Services Marketing Exam 1

Empathy

-Access: approachability and ease of contact; how easy is it for me to talk to a supervisor when i have a problem? -Communication: listening to customers and keeping them informed in the language they can understand; when I have a complaint is the manager willing to listen to me? -Understanding the Customer: making the effort to know customers and their needs; is the moving company willing to accommodate my schedule?

Assurance

-Credibility: trustworthiness, believability, honesty of the service provider; does the hospital have a good reputation? -Security: freedom from danger, risk, or doubt; is it safe for me to use the banks ATM at night? -Competence: possession of the skills and knowledge required to perform the service; can the bank teller process my transaction without fumbling around? -Courtesy: politeness, respect, consideration, and friendliness of contact person; does the flight attendant have a pleasant demeanor?

Customer Analysis

-Overall examination of market characteristics -Customer needs and related characteristics and behaviors Market Attractiveness: -market size and growth -profitability -market trends Customer Needs: -under or unserved needs -more valued benefits

Channel Integration

-a service that is delivered through multiple channels requires a seamless and consistent user experience -new delivery channels are prone to inconsistent and disjointed experiences for customers

Stage 1: Pre-purchase

-awareness of need -evaluation of alternatives (solutions and suppliers) -make decisions on service purchase and often make reservations -multi-attribute model

People may be part of the service experience

-behavior of service personnel and customers can affect satisfaction -recruit, train employees to reinforce service concept -shape customer behavior

Government Policies

-changes in regulation -privatization -new rules to protect customers, employees, and the environment -focus on quality and customer satisfaction -new agreements on trade in services

6 key components of building brand equity

-company's presented brand -external brand communications -customer experience with the company -brand awareness -brand meaning -brand equity

The Servuction System

-conceptualizes the service business as a system that integrates marketing, operations, and customers Visible front stage and invisible backstage -service operations system (backstage): technical core; inputs are processed and service elements are created -service delivery system (front stage): final assembly of service elements takes place and service is delivered to customers

Ministores

-creating many small service factories to maximize geographic coverage (automated kiosk) -separating front and back stages of operation (not common) -purchasing space from another provider in complementary field

High Contact Services

-customer visits service facility and remain throughout service delivery -active contact between customers and service personnel -nursing home, hospital, flight

Most service products cannot be inventories

-customers may be turned away -using pricing, promotion, reservations to smooth demand; work with ops to manage capacity

Select target segments to serve

-determine customers the firm can best serve -identify and analyze possibilities for differentiation -decide on focus strategy -select benefits to emphasize customers -benefits must be meaningful to customers -benefits must not be well met by competitors

Distribution may take place through nonphysical channels

-electronic channels or voice telecommunications -create user friendly, secure websites and free access by telephone

Stage 3: Post Service Encounter

-evaluation of service performance -future intentions and behaviors

Price

-from the firm's perspective, pricing generates income and creates profits -from the customers perspective, pricing is key part of costs to obtain wanted benefits -marketers must recognize that customer costs involve more than price paid to seller - non-monetary costs

Advances in IT

-growth of the internet -wireless networking and technology -digitalizing of text graphics, audio, and video -cloud technology, user generated context, location based services -improved predictive analysis

Operational inputs and outputs tend to vary more widely

-hard to maintain quality, consistency, reliability -difficult to shield customers from failures -redesign for simplicity and failure proofing -institute good service recovery procedures

Intangible Elements

-harder to evaluate service and distinguish from competitors -emphasize physical cues, employ metaphors and vivid images in advertising

Process

-how a firm does things may be as important as what it does -customers often actively involved in processes, especially when acting as co-producers of service -operational inputs and outputs vary more widely -demand and capacity need to be balanced

Customers may be involved in co-production

-interaction between customer and provider; but poor task execution could affect satisfaction -develop user friendly equipment, facilities and systems; train customers, provide good support

People

-interactions between customers and contact personnel strongly influence customer perceptions of service quality -well managed firms devote special care to selecting, training, and motivating service employees -other customers can also affect satisfaction with a service

Low Contact Services

-little or no physical contact with service personnel -contact usually at arm's length through electronic or physical distribution channels -technology helps reduce contact levels (website, app) -online banking, insurance, cable/internet

Disadvantages of Franchising

-loss of control over delivery system; less customer service -effective quality control is important but difficult -conflict between franchisees may arise especially as they gain experience

