Cumulative Final Chapters 13 exclude 13 4 8 and 2 Final Exam Test Preparation MARK3000 Grantham Mary Carpenter Emphasis on Chapters 13 8 and 2 Review Note Pages included at the end Chapter 13 Services The Intangible Product 1 Cumulative Final Chapters 13 exclude 13 4 8 and 2 Exclude Section 13 4 zone tolerance Service any intangible offering that involves a deed performance or effort that cannot be physically possessed Customer service refers to human or mechanical activities firms undertake to help satisfy their customers needs and wants o Good customer service adds value to their products The dependence and growth of service oriented economies in developed countries has emerged for several reasons developed countries o 1 It is generally less expensive for firms to manufacture their products in less o 2 People place a high value on convenience and leisure o 3 As the world has become more complication people are demanding more SERVICES MARKETING specialized services The marketing of services differs from product marketing because of the four fundamental differences involved in services Services are intangible inseparable heterogeneous and perishable o Intangible a characteristic of a service services cannot be touched tasted or seen like a pure product can makes it difficult to convey the benefits of services because of the intangibility of services the images that marketers use must reinforce the benefit or value that a service provides o Inseparable a characteristic of a service services are produced and consumed at the same time that is service and consumption are inseparable Customers rarely have the opportunity to try the service before they try it And after a service is performed it cannot be returned o Heterogeneity as it refers to the differences between the marketing of products and services the delivery of services is more variable Variability in the service s quality since more humans are needed to provide a service An inferior service can t be recalled by the time the firm recognizes a problem the damage has been done Marketers can use variable nature of services to their advantage Some service providers tackle the variability issue by replacing people with machines o Perishable a characteristic of a service it cannot be stored for use in the future THE GAPS MODEL designed to encourage the systematic examination of all aspects of the service deliver process and prescribes the steps needed to develop an optimal service strategy Service gap results when a service fails to meet the expectations that customers have about how it should be delivered o There are four service gaps knowledge gap standards gap delivery gap and communication gap Knowledge gap a type of service gap reflects the difference between customers expectations and the firm s perception of those expectations Knowledge Gap Understanding Customer Expectations To reduce the knowledge gap firms must understand customers expectations To understand those expectations firms undertake customer 2 Cumulative Final Chapters 13 exclude 13 4 8 and 2 research and increase the interaction and communication between managers and employees Customer expectations are based on their knowledge and their experience o Expectations vary according to the type of service o People s expectations also vary depending on the situation The service provider needs to not only know and understand the expectations of the customers in its target market but also have some idea of the occasions of service usage Service quality customers perceptions of how well a service meets or exceeds their expectations o Five service dimensions to determine overall service quality reliability responsiveness assurance empathy and tangibles Reliability the ability to perform the service dependably and accurately Responsiveness the willingness to help customers and provide prompt service Assurance the knowledge of and courtesy by employees and their ability to convey trust and confidence Empathy the caring individualized attention provided to customers Tangibles the appearance of physical facilities equipment personnel and communication materials o Marketing research provides a means to better understand consumers service expectations and their perceptions of service quality Voice of consumer VOC program an ongoing marketing research system that collects customer inputs and integrates them into managerial decisions Standards gap a type of service gap pertains to the difference between the firm s perceptions of customers expectations and the service standards it sets Delivery gap a type of service gap the difference between the firm s service standards and the actual service it provides to customers Communication gap a type of service gap refers to the difference between the actual service provided to customers and the service that the firm s promotion program promises SERVICE RECOVERY Despite firm s best efforts sometimes service providers fail to meet customer expectations Best to avoid service failure altogether Effective service recovery efforts can significantly increase customer satisfaction purchase intentions and positive word of mouth though customers post recovery satisfaction levels usually fall lower than their satisfaction level prior to the service failure Effective service recovery demands o 1 Listening to the customers and involving them in the service recovery Firms often don t find out about service failures until a customer complains Service providers should welcome the opportunity to be a sympathetic ear listen carefully and appear and actually be anxious to rectify the situation to ensure it doesn t happen again o 2 Providing a fair solution Treat customers fairly 3 Cumulative Final Chapters 13 exclude 13 4 8 and 2 Distributive fairness pertains to a customer s perception of the benefits he or she received compared with the costs inconvenience or loss that resulted form a service failure Customers want to be compensated for their loss Listen carefully to the customer Procedural fairness refers to the customer s perception of the fairness of the process used to resolve complaints about service o 3 Resolving the problem quickly Notes Chapter 2 Developing Marketing Strategies and a Marketing Plan 4 Cumulative Final Chapters 13 exclude 13 4 8 and 2 potential customers A marketing strategy outlines the specific actions a firm intends to implement to appeal to o Marketing strategy a firm s target market marketing mix and method of obtaining a