1. What is service? Service includes every interaction between any customer & anyone representing the company. 2.

Characteristics of service related products Intangibility Heterogeneity Inseparability Perishability 3. Implications of intangibility Services cant be inventoried Services cant be easily patented Services cant be readily displayed or communicated Pricing is difficult 4. Implications of heterogeneity Service delivery and customer satisfaction depend on employee and customer actions Service quality depends on many uncontrollable factors There is no sure knowledge that the service delivered matches what was planned and promoted 5. Implications of inseparability Customers participate in and affect the transaction Customers affect each other Employees affect the service outcome Decentralization may be essential Mass production is difficult 6. Implications of Perishability It is difficult to synchronize supply and demand with services Services cannot be returned or resold 7. Expanded mix of for services Product Price Place Promotion People Process Physical evidence 8. People All human actors who play a part in service delivery and thus influence the buyers perceptions: namely, the firms personnel, the customer, and other customers in the service environment.

9. Physical Evidence The environment in which the service is delivered and where the firm and customer interact, and any tangible components that facilitate performance or communication of the service. 10. Process The actual procedures, mechanisms, and flow of activities by which the service is deliveredthe service delivery and operating systems. 11. The GAP Model of service quality The customer GAP The Provider GAP o GAP 1 The listening GAP: Not knowing what customers expect o GAP 2 The Design & Standards GAP: Not having the right service designs & standards o GAP 3 The performance GAP: Not delivering to service standards o GAP 4 The communication GAP: Not matching performance to promises 12. Customer GAP The difference between expected service & perceived service form the customers perspective 13. Ways to use GAP Analysis How are we doing overall in meeting or exceeding customer expectations? How are we doing overall in closing the four company gaps? Which gaps represent our strengths and where are our weaknesses? 14. Consumer evaluation processes for services Search Qualities o attributes a consumer can determine prior to purchase of a product Experience Qualities o attributes a consumer can determine after purchase (or during consumption) of a product Credence Qualities o characteristics that may be impossible to evaluate even after purchase and consumption 15. the Zone of Tolerance The gap between desired service & adequate service Desired Service

Zone of Tolerance Adequate Service

16. Variations in Zone of Tolerance can be wide or narrow can change over time can vary among individuals may vary with the type of product/service 17. How desired service can be influenced? Explicit service promises Implicit service promises Word of mouth communication Past experience 18. How adequate service can be influenced? Temporary service alternatives Perceived service alternatives Self perceived service role Situational factors 19. Mention the parameters to judge service quality. Reliability Responsiveness Assurance Empathy Tangibles 20. Reliability Ability to perform the promised service dependably and accurately. 21. Assurance Knowledge and courtesy of employees and their ability to inspire trust and confidence. 22. Tangibles Physical facilities, equipment, and appearance of personnel. 23. Empathy Caring, individualized attention the firm provides its customers. 24. Responsiveness Willingness to help customers and provide prompt service.

25. What are the factors influencing customer satisfaction? Product quality Service quality Price Specific product or service features Consumer emotions Attributions for service success or failure Perceptions of equity or fairness Other consumers, family members, and coworkers Personal factors Situational factors 26. What are the possible outcomes of customer satisfaction? Increased customer retention Positive word-of-mouth communications Increased revenues 27. What is service quality? Service quality is the customers judgment of overall excellence of the service provided in relation to the quality that was expected. 28. How do you assess service quality? Service quality assessments are formed on judgments of: outcome quality interaction quality physical environment quality 29. What is service encounter? It is the the moment of truth Occurs any time the customer interacts with the firm Can potentially be critical in determining customer satisfaction and loyalty 30. Describe the service encounter process for a hotel visit. Check in Bell person takes customer to room Restaurant meal Wake up call

Check out 31. General Service Bahaviours based on Service Encounter Themes Dos & Donts: Dos Acknowledge Problem Explain Causes Donts Ignore Customer Blame Customer

Apologize Compensate/ upgrade Lay out options Take responsibility

Leave Customer to fend for himself & herself Downgrade Act as if nothing is wrong Pass the Buck

