MKTG 351 CH 13 QUIZ

intangibility

SINCE A SERVICE IS NOT PHYSICAL: it cannot be touched, it cannot be physically possessed, customers have a harder time evaluating the quality of services; THIS POSES A MARKETING CHALLENGE: how can you promote intangible? do you think it is harder to sell tangible product or an intangible one? can there be any advantages of selling intangible products?

perishability

Unused service capacity from one time period cannot be stored for future use; example: empty seats in a movie theater today cannot be stored and sold to customers at a later date; some goods are perishable, but most goods are less perishable than services; there is a problem balancing supply and demand; service providers can plan for demand fluctuations in some cases

homesourcing

a practice whereby customer contact jobs are outsourced into workers' homes

service

an intangible product that involves a deed, a performance, or an effort that cannot be physically possessed; not the same as customer service; some service jobs are filled using "homesourcing"

pricing of services

based on performing specific tasks; based on time spent on the task; demand-based (low price when expected or actual demand i slower, higher price when expected or actual demand is higher); some services are time sensitive, meaning that a significant number of customers desire the service around the same time (peak demand and higher prices); customers can receive better deals during non-peak times; because of the intangible nature of services, customers sometimes rely heavily on price as an indicator of quality

empathy

caring and individual attention provided by employees; make sure customer contact personnel are trained in good customer relations practices (this may take leadership); listening to customer concerns and needs; caring about customer's concerns; providing personal attention

reliability

consistency and dependability in performing the service; evaluation criteria include accuracy of billing or recordkeeping; errors send signals with poor leadership, raises the question, "can I trust this company?"; performing services when promised; this is the most important factor in determining customer evaluations of service quality; how does a customer judge reliability? since dimensions like reliability cannot be examined with the senses, customers must rely on other ways of judging it

internal communication

coordinate among various departments so one department will not make promises other departments don't know about

service quality

customers' perceptions of how well a service meets or exceeds their expectations; because of their characteristics, services are very difficult to evaluate in advance of purchase (and sometimes after purchase); consumers are twice as likely to tell other people about a bad customer service experience than a good one; more than half of the people in one survey admitted to losing their temper with customer service personnel; customers, not the organization, evaluate service quality- a critical distinction because it forces service marketers to examine quality from the customer's viewpoint; you need to determine what customers expect and the develop services that meet or exceed those expectations; the biggest obstacle for customers in evaluating service quality is the intangible nature of the service; evaluation of a good is much easier because goods possess search qualities; services have very few search qualities; they have experience qualities and may have credence qualities

advantages of heterogeneity:

customize service to match customer needs

client publics

direct consumers of a product of a nonprofit organization

management of service expectations

expectations play a major role in customer evaluation of service; set realistic service expectations (do not over promise); you can set expectations through advertising and internal communication

promotion-related challenges caused by intangibility

explaining a service to customers can be difficult without showing a picture of the service; frequently uses tangible cues that symbolize the service (show pictures of facilities, equipment, service personnel; personal selling can help the customer visualize the benefits (the experience); because of heterogeneity and intangibility, word-of-mouth communication is particularly important in service promotion

development of services

heterogeneity causes variation in service quality and makes it hard to standardize services; intangibility makes it hard for customers to evaluate quality before purchase; service providers must market promises to customers; the customer must place trust i the service provider; tangible cues (well-groomed personnel, attractive physical facilities, etc.); example: printing promotional material on premium paper

customer contact

high contact services (health care, grooming, etc.); low contact services (auto repair, dry cleaning, travel reservations, etc.); high contact services usually involve actions directed at people who must be present during production; the process of production may be just as important as the final outcome; the physical appearance of the facility may be a major component of the customer's overall evaluation of the service; employees of high-contact service providers are very important in creating satisfied customers; satisfied employees lead to satisfied customers; employee satisfaction is one of the most important factors in providing high service quality

analysis of customer expectations

how can you understand customer expectations? marketing research such as questionnaires and focus groups, comments from customers (customer reviews), open communications with customer-contact personnel to get their input, desired level (very satisfied), zone of tolerance (somewhat satisfied), acceptable level (barely satisfied), below acceptable level (not satisfied)

how is nonprofit marketing different?

