Services Marketing Exam 1

Why is it important to manage the servicescape?

-Packaging the service (brand image) -Facilitates the delivery process -Enhances the experience -Differentiates service provider from the competition -Socializes customers and employees (tells you how to behave)

What are solutions for intangibility?

-Use tangible cues/physical evidence to help price (trying to make intangible more tangible) -Create a strong organizational image (creates trust, familiarity, and lowers perceived risk) -Utilize personal (family/friends) and non-personal information (reviews)

What are the 8 supersectors?

1. Education and Health services 2. Financial activities (finance/ insurance and real estate) 3. Government 4. Information 5. Leisure and Hospitality 6. Business and Professional services 7. Trade, Transport, and Utilities 8. Other services

Who are the 4 spokespeople for GEICO?

1. Gecko 2. Caveman 3. Googly-eyed Kash 4. Maxwell the pig

What are the 4 distinguishing characteristics of services?

1. Intangibility 2. Inseparability 3. Heterogeneity 4. Perishability

Using the Art of Pricing, what should a price do? (4)

A price should represent value to the customer, encourage customer retention (loyalty), reinforce customer trust (reduce customer uncertainty), and be easy for customer to understand

What are the three main transitions?

Agricultural economy to industrial economy to service economy

Who uses revenue management?

Airline companies, hotels, and car rental businesses

What are all the components of servicescape? (3)

Ambient conditions, space/function, and signs, symbols, and artifacts

What are the different types of physical fences?

Basic product, amenities, and service level

What is Ryanair's pricing strategy?

Budget pricing

How does American Airlines use revenue management?

By adjusting the prices as people purchase tickets

What services does IBM offer (GE offers these too)?

Consulting/offering services -Examples: Cloud services, application services, security services, salesforce consulting services

What are demand solutions for perishability?

Creative pricing (early-bird specials), reservation systems and complimentary services (coffee at repair shop)

Definition of services

Deeds, efforts, or performances

What is efficiency pricing?

Designed to appeal to economically-minded consumers (price conscious) by delivering the best and lowest priced service

What is customization? (heterogeneity)

Designed to meet each customers expectations but will be more expensive, have more room for error and take longer

What are demand strategies when it comes to perishability?

Developing non-peak demand, utilizing non-peak periods to prepare for peak periods, and meeting the needs of a market who has flexibility (college students, seniors)

What is Southwest's pricing strategy?

Efficiency pricing

What does "other services" include?

Equipment and machinery repair, religious activities, grant making, laundry services, personal care, death care, pet care, photofinishing, parking, and dating services

What is standardization? (Heterogeneity)

Faster, cheaper and more convenient

What are examples of space/function?

Furnishings, layout, equipment, etc. (how things are arranged in the environment and how it helps in the performance of service)

Tangible Dominant

Has physical evidence -Ex: salt, soft drinks

What trends do authors discuss in "Piling on the Fees"?

Imposing fees that have little to do with usage and adding/increasing fines and penalties

What does IBM stands for?

International Business Machines

What does GEICO stand for?

It stands for Government Employee Insurance Company

What is the molecular model?

It visually depicts the bundle of benefits the firm offers -This model is better than the scale of market entities

What does the 'Button Gourmet' by Mormedi do?

It's a vending machine that makes healthy food without employees

What is the servuction model?

It's composed of visible and invisible factors that influence the service experience for the customer. Focused on the customer

What is the Prudential Insurance symbol?

It's the rock of Gibraltar and it symbolizes stability and strength

What is intangibility?

Its the characteristic of services that makes them unable to be seen, felt, tasted, or touched in the same way as physical goods -The most important of the four characteristics -Ex: Shoes (heavy on tangible aspects) and movies (heavy on intangible aspect such as experience)

What jobs are being taken over by robots and computers?

Kiva Systems (Amazon), bartenders/baristas (Bionic Bar), chefs/cooks (Moley Robots), Soldiers and guards (Knightsscope)

Intangible dominant

Lacks physical evidence -Ex: consulting, teaching

What are some marketing problems involved in inseparability?

Mass production (service providers can only produce limited service) negative employees, other customers negatively impacting experience, the customer receiving the services experience (ex: scared person at the dentist)

What are marketing problems caused by perishability?

Matching supply and demand

Who are some of Allstate's spokespeople?

Mr. Mayhem and deep voice man (Dennis Haysheit)

What does NAICS stand for?

North American Industry Classification System

What are problems caused by intangibility?

