Mktg 358 Exam 1

satisfaction

>broader concept that includes perceptions of situational factors and personal factors, product quality, service quality, price, etc >the customer's evaluation of a product or service in terms of whether that product or service has met the customer's needs and expectations >a dynamic target that may evolve over time, influenced by a variety of factors and by the passage of time itself

importance of service encounters

>can be critical in determining customer satisfaction and loyalty >initial encounter creates first impression of organization >each encounter is important in creating a composite image of the firm in the customer's memory

search qualities

>characteristics that a customer can identify before purchasing a product >mostly goods >easiest to evaluate >ex. clothing, jewelry, furniture, houses, automobiles

experience qualities

>characteristics that can be identified only after a product is purchased or when it is being consumed, which makes it difficult to evaluate >mix of goods and services >ex. restaurant meals, vacation, haircuts and child care

service quality

>component of satisfaction; focuses on dimensions of service >the customers' judgement of overall excellence of the service provided in relation to the quality that was expected >focused evaluation that reflects the customer's perception of reliability, assurance, responsiveness, empathy and tangibles

situational factors

>considered contemporary in nature >2 types 1. uncontrollable - which includes service performance conditions that customers view as beyond the control of the service provider ex. tornadoes or earthquakes 2. personal - consist of short term, individual factors that make a customer more aware of the need for service (personal emergency situations in which service is urgently needed rise the level of adequate service expectations) ex. car accident and the need for auto insurance

helps employees deliver service effectively and efficiently

>customer relationship management software >sales support software

challenges and questions for service marketers

>defining and improving quality >designing and testing new services >communicating and maintaining a consistent image >accommodating fluctuating demand >motivating and sustaining employee commitment >setting prices >organizing to facilitate strategic and tactical decision-making >finding a balance between standardization and personalization >protecting new service concepts from competitors >communicating quality and value to customers >ensuring the delivery of consistent quality service

how a company delights customers and exceeds their expectations

>develop customer relationships >provide personalized attention >underpromise >be unique *bottom line is exceeding expectations on the basics is nearly impossible. honor promises and do what you are supposed to do

critical inhibitors to closing the service performance gap

>employees >customers >intermediaries

assurance

>employees' knowledge and courtesy and their ability to inspire trust and confidence >one of the five dimensions of service quality >particularly important for services that customers perceive as high risk or they're uncertain about (ex. banking, insurance, brokerage, medical, legal services)

inappropriate pricing

*factor of communication gap >high prices that raise customer expectations >prices that are not tied to customer perceptions of value

inadequate horizontal communications

*factor of communication gap >insufficient communication between sales and operations >insufficient communication between advertising and operations >differences in policies and procedures across branches or units

ineffective management of customer expectations

*factor of communication gap >not managing customer expectation through all forms of communication >not adequately educating customers

overpromising

*factor of communication gap >overpromising in advertising >overpromising in personal selling >overpromising through physical evidence cues

American customer satisfaction index

>a measure of satisfaction with goods and services >tracks on a quarterly basis, customer perceptions across 200 firms representing all major economic sectors, including government agencies >within each industry group, major industry segments are included and the largest companies in that industry are selected to participate >each company receives an ACSI score computed from its customers perceptions of quality, value, satisfaction, expectations, complaints and future loyalty

how a service organization uses the gaps model of service quality

>by documenting the information available on each gap and the factors affecting the size of the gap

implications of simultaneous production and consumption

>customers participate in and affect the transaction >customers affect each other >employees affect the service outcome >decentralization may be essential >mass production is difficult

services

>deeds, processes, and performances provided, coproduced, or correlated by one entity or person for and/or with another entity or person

traditional marketing mix

>elements an organization controls that can be used to satisfy or communicate with customers >product, price, place and promotion >4 P's require some modifications when applied to services

customer perceptions

>subjective assessments/evaluations of actual service experiences

expanded marketing mix (for services)

