Chapter Twelve Services The Intangible Product Beginning Case Faster DVDs diffused compared with VCRs TV diffused somewhat slowly until reach maturity Technical difficulties frustrating o High satisfaction may stem form product because Apple less subject to viruses than PCs consumers may not need customer service as often o Apples efforts to assist Mac iPod iPad iPhone owners Service Marketing Differs from Product Marketing Service intangible offering involved deed performance or effort that cannot be physically possessed o Customer service human or mechanical activities firms undertake to satisfy customers needs and wants o View service as method to maintain sustainable competitive advantage o Dependence and growth of service oriented economies in developed o Less expensive for firms to manufacture product in less developed country o People place high value on convenience and leisure o World becomes more complicated so people demanding more specialized countries services Intangible services because cannot be touched tasted or seen like pure product can o Offer cues to help customers experience and perceive service more positively in atmosphere that appeals to target market o Cannot be shown directly to potential customer and makes difficult to promote Depend on consumers perceptions of integrity trustworthiness Images used must reinforce benefit or value that service provides Inseparable production and consumption o Services produced and consumed at same time service and consumption are inseparable o Customers rarely have opportunity to try service before purchase it After service performed cannot be returned Variability more humans needed to provide service more likely to have this in service quality o By the time firm recognizes problem damage has been done o Micromarketing segmentation strategy can customize service to meet customers needs Some replace people with machines to get rid of this issue Perishable cannot be stored for use in future matching demand and supply Providing Great Service The GAPS Model Customers have expectations about how service should be delivered and when fail to meet them service gap results Knowledge gap difference between customers expectations and firms perception of those customer expectations o Undertake customer research and increase interaction and communication between managers and employees o Expectations vary based on type of service depending on situation o Evaluating service quality using well established marketing metrics determine overall service quality through reliability responsiveness assurance empathy and tangibles Marketing research provides means to better understand consumers service expectations and perceptions of service quality Voice of customer VOC program collects customers inputs and integrates them into managerial decisions Zone of tolerance evaluate how well firm performs on five service quality dimensions and refers to area between customers expectations regarding desired service and minimum level of acceptable service Standards gap difference between firms perceptions of customers expectation and service standards it sets ensure quality setting goals o Achieving service goals through training specific measurable goals to help More employees buy into quality oriented process if involved in o Commitment to service quality providers take cues from management Delivery gap difference between firms service standards and actual service provides to customers o Customer directly interacts with service provider and reduce when employees are empowered to act in customers and firms best interests o Empowering service providers allowing employees to make decision about how service gets provided to customers When authorized to make decisions in helping customers service quality improves o Providing support and incentives Emotional support service providers demonstrating concern for well being and standing behind decisions Instrumental support systems and equipment to deliver service properly Must be consistent and coherent throughout organization Provide rewards to employees for excellent service o Use of Technology wider variety of services greater degree of control by customer over services and ability to obtain information Reducing services costs and in some cases develop competitive advantage over less service oriented competitors Communication gap difference between actual service provided to customer and service that firms promotion program promises o Promise only what you can deliver and possibly a little less Service Recovery Best course of action attempt to make amends with customer and learn from experience o Listening to customer give customer all time needs to get it out and welcome opportunity to be sympathetic ear listen carefully and appear anxious to rectify situation and ensure doesn t happen again o Finding Fair Solution based on previous experience with other firms how have they seen other customers treated Distributive fairness customers perception of benefits he or she received compared with the costs Compensated fair amount for perceived loss resulted from Procedural Fairness perceived fairness of process used to resolve Service provider follow specific company guidelines fair service failure them treatment o Resolving Problems Quickly longer takes to resolve more irritated customer will becomes and more people likely to tell about problem Need clear policies adequate training for employees and empowered employees Ending Case Study Ritz Carlton combines extensive employee training and careful hiring practices to create environment that embraces customer o High quality service gets eternally reinforced by constant training Integrates objective customer information with employee observations o Goal is to encourage guests to engage actively in Ritz Carlton brand o Customer service important driver of company value Modern economic environment makes difficult to do everything for everyone Help customers or guests in own areas of expertise and how to perform outside of job description when called on during bust period to ensure superb customer service all the time
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