Services are often difficult to visualize and understand

-mental intangibility: the difficulty in understanding the value and benefits of a service before purchasing it -physical intangibility: what cannot be touched or experienced

Globalization

-more companies operating on a transnational basis -increased international travel -international mergers and alliances -"offshoring" of customer service -foreign competitors invade domestic markets

Characteristics of services and marketing challenges

-most service products cannot be inventoried -intangible elements usually Dominate value creation (use tangible elements-physical cues and vivid imagery) -services are often difficult to visualize and understand -customers may be involved in co-production/people may be part of the service experience -operational inputs and outputs tend to vary more widely -time factor often assumes great importance -distribution may take place through nonphysical channels

Define and Analyze Market Segments

-needs-based segmentation followed by demographic, psychographic, and behavioral segmentation -identify attributes and service levels valued by each segment

Locational Constraints

-operational requirements (airports) -geographical factors (ski resorts) -need for economies of scale (hospitals)

Needs may be triggered by

-peoples unconscious minds (personal identity and aspirations) -physical conditions (hunger) -external sources (social media)

Tactical Location Considerations

-population size and characteristics -pedestrian and vehicular traffic -convenience of access -competitors in the area -availability of labor

Articulate desired position in the market

-positioning must address an attractive market -positioning must give a sustainable competitive advantage over competition

Determine services marketing strategy and action plan

-positioning strategy -7 Ps of services marketing -customer relationship management strategy -service quality and productive strategy

Strategies for firms to manage consumer perceptions of risk

-preview services through brochures, websites, videos -encourage visit to service facilities before purchase -free trial (taste test) -advertise benefits of service to customer -display credentials -use evidence management -give customer online access to information about order status -offer guarantees

Business Trends

-push to increase shareholder value -emphasis on productivity and cost savings -manufacturers add value through service and sell services -more strategic alliances and outsourcing -focus on quality and customer satisfaction -growth of franchising -marketing emphasis by nonprofits

Social Changes

-rising customer expectations -more affluence -more people short of time -increased desire for buying experiences vs. things -rising customer ownership of computers, cell phones, and high-tech equipment -ubiquitous social networks (easier access to more information) -immigration -growing but aging population

Market Research Factors

-scientific studies conducted in early development process with a clear idea of what type of information needs to be obtained

Organizational Factors

-strong interfunctional cooperation and coordination -employees understand importance of new products/services to firm

Market Synergy

-the new product fits well with the existing image of the firm -advantage vs. competition in meeting customers needs (the firm already has a good understanding of of its customers' purchase behavior) -strong support from firm during/after launch

How are services perishable?

-they cannot be stocked as inventoried for future use -if there is no demand, unused capacity is wasted and the firm loses the chance to create more value from these assets

Time factor often assumes great importance

-time is money; customers want service at convenient times -find ways to compete on speed of delivery; offer extended hours

Success hinges on

-understanding customers and competitors -viable business models -creation of value for customers and firm -increased focus on services marketing and management

Positioning

-unique place in the minds of customers -differentiation forms first step to creating new positioning

Distribution in a Service Context

-what is being distributed? -how should a service be distributed? -where should a service facility be located? -when should a service be delivered?

5 forces that are transforming service markets

1. Government policies 2. Social changes 3. Business trends 4. Advances in IT 5. Globalization

4 broad categories of services

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

5 dimensions used by customers in evaluating service quality

1. Tangible: appearance of physical facilities, equipment, personnel, and communication materials; are a hotels facilities attractive? 2. Reliable: ability to perform the promised service dependably and accurately; does my lawyer call me back when promised? 3. Responsiveness: willingness to help customers and provide prompt service; when there is a problem does the firm resolve it quickly? 4. Assurance: credibility, security, competence, courtesy 5. Empathy: easy access, good communications, customer understanding

4 Principles of Positioning Strategy

1. must establish position for firm or product in minds of target customers 2. position should provide one simple, consistent message 3. position must set firm/product apart from competitors 4. a company cannot be all things to all people; it must focus its efforts

6 Questions for Effective Positioning Strategy

1. what does our firm currently stand for in the minds of current and potential customers? 2 what types of customers do we serve now, and which ones would we like to target in the future? 3. what is value proposition for each of our current service products, and what market segments is each one targeted at? 4. how does each of our service products differ from competitors? 5. how well do customers in chosen target segments perceive our service products as meeting their needs? 6. what changes must we make to our offerings to strengthen our competitive position?

