Chapter 13

4. Management of Service Expectations

-Advertising: set realistic expecations about the service they provide -Good internal communications: if something fails than everything could fail.

How is Nonprofit different?

-Where the chief beneficiairy of a business enterprise is one who owns or holds stock int it, in theory, the only beneficiaries of a non profit organization are its clients, its memebers, or the public at large. -Nonprofit organizations have greate opportunities for creativit than most for-profit business organizations, but trustees or board members of nonprofit organizations are likely to have difficulty judging the performace of the trained professionals they oversee. -Nonprofit marketing is sometimes controversial. (loobbying efforts to gain support)

Target Public

A collective of individuals who have an interest or a concern about an organization, product, or social cause. The term target market and target public are difficult to distinguish from many non-product or social-cause profit organizations.

Homesourcing

A practice whereby customer contact jobs are outsourced into workers' homes.

Development of Services

A service offered by an organization is generally a package, or bunde, of services consisting of a core service and one or more supplementary services. Customization is key in providing a competitive advantage.

1. Analysis of Customer Expectations

Customers usually have two levels of expectations 1. Desired: What the customer really wants 2. Acceptable: What the customer views as adequate. Zone of tolerance: The different between the two levels of expectations. -Marketing research (surveys or focus groups to discover customer expectations) -Open communication with employees

- Client publics

Direct consumers of a product of a nonprofit organization. The client public of a university is its student body The client public usually recives most of the attention when an organization develops a marketing strategy.

Nonprofit pricing

Fixed and variable

Nonprofit marketing (2)

Marketing activités conducted to achieve some goal other than ordinary business goals such as profit, market share, or return on investment. Nonprofit organization marketing and social marketing The basic aim of nonprofit organizations is to obtain a response from a target market.

3. Employee Performance

Once an organization sets service quality standards and managers are committed to them, the firms must find ways to ensure that customer-contact employees perform thier jobs as well. Contact employees (Bank tellers, flight attendants, servers) are often the least trained and lowest-paid members of an organization. Contact employees are the most important link to the custome. -Employee training: There is a direct relationship between the satisfaction of a company's contact employees, which is manifested in a positive attitude and good work ethic, and the satisfaction of its customers. -Evaluation and compensation systems

2. Social Marketing

Promotes social causes, such as AIDS research or recycling.

Services

Services using the metaphor of a theater. A play features production elements (such as actors, audience, a setting) and a performace. The actors (service workers) create a performance (service) for the audience (customers) in a setting (service environment) where the performance unfolds. Costumes (uniforms), props (devices, music, machines), and the setting (face-to-face or indirect through telephone or Internet) help complete the metaphor.

Peak demand

Significant number of customers desire the service around the same time. (For cruises, peak demand occurs in the winter for Caribbean Cruises.)

Search qualities (all goods have)

Tangible attritubutes that can be judged before the purchase of a product. (Trying on a new coat) Serives have very few search qualities

- Core service

The basic service experience or commodity that a customer expects to recieve. (Tutoring from a tutoring session)

3. Perishability

The inability of unused service capacity to be stored for future use. (Unfilled seats on an airine fight today can not be stored and sold to passengers at a later date, unsold basketballo tickets, unscheduled dentists' appointment times, and empty hotel rooms.) Goods are generally less perishable than services.

1. Intangibility

The major characterisitc that distinguishes a service from a good. The chracterisitc that a service is not physical and cannot be perceived by the senses. (Impossibe to touch the education recieved by students who attend class) The level of intangibility of a service increases the overall importance of the brand image when a customer is deciding which to purchase. The characteristic makes it difficult for customers to evaluate a service prior to purchase. This requires service marketers like attorneys to market promises to customers. To cope with the problem, they empale tangible cues (well-groomed and professional looking personnel, and clean and attractive outside facilities)

4. Heterogeneity

Variation in quality Because of the nature of human behavior it is very difficult for service providers to maintain a consistent quality of service delivery. (The staff at one best buy may be more knowedgable than the staff at another Best Buy) Heterogeneity usually increases as the degree of labor intensiveness increases. People-based services are often prone to fluctuations in quality from one time period to the next (Hairstylist gives a customer a good haircut today does not gaurentee that customer a haircut of equal quaity the next time) Allows them to customize their services to match the specific needs of individual customers.