32. What is Relationship Marketing? It is a philosophy of doing business, a strategic orientation, that focuses on keeping current customers and improving relationships with them Does not necessarily emphasize acquiring new customers It is usually cheaper (for the firm) Thus, the focus is less on attraction, and more on retention and enhancement of customer relationships 33. What is service recovery? It refers to the actions taken by a firm in response to service failure. 34. What are the service recovery strategies? Act quickly Provide adequate explanations Treat customers fairly Cultivate relationships with customers Learn from recovery experiences Learn from lost customers Make the service fail safe Encourage & track complaints 35. What are the characteristics of an effective service guarantee? Unconditional o The guarantee should make its promise unconditionally no strings attached Meaningful o The firm should guarantee elements of the service that are important to the customer o The payout should cover fully the customers dissatisfaction Easy to Understand and Communicate o Customers need to understand what to expect o Employees need to understand what to do Easy to Invoke and Collect o The firm should eliminate hoops or red tape in the way of accessing or collecting on the guarantee 36. What are the benefits of service guarantee? A good guarantee forces the company to focus on its customers. An effective guarantee sets clear standards for the organization.

A good guarantee generates immediate and relevant feedback from customers. When the guarantee is invoked there is an instant opportunity to recover, thus satisfying the customer and helping retain loyalty. Information generated through the guarantee can be tracked and integrated into continuous improvement efforts. Employee morale and loyalty can be enhanced as a result of having a service guarantee in place. A service guarantee reduces customers sense of risk and builds confidence in the organization. 37. What steps involved in new service development process? Business strategy development or review New service strategy development Idea generation Concept development & evaluation Business analysis Service development & testing Market testing Commercialization Post introduction evaluation 38. What is service blue printing? A tool for simultaneously depicting the service process, the points of customer contact, and the evidence of service from the customers point of view. 39. What are the service blue printing components? Customer actions Line of interactions Visible contact employee actions line of visibility Invisible contact employee actions line of internal interactions Support processes 40. How will you build a service blue print? Step 1: Identify the process to be blue printed Step 2: Identify the customer or customer segment Step 3: Map the process from the customers point of view Step 4:

Map contact employee actions and or technology actions Step 5: Link contact activities to needed support functions Step 6: Add evidence of service at each customer action step 41. What are the service recovery strategies? Identifying service problems Conducting root cause analysis Modifying processes 42. What are the benefits of service blue printing? Provides a platform for innovation. Recognizes roles and interdependencies among functions, people, and organizations. Facilitates both strategic and tactical innovations. Transfers and stores innovation and service knowledge. Designs moments of truth from the customers point of view. Suggests critical points for measurement and feedback in the service process. Clarifies competitive positioning. Provides understanding of the ideal customer experience. 43. What are the seven service culture standards? Smile Eye Recognition Voice Informed Clean Everyone 44. What are the elements of physical evidence? Servicescape o Exterior design o Parking o Landscape o Surrounding environment o Interior design o Layout o Air quality o Sound/music/scent/light Other tangibles o Business cards

45.

46.

47.

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o Stationary o Billing statements o Employee dress o Brochures o Web pages What are the roles of servicescapes? Package o conveys expectations o influences perceptions Facilitator o facilitates the flow of the service delivery process provides information (how am I to act?) facilitates the ordering process (how does this work?) facilitates service delivery Socializer o facilitates interaction between: customers and employees customers and fellow customers Differentiator o sets provider apart from competition in the mind of the consumer Explain the guidelines for physical evidence strategy. Recognize the strategic impact of physical evidence. Blueprint the physical evidence of service. Clarify strategic roles of the servicescape. Assess and identify physical evidence opportunities. Be prepared to update and modernize the evidence. What is the importance of service employees? They are the service. They are the organization in the customers eyes. They are the brand. They are marketers. What is services marketing triangle?

