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Services Marketing
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Usman Waheed
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If You want these slides then send me at E-mail at ch_paki@hotmail.com or call me at +923006641921
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Chapter 1
INTRODUCTION
TO
SERVICES
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Explain what services are and identify service trends Explain the need for special services marketing concepts and practices Outline the basic differences between goods and services and the resulting challenges for service businesses Introduce the service marketing triangle Introduce the expanded services marketing mix Introduce the gaps model of service quality
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Introduction
Services are deeds,processes and performance Intangible, but may have a tangible component Generally produced and consumed at the same time Need to distinguish between SERVICE and CUSTOMER SERVICE
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Health Care
Professional Services
accounting, legal, architectural
Financial Services
banking, investment advising, insurance
Hospitality
restaurant, hotel/motel, bed & breakfast, ski resort, rafting
Travel
airlines, travel agencies, theme park
Others:
hair styling, pest control, plumbing, lawn maintenance, counseling services, health club
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Salt
Figure 1-1
Tangibility Spectrum
Intangible Dominant
Tangible Dominant
Teaching
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Figure 1-2
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Percent of GDP
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60 50 40 30 20 10 0
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Figure 1-3
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Percent of GDP
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Intangibility
Heterogeneity
Perishability
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Implications of Intangibility
Services cannot be inventoried Services cannot be patented Services cannot be readily displayed or communicated Pricing is difficult
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Implications of Heterogeneity
Service delivery and customer satisfaction depend on employee actions Service quality depends on many uncontrollable factors There is no sure knowledge that the service delivered matches what was planned and promoted
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Implications of Perishability
It is difficult to synchronize supply and demand with services Services cannot be returned or resold
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Goods
Tangible
Table 1-2
Resulting Implications
Services cannot be inventoried. Services cannot be patented. Services cannot be readily displayed or communicated. Pricing is difficult.
Standardized
Heterogeneous Service delivery and customer satisfaction depend on employee actions. Service quality depends on many uncontrollable factors. There is no sure knowledge that the service delivered matches what was planned and promoted. Simultaneous production and consumption Customers participate in and affect the transaction. Customers affect each other. Employees affect the service outcome. Decentralization may be essential. Mass production is difficult. It is difficult to synchronize supply and demand with services. Services cannot be returned or resold.
Nonperishable Perishable
Source: Adapted from Valarie A. Zeithaml, A. Parasuraman, and Leonard L. Berry, Problems and Strategies in Services Marketing, Journal of Marketing 49 (Spring 1985): 33-46. Contact: +923006641921 Usman Waheed
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Figure 1-5
Employees
Interactive Marketing
delivering the promise
Customers
Source: Adapted from Mary Jo Bitner, Christian Gronroos, and Philip Kotler
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Figure 1-6
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Technology
Providers
Source: Adapted from A. Parasuraman
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Customers
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Traditional Marketing Mix Expanded Mix for Services: 7 Ps Building Customer Relationships Through People, Processes, and Physical Evidence
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Place
Promotion
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Table 1-3
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PRODUCT
Physical good Channel type features Quality level Accessories Packaging Warranties Product lines Branding Exposure Intermediaries
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PROCESS
Flow of activities Number of steps Level of customer involvement
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Focus on a service organization. In the context you are focusing on, who occupies each of the three points of the triangle? How is each type of marketing being carried out currently? Are the three sides of the triangle well aligned? Are there specific challenges or barriers in any of the three areas?
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Expected
Service
Customer Gap
Perceived Service
External Communications to Customers
COMPANY
Service Delivery
GAP 3
Customer-Driven Service Designs and Standards
GAP 4
GAP 1
GAP 2
Part 1 Opener
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Part 1 Opener
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Expected Service
GAP
Perceived Service
Part 1 Opener
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Overview the generic differences in consumer behavior between services and goods Introduce the aspects of consumer behavior that a marketer must understand in five categories of consumer behavior: Information search Evaluation of service alternatives Service purchase and consumption Postpurchase evaluation Role of culture
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Figure 2-1
Easy to evaluate
Figure 2-2
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Information Search
Evaluation of Alternatives
Evoked set Emotion and mood
Post-Purchase Evaluation
Attribution of dissatisfaction Innovation diffusion Brand loyalty
Figure 2-3
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Evaluation of Alternatives
Evoked set Emotion and mood
Culture
Post-Purchase Evaluation
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Information search
In buying services consumers rely more on personal sources. WHY? Refer p32 Personal influence becomes pivotal as product complexity increases Word of mouth important in delivery of services With service most evaluation follows purchase
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Perceived Risk
More risk would appear to be involved with purchase of services (no guarantees) Many services so specialised and difficult to evaluate (How do you know whether the plumber has done a good job?) Therefore a firm needs to develop strategies to reduce this risk, e.g, training of employees, standardisation of offerings
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Evoked Set
The evoked set of alternatives likely to be smaller with services than goods If you would go to a shopping centre you may only find one dry cleaner or single brand It is also difficult to obtain adequate prepurchase information about service The Internet may widen this potential Consumer may choose to do it themselves, e.g. garden services
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Emotion and mood are feeling states that influence peoples perception and evaluation of their experiences Moods are transient Emotions more intense, stable and pervasive May have a negative or positive influence
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Need to maintain a desirable impression Service actors need to perform certain routines Physical setting important, smell, music, use of space, temperature, cleanliness, etc.