Not easily displayed or communicated (because you can't touch them), hard to price (undervaluing can be bad)

Is there such thing as pure service?

Not really because even the most intangible dominant service has some tangible aspects

Definition of goods

Objects, devices, or things

What are the invisible components of the servuction model?

Organization and their systems (rules, regulations, processes) -Ex: how many forms you have to fill out a doctors

What are physical and nonphysical fences?

Physical fences are tangible product differences related to the price (seats at a concert) and nonphysical fences are the difference in consumption, transaction or buyer characteristics but the service is the same (economy seats are the same even if people paid a different price for it)

What are possible solutions for supply perishability?

Prepare in advance for expansion, utilize third parties, outsource, increase customer participation (self service)

What does price elastic and price inelastic mean?

Price elastic means there is a high response to change in price and price inelastic means there is a low response to a change in price (ex: life saving medicine people will buy regardless of the price)

What are the 8P's and what's the picture they're on?

Product, place, price, promotion, people, physical evidence, process, and productivity and the picture they're on is the Octuple scull

What is code 92?

Public administration (government)

What are some possible solutions for heterogeneity?

Replace humans with machines and offer the option of standardization or customization

What are three service pricing strategies?

Satisfaction-based pricing, relationship pricing, and efficiency pricing

What are possible solutions to inseparability?

Selecting and training employees, develop strategies to manage other customers (use reservations, put smokers in different section), and develop multi-site locations

What is proprioception? (Possible extra credit?)

Sense of space

What is chroniosception? (possible extra credit?)

Sense the passing of time

What is satisfaction based pricing?

Service guarantees, benefit driven pricing (customer charged for service actually used as opposed to overall fee), and flat-rate pricing (customers pay a fixed price, ex: gym)

What are examples of signs, symbols, and artifacts?

Signage, personal artifacts, decor, etc. (contributing to the image and helping customers find their way)

What is transfarency?

Southwest's philosophy in which customers are treated honestly and fairly and low fares actually stay stay low with no unexpected fees

What are marketing problems caused by heterogeneity?

Standardization and quality is difficult to control, different employees interact differently with customers,

What are examples of ambient conditions?

Temperature, air quality, noise, music, odor, etc. (All related to the 5 senses)

What is the service economy?

The "soft side" of the economy focused on people. Recently changed from 9 supersectors to 8 of the United States

What are the changes planned for the Atlanta airport?

The central passenger terminal complex, parking decks, hotel and travel plaza, air cargo, support facilities, and airside

Why is IBM's nickname "The Big Blue"?

The considered blue-chip stock and their employees wear dark blue suits

What is a product?

The core output produced by a firm and can either be a good or a service

What sector has the highest projected growth? The second highest?

The first highest is health and the second highest is professional and business services

What is the largest sector in employment industry? The second largest?

The first largest is health and the second largest is education services

What is Traveler's insurance's symbol?

The red umbrella

What are the different types of nonphysical fences?

Transaction characteristics, consumption characteristics, and buyer characteristics

What is the servuction model a framework for?

Understanding the customers experience

What are supply strategies for perishability?

Utilizing part-time employees (seasonal) and share capacity (surgeon share operation room where one works M/W and other works T/TH)

What are the components of the servuction model?

Visible, invisible, and other customers

What is marketing myopia?

When a business defines their offering too narrowly and forgets about service -Ex: Guido's Pizza where he makes amazing pizza but is mean

Does Southwest charge for upgraded boarding? Early bird check in?

Yes

What is inseparability?

a characteristic of services that reflects the interconnection between service providers, the customer receiving the service, and other customers sharing the service experience

What is perishability?

a characteristic of services where they can't be saved, their unused capacity can't be reserved, and they can't be inventoried

What is heterogeneity? (Also known as Variability)

a distinguishing characteristic of service that reflects the variation in consistency from one service transaction to the next

What is a critical incident?

a specific interaction between the customer and the service provider that's used for research purposes

What is servicescape?

all the nonliving features that comprise the service environment

What is the scale of market entities?

displays a range of products along a continuum of tangible and intangible dominant offerings

Does Southwest charge for change fees?

no

Does Southwest charge for the 1st and 2nd checked bag?

no

What are the visible components of the servuction model?

servicescape, contact personnel, service providers, and other customers

What is relationship pricing/strategies used?

the primary objective is to enhance firm's relationship with their targeted customers and build long term relationships by offering them price and nonprice incentives. Price bundling is used to market two or more service as a single package for a single price (ex: Delta vacations)