HM 442 final exam

Criteria for effective research program

*Includes both qualitative and quantitative research *Includes both expectations and perceptions of customers *Balances the cost of the research and the value of the information *Includes statistical validity when necessary *Measures priorities or importance of attributes *Occurs with appropriate frequency *Includes measures of loyalty, behavioral intentions, or actual behavior

2 Service Recoveries

-Fixing customer=more costly -Fixing problem=BETTER!!

The performance gap

-deficiencies in HR policies -failure to match supply and demand -customer no fulfilling goals -problem with service intermediaries (the link)

The communication gap

-lack of integrated services marketing communications -ineffective management of customer expectations -overpromising -inadequate horizontal communication -inappropriate pricing

Customer profit segmentation

-platinum (most profitable customers)(positive to our company and spends more) -gold -iron -lead (least profitable customers)(what segment costs is in time, effort and money but not profit)

The seven P's

-product -place -price -promotion -people -process -physical evidence

Service Marketing Research Process

1)Define the problem 2)Obtain data 3)Analyze Data 4)Recommend Solution 5)Apply results

Tangible VS. Intangible

1. Cannot be inventoried 2. Cannot be easily pattened 3. Cannot be displayed or communicated 4. Pricing is difficult

Standardized vs Heterogenous

1. Service delivery depend on employee and customer 2. Many uncontrollable factors 3. Does not always match promise

Perishable vs Nonperishable

1. Services cannot be retuned or resold 2. Difficult to synchronize supply and demand

five dimensions of service quality

1. reliability 2. assurance 3. tangibles 4. empathy 5. responsiveness

encounter types

1. remote encounter - booking through the internet - disney bundles 2. phone encounter 3. face to face encounter

Why is relationship marketing important?

It is cheaper to keep current customers than to acquire new ones.

Physical evidence

the environment in which the service is delivered

Tangibility Spectrum

Ability to grasp something example: cosmetics, find makeup that looks best on you

Strangers

Acquire customer's business

LEFT SIDE OF TRIANGLE

Company to Employees

RIGHT SIDE OF TRIANGLE

Company to customers

Outcome fairness

Compensation, equal compensation with others

Irate Complainer

Complain to friends, Negative WOM, unlikely to complain to third party

Voicer Complainer

Complains ONLY to provider. BEST

Quantitative Research

Describes the nature, attitudes, or behaviors of customers to test hypothesis that a service wants to examine

The Customer Gap

Difference between expected service and perceived service

Firm's benefits from relationship marketing

Economic benefits-lower costs, customers spend more HR benefits-assisting in service delivery, employee retention

Which of the following factors does NOT cause provider gap 3?

Efficient marketing research systems

Dimensions of E Service Quality

Effiency, Fulfillment, System Availability, Privacy

BOTTOM OF THE TRIANGLE

Employees to customers

Partners

Enhance relationship with customer

Types of Relationship bonds

Financial Social Customization Structural

FedEx developed a 12-item statistical Service Quality Indicator to measure customer satisfaction and service quality. The index is comprised of customer-defined performance standards such as number of missed pick-ups, number of lost packages, and number of late deliveries. Each of the performance standards is weighted based on the relative importance of each standard to customers. By developing a Service Quality Indicator that incorporates customer-defined performance standards, FedEx is closing provider ________ of the gaps model of service quality.

Gap 2

Home Design is a reasonably priced source for home decorating items like bronze bookends and silver candlesticks. Until its recent remodeling, customers who happened into the store were often disappointed because they expected the store to be a discount store. The front of the store had some masonry damage. Its parking lot needed repaving. Its store windows were stained and one was cracked. Now customers who enter the store expect to find unique decorating items because the outside of the store is so tastefully done. This change in servicescape was a way to narrow provider ________ of the gaps model of service quality.

Gap 2

The owner of a small but growing business, Terry Franklin was becoming overwhelmed with requests from his outside customer service representatives for decisions about solutions to customer problems. Noting the mountain of his own work that was piling up, he instituted a policy change and informed the representatives. "Keep the customers happy," he said. "If it's a problem that takes less than $100.00 to fix, there's no need to call me. Use your judgment and go ahead and fix it." Terry Franklin is using empowerment to narrow provider ________ of the gaps model of service quality.

Gap 3

The Oaks at Ojai is an award-winning destination spa in California. Two thirds of The Oaks' guests are repeat visitors who return to the spa for a fun and relaxing service experience unsurpassed by other spas. Just before heading home, each guest is asked to complete a questionnaire and provide feedback about his or her experience. Questions are specific and management meets weekly to review and discuss the improvements suggested by guests. Each guest who completed a questionnaire receives a letter of thanks with a promise to follow up on any issues mentioned. By conducting research and focusing on customer relationships, The Oaks is closing provider ________ of the gaps model of service quality.

Gap one

Bucket Theory of Marketing

In: New Customers, increased purchases by customers Out: Lost customers, decreased purchases by some customers

Service Failure

Is inevitable. It occurs when service performance that falls below a customer's expectations in such a way that leads to customer dissatisfaction.