There are three components in the triangle: Company, service providers & customers. The flow of information between company and service provider is termed as internal marketing which enabling the promise. The flow of information between company & customer is termed as external marketing which is termed as making the promise & the flow of information between service provider & customer is termed as interactive marketing which helps to deliver the promise. 49. Who are termed as boundary spanners? The service employees

50. How Customers Widen the Service Performance Gap? Lack of understanding of their roles Not being willing or able to perform their roles No rewards for good performance Interfering with other customers 51. What is the importance of other customers (Fellow) in service delivery? Other customers can detract from satisfaction: o disruptive behaviors o overly demanding behaviors o excessive crowding o incompatible needs Other customers can enhance satisfaction: o mere presence o socialization/friendships o roles: assistants, teachers, supporters, mentors 52. service franchisees Service outlets licensed by a principal to deliver a unique service concept it has created. E.g. McDonalds 53. Service Agents & Brokers Representatives who distribute & sell the services of one or more service suppliers. E.g. travel agents, insurance agents etc. 54. Electronic channels All forms of service provision through electronic means. E.g. ATMs 55. What are the common issues involving intermediaries? conflict over objectives and performance difficulty controlling quality and consistency across outlets tension between empowerment and control channel ambiguity 56. Mention five major approaches to overcome service communication channels. Address service intangibility Manage service promises Manage customer expectations Manage customer education Manage internal marketing communication 57. What are the approaches for managing service promises? Create a strong service brand Coordinate external communication

58. What are the approaches for managing customer service expectations? Make realistic promises Offer service guarantees Offer choices Communicate the criteria and levels of service effectiveness 59. What are the approaches for managing customer education? Prepare customers for the service process Confirm performance to standards and expectations Clarify expectations after the sale Teach customers to avoid peak demand periods and to seek slow demand periods 60. What are approaches for managing internal marketing communication? Create effective vertical communications Sell the brand inside the company Create effective upward communication Create effective horizontal communications Align back-office and support personnel with external customers through interaction or measurement Create cross-functional teams of sales, service, and operations people when developing new services or engaging in service improvements Maintain a customer focus throughout all functions 61. What are the best practices for closing the communication gap? Employing integrated services marketing communication strategies around everything and everyone that sends a message or signal. Manage customer expectations effectively throughout the experience. Develop mechanisms for internal communication to avoid over-promising and ensure successful delivery. 62. Role of non monetary price Time costs Search costs Convenience costs Psychological costs 63. What are three basic marketing price structures & challenges for services? Competition based Cost based Demand based 64. What is reference pricing? A reference price is a price point in memory for a good or a service & can consist of the price last paid, the most frequently paid or the average of all prices customers have paid for similar offerings

65. What are the reasons for difference in reference pricing? Service variability limit knowledge Providers are unwilling or unable to estimate prices Individual customer needs may vary Collection of price information is overwhelming in services Prices are not visible 66. What is moment of truth? A moment of truth is usually defined as an instance wherein the customer and the organization come into contact with one another in a manner that gives the customer an opportunity to either form or change an impression about the firm. 67. What is moment of magic? Favorable moments of truth have been termed as moments of magic. These are instances where the customer has been served in a manner that exceeds his expectations. Eg: An airline passenger being upgraded to from an economy to a business class ticket. 68. What is moment of misery? These are instances where the customer interaction has a negative outcome. A delayed flight, rude and inattentive shop assistants or poor quality of food served at a restaurant all qualify as moments of misery for the customers. 69. What are the differences between goods & services? Goods Services A physical commodity A process of activity Tangible Intangible Homogeneous Heterogeneous Production & distribution are separate from their Production, distribution & consumption are consumption simultaneous processes Can be stored Cant be stored Transfer of ownership is possible Transfer of ownership is not possible

70. What are the strategies are there for effective customer participation? Define customers jobs Educate & reward customer Manage the customer mix 71. How can a marketer position his product or service offering? the consumer can relate the product and service offering to a need or want the marketer can create a distinctive image of himself the consumer can perceive a brands characteristics relative to those of competitive offerings

