Marketing Exam Models #13-17
#17 Dimensions of service quality
5 broad dimensions detailing the factors that customers use to evaluate service quality: -Tangibles (appearance of physical elements) -Reliability (dependable and accurate performance in delivering promised service) -Responsiveness (promptness and helpfulness) -Assurance (credibility [trustwortiness, honesty], security, competence and courtesy) -Empathy (easy access, good communications and customer understanding)
#16 The Servicescape Model
A comprehensive model that shows the main dimensions of service environments: -Ambient conditions: Characteristics pertaining to the five senses. -Spacial layout and Functionality -Signs, symbols and artifacts communicating firm image and affecting customer behavior. The way in which these dimensions correlate with each other and come together is perceived holistically by employees and customers. The servicescape must thus be designed with the intention of eliciting certain internal responses from both employees and customers through these "reponse moderators" in order to affect attitudes and behavior.
#13 The long tail
A theory that rests on two concepts. 1) The left side of the area (the "head") under the model's curve represents "hits", for which demand is sufficient for physical sales practices to be profitable (the revenue from selling the products outweighs the costs of having to physically display, store and distribute the goods). Meanwhile, the right side (the "long tail") consists of former hits and niche products, which cannot be profitably sold through brick-and-mortar channels. In current times, due to the increased prevalence of online channels, merchandise assortments are growing because goods don't have to be physically displayed. This untapped demand can thus now be met, as search and recommendation tools prevent customers from being overwhelmed by the vast selections. 2) Consumer value niche products more than products designed for mass appeal. The increased accessibility and salience of these niche products will increase their sales as availability increases for the people originally demanding them, and as more customers discover the products and begin demanding them as well. As a consequence, the long tail will become longer (as more obscure products are made available) and fatter, while the head becomes smaller (as consumers discover products better suited to their tastes).
#14 The wheel of loyalty
A three step model detailing how customers can be retained. The steps are enabled through: -Frontline staff -Account managers -Membership programs -CRM systems 1. Build a foundation for loyalty -Segment the market to match customer needs and firm capabilities. -Be selective: Acquire customers who fit the core value proposition. -Manager the customer base via effective tiering of service (develop tiers around the levels of profit contribution of different groups of customers). -Deliver quality service 2. Create loyalty bonds -Deepen the relationship via: ---Cross-selling (if customers are subscribed to multiple services at one firm they are less likely to turn away from the firm) ---Bundling (--||--) -Give loyalty rewards: ---Financial ---Non-financial ---Higher tier service levels ---Recognition and appreciation -Build higher-level bonds ---Social (familiarity and friendliness) ---Customization (the usual?) ---Structural (development that streamlines the service process - fx the retention of credit cards and cookie storage) 3. Reduce churn drivers -Conduct churn (the drivers of customer defections) diagnostic and monitor declining/churning customers -Address key churn drivers: ---Proactive retention measures (prevent churns beforehand) ---Reactive retention measures (save teams who try to retain customers intending to cancel) -Put effective complaint handling and service recovery processes in place -Increase switching costs
#15 The Service Gaps Model
Four potential gaps within a service organization that may lead to the fifth, most serious, gap - the difference between what customers expect and what they perceive was delivered. #1 Market Research gap: Difference between what management think customers want, and what they actually want. #2 Service Design gap: Discrepancy between what management believes customers want, and designed service specifications. #3 Conformance gap: Discrepancies between service specifications and service delivered by personnel. #4 Communication gap: Discrepancies between a firm's promised service delivery and actual service delivery. Over-promises can be caused by by ignorance on behalf of external communicators, or by the incentives of external communicators lying in over-promises (Gap #4.5. when firm does not adequately highlight the steps taken in delivering quality service). #5 Service quality gap: A sum of all four gaps - A discrepancy between what customers expect from a service and the actual service delivery.