > Enhancing Relationship value of customers Benefits for customers: receipt of greater value confidence and trust in provider, reduced anxiety social benefits familiarity, social support, personal relationships special deals or price breaks Benefits for firms: economic increased and steady revenue, reduced marketing and admin. costs customer behavior benefits word of mouth (WOM) endorsements, customer voluntary performance, social benefits and mentors to other customers human resource management easier jobs for employees, employee social benefit and retention Customer profitability tiers Platinum most profitable customers typically heavy users of the product not overly price sensitive willing to invest in and try new offerings committed customers Gold profitability levels are not as high sometimes want price discounts not as loyal as platinum may be heavy users who minimize risk by working with multiple vendors Iron essential majority of customers spending levels, loyalty, and profitability not enough for special treatment Lead customers who cost the firm money demand more attention than they are due given their spending and profitability sometimes problem customers complain about the firm to others and tie up firm resources Service failure and recovery recovery how quickly can you bounce back from a problem spontaneity sense something is wrong and fix it before it’s a problem coping “you can’t pick your customers,” deal with problem customers best way you can adaptability how can you adapt to circumstances Do: acknowledge problem, explain causes, apologize, compensate, take responsibility, give options Don’t: ignore, blame, downgrade, act as is nothing is wrong, have someone else deal with it Customer responses to failures 15% complain to management or company headquarters many times, the problem gets fixed 45% complain to a frontline employee 50% do not complain about a problem tell other people about the problem and spreads a bad image of the company Fairness in customer relationships Outcome fairness: results customers receive from complaints fair give a coupon or a free meal to compensate unfair refuse to refund money for cold food or refuse to apologize Procedural fairness: policies, rules, and timeliness of complaint process fair manager accepts responsibility and/or calls back later to check in unfair give a phone number to call instead of accepting responsibility Interactional fairness: interpersonal treatment received during complaint process fair courtesy, inform customer of reasons the problem may have occurred unfair seem not to care, be rude Service recoveries encourage and track complaints act quickly provide adequate explanations treat customers fairly cultivate relationships with customers learn from recovery experiences learn from lost customers survey make the service failsafe Service guarantees A guarantee is a pledge or assurance that an offered product will perform as promised and, if not, some form of reparation will be undertaken by the firm For tangible products, a guarantee is often done in the form of a warranty. Services are often not guaranteed because they cannot be returned, and experience is intangible. Should give a WOW factor. Should not rely on employees to describe service guarantee might confuse customer due to oversimplification, incompleteness, subjectivity, and biased interpretation. Guarantees need to be: Unconditional no strings attached. Keep your promise Meaningful guarantee elements that the customer wants Easy to Understand customers need to know what to expect Easy to invoke and collect no hoops should be in the way of getting the guarantee Benefits include: you know you’re getting a good product forces company to focus on its customers sets clear standards for organization generates immediate feedback from customers customer satisfaction and loyalty employee morale and loyalty can be enhanced reduces customer’s sense of risk and builds confidence Guarantees aren’t always necessary: cheap products doesn’t fit your company image could be abused by customers cost of guarantee outweighs benefits Customer satisfaction Satisfied customers increase retention, positive WOM, increased revenue Dissatisfied customers can be bad for your business. Exponential power of storytelling as people tell the story, the negativity is embellished as it grows. Half of customers who complain feel as though they got NO compensation for their complaints. Relationship value of customers lifetime value in customers how much money they spend on your company in their lifetime is how much they are worth to you ex: Toyota customers are worth tens of thousands of dollars Starbucks customers might be worth about $2,000 in their lifetime
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