Mkt 3010 1st Edition Lecture 12 Outline of Last Lecture ExamOutline of Current Lecture Ch 13Serviceseconomic importance of servicesServices marketing differs from product marketingIntangibleInseparableVariable/heterogeneityPerishableProviding great service: the GAPS modelKnowledge gapStandards gapDelivery GapCommunications gapService recoveryCurrent LectureMar 5These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.Chapter 13: Services: The Intangible ProductServices- Customer service- this is the way firms can add additional value to customerso Human or mechanical activitieso Satisfy customers’ needs and wants- Hybrid productso Combination of goods and service (a phone- physical phone and service)Economic Importance of Services- Developed economies rely on services—70% of GDP in US comes from services. Production of services is cheaper than goods. As leisure time goes down for people, they get a higher value outof more and more services instead of doing it themselvesServices Marketing Differs from Product Marketing- Intangible-walk away with no ownershipo Quality evaluation- how do you know if your expectations have been met? Experience quality- can only evaluate the quality of a service after the fact. Credence quality- are you knowledgeable enough to know if it was a good service** did your accountant do a good job on taxes.o Convey benefits- what do we look at? Cues & atmosphere- we will place tangible on intangible; physical things that show the customer what kind of service they are gettingo Promotion Symbols & Images- promotion shown by the service that represent the service and show what it might be like.- Inseparableo Production and consumption simultaneous- you see/consume it as it is happening—this causes inconsistencies in the serviceo Employee dependence- want them to feel empowered so that they will be competent in helping customerso Guarantees and warranties- to reduce the risk that something will go wrong with the service- Variable/Heterogeneityo Standardization- is there anything that we can standardize to over come variabilityo Trainingo Micromarketing- impactful way to target individual consumers, this acknowledges the fact that there is variability but trying to make it a unique positive experience for each customer.o Machines- to make things more homogeneous- Perishableo Services can’t be stored, warehoused, or inventoriedo Match demand and supply- to try to overcome perishability**break even analysisProviding Great Service: The GAPS Model- in our service industry, are there any gaps in meeting customer satisfaction, and strategies to close the gap.1. The Knowledge Gap: Customer expectations vs. Firm’s perception of customer expectations**If the firm has a clear understanding of what the customer wants then there is no gap.- We engage in research to close this gapo Knowledge and experienceo Type of serviceo Situation- Service quality- did a service meet or beat expectation, and we talk about it in these forms:o Reliability- was the service accurate and dependableo Responsiveness- prompt service and willingness to helpo Assurance- are they able to display trust and confidenceo Empathy- do they care, individualized attentiono Tangibles- look at physical appearance of service place, equipment, etc.- Voice-of-customer program- managerial decisions need to come out of this- Zone of tolerance- how and what do you expect, but how much will you be able to accept under that expectation.2. The Standards gap: Firm’s perception of customer expectations vs. Service standards- Training- trying to make all employees as effective and consistent as possible- Commitment3. The Delivery Gap: The service standard vs. Actual service- Empowerment- can the employee work effectively on their own - Emotional and instrumental support- a concern for employees from management, and do they provide the necessary tools- Technology- can the firm provide any useful technology to assist the service process4. The Communications Gap: Service provided vs. Service promised- Manage customer expectations- do what you promiseService Recovery- Listen to customer- Find a fair solutiono Distributed fairness- what the company gives you to compensate for the lost service,and it makes up for ito Procedural fairness- what process did you have to go through to get complaint rectified- Resolving problems quicklyKey terms:Hybrid productsIntangibleInseparableHeterogeneityPerishableGAPS modelDistributed fairnessProcedural