MKT Exam3

Which of the following is the most popular definition of customer satisfaction and dissatisfaction?

A comparison of customer expectations to perceptions about the actual service encounter

What is service quality?

An attitude formed by a long-term, overall evaluation of a firm's performance

Which of the following strategies for cultivating customer loyalty ensures that each transaction is handled to the customer's satisfaction?

Being available when you are needed the most

-Positive WOM generated from existing customers often translates into more new customers -Satisfied current customers often purchase more products more often than dissatisfied customers -Satisfied current customers less likely to be lost to competitors than dissatisfied customers -High customer satisfaction ratings help insulate firm from price competition -Firms that pride themselves on their customer satisfaction efforts tend to have more positive work environments

Benefits of customer satisfaction

Which of the following is not a reason why customer retention has become increasingly important?

Competition has decreased

Which of the following is a criticism of customer satisfaction research?

Customer satisfaction research tends to focus on registered complaints, Customer satisfaction research often excludes the firm's employees from the survey process, Customer satisfaction research focuses on whether current needs are being met but fails to investigate customers' future needs.

Which of the following is not a factor contributing to inflated customer satisfaction ratings?

Customers are never satisfied

-Average business doesn't hear from 96% of its unhappy customers -For every complaint received, 26 customers have same problem -Average person with problem tells 9 or 10 people; 13% will tell > 20 -Customers who have their complaints satisfactorily resolved tell average of 5 people about treatment they received -Complainers more likely to do business with you again than noncomplainers: --54% to 70% if resolved at all, and 95% if handled quickly

Facts we know about the importance of customer satisfaction

Indirect measures of satisfaction are generally obtained with customer satisfaction surveys.

False-Direct measures

Higher levels of satisfaction are obtained from mail questionnaires and self-administered interviews compared with results from personal interviews and phone surveys

False-personal interviews and phone surveys

When forming customer expectations, the firm's website acts as an implicit service promise

False-the firm's brochure

Although a firm may receive hundreds of customer complaints pertaining to perceived service failures throughout a year, ultimately these service failures can be categorized into how many groups?

Four

What type of measurement tracks and monitors sales records, profits, and customer complaints?

Indirect measures

Experts in the area of service recovery recommend that in establishing service recovery as a priority and developing recovery skills, firms should consider which of the following rules of thumb?

Measure the costs, Empower the front line, Respond quickly

which type of wait is considered longest of all?

Post process waits

The level of service quality a consumer believes is likely to occur is called what?

Predicted service

Which type of customer is never satisfied yet continues to return?

The chronic complainer customer

Firms with higher customer satisfaction ratings make the firm more resistant to competitors' efforts to improve their market share.

True

Positive disconfirmation of consumer expectations occurs when expectations are lower than perceptions.

True

8 Principles concerning customer wait times

Uncertain Waits Are Longer than Known, Finite Waits, Unexplained Waits Are Longer than Explained Waits, Anxiety Makes the Wait Seem Longer, Preprocess Waits Feel Longer than In-Process Waits—Post-Process Waits Feel Longest of All, Unfair Waits Are Longer than Equitable Waits, Unoccupied Waits Feel Longer than Occupied Waits, Solo waits are longer than group waits, The More Valuable the Service, the Longer the Customer Will Wait

Complaining behavior results in which of the following three outcomes?

Voice, exit, retaliation

Which of the following models used by service providers strives for no customer defections to competitors?

