Ch 6-7 Service Marketing

Which of the following is NOT a reason why a service firm may avoid a customer relationship with a particular customer?

Customer is NOT divisible

May include the customer intimacy approach

Customer retention strategies based on customization bonds:

Service Recovery Paradox

A florist had promised to have the bridal flowers delivered to the wedding rehearsal dinner by 6 p.m. Because of vehicle problems, the flowers did not arrive until the meal was nearly over and the bride and her mother were very upset. To show how sorry he was for the poor service, the florist put extra flowers in the bridal bouquet and gave each mother and grandmother a free orchid corsage. The bride and her mother were extremely pleased with the extra flowers and have recommended the florist to a number of their friends. The florist is wondering if he shouldn't deliberately underdeliver other jobs, compensate the consumer with some upgrade and benefit from even more positive feedback. The florist is responding to the:

Which of the following statements about the benefits of service guarantees is true?

A good guarantee forces the company to focus on its customers

All of the following are causes for customer's brand switching EXCEPT:

A service paradox

Encourage and track complaints

Bruce was driving to work yesterday when he was nearly run off the road by a speeding furniture delivery truck. On the back of the truck was a phone number to call if you believed the driver was not handling the truck safely. Rather than deciding to never buy furniture from this furniture company, Bruce called the company and complained about the truck driver. The person who took his call thanked Bruce for his concern, apologized for the driver and promised to reprimand him. Which service recovery strategy was the furniture store using?

Friends

Following the acquaintance relationship in the evolution of customer relationships is the customers in _____ stage.

The parents would spread the word about their happiness with the services provided by the day care center

How would a day care center operator benefit from the implementation of relationship marketing with the parents of three preschool children?

Generally low with some variation on how the competition creates unique value

How would you describe the sustainability of competitive advantage in the acquaintance stage of the customer relationship evolution?

As the flight attendant listened to the business traveler complain about having to sit in the plane and wait for two hours before the plane took off, the attendant sorted through some magazines, got a blanket for another passenger and clearly ignored the legitimate complaints of the businessperson. This is clearly a problem with:

Interactional Fairness

Once Mariko had carried her dry cleaning to the car, she took a minute to see if the cleaners had removed the stain from her wool skirt. The stain was still there, so Mariko took the skirt back to the cleaner. When Mariko showed the stained skirt to the cleaner employee, she shrugged and said, "I guess you want us to reclean the skirt?" Mariko responded, "Yes, please." The employee took the skirt, gave Mariko a dirty look and began sorting some items on the counter. The employee did not treat Mariko with:

Interactional Fairness

________ refers to the fact that a complaining customer expects to be treated fairly, with care and honesty.

Interactional Fairness

_______ focuses on the interpersonal treatment received by the consumer during the complaint process

Interactional fairness

A consumer who is more likely to engage in negative word-of-mouth than any other type of consumer is called a(n):

Irate

Many carwashes offer free replacement washes to car owners if it rains or snows within 24 hours of when they had their cars cleaned at the carwash. Because people who would take advantage of this service guarantee are the ones that are concerned about the appearance of their car, this service guarantee:

Is very meaningful

Confidence

Kayla has been having her haircut by Duncan, a hairstylist at Studio 21 Salon, for five years. She has continued to use the same hairstylist even though the price of a haircut at Studio 21 Salon is $10 higher than at competing hair salons. Duncan stays up to date on the latest hairstyles and hair care products and Kayla always leaves the salon with a haircut she loves. Kayla realizes _____ benefits from her relationship with Duncan.

With which service recovery strategy is the reliability dimension of service quality most closely associated?

Make the service fail safe

When Theo complained out loud that the hotel restaurant did not serve breakfast late enough in the morning, a hotel worker overheard him and went to the kitchen. When the hotel worker returned, he presented Theo with a plate of sweet rolls, a cup of coffee and the hotel's apology for having to close down the breakfast service early. Which service recovery strategy is being used in this example?

Respond Quickly

Build long-term relationships through social and interpersonal as well as financial bonds

Retention strategies based on social bonds:

Economic benefits; customer behavior benefits; human resource management benefits

The three types of benefits to organizations of maintaining and developing a loyal customer base are:

acquaintances to friends

The transition from the _____ stage to the _____ stage of the customer relationship requires the development of trust.

