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Quiz Test 2 Study Guide

by: Ian Adams

Quiz Test 2 Study Guide CONSCI 3910 - 0010

Ian Adams
GPA 3.606

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This study guide includes all of the notes since Quiz Test 1 and everything that will be on the Quiz Test 2.
Consumer Service and Satisfaction
Jay Kandampully
Study Guide
consumer science
50 ?




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This 8 page Study Guide was uploaded by Ian Adams on Tuesday March 1, 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 256 views. For similar materials see Consumer Service and Satisfaction in Behavioral Sciences at Ohio State University.

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Date Created: 03/01/16
CONSCI 3910  Jay Kandampully  Quiz Test 2 Review Week 5: Service Quality INTRODUCTION This week we discussed the unique characteristics of service quality and how it can be managed KEY POINTS   Service quality is more important than product quality  Moments of Truth must be managed in order for service firms to be successful  Functional quality is more important than technical quality for services  Process quality should be focused on by service firms versus output quality MAIN IDEAS  Why is service quality more important than product quality? o Intangible nature of services means it cannot be returned  o Quality of services cannot be judged prior to purchase o Have to pay or give up something before you receive the full service  How is service quality different from product quality? o Quality of service depends on the individual person receiving it, not the  manufacturer o Challenging to assess the quality of services from company to company o Without customers, services cannot be produced o Customer starts manufacturing process in services  Moments of Truth o These occur whenever anyone comes in contact with any aspect of the  organization (i.e. in person, over the phone, online, etc.) o All firms have control over these moments, unlike climate conditions, natural  calamities, illness, etc. o A customer comes into contact with some aspect of the organization and gets an  impression of the service. The impression can be either positive or negative o Firms must focus on managing those moments of truth that are critical to the  customer o Example: Scandinavian Airlines  Bankrupt late 70s  50,000 moments of truth from the time the customer buys ticket to when  they leave with their bags  Became “Airline of the Year” in 1984 after improving moment of truth  management  Moments of truth in air travel: flight booking, check­in, airport facilities,  on board services, on board meals, baggage services, check out, etc.  Deming’s Chain Reaction o If you improve quality and reduce number of defects, the firm will prosper o Improve quality—>decrease costs—>improve productivity—>increase market  share—>stay in business—>increase employment—>improve return on  investment o This chain reaction theory does NOT hold true in the service industry since you  need to increase cost in order to increase quality  Customer Perceptions of Quality o Grönroos’ Model  Technical quality: What is delivered. Relates to things we receive, such  as food in a restaurant. Technical quality is expected by customers, so you  can’t compete using technical quality  Functional quality: How it is delivered to customer. Much more  important than what is delivered to customers. How customers feel is more important than what they receive. How companies differentiate themselves  Need to focus on managing the functional quality since the technical  quality is expected by the customer o Lehtinen’s Model  Process quality: Judged during the service. The actual steps that are  carried out during the service (such as the action of getting your hair cut)   Output quality: Judged after the service (how you feel about haircut after  it’s completed)  Need to focus on managing the process quality since the output quality is  already expected by the customer o Service quality gap  Quality gap that happens when can’t meet customer expectations. The  bigger the gap, the bigger the dissatisfaction  Expected service: What I want  Perceived service: What I get  Expectations much greater today than the past  Face challenges if you don’t control expected service. Firms must provide  specific details on what the customer will receive if they choose you  (Don’t come to a 3 star hotel with a 5 star expectation)  Use clearly stated service guarantees to limit customer expectations  Most to least important in service organizations o Reliability o Responsiveness o Assurance o Empathy o Tangibles Week 6: Understanding Customer Needs/Internal and External Customers &  Blueprinting Service Interactions INTRODUCTION This week we discussed understanding customer needs on Tuesday and Internal and External  Customers & Blueprinting Service Interactions on Thursday KEY POINTS  Researching the customer is key to a service firm’s success  There are 12 types of customer perception research  Internal customers are members of your firm who use the services of other members of  your firm, while external customers are not members of the firm  Service blueprinting is critical so firms know where to improve MAIN IDEAS Understanding Customer Needs  Why research the customer? o To know why a customer purchased or why they did not purchase a product or  service o To understand whether or not they are satisfied with the product or service  o To understand the customer’s expectations about the product or service before  purchase and consumption o To learn how the customer has experienced the different components of service o To learn customer preferences and how they are changing  Types of Customer Perception Research o In­depth Interview  Often one­on­one, around 30 minutes. Try to figure out customers’  motivations for their purchasing actions and what their habits look like.  