4 key questions for designing an effective service distribution strategy

1. what flows through the channel? 2. how should the service reach the customer? 3. where should the service be delivered? 4. when should the service be delivered?

______ of all franchising systems fail within the first 4 years, and _____ of all franchisors cease to exist after 12 years

1/3, 3/4

Services account for almost _______ of the GDP worldwide.

2/3

Estimated size of the service sector in the United States

79%

Service Profit Chain

A conceptual framework that shows how marketing, operations, HR and IT are integrated in high-performance service organizations. -customer loyalty drives profitability and growth -customer satisfaction drives customer loyalty -value drives customer satisfaction -quality and productivity drive value -employee loyalty drives service quality and productivity -employee satisfaction drives employee loyalty -internal quality as delivered by operations and ID drives employee satisfaction -top management leadership underlies the chain's success

The Flower of Service Model

A core product surrounded by cluster of supplementary services -information, consultation, order taking, hospitality, safekeeping, expectations, billing, payment (arranged by how likely a customer encounter is; most to least)

Enhancing Supplementary Services

Add extra value for the customer -consultation -hospitality -safekeeping -expectations

_____ service represents the minimum tolerable expectations, the bottom level of performance acceptable to the customer.

Adequate

The internet transferring power from suppliers to customers, especially in consumer markets is an example of which force transforming the service economy? (CH 1)

Advances in IT

Behavioral Control

Allows the customer to change the service situation by asking the firm to customize its typical offerings -asking employees to make special arrangements for a romantic candlelight dinner

Supplementary Services

Augment the product, both facilitating its use and enhancing its value -can play an important role in differentiating the core product from competing services

Mike is taking his wife to a fancy hotel for their 10-year anniversary. He wants to do something special for her, so he requests a room on a high floor and rose petals to be on the floor of their room when they arrive. By doing this he is exercising which type of control?

Behavioral

The Virgin Group utilizes which of the following branding strategies whereby the brand name is used in offerings in unrelated fields? (CH 4)

Branded house

Unfocused

Broad markets with wide range of services -many service providers fall into this category -danger of becoming a "jack of all trades and master of none" -public utilities and government agencies may be obligated to do this

Experience Attributes

Cannot be evaluated before purchase, must "experience" to know it; sporting event, hair cut

Jimmy is meeting a group of friends at a fancy restaurant to celebrate a friend getting a new job. He makes a reservation through the OpenTable app. He notes that they want a booth in the corner and would like drinks on the table when they arrive at 7 PM. He has prepaid for the drinks to ensure they are there. It is important that his experience at the restaurant match what he selected when making the reservation. This represents the importance of ______. (CH 5)

Channel integration

_____ qualities are characteristics of a product consumers may find impossible to evaluate even after purchase and consumption. (CH 2)

Credence

Service Expectations

Customers evaluate service quality by comparing what they expect against what they receive -expectations vary by business and industry -expectations change over time

How should a service be distributed?

Customers visit service site: -cost to firm vs. cost to customer, convenience of location Service provider goes to customers: -no other option (landscaping, pest control) -profitable niche (food delivery) Service transaction is conducted remotely: -technology facilitated (now more than ever)

When segmenting the market using _____ variables such as age or generation, it is important to recognize that the use of other segmentation variables will likely provide more meaningful segments. (CH 3)

Demographic

Physical Environment

Design servicespace and provide tangible evidence of service performances; manage the physical cues carefully: -buildings/landscaping -interior design/furnishings -vehicles/equipment -staff grooming/clothing -sounds and smells

Determinant Attributes

Determine buyers choices between competing alternatives: -way down the list of service characteristics that are most important to purchasers -customers see significant differences between competing alternatives on these attributes -quality of in-flight service, availability of frequent flier miles)

Understanding the pedestrian and vehicular traffic, competition in the area, availability of labor, and rental costs are just a few things to consider when

Determining where a service facility should be located

Which of the following is an example of a special request in advance of service delivery?