An effective service guarantee would never be described as:

standardized/ generic

Customer retention

A primary goal of firms at the friendship stage of the relationship is:

the communications strategy

According to the text, the relationship value of a customer is not influenced by:

Strangers

According to the text, the relationships between businesses and their customers have the ability to evolve. In the first step of this evolution process, customers are identified as:

The type of complainer that is called a(n) _____ has an above average propensity to complain. They have a very optimistic sense of the potential positive consequences of all types of complaining.

Activist

The Enhancement of its relationship with the customer

At the partnership stage of the customer relationship, the firm is most concerned with:

When Shelly hired the housecleaning service, she asked them to use her hypoallergenic cleaning supplies. Instead the workers used their own supplies and Shelly had to lose a day from work because of her allergic reaction to the smell of the cleaners. When Shelly looked at the service guarantee that the workers had left, she found that she could get a reimbursement for all of her out-of-pocket expenses if she had a notarized letter from her doctor describing her condition and her reaction, an affidavit from the workers that they had used the wrong cleaners and another notarized statement that she would not have become ill if the workers had used the right cleaners. This service guarantee is ineffective because it is NOT:

Easy to invoke and collect

Aquaintances

If WedSafe's primary marketing effort is satisfying its customers, the company is in which stage of the customer relationship evolution?

Which of the following is NOT an example of a commonly used service recovery strategy?

Implement the service paradox

switching costs

In many instances, customers develop loyalty to an organization in part because of costs involved in changing to and purchasing from a different firm. These costs are called:

Social Support System

In some long-term customer-firm relationships, a service provider may become part of a customer's __________ , such as when a hairdresser serves as a personal confidant, or a proprietor of a local retail store is known as a central figure in the neighborhood network.

Structural Bonds

Aramark is a food service company that supplies meals to more than 200,000 hospital patients daily. To improve its service, it created a database that tracks patient preferences individually by hospitals, regionally and nationally. The accumulated database is used to provide better menus. Aramark's kitchen staffs deliver the food and are referred to as hosts. All hosts have a minimum of 40 hours of training to teach them how to be courteous, efficient and quick. These trained hosts deliver customized meals from carts preloaded according to room number. According to patient surveys, Aramark has boosted patient satisfaction by almost 10 percent by providing customized meals. Aramark is using _____ in its customer retention strategy.

What are poka-yokes?

Automatic warnings or controls to ensure mistakes don't happen

Confidence benefits; social benefits; special treatment benefits

Beyond the specific inherent benefits of receiving service value, customers also benefit in other ways from long-term associations with firms. The three types of relational benefits for customers are:

According to the _______, while advertising, sales and promotions pour profits into your company, there will always be some customer defection, which has the potential to grow larger.

Bucket Theory of Marketing

When its sales were declining, Canadian Airline conducted a marketing survey to understand the expectations of the business traveler, its target market. It learned business travelers resent that they are bosses in their own offices but are totally controlled by the whims of the airlines when they travel. If Canadian Airline had only surveyed former customers who were still in their database, it would have used which service recovery strategy?

learn from lost customers

Identifies customers who need different sorts of attention

A company that uses a four-tier scheme to segment its customers by profitability:

flower's for his wife's bday are not delivered (because of ego involvement)

A consumer is more likely to complain when the:

the level of ego involvement in the purchase is high

A consumer is more likely to complain when:

passive

A person who is a(n) _____ is a type of complainer who is unlikely to say anything to the service provider. This type of complainer often doubts the effectiveness of complaining because of a belief that the consequences will not merit the time and effort they will expend complaining.

Which of the following is NOT a benefit provided by a service guarantee?

A way to increase a customer's sense of risk

Roger Pack is a breeder of Pomeranian dogs. He has used the same grooming salon for his dogs for the last 10 years. When a new groomer accidentally trimmed too much off of one of his show dog's hind quarters, he was upset. He decided not to make a big deal of the event because of his long-term dealings with the salon owner. Which service recovery strategy is exemplified here?