Interviewer actively listens and detects how consumer is acting during  consumption  You can get good and thorough consumer insight  Time­consuming and expensive o Focus Group Interviews  A few interviewees in a group of typically 5­6 people. The interviewees  discuss a particular topic. They candidly speak their feelings on a subject.  Interviewer more passive and just tries to keep them on same topic.  Mostly used in retail industry  Can generate new and unique ideas for the firm  Expensive, hard to get a group of people together at same time and place o Statistical Customer Surveys  Customers fill out questionnaires via mail, online, in­person, etc.  Only get answers to questions that are explicitly asked, nothing more;  need to change questions constantly so customers do not get bored o Critical Incident Technique  Assessing moments of truth experiences that are critical to a firm; how  companies see relationship between loyalty and satisfaction  Customers tell stories that they gathered from their service experiences o Transaction Analysis  Customers fill out surveys related to a particular transaction  Example: Amazon asks you to rate your transaction for a used book you  just purchased  Example: eBay lets you rate buyer and seller for each transaction o Mystery Shoppers  Used in retail industry. Trained person goes to retail store and checks  various aspects of store to test it against standards. They check every  detail, including temperature and lighting o Complaint Analysis  Provides an opportunity to see an issue and then discover how to resolve it o Measurement of Perceived and Expected Service  Important to keep consumer expectations under control so that they know  what they are paying for, and so they do not expect too much o Performance­based Measurement  Assessing firm based on the performance of employees o Customer Satisfaction Measurement  Quality could be assessed based on one transaction, but satisfaction  requires repetition of quality o Service Attribute Score  Firm looks for different attributes such as satisfaction, reliability,  approach, uniqueness, relationship, recovery, innovation. Can assess your  company as compared to competitor’s score o Employee Research  Allows firm to know thoughts from the point of view of an employee.   If an employee is happy, then the customer is happy  Co­creation of Value o Customers are becoming very active co­creators for developing new products and  services, and the co­creation of value o Example: Nike allows you the option to customize your sneakers o Example: Ben and Jerry’s lets you suggest flavors of ice cream Internal and External Customers & Blueprinting Service Interactions  Important to understand what customers go through in your service to know what  changes to make  Internal customers: a member of your firm who relies on assistance from another  member to fulfill their job duties o Example: a sales representative who needs assistance from a customer service  representative within the company to accurately complete an order for a customer  External customers: those people who purchase your products or services who are not a  part of the firm  Frontlines of stores used to be the only way for internal and external customers to  interact, but now they can interact online   Line of interaction: the environment where people interact with services; front office;  part of the service experience for customer  Line of visibility: includes all people you can see in a service firm (including people like  the cooks in a restaurant that you can see but do not interact with); behind this line is the  back office  Services are like icebergs: you only see a small part of the services being performed.  Much more time and effort goes into your services that you do not see  Service blueprinting: allows managers to clearly map the service processes that are  carried out to provide for the customer o Depicts all the processes and activities involved in both the production and  delivery of service o Gives answers to what and how the service is being offered o Bird’s eye view of all moments of truth o Allows firm to anticipate services that are the most valuable to customers o Allows firm to find the “fail points” that are vulnerable to things going wrong  Step 1: Identify the process to be blueprinted  Step 2: Identify the customer or customer segment  Step 3: Map process from customer’s point of view  Step 4: Map the contact employees’ actions, both front and back office  Step 5: Link customer and contact employees’ activities needed to support functions  Step 6: Add evidence of service at each customer action step  80/20 Rule o 20% of customers account for 80% of your sales o Applies