Dietary requirements

Which of the following is a supplementary service for a luxury hotel? (CH 4)

Different check in line for loyalty members of the hotel

Segmentation

Dividing population of possible customers into groups with common service-related characteristics -similar needs within same segment, different needs between segments

Definition of Services

Economic activities offered by one party to another -most commonly employ time-based performances to bring about desired results -in exchange for their money, time, and effort, service customers expect to obtain value from access to goods, labor, facilities, environments... and normally do not take ownership of the physical elements involved

Facilitating Supplementary Services

Either needed for service delivery, or help in the use of the core product: -information -order taking -billing -payment

Franchising

Expand delivery of effective service concept without a high level of monetary investments compared to rapid expansion of company-owned sites. -franchisor provides training, equipment and support marketing activities -Franchisees invest time and finance, and follow copy and media guidelines or franchisor Growth oriented firms LIKE franchising because the franchisees are motivated to ensure good customer service and high-quality service operations

Customer _____ are beliefs about service delivery that function as standards against which performance is judged

Expectations

Psychological Risk

Fears and negative emotions

Growth oriented service firms like ______ because it allows for motivated owners to provide good customer service and high-quality service operations. (CH 5)

Franchising

The following is an example of a highly regulated service market where it is difficult for international players to enter. (CH 5)

Healthcare

Susie is a wedding photographer in Auburn. Not only does she take pictures, but she treats her clients to lunch before the big day to really understand what they are looking for in terms of photos. By taking her clients to lunch, Susie is modeling ______, which provides additional value to her clients. (CH 4)

Hospitality

Social Risk

How others may think and react

To develop effective marketing strategies, marketers must understand how people make decisions about buying and using services, what the experience of service delivery and consumption is like for customers, and _____. (CH 2)

How they evaluate the experience

Credence Attributes

Impossible to evaluate confidently even after purchase and consumption; complex surgery, education, legal services

What is being distributed?

In a typical service sales cycle, distribution embraces 3 interrelated flows: 1. Information flow: the distribution of information and promotion materials related to the service offer (get the customer interested in buying the service) 2. Negotiation flow: reaching an agreement on the offer so that a purchase contract can be closed (sell the right to use a service; a reservation or a ticket) 3. Product flow: the development of networks or local sites

Which of the following categories of service typically involves intangible actions (banking, legal services)? (CH 1)

Information Processing

On a recent visit to The Home Depot store, a sales associate greeted Madison when she entered the store, helped her locate the items she needed to repair her gutters, and suggested how she could prevent gutter problems in the future. The assistance provided by the sales associate illustrates the _____ of services. (CH 1)

Intangibility

Fully Focused

Limited range of services to narrow and specific markets Opportunities: -developing recognized expertise in a well-defined niche may provide protection against would-be competitors -allows firms to charge premium prices Risks: -market may be too small to generate needed volume of business -demand for a service may be displaced by generic competition from alternative products -purchasers in chosen segment may be susceptible to economic downturn Example: -A hospital that only performs one surgery (hernia), on healthy patients (mostly men in the age range of 40-60)

Which type of service innovation is the rarest? (CH 4)

Major service innovations

Distribution of Core Services

Many core services require a physical location, which restricts distribution (a live broadway performance must take place in Manhattan) -online educational programs offered by Kahn Academy -the tent you bought online at REI will be delivered to your home

How does BTB drive economic development?

Many manufacturing firms outsource their non-core support activities to independent service providers. This leads to an increased specialization with significant improvements in overall productivity and standards.

Microsoft Azure's cloud computing is able to provide a wide range of services to a relatively narrow market segment. It has the capabilities to perform and deliver multiple services for those select customers that require them. This is an example of what focus strategy?

Market Focused

Microsoft Azure's cloud computing is able to provide a wide range of services to a relatively narrow market segment. It has the capabilities to perform and deliver multiple services for those select customers that require them. This is an example of what focus strategy? (CH 3)

Market Focused

A ____ is composed of a group of buyers who share common characteristics, needs, purchasing behavior, or consumption patterns. (CH 3)

Market Segment

The accounting firm KPMG has clients all around the world. It has recognized that customers have common needs across many countries and they want consistent service. KPMG is capitalizing on which driving force for international expansion?

Market drivers

A ____ is composed of a group of buyers who share common characteristics, needs, purchasing behavior, or consumption patterns.

Market segment

Bright Horizons strategy included which of the following? (CH 3)

Marketing services to employers instead of parents

Intangible Actions

Mental stimulus processing Information processing

Service firms have reservations systems because

Most service products cannot be inventoried

Which of the following is an example of distribution when a customer visits the service site? (CH 5)

Movie theatre

Service Focused

Narrow range of services to a fairly broad market -as new segments are added, firm needs to develop knowledge and skills in serving each segment (Starbucks, Chick-fil-a)

What are services?

