Marketing Chapter 13 video
Homesourcing
- A practice whereby customer contact jobs are outsourced into workers' homes
Supplementary service
- Supports the core service used to differentiate the service bundle from those of competitors
search qualities
- Tangible attributes that can be judged before the purchase of a product
core service
- The basic service experience or commodity that a customer expects to receive
Opportunity cost
- The value of the benefit given up by choosing one alternative over another
Dimensions of Service Qualities Tangibles
-Look good, clean, neat, appropriate
Service Quality Model Analysis of customer expectations
-Marketing research -Open communication with emplyees
Management of service expectations
-Service companies must set realistic expectations about the services they provide and deliver on promises made -Advertising -Good internal communication -Word-of-mouth communication from other customers shapes expectations -Because service companies cannot manage this "advertising" directly, the best way to ensure positive word-of-mouth communication is to provide exceptional service quality -Advertising -Good internal communications
Empathy
Act like you care Important in a setting like healthcare.
Thought Question: Many services cannot be "sampled" first. How can a marketer offer a "sample" of a hotel room in advance or a haircut?
For hotel: offer a virtual room or a virtual hotel tour. Haircut: maybe an app to try out different hairstyles
Assurance
Giving customers the feeling that you, as a service provider, know what you're talking about. Critical in service like healthcare.
Heifer International Video
It is primarily aimed at target publics with maybe a secondary target of the general public.
Developing nonprofit market strategies
Nonprofit organizations develop marketing strategies by defining and analyzing a target market and creating and maintaining a total marketing mix that appeals to that market Target Markets -Target public: interested parties (support) -Client publics: direct consumers of the product -General public: indirect consumers
Which dimension is the most important overall?
Research tells us that reliability is the one that customers say is the most important, because after all that's what youre purchasing with the service, youre buying something that you get the same every single time, you want to be reliable every single time. Tangibles are also important. And some of the others can be the most important in different areas.
Video 2 Service vs. Service Excellence
Service is the product with an intangible core Service excellence is how well the whole service product bundle is provided -Including customer service activities
Thought Question: Are students a product or a customer?
Students as a product: -who is the buyer? What are they purchasing? -How can you make yourself as a product more tangible to buyers? -How can you give them a sample? internship -How can you address heterogeneity? if you market yourself well to stand out. -How can you address inseparability? -How can you address perishability?
Inseparability: Dental Care video
The advertisement addresses the concern of it being inseparable. The child must be there and the child may not like it.
Service quality Expectations
What do you expect when you go to a fast food restaurant?- expect food to be hot and fast, the store to be clean and the employees to be prompt and polite. What do you expect when you go to a fancy restaurant? - expect it to be clean but also to look classy. Prob expect food to be hot too not necessarily fast but also very high quality. Servers to be attentive and to answer questions knowledgeably about the menu.
Bob Farrell: Give 'em the Pickle
What pickles have you gotten or given? The theme of personalization is seen
Nonprofit Marketing
marketing activities conducted to achieve some goal other than ordinary business goals such as profit, market share or return on investment. -Is divided into two categories: -Nonprofit-organization marketing -The use of marketing concepts and techniques by organizations whose goals do not include making profits -Social marketing Promotes social causes
experience qualities
- Attributes that can be assessed only during purchase and consumption of a service
Credence qualities
- Attributes that customers may be unable to evaluate even after purchasing and consuming a service
Off-peak pricing
- The practice of reducing prices of services used during slow periods in order to boost demand In cases where customers tend to purchase services in a bundle, marketers must decide whether to offer the services at one price, price them separately, or use a combination of the two methods
Inseparability of production and Consumption
- The quality of being produced and consumed at the same time -Production of a service cannot be separated from its consumption by customers. -Customers must be present at the consumption of the service and cannot take it with them. -Customers affect the outcome -Cannot "sample"- Like you can try a haircut before you get it.