Cultivate relationships with customers

The term customer intimacy is most closely related to the establishment of _____ bonds

Customization

Step-by-Step day care center offers parents several other services not normally offered by day by day care centers. A caterer is present every morning when the children are dropped off to take orders for supper. When the parents pick up their children in the evening, their supper is ready for them to take home, too. A hair stylist comes to the center once a week and cuts the hair of any child whose parents request this service. A photographer comes to the center every three months to take updated pictures of children whose parents don't have the time to take their children to the photography studio. In this way, Step-by-Step is using _____ to support its customer retention strategy.

Customization Bonds

switching costs

Molly and Tom are getting married. Last month they hired a caterer for the wedding reception. This month they attended a wedding for which their chosen caterer had provided food, dishes and flowers. Neither thought the food was good and Molly worried that the dishes looked cheap. However, they feel they cannot change caterers at this date due to the large deposit required by the catering company when it took the job. Molly and Tom do not want to pay:

Customer retention

Moonlight Catering has increased the deposit it requires before agreeing to cater an event to $300. This amount is nonrefundable and must be paid when Moonlight Catering is hired for the job. This increase in deposit will help Moonlight Catering achieve its goal of:

Not profitable in the long run

United Jersey Bank offers customers, who have a combined balance of $3000 or more in a United Jersey Checking Account and Preferred Money Market Account, a service called United Jersey Preferred Banking. This service is designed to make banking more convenient and profitable for customers. United Jersey Preferred Banking eliminates monthly maintenance fees, provides unlimited free transactions at ATMs, preferred rates on personal loans, higher interest rates on savings with higher balances and a consolidated monthly statement. United Jersey Bank does not offer United Jersey Preferred banking to customers with a combined balance of less than $3000 in a United Jersey Checking Account and Preferred Money Market Account because these customers are:

Strangers

WedSafe is the name of a company that provides wedding insurance. For example, in the event that a wedding is called off, the couple can insure themselves against loss of their nonrefundable deposits. If WedSafe's primary marketing effort is to make engaged couples aware of its services, the company is in which stage of the customer relationship evolution?

When its sales were declining, Canadian Airline conducted a marketing survey to understand the expectations of the business traveler, its target market. It learned business travelers resent they are bosses in their own offices but are totally controlled by the airlines when they travel. Canadian Airline instituted gate-side business centers, shower facilities and massage chairs as well as continuous "power to the seat" for those who want to work on their laptops. By listening to its business travelers and providing the services they want, Canadian Airline's sales started increasing. What service recovery strategy did Canadian Airline use?

learn from recovery experience

By noting that a number of customers had complained about late bus arrivals at one particular stop, the bus line rerouted the bus away from a heavy traffic area. By increasing its miles traveled slightly, the bus was able to improve its arrival time substantially at the stop where it had formerly been perpetually late. Which service recovery strategy did the bus line use?

learn from recovery experiences

The empowerment of employees makes which of the following service recovery strategies easier to implement?

respond quickly

PSE&G is a utility company. One of its service guarantees is to keep all appointments. If PSE&G fails to keep an appointment mutually agreed upon by the customer and the company, PSE&G will credit residential customers' accounts by $25 and business customers' accounts by $100. The guarantee only applies to appointments for meter readings, account investigation, gas service, gas appliance repair and both electric and gas meter work scheduled three days in advance. Which of the following statements about PSE&G's service guarantee is FALSE?

the guarantee is unconditional

The carpenter came to install the new flooring in the Stephenson's kitchen two weeks ago. Once he had removed the old flooring, he announced he needed to go get a sander to smooth out the subflooring. He has not been back. A person who is an irate type when it comes to complaining would react to this by:

Firing the first carpenter and hiring another one who is willing to complete the job

Kate recently learned to play golf. Last week, she decided to try a new golf course. She signed in to play and was given the keys to an electric golf cart without any instructions on how to operate it. After she drove the cart into a lake, she swore never to play golf again. According to Kate, "There are just too many things you have to know before you can become a real golfer." Two months later, the golf course manager called Kate and asked why she had not returned to play another game. Which service recovery strategy is being used in this example?

Learn from lost customers

Banjo Bob repairs guitars, banjos, and other stringed instruments for a living. Banjo Bob promises his customers "100 percent satisfaction in every repair." Which service recovery strategy is Banjo Bob?