Customization Bond

Loyalty Encouraged through intimate knowledge of customer

Service Guarantee

Pledge of our assurance that service will perform in certain way

Procedural Fairness

Policies, rules, time limit should be same

Interactional Fairness

Politeness, honesty to employees

Qualitative Research

Problem definition, more formal research, gaining insight when more formal research is not necessary. First type of research done

The 4 P's

Product Price Place Promotion

Market Based Enthography

Refers to an ethnographic focus on behavior of people constituting a market for a product or service. -look at cultures of consumers

Service Recovery

Refers to the actions taken by a firm in response to service failure

Hertz Car Rental has a customer loyalty program called Gold Plus Rewards that rewards members with one point per dollar spent on qualifying rentals. Free weekend rentals can be earned for as few as 500 points. By having a customer loyalty program, Hertz is using ________ marketing.

Relationship

Friends

Retain customer's business

Gap 2

STANDARDS GAP: the difference between the girms perceptions of customer expectations and the service standards its sets

Acquaintances

Satisfy customer needs

Social Bond

Seeks to build long term relationships through social bonds

Someone's birthday, zone of tolerance would...

Service expectations narrow

Ethnographic Research

Studies human behavior in its natural context, involves observation of behavior and physical setting

Least expensive types of Research

Surveys

Zone of Tolerance

The area between adequate service and desired service

Desired Service

The level of service the customer hopes to receive

Adequate Service

The level of service the customer is willing to accept

Which of the following would result in a broadening of provider gap 1?

The marketing research done by the motel chain includes insufficient research about what its target market wants

Relationship Marketing

The philosophy of doing business, focuses on retention and enhancement for current customers

Example of natural disaster that impacts zone of tolerance?

Tornadoes, Hurricane

American Customer Satisfaction Index (ACSI)

Tracks changes in customer satisfaction over time across the country

Service Recovery Paradox

When a customer who has experienced a service failure and exemplary service recovery is more likely to be MORE satisfied with the service provider

Less options-Zone of tolerance is...

Wide

Passive Complainer

Won't say anything

Customer Value

a prediction of the net profit attributed to the entire future relationship with a customer

market oriented ethnology

a set of approaches (interviews, observations) to fully understand how customers assess and use services

Service Blueprint

a tool for simultaneously depicting the service process, the points of customer contact and the evidence of service from the customers POV.

reliability

ability to performed promised service dependably and accurately

Activist Complainer

above average propensity to complain on all levels, in extreme cases can become "terrorists"

People

all human actors who play a part in service delivery

Trailer calls or post transaction surveys

ask customers a short list of questions immediately after a transaction

Lost Customer Research

asking customers who have previously left a service company reasons for leaving

empathy

caring, individualized attention in the firm provides its customers

Service quality

customer's judgement of overall excellence of the service provided in relation to the quality expected

Avoidance

desire not to stay, explore, work and affiliate with

socializer

facilitates interaction between -- customers and employees customers and fellow customers

facilitator

facilitates the flow of service delivery process

boundary spanner

front line service employees called that because they operate they organization boundary

employee empowerment

giving employees responsibility and authority to make decisions regarding all aspects of product development or customer service

Customer panels

groups of customers are assembled to provide attitudes and perceptions about a service over time

Complaint Solicitations

identify dissatisfied customers, correct individual problems, identify common service failure points

assurance

knowledge of employees/ ability to inspire create trust and confidence

Emotional Labor

labor that goes beyond the physical or mental skills needed to deliver quality service

Financial Bond

lower price for greater value, tied to firm for incentives

organization/client conflict

more common type of conflict for frontline employees is conflict between their two bosses the organization and the individual customer

mystery shopping

outside researchers are sent into service establishments , experience the service as a customer and report on the service provided

tangibles

physical facilities, equipment, and appearance of personnel

Factors of customer satisfaction

product quality, service quality, and price

Critical Incident studies

qualitative interview procedure, ask customers to provide examples about satisfying and dissatisfying service encounters

SERVQUAL survey

quantitative research technique used to gauge how the relationship is with a customer based on 5 dimensions

differentiator

sets provider apart from competition in the mind of the consumer

Person/role conflict

service workers may feel role conflict when they are required to subordinate their feelings or beliefs as when they are asked to live by the motto "the customer is always right even when he is wrong"

interclient conflict

sometimes conflict occurs for boundary spanners when incompatible expectations and requirements arise from two or more customers

Structural Bond

technology based and makes customer more productive

One time fixes

technology, policy or procedure changes that, when instituted address customer requirements

service encounter

the "moment of truth" - occurs anytime the customer interacts with the firm

Process

the actual procedures, mechanisms, and activities used for product delivery

Clue Management

the process of clearly identifying and managing all the various clues that customers use to form their impressions and feelings about the companys

Hard service standards

things that can be counted, timed or observed through audits

Soft service standards

things that cant be counted, timed or observed through audits but still important things, often associated with the interpersonal skills or attitude of the service provider

Spatial layout

ways in which machinery, equipment and furnishings are arranged: size and shape of those items; and spatial relationships amoung them

responsiveness

willingness to help customers and provide prompt service