to basically any situation, whether social or economic  You place 20% of your daily effort on studying, which leads to the  majority (80%) of your success for the day  Pareto Chart o Graphically summarizes the relative importance of the differences between  groups of data o They are histograms that shows factors in order of importance  Important so managers know which issue to solve first  Fishbone Diagram (Cause and Effect) o Ideas can be categorized to help organizations prioritize their problem­solving o Managers can link an effect with a specific cause to help pinpoint issues Week 7: Service Marketing INTRODUCTION This week we discussed the changing world of marketing as it relates to services KEY POINTS  Traditional marketing tactics do not work well in this day and age  The main functions of marketing are to communicate with customers and get their  feedback  Production, consumption, and marketing overlap during the interactions between the  buyers and sellers  Most money that would be spent on marketing should be used to improve customers’  overall experiences during consumption MAIN IDEAS  Old, traditional marketing of services is no longer successful o Companies cannot tell customers what they want, rather they need to find out  what the customer wants o Firms have to transform their customers into marketers that tell others about the  services they enjoy o Making a return on investment (ROI) is achieved through customer satisfaction o Spending money on creating experiences for consumers is much more effective  than spending money on an ad  Marketing and Customer Relationship of Physical Goods o Old flow: Production → Marketing → Consumption o New flow: Consumption → Marketing → Production  Main Functions of Marketing o Communicate with the consumers o Get feedback from the consumers  Social Customers o People today can post on social media about their experiences o People today can create customer communities (such as My Starbucks Idea for  Starbucks or Harley Owners Group for Harley­Davidson)  Inter­relationship Between Production, Consumption, and Marketing in Services o The overlap of production, consumption, and marketing are the buyer­seller  interactions  Production and consumption happen at the same time due to the nature of  services, and marketing efforts must happen then to ensure the consumer  has a positive experience  Marketing, operations, and human resources in a firm must equally work  together to create memorable experiences  Prevailing Marketing Myth: Promotion is key to success o Promotion does not work for services because each service provided is a unique  experience o For the majority of the things we buy, we are paying mostly for the experience  and not the product  Price is 60% Experience, 40% Product  Example: The actual cost of the coffee itself at Starbucks is very low, but  the price for the drink is high due to the created experience  The higher the created experience, the higher the charge can be  3 Phases of Customer Experience o Pre­Consumption  Before you undergo the service  You may have heard things about the service from others, but you do not  know what your experience will be like  Firms should focus on Operations o Consumption  Actually undergoing the service  Phase where services need to work to improve overall experience  satisfaction rate  Firms should focus on Marketing o Post­Consumption  After you have undergone the service  Customers can promote their experience to others  Customers are more likely to tell others about the service if a storyline was created during the service  Firms should focus on Word­of­Mouth Week 8: Service Mix INTRODUCTION These notes are from Tuesday of Week 8, the class before the “Quiz Test.” They cover the 7P’s  of the service mix KEY POINTS   The 4P’s of marketing are product, place, price, and promotion  The 7P’s of the service mix include the marketing 4P’s with the addition of people,  physical evidence, and process MAIN IDEAS  Traditional Marketing Mix (4P’s) o Product (quality, features, options, brand name, packaging, etc.) o Place (channels, coverage, locations, transport) o Price (list price, discounts)  o Promotion (advertising, personal selling, publicity)  Service Mix (7P’s) ­ Focus on people, physical evidence, and process because these are  unique to services o Product/service o Place  Based on place, some firms will need different marketing strategies than  others  Example: Hotel near Niagara Falls does not need to do much marketing  because will always be busy o Price  More important for customers when large differences in price  Customers perceive higher price as higher quality o Promotion  Done for short period of time for a small number of things (people become hesitant when promotions occur too often) o People  People are the distinguishing factor between firms   Type of customers communicate a message about your firm o Physical evidence  What the surroundings suggest about a service (such as how room is set  up, level of cleanliness, what type of clothing worker is wearing, how  back office and front office is divided, etc.) o Process  Important for service delivery to be easy for customer to ensure repeat  business  Third place o Place between work and home that people come together to meet


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