Marketing Exam 3

Gap Model of Service Quality

Five gaps that can cause problems in service delivery and influence customer evaluations of service quality. Gap 1: the gap b/w what the *customers want* and what *management thinks* customers want. Gap 2: the gap b/w what *management thinks* customers want and the *quality specifications* that management develops to provide the service. Gap 3: the gap b/w the *service quality specifications* and the *service that is actually provided*. Gap 4: the gap b/w what the *company provides* and what the *customer is told it provides*. Gap 5: the gap b/w the *service that customers receive* and the *service they want*.

Case Discussion: Nordstorm Local

"There aren't store customers or online customers — there are just customers who are more empowered than ever to shop on their terms," Erik Nordstrom, co-president of Nordstrom

Shopping Center and Mall Locations

*Advantages* -Design attracts shoppers -Activities and ___________draw customers -Ample parking -Unified image -Sharing of common area expenses *Disadvantages* -Expensive leases -Failure of common promotion efforts -Lease restrictions -Hours of operation -Name-Brand domination -Direct competitors -Consumer time limits

Components of Service Quality

*Reliability:* The ability to perform the service right the first time. *Responsiveness:* The ability to provide prompt service. *Assurance:* The knowledge and courtesy of employees. *Empathy:* Caring, individualized attention to customers. *Tangibles:* The physical evidence of a service.

What are the functions of a marketing channel?

*Specialization and division of labor* *Overcoming discrepancies* *Providing contact efficiency*

Overcoming Discrepancies

- Discrepancy of Quantity: The difference between the *amount of product produced* and the *amount an end user wants* to buy. - Discrepancy of Assortment: The lack of all the items a customer needs to receive full satisfaction from a product or products. - Temporal Discrepancy: A situation that occurs when a product is produced but a customer is not ready to buy it. - Spatial Discrepancy: The difference between the location of a producer and the location of widely scattered markets.

specialization and division of labor (Function of marketing channel)

-Creates greater efficiency -Achieves economies of scale -Aids producers who lack resources to market directly -Builds good relationships with customers

Four Online Retailer Approaches

-Supplement their stores -Very focused on specific needs of target -Compliment their stores/catalogs -More efficient than competitors

price strategy

-define the unit of service consumption -determine if multiple elements are "bundled" or priced separately

The service mix

-determine which new services to introduce -determine the target market -decide which existing services to maintain and which to eliminate

When are services assessed?

1. *Search quality:* Applied to goods more often, assessed before purchase 2. *Experience quality:* assessed after purchase 3. *Credence quality:* assessed only with appropriate knowledge.

Categories of Discount Stores

1. Full-Line Discounters: Supercenters 2. Specialty Discount Stores: 3. Warehouse Clubs 4. Off-Price Retailers

Classification of ownership

1. Independent Retailers: Owned by a single person or partnership and not part of a larger retail institution 2. Chain Stores: Owned and operated as a group by a single organization 3. Franchises: The right to operate a business or sell a product

Levels of Distribution Intensity

1. Intensive: Achieve mass market selling. Convenience goods. 2. Selective: Work with selected intermediaries. Shopping and some specialty goods. 3. Exclusive: Work with single intermediary. Specialty goods and industrial equipment.

Channel Strategy Decisions

1. Market Factors 2. Product Factors 3. Producer Factors

service as a process

1. People processing 2. Possession processing 3. Mental stimulus processing 4. Information processing

Reasonableness

A latitude or space that exists around expectations in the delivery of service. It implies a level of flexibility and autonomy in the judgment of service personnel in service encounters

marketing channel

A set of interdependent organizations that ease the transfer of ownership as products move from producer to business user or consumer. Ex. "Unlike many other wholesalers in the fresh fish industry, Hachimenroppi buys fish straight from the fishermen/unions in order to get the best price and quality." Wall Street Journal

Retailing

All the activities directly related to the sale of goods and services to the ultimate consumer for personal, non-business use

The Proper Location

Choosing a Community: - Economic growth potential - Competition - Geography Choosing a Site - Freestanding Store - Shopping Center - Mall

patronage-oriented pricing (Pricing Objectives)

Maximize the number of customers by varying price

How to classify retail operations

Ownership Level of Service Product Assortment Price

Producer Factors

Producer Resources Number of Product Lines Desire for Channel Control

Channel Intermediaries

Retailer Wholesale Agents and Brokers

Pricing Objectives

Revenue-oriented pricing Operations-oriented pricing Patronage-oriented pricing

Retailing Strategy

Step 1: Segment the Market -Demographics -Geographics -Psychographics Step 2: Choose the Retailing Mix -Product Place -Price ? -Promotion ?

Product Factors

These effect channel choices... Product Complexity Product Price Product Standardization Product life cycle Product delicacy

Channels for Customer Products

Zara example

How do services differ from goods?

intangible, inseparable, heterogeneous, perishable

Revenue-Oriented Pricing (Pricing Objectives)

maximize the surplus of income over costs

operations-oriented pricing (Pricing Objectives)

seeks to match supply and demand by varying prices