Video 3 Service Quality
-A customer's perception of how well a service meets or exceeds their expectations. -Customers evaluate service quality -It is important for service organizations to determine what customers expect and then develop service products that meet or exceed those expectations
Development of services
-A service offered by an organization is generally a package, or bundle, of services consisting of a core service and one or more supplementary services -Heterogeneity allows for service marketers to customize their services to match the specific needs of individual customers, which creates a competitive advantage
Four factors that affect service quality
-Analysis of customer expectations -Service quality specifications -Employee performance -Management of service expectations
Employee performance
-Customer-contact employees in most service industries are often the least-trained and lowest-paid members of the organization -There is a direct relationship between the satisfaction of a company's contact employees, which is manifested in a positive attitude and a good work ethic, and the satisfaction of its customers -Employee and customer satisfaction levels also have a direct relationship with customer retention and loyalty -Employee training -Evaluation and compensation systems
Giving Great Service
-Differentiates your business -Solidifies customer relationships -Can compete on value rather than price -is more profitable
Responsiveness
-Don't make me wait! -What if it can't be helped? -have things to do while you wait, have little things to give to people.
Reliability
-Get it right every time -consistency -Ex: her husband going through the drive thru at the bank and deposited a check. He checked the receipt after deposit and it said that they had 1.4 million dollars in that account. The lady had typed in the account number instead of the deposit. You want to be able to rely on your bank.
Client-Based relationships
-Interactions resulting in satisfied customers who use a service repeatedly -Build trust -Demonstrate customer commitment -Satisfy customers Ex: having a finance advisor
Distribution of Services
-Marketers deliver services in various ways -Customers go to the service provider's facility -Services may be provided at the customer's home or business -Services may be delivered at "arm's length," meaning no face-to-face contact occurs between the customer and service provider -Marketing channels for services usually are short and direct -Some services use intermediaries -Inventory management, especially balancing supply and demand for services, is a serious concern for service marketers -To make delivery more accessible to customers and increase the supply of a service, as well as reduce labor costs, some service providers have replaced some contact personnel with equipment -In other words, they have changed a high-contact service into a low-contact one
Service quality specifications
-Once an organization understands its customers' needs, it must establish goals to help ensure good service delivery -These goals, or service specifications, are typically set in terms of employee or machine performance -The most critical aspect of service quality specifications is managers' commitment to service quality -Service managers who are committed to quality become role models for all employees in the organization -Service goals -Management commitment to service quality
Another way to think about excellent service is what do you do for your customers that they cant get elsewhere?
-Provide specific customer service activities that are not being provided elsewhere, and to do them well, like in the ways the Disney speaker mentioned. Ex: when she lived in Utah and her local Wendy's store. There were huge lines at lunchtime. The drive through lane would be packed with cars lined up out into the street. The dine in service was also full. She met the owner of that wendy's and asked what was up, he said that he had built the same type of experience mentality that the Disney's people were talking about, by providing extra customer service activities and fostering this mentality in his employees that was experience-based and not task-based.
Promotion of services
-The intangibility of services results in several promotion-related challenges to service marketers -Promotion of services typically includes tangible cues that symbolize the service -Compared with goods marketers, service providers are more likely to promote: Price, guarantees, performance documentation, availability, and training and certification of personnel. -Personal selling can help customers visualize the benefits of a given service -Word-of-mouth communication is important in service promotion
Customer contact
-The level of interaction between provider and customer needed to deliver the service. - Customer contact can range from low like in auto repair or dry cleaning where you drop off something to be addressed, up to high levels of customer contact, as in the case of spa services where you must be physically there the whole time. -Employee satisfaction is one of the most important factors in providing high service quality to customers -Service organizations must take steps to understand and meet the needs of employees by: -Training them adequately -Empowering them to make decisions -Rewarding them for customer-oriented behavior
Perishability
-Unused service capacity cannot be stored for future use. -must balance supply and demand. Ex: Airlines, once plane takes off with an empty seat there is no way to sell that seat on that flight again. Ex 2: Delta video, making private jets for people to take.