Make the service fail safe

_____ concerns the results that customers receive from their complaints

Outcome fairness

Initiate communication

The primary goal of businesses that are in the first stage of their relationship with a customer is to:

Voicer

A business traveler checked into a Hyatt hotel and was given a room next to the elevator. When he turned on the television, he was greeted with a Hyatt customer service survey. He immediately took advantage of having the survey to let Hyatt know how unhappy he was with his room location. The business traveler would most likely be classed as a(n) _____ type.

For which of the following service providers would a guarantee be inappropriate?

A child care provider who has a reputation for providing the best and most responsible child care in a community

Social

Elmer Jennings is a government auditor and works for the Bracken and Leach firm. He is the one who checks to see that city and county governments have complied with accounting principles. As an auditor, Jennings sometimes will spend six weeks in one office while he checks its accounting records. The closeness of the relationship that Jennings builds with the government employees he works with was realized by Bracken and Leach when Jennings left the firm, went to work for another one and took his clients with him. This is an example of how _____ benefits can be both helpful and harmful.

customer inertia

Every month the pest exterminator does a monthly spraying at Jean Poole's house. Every month Jean gripes that she is being ripped off by the exterminating company and that she's going to find a new one. But she never does change service providers due to:

Financial Bonds

Every time Tom and Betty stay at a Marriott Hotel, they earn points that can be used at a later date for free rooms, meals and other hotel amenities. Marriott is using _____ to implement its retention strategy.

Use price as the primary marketing mix element

Retention strategies built around financial bonds:

Could cause resentment/ seen as demeaning

Salespeople for college texts call on college instructors to sell them on using a particular text for their classes. Improvements in efficiency have led some publishers to stop making sales calls altogether on smaller colleges. It is a much better use of the sales force's time to call on schools with large classes and big adoption rates. From the customer's point of view, this application of the profitability tier

Providing value comparable to the competition

In acquaintance relationships, firms generally focus on:

she is in the wrong segment

New Bedford College has a two-year masters degree program designed for special education teachers. Thirty-five students enter the program each fall. The education department requires that the 35 students take the same classes. Classes are made available in sequence. If Beth wanted to take only one special education class to get her a teaching certificate in learning disabilities (LD), she would be unable to because she would not be able to participate in any carry-over projects from previous classes (This is a common teaching tool for the New Bedford education department faculty.). New Bedford College will avoid setting up a relationship with Beth because:

Kelso Massage Therapy promises its clients that there wait for a massage will be less than fifteen minutes or the massage is free. What type of service recovery tool is Kelso Massage Therapy using?

Offer a guarantee

Structural Bonds

Often, _____ are created by providing customized services to the client that are technology based and make the customer more productive

Customization

Pandora is an Internet-based music discovery service that helps its customers find and enjoy music that they like. A customer can create up to 100 unique "stations" by identifying favorite songs or artists and then Pandora's expert system analyzes what they like and provides suggestions based on this analysis. Pandora is using ____________ to develop and maintain customer relationships.

Financial Bonds

Participants in the Coffee Café's loyalty program get a free large cup of coffee after every 10th cup of coffee purchased. After purchasing 100 cups of coffee from the Coffee Café, loyalty program participants receive a $10 gift certificate good for food and beverage items or merchandise. Coffee Café's uses _____ to encourage its customers to remain loyal.

Voicers, irates, activists, and passives

People who complain can be categorized as:

Barriers the customer faces in leaving a relationship

The development of strong customer relationships is strongly influenced by:

Adam was working late in his hotel room when the light bulb in the lamp at his desk burned out. He called the front desk and asked for a replacement bulb. The desk manager told Adam that a new one would be provided tomorrow morning and that he did not have the key to the stockroom. Adam tried to explain how much he needed the light to finish his sales report, but the manager was polite but adamant that he could not help. This example illustrates lack of:

Procedural Fairness

In addition to compensation, customers expect _____. In other words, they expect fairness in terms of policies, rules and timeliness of complaint process.

Procedural Fairness

Many frequent flyers have missed their flights due to long, slow security checks before being allowed to enter the airline's terminal. This policy designed to ensure safe flights has resulted in problems associated with perceived:

Procedural Fairness

When the dentist's office bills the patient who had an appointment but did not show up for it and did not cancel the appointed, it is an example of _____ because the patient was made aware of the policy before making the appointment.