Zero defections model

The level of service quality a customer is willing to accept.

adequate service

What percentage of a company's profits come from long-term customers?

as much as 95%

1 Focuses on whether current needs are being met but fails to investigate customers' future needs 2 Tends to focus on registered complaints 3 Tends to focus on global attributes and ignores operational elements 4 Often excludes firm's employees from survey process 5 Some firms are convinced that customers may not know what they want and that sometimes ignoring the customer is best strategy to follow

criticisms of customer satisfaction research

Frequency marketing, relationship marketing, and service guarantees are all examples of what type of program?

customer retention

The level of service quality a customer actually wants from a service encounter.

desired service

Measures of satisfaction generally obtained directly from customers using customer satisfaction surveys

direct measures

Model proposing that comparing customer expectations to their perceptions leads customers to have their expectations confirmed or disconfirmed.

expectancy disconfirmation model

The script a consumer carries into the service setting; what the consumer expects to happen and the benchmark against which he or she will evaluate the experience.

expected script

The spectrum of performance ability. Not all consumers are equally proficient. The novice does not know what to do and how to perform. An _____ knows how to be part of the production process.

expert

Individuals who have expertise in the purchase process for a particular good or service. Expert performers, by comparison, are expert in the service production process.

expert customer

expert in service production process

expert performer

Enduring service intensifiers: personal factors that are stable over time and increase a customer's sensitivity to how a service should be best provided. Types of enduring service intensifiers: -Derived expectations: expectations appropriated from and based on the expectations of others. -Personal service philosophies: a customer's own internal views of the meaning of service and the manner in which service providers should conduct themselves. Personal needs: a customer's physical, social, and psychological needs. Factors Influencing Service Expectations: Desired Service and Predicted Service (Figure 11.11) -Explicit service promises: obligations to which the firm commits itself through its advertising, personal selling, contracts, and other forms of communication. -Implicit service promises: obligations to which the firm commits itself by means of the tangibles surrounding the service and the price of the service. -Word-of-mouth communications: unbiased information from someone who has been through the service experience, such as friends, family, or consultants. -Past experience: the previous service encounters a consumer has had with a service provider. Factors Influencing Service Expectations: Adequate Service (Figure 11.11) -Transitory service intensifiers: personal, short-term factors that heighten a customer's sensitivity to service. -Perceived service alternatives: comparable services customers believe they can obtain elsewhere and/or produce themselves. -Self-perceived service role: the input a customer believes he or she is required to present in order to produce a satisfactory service encounter. -Situational factors: circumstances that lower service quality but that are beyond the control of the service provider. -Predicted service: the level of service quality a consumer believes is likely to occur. The Link between Expectations, Customer Satisfaction, and Service Quality - When evaluating the service experience, consumers compare the 3 types of expectations to the perceived service delivered. - Customer satisfaction is calculated by comparing predicted service and perceived service.

factors influencing expected service

- Genuinely satisfied customers Unless existing customers have nowhere else to go to purchase their services, existing customers who voluntarily do business with the firm should be satisfied. See E-Services In Action - Enhancing Online Customer Satisfaction. - Response bias Response bias: a bias in survey results because of responses being received from only a limited group among the total survey participants. Some argue that companies hear only from their satisfied customers. Dissatisfied customers do not want to take the time to complete the firm's questionnaire and/or do not think it will do any good. - Data collection method Research suggests that higher ratings are obtained via personal interviews as compared to nonpersonal forms of data collection. Respondents to personal interviews may feel more awkward expressing negative statements than when expressing them anonymously on self-administered questionnaires. - Question form Question form: the way a question is phrased, i.e., positively or negatively. Asking questions in a positive form ("How satisfied are you?") appears to lead to greater reported levels of satisfaction than does posing questions in a negative form ("How dissatisfied are you?"). Context of the question Question context: the placement and tone of a question relative to the other questions asked Asking a general satisfaction question prior to a specific satisfaction question tends to increase satisfaction levels. Timing of the questions Question timing: the length of time after the date of purchase in which questions are asked. Customer satisfaction appears to be highest immediately after the purchase has been made. Social desirability bias Social desirability bias: a bias in survey results because of respondents' tendencies to provide information they believe is socially appropriate. Some researchers believe that respondents tend to withhold critical judgment because to do otherwise would be socially inappropriate. Mood - Respondents in positive mood states make more positive judgments, rate products they own more favorably, and tend to see the brighter sides of things.

factors that contribute to inflated customer satisfaction ratings

It costs three to five times more to keep a customer than to get a new one.

false-It costs three to five times more to get a new customer than to keep one.