>the 4 P's plus people, physical evidence and process >people, physical evidence and process are included because they're important for services, they're within control of the firm, and any or all of them may influence the customer's initial decision to purchase a service as well as the customer's level of satisfaction and repurchase decisions

the providers gap

Gap 1 - the listening gap Gap 2 - the service design and standards gap Gap 3 - the service performance gap Gap 4 - the communication gap

delight

a profoundly positive emotional state that results from having one's expectations exceeded to a surprising degree

customer gap

difference between customer expectations and perceptions

key factors leading to provider gap 4

lack of integrated services marketing communications ineffective management of customer expectations overpromising inadequate horizontal communications inappropriate pricing

factors that influence adequate service

perceived service alternatives situational factors predicted service >these influences are short-term and tend to fluctuate more than factors that influence desired service

factors that influence desired service

personal needs personal service philosophy derived service expectations

key factors leading to provider gap 2

poor service design absence of customer-driven standards inappropriate physical evidence and servicescape

factors influencing customer satisfaction

product and service features perceptions of product and service quality price customer emotions attributions for service success or failure perceptions of equity or fairness other customers, family members, and coworkers

five dimensions of service quality

reliability assurance tangibles empathy responsiveness

lack of integrated services marketing communications

*factor of communication gap >tendency to view each external communication as independent >not including interactive marketing in communications plan >absence of strong internal marketing program

inadequate customer research orientation

*factor of listening gap >insufficient customer research >research not focused on service quality >inadequate use of market research

inadequate service recovery

*factor of listening gap >lack of encouragement to listen to customer complaints >failure to make amends when things go wrong >no appropriate recovery mechanisms in place for service failures

lack of upward communication

*factor of listening gap >lack of interaction between management and customers >insufficient communication between contact employees and managers >too many layers between contact personnel and top management

insufficient relationship focus

*factor of listening gap >lack of market segmentation >focus on transactions rather than relationships >focus on new customers rather than relationship customers

inappropriate physical evidence and servicescape

*factor of service design and standards gap >failure to develop tangibles in line with customer expectations >services cape design that does not meet customer and employee needs >inadequate maintenance and updating of the servicescape

absence of customer driven standards

*factor of service design and standards gap >lack of customer-driven service standards >absence of process management to focus on customer relationship >absence of formal process for settling service quality goals

poor service design

*factor of service design and standards gap >unsystematic new service development process >vague, undefined service designs >failure to connect service design to service positioning

problems with service intermediaries

*factor of service performance gap >channel conflict over objectives and performance >channel conflict over costs and rewards >difficulty controlling quality and consistency >tension between empowerment and control

contentment

>satisfaction can be viewed as this >a passive response that customers may associate with services they do not think a lot about or services that they receive routinely over time

fulfillment

>satisfaction can cause one to feel this way >knowledge that one's needs have been met

ambivalence

>satisfaction may be associated with feelings of this >when there is a mix of positive and negative experiences associated with the product or service

past experience

>the customer's previous exposure to service that is relevant to the focal service, shapes predictions and desires >may incorporate previous experience with the focal service provider, typical performance of similar service offerings, and experience with the last service purchased

key factors leading to the customer gap

Provider Gap 1 - not knowing what customers expect Provider Gap 2 - not having the right service designs and standards Provider Gap 3 - not delivering to service standards Provider Gap 4 - not matching performance to promises

customer effort

another driver of customer loyalty that is distinct from quality and satisfaction

provider gap 1

difference between customer expectations and company perceptions of customer expectations the listening gap

factors that influence desired and predicted service

explicit service promises implicit service promises WOM communication past experience predicted service

outcomes of customer satisfaction

increased customer loyalty positive WOM increased revenues increased return to shareholders

customers not fulfilling roles

*factor of service performance gap >customers lack knowledge of their roles and responsibilities >customers negatively impact each other

failure to match supply and demand

*factor of service performance gap >failure to smooth peaks and valleys of demand >inappropriate customer mix >over reliance on price to smooth demand

deficiencies in human resource policies

*factor of service performance gap >ineffective recruitment >role ambiguity and role conflict >poor employee-technology job fit >inappropriate evaluation and compensation systems >lack of empowerment, perceived control, and teamwork

reliability

>ability to perform the promised service dependably and accurately >one of the five dimensions of service quality >means that the company delivers on its promises (about delivery, service provision, problem resolution and pricing)

tangibles

>appearance of physical facilities, equipment, personnel, and communication materials >one of the five dimensions of service quality >provide physical representations or images of the service that customers will use to evaluate quality

empathy

>caring, individualized attention given to customers >one of the five dimensions of service quality >convey to customers, through personalized service, that customers are unique and special and that their needs are understood

credence qualities

>characteristics that a customer may find impossible to assess even after purchase and consumption of a product >most difficult to evaluate >most services >ex. TV repair, legal services, root canal, auto repair, medical diagnosis

derived service expectations

>occur when customer expectations are driven by another person or group of people >all of customers' individual expectations are intensified because they represent and must answer to other parties who will receive the service ex. a niece from a big family who is planning a 90th birthday party for a favorite aunt is representing the entire family in selecting a restaurant for a successful celebration. her needs are driven in part by expectations derived from other family members