Offering benefits without transfer of ownership -includes rental of goods -marketing tasks for services differ from those involved in selling goods and transferring ownership

Tangible Actions

People processing Possession processing

Adequate Service

Perceived service alterations + Situational factors -the minimum level of service customers will accept without being dissatisfied -important determinants of customer satisfaction

An attorney who charges a client for a missed appointment is taking into account the ____ characteristic of services. (CH 1)

Perishability

Desired Service

Personal needs + Belief about what is possible -"wished for" level of service -can also be influenced by what is promised by service providers, word of mouth, and past experiences -important determinants of customer satisfaction

Jimmy's car breaks down along the side of the road. This causes him to realize he needs to buy a new car. Which of the following stimuli triggered his need arousal? (CH 2)

Physical Condition

_____ provide a visual representation of competitive positioning for multiple businesses on key attributes.

Positioning Maps

The 7 Ps of services marketing

Product Price Place/Time Promotion Process Physical Environment People

Customers are attracted to _____ service distributions since they are often more convenient, can offer better prices, and are available 24/7.

Remote

Stage 2: Service Encounter

Request service from a chosen supplier or initiate self-service (payment may be upfront or billed later)

Developing an Effective Positioning Strategy

Segmentation, targeting, and positioning integrated with customer, competitor, and company analyses to give us a positioning statement. -Target Audience: specific groups of people that the brand wants to sell and serve -Frame of Reference: category the brand is competing in -Point of Difference: most compelling benefit offered by brand that stands out from competitors -Reason to Believe: proof that brand can deliver the benefits that are promised

The maintenance contract offered by Sears on its Kenmore refrigerators, dishwashers, and microwaves is an example of a _______.

Service

Chick-fil-a and Starbucks are examples of which focus strategy?

Service Focused

Theatrical Metaphor

Service delivery is a series of events that customers experience as a performance Service facilities: -stage on which the drama unfolds; may change from 1 act to another Personnel: -front stage personnel = members of a cast -back stage personnel = support production team Roles: -like actors, employees have roles to play and behave in specific ways Scripts: -specifies the sequences of behaviors for customers and employee

Place/Time

Service distribution can take place through physical and non-physical channels (some firms use electronic channels) -convenience of place and time become important determinants of effective service delivery

Pret a Manager, a London-based sandwich shop, introduced restaurant-quality sandwiches with fast-food speed. This would be an example of a

Service improvement

Product

Service products rather than physical products Value is key Service products consist of core and supplementary elements: -core products meet primary needs -supplementary elements are value-added enhancements

Information Processing

Services directed at intangible assets -information is the most intangible form of service output -may be transformed into enduring forms of service output -line between information processing and mental stimulus processing may be blurred

People Processing

Services directed at people's bodies Customer must: -physically enter the service factory -co-operate actively with the service operation Managers should think about the process and output from the customers perspective: -to identify benefits created and non-financial costs (time, mental/physical effort)

Mental Stimulus Processing

Services directed at peoples minds Ethical standards required when customers who depend on such services can potentially be manipulated by suppliers. -physical presence of recipients is not required -core content of services is information-based (can be inventoried)

Possession Processing

Services directed at physical possessions -customers are less involved compared to the people processing services -involvement may be limited to just dropping off the possession -production and consumption are separable -the focus is now on the item, not as much the person delivering the item

Challenges of distribution in large domestic markets

Special challenges in federal nations covering a large geographical area: -distances involved and the existence of multiple time zones -multiculturalism: leading to segmenting issues -differences between the laws and tax rates of various states or provinces and those of the respective federal government -different languages

The three-stage model of service consumption

Stage 1: Pre-purchase Stage 2: Service Encounter Stage 3: Post Service Encounter

Distribution of Supplementary Services

Supplementary services can be distributed widely and cost-effectively vie other means -Club Med customers can get information and consultation from a travel agent fact-to-face, online, by phone, or by email

Search Attributes

Tangible, can evaluate before purchase, help reduce risk

Delivery Process

The process used to deliver the core product and supplementary services -how the different service components are delivered to the customer -the customers role in this process -how long delivery lasts -the level and style of service to be offered

Strategic Location Considerations

To develop a location strategy, a firm should start by understanding customer needs and expectations, competitive activity, and the nature of the service operation -firms in competitive industries should make it easy for people to access frequently purchased servers (ATM, fast food) -customers may be willing to travel further to access specialty services -you have to achieve a balance between ease of access and convenience, and cost of providing the access and convenience

When should service be delivered?