Mary's local grocery store gave her a card that tracks Mary's purchases and rewards her with discount coupons. This is an example of relationship marketing.

false-Reward programs are a form of frequency marketing. Relationship marketing is a technique based on developing long-term relationships with customers.

Service customers tend to feel comfortable about evaluating services and are not afraid to voice their opinions.

false-Service consumers often lack the security of making an objective observation and may doubt their own subjective evaluations. Service customers also may not feel adequately qualified to voice a complaint for fear that they lack the expertise to evaluate the quality of the service.

The most powerful of all guarantees that promises complete customer satisfaction is the implicit guarantee.

false-The most powerful of all guarantees that promises complete customer satisfaction is the unconditional guarantee.

Customer retention is a marketing strategy for constantly seeking new customers by offering discounts and markdowns and developing promotions that encourage new business.

false-This is the definition of conquest marketing. Customer retention focuses the firm's marketing efforts toward the existing customer base.

Service quality is a specific goal or program that the firm strives to achieve or complete.

false-but must be an ongoing part of all management and service production on a daily basis.

The component of perceived justice that refers to the outcomes associated with the service recovery process is referred to as interactional justice.

false-distributive justice

The first step in developing an effective service recovery management program is identifying service failure.

false-instilling a service recovery culture throughout the firm.

Even if the contact personnel respond in a positive manner to a service failure, the customer will likely recall the encounter as a negative event.

false-n a positive manner to the service failure.

The majority of consumer complaints tend to be noninstrumental and reflexive.

false-noninstrumental(expressed without expectation that an undesirable state will be altered) and ostensive(directed at someone or something outside of the realm of the complainer).

Consumers rate responsiveness as the most important of the five SERVQUAL dimensions.

false-reliability

Which of the following is the most widely used component of a firm's service quality information system, with its primary purpose being to identify areas of information to be collected in subsequent survey research?

focus group interview

Before the firm can close the service gap, it must close or try to narrow how many other gaps?

four

Service production processes are arranged on a spectrum according to how much the consumer is part of the process. In a high-contact system, the consumer is an integral part of the process.

high contact system

how can customer satisfaction be measured

indirect and direct measures

Measures of customer satisfaction including tracking and monitoring sales records, profits, and customer complaints

indirect measures

Which of the following dimensions is not measured by SERVQUAL?

intangibles

If actual perceptions were less than what was expected

it leads to customer dissatisfaction

Service production processes are arranged on a spectrum according to how much the consumer is part of the process. In a low-contact system, the consumer plays only a small role.

low contact system

The spectrum of performance ability. Not all consumers are equally proficient. The _______ does not know what to do and how to perform. An expert knows how to be part of the production process.

novice consumer

The level of service quality a consumer believes is likely to occur.

predicted service

Jerome purchased a new camera from Flip's Electronics. The camera stopped working three days after Jerome purchased it. Jerome returned the camera to Flip's, and the manager gave him a replacement. The manager was practicing which type of recovery strategy?

restoration

Katelyn, a waitress in a popular local restaurant, is required to always mention the "special of the day" before taking customers' orders. Katelyn is experiencing which of the following?

role conflict

Increased research orientation and enhanced upward communication will assist the firm in decreasing the knowledge gap

true

The SERVQUAL dimension that measures consumer views of the firm's personnel and communication materials is the tangibles dimension.

true

The component of a firm's service quality information system that is used specifically to assess employee performance is mystery shopping.

true

The defection management process includes creating switching barriers that discourage defections.

true

Level of quality ranging from high to low and reflecting the difference between desired service and adequate service; expands and contracts across customers and within the same customer, depending on the service and the conditions under which it is provided.

zone of tolerance