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Global Feature: Differences in the Service Experience in the U.S. and Japan Authenticity Caring Control Courtesy Formality Friendliness Personalization Promptness
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Chapter 3
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Recognize that customers hold different types of expectations for service performance Discuss controllable and uncontrollable sources of customer expectations Distinguish between customers global expectations of their relationships and their expectations of the service encounter Acknowledge that expectations are similar for many different types of customers Delineate the most important current issues surrounding customer expectations
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DEFINITIONS
Customers have different expectations re services or expected service Desired service customer hopes to receive Adequate service the level of service the customer may accept DO YOUR EXPECTATIONS DIFFER RE SPUR and CAPTAIN DOREGO?
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Figure 3-1
Adequate Service
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Figure 3-2
Desired Service
Zone of Tolerance
Adequate Service
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Figure 3-3
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Level of Expectation
Zone of Tolerance
Adequate Service
Desired Desired Service Service Zone of Tolerance Adequate Adequate Service Service
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Most Important Factors Least Important Factors Source: Berry, Parasuraman, and Zeithaml (1993)
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Figure 3-4
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Expectations
HIGH
Figure 3-5
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Adequate Service
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Personal needs include physical, social, psychological categories Enduring service intensifiers are individual, stable factors that lead to heightened sensitivity to service This can further divided into Derived Service Expectations and Personal service Philosophies
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Figure 3-6
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Situational Factors
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Transitory service intensifiers temporary a computer breakdown will be less tolerated at financial year-ends Perceived service alternatives Perceived service role of customer Situational factors
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Figure 3-7
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Past Experience
Predicted Service
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Chapter 4
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Provide you with definitions and understanding of customer satisfaction and service quality Show that service encounters or the moments of truth are the building blocks of customer perceptions Highlight strategies for managing customer perceptions of service
Figure 4-1
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Reliability Responsiveness Assurance
Empathy
Tangibles
Product Quality
Customer Satisfaction
Price
Personal Factors
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Product/service quality Product/service attributes or features Consumer Emotions Attributions for product/service success or failure Equity or fairness evaluations
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Figure 4-3
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Loyalty (retention)
Satisfaction measure
Source: James L. Heskett, W. Earl Sasser, Jr., and Leonard A. Schlesinger, The Service Profit Chain, (New York, NY: The Free Press, 1997), p. 83.
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Service Quality
The customers judgment of overall excellence of the service provided in relation to the quality that was expected. Process and outcome quality are both important.
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Reliability
Ability to perform the promised service dependably and accurately. Knowledge and courtesy of Assurance employees and their ability to convey trust and confidence. Physical facilities, equipment, and Tangibles appearance of personnel. Caring, individualized attention the Empathy firm provides its customers. Responsiveness Willingness to help customers and provide prompt service.
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In groups of five, choose a services industry and spend 10 minutes brainstorming specific requirements of customers in each of the five service quality dimensions. Be certain the requirements reflect the customers point of view.
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RELIABILITY
SERVQUAL Attributes
ASSURANCE
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Providing service as promised Dependability in handling customers service problems Performing services right the first time Providing services at the promised time Maintaining error-free records
Employees who instill confidence in customers Making customers feel safe in their transactions Employees who are consistently courteous Employees who have the knowledge to answer customer questions
EMPATHY
RESPONSIVENESS
Keeping customers informed as to when services will be performed Prompt service to customers Willingness to help customers Readiness to respond to customers requests
Giving customers individual attention Employees who deal with customers in a caring fashion Having the customers best interest at heart Employees who understand the needs of their customers Convenient business hours Modern equipment Visually appealing facilities Employees who have a neat, professional appearance Visually appealing materials associated with the service
TANGIBLES
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is the moment of truth occurs any time the customer interacts with the firm can potentially be critical in determining customer satisfaction and loyalty types of encounters: remote encounters phone encounters face-to-face encounters is an opportunity to: build trust reinforce quality build brand identity increase loyalty
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Check-In
Figure 4-4
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Figure 4-5
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Sales Call
Billing
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GOAL - understanding actual events and behaviors that cause customer dis/satisfaction in service encounters METHOD - Critical Incident Technique DATA - stories from customers and employees OUTPUT - identification of themes underlying satisfaction and dissatisfaction with service encounters
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Think of a time when, as a customer, you had a particularly satisfying (dissatisfying) interaction with an employee of . When did the incident happen? What specific circumstances led up to this situation? Exactly what was said and done? What resulted that made you feel the interaction was satisfying (dissatisfying)?