Traditionally, schedules were restricted (service availability limited to daytime, 40-50 hours a week); today we can get 24/7 service around the world Key factors in determining the opening hours of a service facility: 1. customer needs and wants 2. the economics of opening hours

Functional Risk

Unsatisfactory performance outcomes

Core Product

What the customer is fundamentally buying; can be tangible or intangible

Market Focused

Wide range of services to a narrowly defined target segment -need to make sure firms have operational capability to do and deliver each of the different services selected -need to understand customer purchasing practices and preferences

Jamie desires a haircut that will look just as attractive when she awakens in the morning as it does when she is going out on a date. With the desired haircut, all she has to do to fix her hair is to shake her head. A haircut is adequate when it doesn't have any stray long hairs and it hides her cowlick. Jamie's recent haircut was in her _____ because while it didn't look grate all the time, a quick brushing was all that was needed to fix it. (CH 2)

Zone of tolerance

Branded House

a company that applies its brand name to multiple offerings in unrelated fields -the Virgin Group:travel, entertainment, lifestyle, financial services, healthcare, media and telecommunications -danger: the brand gets overstretched and weakened

Evoked Set

a set of possible services or brands that a customer may consider in the decision process; can be derived from past experiences or external sources

Supplementary Service Innovations

addition of new or improved facilitating or enhancing elements to an existing core service or significantly improving an existing supplementary service -Rainforest Cafe keeps customers entertained with aquariums, waterfalls, monkeys, talking trees -adding additional parking at a retail site or accepting payment via smartphone

Product-Line Extensions

additions to current product lines; new services may be targeted at existing customers to serve a broader variety of needs, or designed to attract new customers with different needs -a restaurant may offer a menu for dogs so that both the dogs and their owners can dine at the same restaurant

Satisfaction

attitude-like judgement following a service purchased or series of service interactions

Billing

bills should be clear, accurate, and intelligible; billing can be: -periodic statements of account activity -invoices for individual transactions -verbal statements of amount due -online or machine display of amount due for self-payment transactions -self billing: simplest approach; billing and payment are combined into a single act

Corporate Branding --> Individual Product Branding

branded house, sub-brands, endorsed brands, house of brands

Service Tiering

branding is used to differentiate core services as well as service levels (first class, business)

Targeting

choose one or more segments to focus on

The Components of a Service Product

core product supplementary services delivery processes

Competitor Analysis

current positioning strengths weaknesses

Company Analysis

current positioning and brand image resources limitations and constraints strengths weaknesses values

Developing a services marketing position strategy (3 Cs)

customer competitor company

Expectations

customers appreciate some flexibility when they make special requests and expect responsiveness when things don't go according to plan: -special requests: dietary requirements, medical needs -problem solving -handling of complaints/suggestions/complements -restitution: compensation for performance failures

Payment

customers may pay faster and more cheerfully if you make transactions simple and convenient for them; payment options include: -self service: insert card/cash into a machine, transfer funds electronically, mail a check, electronic payment -direct to payee or intermediary: cash handling/change giving, check handling, credit/debit card handling, coupon redemption -automatic deduction from financial deposits: automated systems, pre-arranged automatic deduction for bill payment through direct debit

Order Taking

customers need to know what is available and may want to secure commitment to delivery; the process should be fast and smooth; order-taking includes: -order entry -reservations or check ins (represent a special type of order taking that entitles customers to a specified unit of service) -applications

Information

customers often require information about how to obtain and use a product or service; mobile app, signs, front-line employees -direction to service site -price information -schedules/service hours -being able to track your package

Safekeeping

customers prefer not to worry about looking after the personal possessions that they bring with them to a service site: -child care/pet care -parking for vehicles/valet -coat rooms -baggage handling -storage space -security personnel

Hospitality

customers who invest time and effort in visiting a business and using its services deserve to be treated as guests -greeting -food and beverages -toilets and washrooms -waiting facilities and amenities -transportation -fullest hospitality expression is in fact-to-face encounters

Process-Line Extensions

distinctive new ways of delivering existing products; offer a different or more convenient experience for existing customers, or attract new customers who find the traditional approach unappealing -having self-service complement delivery by service employees or creating online or app based delivery service

Mediam Contact Services

dry cleaning, auto repair, computer/phone repair

House of Brands

each of the brands owned by the corporation is promoted under its own name -Yum! Brands Inc.;you probably haven't heard of it but you have heard of the restaurants it created: Taco Bell, KFC, Pizza Hut...

