MKT 3010 1st EditionExam# 3 Study Guide Lectures: 12-16Know all vocab from the following chapters as well as the information belowChapter 13- Why is customer service important to customers?o It is additional value on top of receiving the product- What are hybrid products?o Combination of goods and services- How do service-oriented economies develop? Why is this important in terms of services?o 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 out of more and more services instead of doing it themselves.- What are the four factors that contribute to making marketing services different than marketing products? What does each of these entail? How do marketers overcome each of these when marketing services?o Intangible-walk away with no ownership 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. 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 getting Promotion- Symbols& Images- promotion shown by the service that represent the service and show what it might be like.o Inseparable Production and consumption simultaneous- you see/consume it as it is happening—this causes inconsistencies in the service Employee dependence- want them to feel empowered so that they will be competent in helping customers Guarantees and warranties- to reduce the risk that something will go wrong withthe serviceo Variable/Heterogeneity Standardization- is there anything that we can standardize to over come variability Training 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. Machines- to make things more homogeneouso Perishable Services can’t be stored, warehoused, or inventoried Match demand and supply- to try to overcome perishability**break even analysis- What is a service gap?o When a service fails to meet the expectations have about it.- Why do marketers use The Gaps Model? What are the four gaps and what is entailed in each? How do marketers close each gap?o The Gaps model is designed to encourage the systematic examination of all aspects of the service delivery process and prescribes the steps needed to develop an optimal service strategy1. 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 Situation2. The Standards gap: Firm’s perception of customer expectations vs. Service standards- Training- trying to make all employees as effective and consistant 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 promise- What is important in understanding customer expectations?o Customer research and increasing the interaction and communication between managers and employees- What is service quality and how is it evaluated? What are the definitions of these five factors?o Service quality- did a service meet or beat expectation, and we talk about it in these forms: Reliability- was the service accurate and dependable Responsiveness- prompt service and willingness to help Assurance- are they able to display trust and confidence Empathy- do they care, individualized attention Tangibles- look at physical appearance of service place, equipment, etc.- What is a voice-of-customer (VOC) program? What is the zone of tolerance? How is the zone of tolerance determined?o Voice-of-customer program- managerial decisions need to come out of this: this is an ongoing research system that collects customer inputs and integrates them into managerial decisions.o Zone of tolerance- how and what do you expect, but how much will you be able to accept under that expectation.- When should a service recovery be performed? What should a service recovery entail? What is distributive fairness vs. procedural fairness?o When a service provider fails to meet customer expectations Listen to customer Find a fair solution- Distributed fairness- what the company gives you to compensate for the lost service, and it makes up for it- Procedural fairness- what process did you have to go through to get complaint rectified Resolving problems quicklyChapter 14- What is entailed in the price of something? o Value; what the customer is willing to give up (time, money, etc.) to acquire the product- Why is pricing important? o Judgment of value- what you are getting for what you give upo Challenging to manage- what is the rational inside the consumer to make them buy a product at a certain priceo The only revenue generatoro Important in purchase decisions- “it all comes down to price”- if two products are equal we look at price; we correlate quality with price- What is the key to a successful pricing strategy?o Match the product or service with the consumer’s value perceptions.- In what way is price a signal? What does a price that is too low signal? What does a price that istoo high signal?- Prices can be both too high and too lowo Too high: might signal low value--for what I’m giving up, I’m not getting enough in returno Too low: might signal poor quality***Consumers don’t particularly want a low price, they want high value- The firms pricing objectives result in a variety of pricing strategies. What are they and what is entailed with each, including why they are utilized? Which pricing strategy is liked most by marketers?- Profit Orientationo Maximizing profits- Total Revenue (want to make as large as possible) vs. Total costs (as low as possible, cutting costs is often a short term