perceived service alternatives

>other providers from who customers can, or perceive they can, obtain service from >if customers believe they have multiple service providers to choose from, or if they can provide the service for themselves, their levels of adequate service are higher than those of customers who believe it is not possible to get better service elsewhere (it also narrows the zone of tolerance) >it is important that service marketers fully understand the complete set of options that customers view

reasons for organizations broken promises

>overpromising in advertising or personal selling >inadequate coordination between operations and marketing >differences in policies and procedures across service outlets

marketing strategies for managing demand

>price changes >advertising >promotion >alternative service offerings

sources of customer expectations

>pricing >competitive offerings >sales promises

customer expectations

>standards or reference points that customers bring into the service experience >consists of what a customer believes should or will happen

word of mouth communication

>statements made by parties other than the organization, convey to customers what the service will be like and influence both predicted and desired service >statements carry particular weight as an information source because it is perceived as unbiased

technology

>the foundation of many service offerings >provides new ways to deliver service >enables both customers and employees >extends the global reach of services

people

all human actors who play a part in service delivery and thus influence the buyer's perceptions: namely, the firm's personnel, the customer, and other customers in the service environment >their attitudes and behaviors, the way they're dressed, personal appearance, etc. influence customer's perceptions of service

process

the actual procedures, mechanisms, and flow of activities by which the service is delivered - the service delivery and operating systems >can differ between production-line/standardized or empowered/customized approaches

provider gap 3

the difference between service delivery and customer-driven service designs and standards the service performance gap

provider gap 4

the difference between service delivery and external communications to customers the communication gap

face-to-face encounters

>encounter that occurs between an employee and a customer in direct personal contact >both verbal and nonverbal behaviors are important determinants of quality, as are tangible cues such as employee dress and other symbols of service (equipment, info. brochures, physical setting) >in this encounter, customer plays a role in creating quality service through their own behavior during the interaction

remote encounters

>encounters can occur without any direct human contact, such as a customer interacts with a bank through the ATM >automated >each encounter of this type represents an opportunity for the firm to reinforce or establish quality perceptions >tangible evidence of the service and the quality of the technical processes and systems become the primary bases for judging quality

examples of service industries

>health care (hospital, medical practice, dentistry, eye care) >professional services (accounting, legal, architectural) >financial services (banking, investment advising, insurance) >hospitality (restaurant, hotel/motel, bed&breakfast, ski resort, rafting) >travel (airline, travel agency, theme park) >others (hair styling, pest control, plumbing, lawn maintenance, counseling services, health club, interior design)

characteristics of services compared to goods

>intangibility >heterogeneity >simultaneous production&consumptions >perishability

staying power

>involves the questions of how long a company can expect an experience of delight to maintain a consumer's attention >if it is fleeting and customer forgets it immediately, it may not be worth the cost of providing the delight

implications of perishability

>it is difficult to synchronize supply and demand with services >services cannot be returned or resold

desired service

>level of service the customer hopes to achieve >the "wished for" level of performance >what the customer believes "can be" and "should be" >"delights" >if service is above this level, customers will be very pleased and probably quite surprised as well

technology-mediated encounters

>most frequent type of encounter between an end-customer and the firm (occurs over the phone, live chats, or other platforms with real person) >judgment of quality of this encounter is based on tone of voice or communication, employee knowledge, and effectiveness/efficiency in handling customer issues

explicit service promises

>personal and non personal statements about the service made by the organization to customers >statements are personal when they are communicated by the firm's salespeople and non personal when they come from the company's web pages, advertising, brochures, etc. >one of the few influences on expectations are completely within the control of the service provider; have a direct effect on desired service expectation >they shape what customers desire in general as well as what they predict will happen in the next service encounter from a particular service provider or in a certain service encounter

delights

>product features that are unexpected and surprisingly enjoyable >things that consumers would not expect to find and are therefore highly surprised and sometimes excited when they receive them ex. in college, these would include interesting course lectures, professors who are entertaining or friendly, and good audiovisual aids provided in classroom

common themes in critical service encounters research

>recovery (employee response to service delivery system failure) >adaptability (employee response to customer needs and requests) >spontaneity (unprompted and unsolicited employee actions) >coping (employee response to problem customers)

musts

>refers to attributes central to the basic function of the product or service >their provision is not particularly noticeable, but their absence would be ex. in college, these things would include professors, rooms, syllabi, class meetings

customer service

>refers to the service offered in support of a firm's main products

types of service encounters

>remote encounters >technology-mediated encounters >face-to-face encounters *a customer may experience any of these types of encounters, or a combination of all three, in his or her interaction with a service firm