Cognitive Control

exercised when the customer understands why something is happening and knows what will happen next -the flight will be delayed because there is a technical problem with the aircraft

How customers evaluate services and what determines their satisfaction

expectancy-disconfirmation model of satisfaction performance expectations + perceived performance = confirmation/disconfirmation = satisfaction outcome

Behavioral Segmentation

focuses on observable behavior

Needs Based Segmentation

focuses on what customers truly want in a service

External Brand Communications

from word of mouth and publicity; out of the firm's control

Benefits of Positioning Maps

help to visualize strategy, predictions can be made of how positions may change in light of future developments, easily digestible, can stimulate "visual awakening" to threats and opportunities

Positive Disconfirmation

if performance is better than expected

Negative Disconfirmation

if performance perceptions are worse than expected

Confirmation

if same as expected

Three flors that address what is being distributed are

information and promotion flow, negotiation flow, product flow

Alternative to Franchising

license another supplier to act on the original suppliers behalf to deliver core products (trucking companies, banks selling insurance products)

Company's Presented Brand

mainly through advertising, service facilities and personnel

Factors favoring adoption of transnational strategies

market drivers competition drivers technology drivers cost drivers government drivers

7 New Service Categories

minor --> major changes -style changes -service improvements -supplementary service innovations -process line extensions -product line extensions -major process innovations -major service innovations

Service Improvements

modest changes in the performance of current products, including improvements to either the core products or existing supplementary services (most common type of innovation) -a hotel has a series of buttons where customers can choose their music from a choice of funk, garage, or rhythm and blues

Financial Risk

monetary loss, unexpected extra costs

Major Service Innovations

new core products for previously undefined markets; new service characteristics as well as radical new processes (pretty rare) -Amazon diversified into providing on-demand computing power

Demographic Segmentation

on its own will not result in meaningful segments

Amazon offers customers the opportunity to buy an item with 1-click. This is an example of

order-taking

The three additional Ps of services marketing that extend the original four Ps of marketing are_____.

physical environment, process, people

Zone of Tolerance

range within which customers are willing to accept variations in service delivery -the range of service within which customers don't pay explicit attention to service performance -important determinants of customer satisfaction

Predicted Service Level

service level that customer believes firm will actually deliver -can also be affected by service provider promises, word of mouth, and past experiences -directly affects how customers define "adequate service" -most important level for the consumer choice process

Brand Awareness

the ability to recognize and recall a brand when provided with a cue

Sub-brands

the corporate or the master brand is the main reference point, but each product has a distinctive name as well -FedEx: FedEx ground, FedEx express, FedEx home delivery...

Decisional Control

the customer can choose between two or more standardized options without changing wither option -choosing between 2 tables at a restaurant

Service Quality

the high standard of performance that consistently meets or exceeds customer expectations -customer satisfaction and service quality are determined by comparing customers expectations with their performance perceptions

Endorsed Brands

the product brand dominates, but the corporate name is still featured -Intercontinental Hotel Group is well known itself, but the hotels it has produced (Crowne Plaza Hotel, Hotel Indigo, Holiday Inn....) are also very well known -for a multi-brand strategy to work, each brand must promise a distinctive value proposition targeted at a different customer segment -strategy: encouraging customers to continue to buy from within the brand family (loyalty programs are often used to encourage this)

Brand Equity

the value premium that comes with a brand; the degree of marketing advantage that a brand has over its competitors -customer's actual experience with the brand is the post powerful when it comes to building brand equity

Sensory Risk

unwanted impact on any of the 5 senses

Psychographic Segmentation

useful for strengthening brand identity and creating emotional connection

Major Process Innovations

using new processes to deliver existing products with added benefits -using technology to transform online higher education

Consultation

value can be added to goods and services by offering advice and consultation tailored to each customers needs and situation -customized advice (subtle approach) -personal counseling -tutoring/training in service use -management or technical consulting

Style Changes

visible changes in service design or scripts (simplest type of innovation), no changes in process or performance -redesigning retail branches, websites, or uniforms

Temporal Risk

wasted time, delays leading to problems

Brand Meaning

what comes to the customers mind when a brand is mentioned

Customer experience with the company

what the customer goes through when they patronize the company

Moment of Truth

when the customer directly interacts with the service firm -skills, motivation and tools employed by the firm/employee to prove to the customer that they are the best alternative for them -good or bad experience for the customer?