in theory, the only beneficiaries of a nonprofit organization are its clients, its members, or the public at large; nonprofits have greater opportunities for creativity than most for profits, but it's harder to judge the performance of the employees/volunteers; some nonprofits an be controversial (political parties, political action committees, groups advocating or opposing controversial causes); the basic aim of nonprofits is to obtain a desired response from a target market

general publics

indirect consumers of a product of a nonprofit organization

characteristics of services

intangibility, inseparability of production and consumption, perishability, heterogeneity, client-based relationships, close customer contact

assurance

knowledge/competence of employees and ability to convey trust and confidence

developing nonprofit marketing strategy

nonprofits may attempt to serve many diverse groups

products

normally ideas and services

employee performance

once you have set the goals or standards, you have to make sure employees perform their jobs well; some customer contact personnel are are often the least-trained and lowest-paid employees (they are the key link with customers); make sure they are satisfied with their jobs; unhappy employees hurt customer relations; train them effectively; provide information about service specifications (let them know what's expected); evaluation and compensation also play parts in employee performance

service quality specifications

once you understand customer expectations, you can establish goals or service specifications; typically set in terms of employee performance and tied to customer expectations; most important aspects: all managers must be committed to service quality, especially frontline managers who are in direct customer contact

one of the most important factors in customer judgements of service quality is service expectations. these are influence by:

past experiences with the service, word-of-mouth from other customers, and the service company's own advertising

social marketing

promotes social causes

experience qualities

qualities that can be assessed during or after the consumption of a service

search qualities

qualities that can be evaluated prior to purchase

credence qualities

qualities that the customer be unable to evaluate even after using the service

distribution

relates to how ideas and services will be made available to clients. intermediaries are generally not available, so direct channels are the norm

service marketers must understand how consumers judge

service quality

heterogeneity (variation)

services provided by people are subject to variation in quality; quality control is usually much easier with goods; because of the human element, service providers have a hard time maintaining consistent quality of service delivery; training and establishing standard procedures can help; variation usually increases as the amount of human labor increases; equipment-based serves have less variation

distribution of services

sometimes customers go to the service provider's facility (health care, spa services, etc.); in other cases the service provider may go to the customer's home (lawn care, etc.); some services are delivered at "arms length"- no face to face contact; channels are usually short, with no intermediaries (exceptions: travel agents, online personal shopping); inventory management is very important

tangibles

the physical evidence of the service; may be the only aspects of service that can be viewed before purchase and consumption; appearance of the physical facilities; appearance of the service personnel; tools or equipment used to provide the service

client-based relationships

the success of many services depends on creating and maintaining client-based relationships; interactions that produce satisfied customers; the customers use the service repeatedly over time; word of mouth is a key factor in maintaining client-based relationships; the service provider must take steps to build trust and make sure the customers are satisfied, so they become very loyal and unlikely to switch to competitors

non profit organization marketing

the use of marketing techniques by organizations whose goal do not include making profits; these organizations try to achieve some goal other than ordinary business goals

inseparability of production and consumption

this happens when the production of a service cannot be separated from its consumption by customers; airline flights are produced and consumed simultaneously; many times customers must be present at the production of a service (hair cut); both the service provider and the customers may have to work together to provide the service's full value; customers may not only want a specific type of service but expect it to be provided in a specific way by a specific individual

promotion

this may be the first sign that nonprofits are using marketing; nonprofits use advertising, public relations, publicity, internet, and personal selling

service organizations must:

train employees adequately, empower employees to make decisions, and reward employees for customer-oriented behavior

price

user markets (fixed or variable fees); donor markets (any donation = variable fees); opportunity cost (when organizations ask you to spend time)

growth and importance of services

usually provided through the application of human and/or mechanical efforts that are directed at people or objects; education involves the efforts of service providers that are directed at people (students); interior decorating services direct their efforts at objects; services can involve the use of mechanical efforts directed at people or objects; many services include both human and mechanical efforts; services as products are not the same as customer service which adds value; services dominate advanced economies; over half of the new business in the U.S. are service businesses, and this trend is expected to increase; long-term economic growth and lifestyle changes have encouraged service sector growth; business services have grown as the business environment becomes more complex.

target market

we need to slightly modify the idea of a target market for nonprofit

responsiveness

willingness or readiness of employees to provide the service; returning customer phone calls/emails; handling urgent requests

advertising

you are forced to make promises because you cannot show pictures of the benefits; promising more than you can deliver will lead to disappointed customers