MARK 3000 chapter 13

understanding customer expectations (knowledge gap)

managers must understand what customers want to close the knowledge gap, firms undertake customer research and increase interaction between managers and employees, expectations are based on knowledge and experience and vary based on type of service and situation, understand customer expectations with well established marketing metrics

heterogeneous

(different from time to time) this is the variability in the service's quality, which can be increased with the number of humans needed to provide the service (inferior services cannot be recalled) but this may be used for the marketers advantage (customization to meet user needs) but the negatives of this problem can be overcome by using machines (technology/automation) instead of people or giving service providers guidance through scripts and training

the delivery gap

(employees do not perform correctly) the difference between the firms service standards and the actual service it provides to customers, this gap can be closed by getting employees to meet or exceed service standards when service is being delivered by empowering service providers, providing support and incentives, and using technology where appropriate (hire well, train well, monitor, and reward)

service product continuum

a continuum that includes everything in between pure service to pure good, most offerings lie in the middle (even a firm primarily engaged in selling a good offer certain services to maintain a sustainable competitive advantage)

processes

activities which lead up to and are part of the services, crucial because it ensures that the same standard of service is repeatedly delivered to the customers, must be clearly defined and efficient to avoid confusion and promote a consistent service

service

any intangible offering that involves a deed, performance, or effort that cannot be physically possessed, businesses can offer this solely or in addition to a good, this offering has become more prominent recently (it's cheaper to manufacture goods in less developed countries and people value their leisure time so are willing to pay for this)

marketing of services

basic marketing mix (4 p's) is expanded (strategies/applications differ in each of the 4 p's as compared to goods) to include processes, people, and physical evidence and original 4 p's are altered

listening to the customers and involving them in the service recovery

customer must air the complaint completely (firm listens) which makes customer feel better and firm must be ready to rectify the situation to ensure it doesn't happen again, co-creation rectifies negative feelings of customers

service quality

customers perceptions of how well a service meets or exceeds their expectations, often difficult for customers to evaluate, customers generally use five distinct service dimensions to determine this: reliability, responsiveness, assurance, empathy, and tangibles

finding a fair solution

customers want to be treated fairly: whether that means distributive or procedural fairness, perception of fair is based on consumers previous experience with other firm, how they have seen other customers treated, material they have read, and stories recounted by peers

service gaps model

designed to encourage the systematic examination of all aspects of the service delivery process and prescribes the steps needed to develop an optimal service strategy, includes the: knowledge gap, standards gap, delivery gap, and communication gap

promotion (service)

due to easy replication of services, this is crucial in differentiating a service offering in the mind of the consumer, firms offering identical services invest in advertising, this should focus on making the service seem tangible and should emphasize the core aspects of the service, marketers should use a logo that reflects the service (imagery)

servicescape

emphasizes the impact of the physical environment in which a service process takes place, customers perceive the quality of the service based on the environment in which the service process takes place

customer service

human or mechanical activities firms undertake to help satisfy their customers needs and wants which adds value to their products

voice of customer (VOC) program

marketing research provides a means to better understand consumers service expectations and their perceptions of service quality (research can be extensive/expensive or it can be integrated into a firms everyday interactions with customers), this assesses how well firms are meeting customer expectations by collecting customer inputs and integrating those inputs into managerial decisions

price (service)

more difficult to set with products because it isn't easy to define the inputs of a service, also difficult to justify to customers because of intangibility, marketers can use prices to adjust demand of a service

distributive fairness

pertains to a customer's perception of the benefits received compared with the costs (inconvenience or loss), customers want to be compensated a fair amount for a perceived loss that resulted from a service failure, key is listening to customer (customers want tangible restitution)

the standards gap

pertains to the difference between the firms perception of customers expectations and the service standards (specifies service) it sets, by setting appropriate service standards (establish policies and performance standards), training employees to meet and exceed those standards, and measuring service performance, firms can attempt to close this gap, the firms standards must be based on what the customer wants/needs

product

physical goods, ideas, or services

the communication gap

refers to the difference between the actual service provided to customers and the service that the firms promotion program promises (commercials and comments from sales people), firms must be realistic about their services and reflect actual services provided, also must manage customer expectations

procedural fairness

refers to the perceived fairness of the process used to resolve complaints, customers want efficient complaint procedures over whose outcomes they have some influence (want employees to follow specific guidelines)

the knowledge gap

reflects the difference between customers expectations for service quality and the firms/managements perception of those customer expectations, firms close this gap by determining what customers really want/need by doing research using marketing metrics such as service quality and the zone of tolerance and also firms shouldn't just assume customers are happy

service gap

results when delivery of an actual service doesn't match the customers expectations about service quality or how a service should be delivered, explained by the service gaps model

place (service)

service delivery is concurrent with its production (inseparable) and cannot be stored or transported, the location of the service product assumes importance, generally there are no intermediaries in the delivery of service so convenience is an important consideration for this in terms of the customer

inseparable production and consumption

services are produced and consumed at the same time, sometimes customers participate in the service process, interaction with the service provider may have an important impact on the customers perception of the service outcome, customers cannot try the service before they purchase it (cannot inspect for defects) and cannot return a service after it has been performed (so marketers can increase confidence and lower risk of customer by offering warranties or guarantees)

perishable

services cannot be stored for use in the future which provides challenges and opportunities to marketers in terms of the critical task of matching demand and supply and if not matched correctly then revenues are lost

reliability

the ability to perform the service dependably and accurately (service performed correctly)

tangibles

the appearance of physical facilities, equipment, personnel, and communication materials (service was performed in a nice environment)

empathy

the caring, individualized attention provided to customers (service was performed with caring attitude)

people

the employees that execute the service (concerning the manner in which they do) and the customers (service is inseparable for people delivering it so it is crucial)

assurance

the knowledge of and courtesy by employees and their ability to convey trust and confidence (service was performed like the employee knew what they were doing)

resolving problems quickly

the longer it takes to resolve a service failure, the more irritated the customer will become and the more people they will tell about the problem, firms need clear policies, adequate training for their employees, and empowered employees

intangible

the most fundamental difference between a product and a service, services cannot be touched, tasted, or seen like a pure product can which proves highly challenging to marketers because it makes it difficult to convey the benefits of the service, so service providers offer cues to help customers experience and perceive their service more positively and make the experience more tangible: creatively employ symbols and images (reinforce benefit/value of service) and use atmospherics

physical evidence

the tangible part of the service (the "servicescape") most service providers strive to incorporate certain tangible elements into their offering to enhance customer experience, where the service is being delivered from, marketers can use this to charge a premium price for a service and establish a positive experience

responsiveness

the willingness to help customers and provide prompt service (service was performed on time)

services marketing differs from product marketing

there are four fundamental differences between the two: intangible, inseparable, heterogeneous, and perishable

product (service)

this is intangible, heterogeneous, inseparable, and perishable, it may be customizable, marketers must emphasize the service process and build brand image

service recovery

when firms fail to meet customer expectations, so firm must make amends with customer and learn from mistake (demonstrate customer commitment) this can increase customer satisfaction, purchase intentions, and positive word of mouth, to be effective this must demand: listening to customers and involving them in this, finding a fair solution, and resolving the problem quickly