- Suppementary service

with the core service, supports the core service and is used to differntiate the service bundle from those competitors. (When attending a tutoring session, the outlines with additional information, handouts with practice questions)

4 factors that affect service quality

(Providing high- quality service consistently is very difficult.) 1. analysis of customer expectations 2. service quality specifications 3. employee performance 4. management of service expectations

Five dimensions of Service Quality

1. Tangibles= physical evidence of the service. (appearance of facilities and employees) The only aspects of a service that can be viewed before purchase and consumption. 2. Reliablity (Most importants in determining customer evaluations of service quality)= Consistency and dependability in performing the service. (An airline leaving on time) 3. Responisivness= Willingness or readiness of employess to provide the service. (A server refilling a customer's cup of coffee without being asked) 4.Assurance = Knowledge/competence of employees and ability to convey trust and confidence (A highly trained financial adviser) 5. Empathy=Caring and individual attention provided by employees. (A nurse counseling a heart patient)

- Credence qualities

Attributes that customers may be unable to evaluate even after the purchase and consumption of a service. (Surgical operations, automobile repairs, and legal representation are services that are high in credence qualities)

- Experience qualities

Attributes, such as taste, satisfaction or pleasure that can be assessed only during the purchase and consumption of a serivce. (Resteraunts and vacations are services that are high in experience qualities.)

Service quality (2)

Customers' perceptions of how well a service meets or exceeds their expectations. (Experience qualities/Credence qualities) (because of thier qualities services are difficult to evaluate) Customers, not the organization, evaluate service quality. Service expectations: Are influence by past experiences with the service, word-of-mouth communication from other customers, and the service company's own advertising.

- General publics

Indirect consumers of a product if a nonprofit organization The genera public of a university is its parents, alumni, and trustees.

2. Inseparability of Production and Consumption

Inseparability: The fact that the production of a service cannot be separated from its consumption by customers. (A airline flight is produced and consumed simotaneously) Customers must be present at the production of the service and cannot take the service home. The fact that customers are present and may take part in the production of a service means they can affect the outcome of the serivce.

Characteristics of a service (6)

Intangibility, inseparability of production and consumption, perishability, heterogeneity, client-based relationships, and customer contact)

1. Nonprofit Organization marketing

Is the use of marketing concepts and techniques by organizations whose goals do not include making profits.

Distribution of services

Marketers deliver services in various ways. -Customers go to a service provider's facility (Dry-cleaning, Spa services, and health care) -At Customers home (lawn care) -"At Arm's length": no face to face contact occurs. (Electric, online, cable television, and telephone services) Marketing channels for services are usually short and direct, meaning the producer deeiver the service directly to the end user. Some services, however, use intermediaires. (Travel agents faciliate the delivery of airine services) (Grub hub) Service marketers are less concerned with warehousing and transporationg than are goods marketers. Service are very concenered about inventory management, especially balancing supply and demandb for services. (Use reservations or appointments for scheduling delievery)

2. Service Quality Specifications

Once an organization understand its customers' needs, it must establish goals to help ensure good service delivery. These goals, or service specifications, are typically in terms of employee or machine performance (A bank requiring its emnployees to conform to a dress code or that all incoming phone calls be answered by the third ring) -Service goals (stated above) -Management comminitment to service quality

Pricing of Services

Priced with consumer price sensitivity, the naure of the transaction, and its costs in mind. -The prices of such services as pest control, dry cleaning, carpet cleaning, and health consultations are usually based on the performance of specific tasks. -Service prices are based on time spent on the task, consultants, counselors, piano teachers usually charge by the hour or day. -Some services use demand-based pricing. When demand for a service is high, the price is also high. -Providers offer a one-price option for a specific bundle of services and make add-on services available at additional charges.

Promotion of services

The intangibility of services results in several promotion-related challenges to servivce marketers. -Explaining a service to customers can be a difficult task Promotion od services typically includes tangible cues that symbolize the service. (Liberty Mutal logo= statue that symbolizes strength to customers) -To make a serivce more tangiable, promotions for services may show pictures of facilities, equipment, and service personnel. (Advertisements for fitness centers may depict the equipment available) -Marketers may also promote thier services as a tangible expression of consumers' lifestyles. (The advertisement Air France highlights the luxury and five star service avaiable) -Branded marketing can help service firms hone their messages for maximum impact. (JP Morgan Chase revamped its banking wesbite in part to create a the same message across all avaikable channels) Service providers are more likely to promote price, guarantees, performance documentation, avaiabilty, and training certification of contact personnel.

6. Customer Contact

The level of interaction between provider and customer needed to deliver the service. Not all services require a high degree of customer contact, but many do. High-contact services: Health care, real estate, and legal services Low-contact services: Tax preparation, auto repair, travel reservations, and dry cleaning. Technolofy has enabled many service-oriented businesses to reduce their level of customer contact. Satisified employees lead to satisifed customers.

Off-Peak pricing

The practice of reducing prices of services used during slow periods in order to boost demand. (This is why the price of a matinee movie is generally lower than the same movie shown at a later time)

5. Client-Based relationship

The success of many services depends on creating and maintaining these relationships which are interactions that result in satisfied customers who use a serivce repeatedly over time. (An accountant may serve a family in his or her area for decades. If the memebers of this family like the quality of the accountant's services, they are likely to recommend the accountant to other families.

Opportunity cost

The value of the benefit given up by choosing one alternative over another. (Volunteers who answer phones for a university counseling service or a suicide hotline, for example, give up the time they could spend studying or doing other things as well as income they might earn from working at a for-profit business organization)