72. Mention the strategies for developing loyalty bonds with customers. Having the right portfolio of customer segments Attract the right customers Tiering the right service Deliver high levels of satisfaction 73. Mention some of the financial rewards for customers Discounts on purchase Loyalty program rewards Cash back programs 74. Give examples of non financial rewards. Nonfinancial rewards (also called soft benefits) provide benefits that cannot be translated directly into monetary terms. Examples include giving priority to loyalty program members on reservation wait lists and virtual queues in call centers. 75. What is intangible reward? Important intangible rewards include special recognition and appreciation. Customers tend to value the extra attention given to their needs and appreciate the implicit service guarantee offered by high-tier loyalty program memberships. 76. What is SERVQUAL? The SERVQUAL scale involves a survey containing 21 service attributes, grouped into the five service quality dimensions of reliability, responsiveness, assurance, empathy & tangibles. 77. What is 80/ 20 rule in services marketing? 20% of the customers produce 80% of sales profit 78. Mention the characteristics of passive customers. Least likely to take any action Unlikely to say anything to the provider Less likely than others to spread negative word of mouth Unlikely to complain to a third party 79. Mention the characteristics of voicers. Actively complain to the service provider Less likely to spread negative word of mouth/to switch patronage/or to go to 3rd parties with their complaints These customers should be viewed as the service providers best friends as they give companies a 2nd chance 80. Mention the characteristics of Irates. More likely to engage in negative word of mouth They are unlikely to complain to 3rd parties

 81. 82.

They are less likely to give service provider a 2nd chance They believe that complaining to the provider can have social benefits Mention the characteristics activists. They have the propensity to complain on all dimensions They will complain to providers, others & third party also When consumers complain, what do they expect from service providers? Customers expect fair treatment. These are termed as: o Outcome fairness o Procedural fairness o Interaction fairness 83. What is service recovery paradox? It is a practice to first disappoint customers so they can recover & gain even greater loyalty from them as a result. 84. What are the service recovery strategies? Do it right for the first time Welcome & encourage complaints Act quickly Treat customers fairly Learn from recovery experiences Learn from lost customers Return to doing it right 85. What are the different types of service guarantees? Satisfaction versus service attribute guarantees External versus internal guarantees Unconditional Meaningful Easy to understand & communicate 86. What is cost based pricing? In cost based pricing, a company determines expenses from raw materials & labour, ads amounts or percentages for overhead & profit, & thereby arrives at the price. This method is widely used by industries such as utilities, contracting, wholesaling & advertising. the basic formula for cost based pricing is: Price = Direct costs + Overhead Costs + Profit Margin 87. What is competition based pricing? This approach focuses on the prices charged by other firms in the same industry or market. Competition based pricing does not always imply charging the identical rate others charge but rather using others prices as an anchor for the firms price.

88. What is price signaling? It occurs in markets with a high concentration of sellers. In this type of market, any price offered by one company will be matched by competitors to avoid giving a low cost seller a distinct advantage. 89. What is going rate pricing? Going rate pricing involves charging the most prevalent price in the market. Rental car pricing is an illustration of this technique. 90. What is demand based pricing? It set prices consistent with customer perceptions of value: prices are based on what customers will pay for the services provided. 91. What is odd pricing? This is the practice of pricing services just below the exact amount to make buyers perceive that they are getting a lower price. A pair of shoe priced as Rs. 399 rather than Rs. 402. 92. What is synchro pricing? Synchro pricing is the use of price to manage demand for a service by using customer sensitivity to prices. Certain services, such as tax preparation, passenger transportation, long distance telephone calls, hotels etc. have demand that fluctuates over time as well as constrained supply at peak time. Pricing can, play a role in smoothing demand & synchronizing demand & supply. 93. What is penetration pricing? Penetration pricing is a strategy in which new services are introduced at low prices to stimulate trial & widespread use. 94. What is prestige pricing? This is a special form of demand based pricing by services marketers who offer high quality or status service. 95. What is skimming pricing? This is a strategy in which new services are introduced at high prices with large promotional expenditures. 96. What is value pricing? This widely used term has come to mean giving more for less. In current usage it involves assembling a bundle of services that are desirable to a wide group of customers & then pricing them lower than they cost alone. MacDonalds adopted this value pricing.

97. What is market segmentation pricing? In this form of pricing, service marketer charges different prices to groups of customers for what are perceived to be different quality levels of service, even though there may not be corresponding differences in the costs of providing the service to each of these groups. 98. What is price bundling? Some services are consumed more effectively in conjunction with other services, other services accompany the products they support (such as extended service warranties, training etc.). When customers find value in a package of services that are interrelated, price bundling is an appropriate strategy. 99. What is result based pricing? In service industries in which outcome is very important but uncertainty is high, the most relevant aspect of value is the result of the service. 100. What is two part pricing?

Here the service price is broken into a fixed fee plus variable usage fees. (e.g. DTH installation charges & monthly subscription charges).