Heterogenity
-Variations in quality -Human behavior leads to inconsistent quality Many service firms automate to reduce inconsistency But: less personal -Ex: Bad haircut video, Marketers can communicate to customers that are licensed, or have a certain level of training that can provide the assurances that they can actually perform the service being asked.
Service Recovery
-be prepared to do the job right the first time -Be prepared to do it more than right the second time -the second essential component of service.
Firms to know: The ritz Carlton
-known for extreme attention to detail -A two time winner of the Malcolm Baldridge National Quality Award. -Sets the standard for service in its industry -Keys to success are planning and constant evaluation.
Outcomes of Dissatisfaction
1. Customer complains and is satisfied with recovery 2. Customer complains and is not satisfied with recovery 3. Customer does not complain, remains dissatisfied. This one happens the most
Principles of Recovery
1. Never argue with a customer- you may win! 2. Make it easy to complain 3. Resolve at the point of contact, not later 4. Resolve quickly 5. Find a fair solution 6. Repair the system
Developing Marketing Mixes
A marketing strategy should include a blueprint for making decisions about product, distribution, promotion, and price Organizations must define what they are providing Nonprofit organizations usually deal with ideas and concepts, which require more effort to present benefits than the marketing of tangibles Distribution decisions in nonprofit organizations relate to how ideas and services will be made available to clients In a nonprofit setting, marketers may need to revise the traditional concept of the marketing channel Nonprofits use advertising and publicity to communicate with clients and the public Nonprofit organizations must determine pricing in user and donor markets May have fixed fees for users Variable fees change depending on the user's ability to pay
Service
An intangible product that involves a deed, a performance, or an effort that cannot be physically possessed. Not to be confused with customer service.
Zone of tolerance
Customers usually have two levels of expectations: Desired What the customer really wants Acceptable What the customer views as adequate The zone of tolerance is the differences btw the 2 levels.
Keys to Recovery
Empower the employee -hampton inn refunds 1% of total room revenue -for every dollar refunded, it gets back 7 in business -Ritz Carlton authorizes 2,000 per day. Don't Assume customers scam -Est. 1%-3% do Don't overdo -Save big responses for big problems -Don't make customer uncomfortable -Dollar Rent a Car asks customers what they think is fair
But...
Giving great service doesnt mean being upscale, exclusive, or expensive. See that these Service companies is the personal nature of the way services are provided. The personalization makes people feel special and connected to the brand and builds the strongest level of loyalty.
Services as Products
Lifestyle changes have encouraged service expansion. Business services have also grown.
Pricing of Services
Pricing should consider: -Consumer price sensitivity -The nature of the transaction -Its costs Prices can be based on the: -Performance of specific tasks -Time spent on the task -Level of demand Demand-based pricing -When demand for a service is high, the price is also high -When demand for a service is low, so is the price
Mr. Stallard video about what great service means at Sewell
Sewell differentiates itself based on excellent customer service. It has done that so well that even in times of economic recession, when you would expect luxury car sales would be down, Sewell continued to see sales and profits rise.
Nonprofit Marketing objectives
The basic aim of nonprofit organizations is to obtain a desired response from a target market -Change values/spread message -Financial contribution -Donation of services Nonprofit marketing objectives are shaped by the nature of the exchange and goals of the organization
The magic of disney Virtual Guest Speaker: Dennis Snow on Creating Magical Customer Experiences
The speaker talked about the overall experience. It's not just the core product benefit of, in the case of Disney, entertainment or the rides that builds loyalty, but the overall perception, which is built from all the individual experiences associated with buying and using the product, including those customer service support activities.
Characteristics of Services Intangibility
They cannot be possessed or even perceived by the senses. -the major characteristic that distinguishes a service from a good. Ex: A haircut because you cant hold it, smell it, or taste it.