implications of heterogeneity

>service delivery and customer satisfaction depend on employee and customer actions >service quality depends on many uncontrollable factors >there is no sure knowledge that the service delivered matches what was planned and promoted

reasons for product companies to focus on services

>service offerings can be customized, so firms can offer more value to customers >services can provide platforms for firm profitability because they have higher profit margins than products

implicit service promises

>service-related cues, other than explicit promises, that lead to inferences about what the service should and will be like >these cues are dominated by the price and the tangibles associated with the service ex. a customer shopping for insurance finds 2 firms charging radically different prices. one may infer that the firm with the higher price should and will provide higher-quality service and better coverage

implications of intangibility

>services cannot be inventoried >services cannot be easily patented >services cannot be readily displayed or communicated >pricing is difficult

reasons for service marketing

>services dominate U.S. and worldwide economies >service as a business imperative in goods-focused businesses >deregulated industries and professional service needs >service marketing is different >service leads to profits

E-S-QUAL

>the extent to which a website facilitates efficient and effective shopping, purchasing and delivery >7 dimensions of this that are critical for core service evaluation (efficiency, fulfillment, system availability, privacy) and service recovery evaluation (responsiveness, compensation, contact)

zone of tolerance

>the extent to which customers recognize and are willing to accept a variation in service since they're heterogenous in that performance may vary across providers, across employees from the same provider and even with the same service employee >the area between desired service and adequate service >"desirables" >when it falls out of this range, the service gets the customers attention in either a positive or negative way

predicted service

>the level of service that customers anticipate they are likely to get >predictions made by customers about what is likely to happen during an impending transaction or exchange >typically an estimate or a calculation of the service that a customer will receive in an individual transaction rather than in the overall relationship with a service provider >if customers predict good service, their levels of adequate service are likely to be higher than if they predict poor service ex. full-time residents in a college town usually predict faster restaurant service during the summer months when students are not on campus. this prediction will lead them to have higher standards for adequate service in restaurants during the summer than during school months

service encounter

>the most vivid impression of service occurs in this or the moment of truth, when the customers interacts with the service firm >it is these encounters that customers receive a snapshot of the organization's service quality, and each encounter contributes to the customer's overall satisfaction and willingness to do business with that firm again >can potentially be critical in determining customer satisfaction and loyalty

adequate service

>threshold level of acceptable service >minimum level of service the customer will accept >"musts" >if service drops below this level, customers will be frustrated and most likely dissatisfied with the company

responsiveness

>willingness to help customers and provide prompt service >one of the five dimensions of service quality >emphasizes attentiveness and promptness in dealing with customer requests, questions, complaints and problems >dimension is communicated to customers by the length of time they have to wait for assistance, answer to questions, or attention to problems

key factors leading to provider gap 3

deficiencies in human resource policies failure to match supply and demand customers not fulfilling roles problems with service intermediaries

provider gap 2

difference between customer-driven service designs and standards and the company perceptions of customer expectations service design & standards gap

satisfiers

features that have the potential to further satisfy beyond the basic function of the product ex. in college, these would include a free textbook for students signing up for the course or cookies provided for the first day of class

possible levels of customer expectations

ideal expectations or desires normative "should" expectations experience-based norms acceptable expectations minimum tolerable expectations

key factors leading to provider gap 1

inadequate customer research orientations lack of upward communication insufficient relationship focus inadequate service recovery

personal needs

states or conditions essential to the physical or psychological well-being of the customer and are pivotal factors that shape what customers desire in service ex. a fan who regularly goes to baseball games right from work, and is therefore thirsty and hungry, hopes and desires that the food and drink vendors will pass by his section frequently

personal service philosophy

the customer's underlying generic attitude about the meaning of service highest expectations and the proper conduct of service providers ex. if you have ever been employed as a server in a restaurant, you're likely to have standards for restaurant service that have been shaped by your training and experience in that role. thus, you might think that servers should not keep customers waiting longer than 15 minutes to take their orders

physical evidence

the environment in which the service is delivered and where the firm and customer interact, and any tangible components that facilitate performance or communication of the service >brochures, letterheads, business card, reports, signage, equipment, web pages, etc. >extremely influential when customer does not have much to judge actual quality of service on

frequently asked questions about customer expectations

what does a service marketers do if customer expectations are "unrealistic"? should a company try to delight the customer? how does a company exceed customers' service expectations? do customers' service expectations continually escalate? how does a service company stay ahead of competition in meeting customer expectations?