Procedural Fairness

profitability

Rather than treating all of its customers the same, FedEx categorized its customers internally as "the good, the bad, and the ugly" based on their ___________.

Customization

Regency Dry Cleaners operates in a medium-sized community. Its customers all live within a 20-mile radius of the cleaners. Regency provides its regular customers with several alternative pickup and delivery schedules rather than a single weekly pickup and delivery. Regency's driver will pick up clothes in the morning and deliver them back clean in the afternoon if that is what a customer needs. Regency has found the increase in its total number of customers because of this service more than pays its additional operation expenses. Regency has built its customer retention strategy around

_____ marketing focuses on keeping and improving current customers, rather than concentrating on acquiring new customers.

Relationship

Current and future profitability

Since service companies have found that customers differ in their relationship value and that it may be neither practical nor profitable to meet or exceed all customers' expectations, they have divided their target markets according to:

Every Thursday afternoon for almost twenty years, Jasmine and Tanya have gotten a manicure at the same location. The manicure salon has changed ownership three times and has had two different names during that same period, but Jasmine and Tanya still find it a convenient place to meet and share news about friends and relatives. Jasmine and Tanya's relationship with the manicure salon exemplifies how a service provider uses _____ to support its customer retention strategy.

Social Bonds

Miller & Sons Funeral Home has handled all of the funeral needs for the Atwater family since 1957. The family believes that Miller & Sons offers them good value for their dollar and the Miller sons and the Atwater boys played on the same high school football team. Miller & Sons Funeral Home is using _____ to implement its customer retention strategy.

Social bonds

Dysfunctional Customers

Sometimes firms have service encounters that fail because of ___________, who intentionally or unintentionally act in a way that is disruptive, rude, or aggressive.

relationship value

The _____ of a customer is a concept that looks at customers from the perspective of their lifetime revenue or profit contributions to a company.

Service Recovery Paradox

The _______ suggests an initially disappointed customer who has experienced good service recovery might be even more satisfied and loyal as a result.

Confronting the carpenter at another job site and demanding to know when he would be back to finish the floor

The carpenter came to install the new flooring in the Barry kitchen two weeks ago. Once he had removed the old flooring, he announced he needed to go get a sander to smooth out the subflooring. He has not been back. A person who is a voicer type when it comes to complaining would react to this by:

taking no active whatsoever

The carpenter came to install the new flooring in the Stephenson's kitchen two weeks ago. Once he had removed the old flooring, he announced he needed to go get a sander to smooth out the subflooring. He has not been back. A person who is a passive type when it comes to complaining would react to this by:

A pseudo-relationship occurs when

The customer interacts many times with the same company, but with different service providers

Which of the following is an example of a poka-yoke?

The day care center has carefully labeled bins for each parent to fill with food, diapers, clothes and toys so that one child's stuff will not be confused with another's

Partnership

The key to success in the _____ stage of the customer relationship is the firm's ability to use customer knowledge and information systems to deliver highly personalized and customized offerings.

Which of the following is the BEST example of outcome fairness?

The small movie theater gave all patrons two free movie tickets for the night of their choice when the movie projector broke halfway through showing the newest Brad Pitt movie

Which of the following is the BEST example of procedural fairness?

When Tia walked into the salon and asked to have her hair cut, the receptionist pointed to the sign that read, "To keep from inconveniencing our customers, this hair salon will not style the hair of anyone who does not have an appointment"

Service Remedy

When a customer of Twin Cities Rehabilitation Center complained that his therapist was one hour late for their appointment, the owner of the center gave the customer credit for one free hour of therapy. The action taken by the owner is an example of ___________.

When is a service guarantee inappropriate?

When service quality is truly uncontrollable

Employee Retention

Which of the following is one of the ways an organization benefits from maintaining and developing a loyal customer base?

Resolving customer problems effectively has a strong impact on customer satisfaction and loyalty

Which of the following statements about service failure and service recovery is true?

Contractual Costs

_____ arise(s) when the customer is required to pay a penalty to switch providers

Service recovery

________ refers to the actions taken by an organization in response to a service failure.

Structural

_________ are created by providing services to the client that are designed right into the service delivery system.