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Recovery:
Employee Response to Service Delivery System Failure
Adaptability:
Employee Response to Customer Needs and Requests
Coping:
Employee Response to Problem Customers
Spontaneity:
Unprompted and Unsolicited Employee Actions and Attitudes
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DO
Recovery
DONT Ignore customer Blame customer Leave customer to fend for him/herself Downgrade Act as if nothing is wrong
Acknowledge problem Explain causes Apologize Compensate/upgrade Lay out options Take responsibility
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DO
Adaptability
DONT
Promise, then fail to follow through Ignore Show unwillingness to try Embarrass the customer Laugh at the customer Avoid responsibility
Recognize the seriousness of the need Acknowledge Anticipate Attempt to accommodate Explain rules/policies Take responsibility Exert effort to accommodate
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DO
Spontaneity
DONT Exhibit impatience Ignore Yell/laugh/swear Steal from or cheat a customer Discriminate Treat impersonally
Take time Be attentive Anticipate needs Listen Provide information (even if not asked) Treat customers fairly Show empathy Acknowledge by name
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DO
Coping
DONT Take customers dissatisfaction personally Let customers dissatisfaction affect others
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Figure 4-6
People
Process
Physical Evidence
Tangible communication
Servicescape
Guarantees Technology
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Part 2
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CUSTOMER
Provider GAP 1
Expected Service
COMPANY
Part 2 Opener
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Chapter 5
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Objectives for Chapter 5: Understanding Customer Expectations and Perceptions through Marketing Research
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Present the types of and guidelines for marketing research in services Show the ways that marketing research information can and should be used for services Describe the strategies by which companies can facilitate interaction and communication between management and customers Present ways that companies can and do facilitate interaction between contact people and management
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To identify dissatisfied customers To discover customer requirements or expectations To monitor and track service performance To assess overall company performance compared to competition To assess gaps between customer expectations and perceptions To gauge effectiveness of changes in service To appraise service performance of individuals and teams for rewards To determine expectations for a new service To monitor changing expectations in an industry To forecast future expectations
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Figure 5-1
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Research Objectives
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Research Objective
Identify dissatisfied customers to attempt recovery; identify most common categories of service failure for remedial action Assess companys service performance compared to competitors; identify service-improvement priorities; track service improvement over time Obtain customer feedback while service experience is still fresh; act on feedback quickly if negative patterns develop Use as input for quantitative surveys; provide a forum for customers to suggest service-improvement ideas Measure individual employee service behaviors for use in coaching, training, performance evaluation, recognition and rewards; identify systemic strengths and weaknesses in service Measure internal service quality; identify employeeperceived obstacles to improve service; track employee morale and attitudes Determine the reasons why customers defect To forecast future expectations of customers To develop and test new service ideas
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Stage 1 : Stage 2 : Stage 3 : Stage 4 : Stage 5 : Stage 6 :
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9 8 7
Figure 5-5
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6
5 4 3
O O
2
1 0
Reliability Responsiveness Assurance Empathy Tangibles
Retail Chain
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10 8
6
4 2 0
Reliability Responsiveness Assurance
Zone of Tolerance
Empathy
Tangibles
Computer Manufacturer
S.Q. Perception
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HIGH
Figure 5-6
Importance/Performance Matrix
High Leverage
Attributes to Improve
Attributes to Maintain
Importance
Low Leverage
Attributes to Maintain
Attributes to De-emphasize
LOW
Performance
HIGH
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Chapter 6
BUILDING
CUSTOMER
RELATIONSHIPS
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Explain relationship marketing, its goals, and the benefits of long-term relationships for firms and customers Explain why and how to estimate customer lifetime value Specify the foundations for successful relationship marketing--quality core services and careful market segmentation Provide you with examples of successful customer retention strategies Introduce the idea that the customer isnt always right
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Relationship Marketing
is a philosophy of doing business that focuses on keeping and improving current customers does not necessarily emphasize acquiring new customers is usually cheaper (for the firm)--to keep a current customer costs less than to attract a new one goal = to build and maintain a base of committed customers who are profitable for the organization thus, the focus is on the attraction, retention, and enhancement of customer relationships
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Think of a service provider you are loyal to. What do you do (your behaviors, actions, feelings) that indicates you are loyal? Why are you loyal to this provider?
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loyal customers tend to spend more with the organization over time on average costs of relationship maintenance are lower than new customer costs employee retention is more likely with a stable customer base lifetime value of a customer can be very high
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Figure 6-1
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Figure 6-3
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Quality Service
Employee Loyalty
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Figure 6-5
STEP 1:
Identify Bases for Segmenting the Market
STEP 2:
Develop Profiles of Resulting Segments
STEP 3:
Develop Measures of Segment Attractiveness
STEP4:
Select the Target Segments
STEP 5:
Ensure that Segments Are Compatible
Figure 6-6
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I. Financial Bonds
IV. Structural Bonds
Continuous Relationships
Joint Investments
Personal Relationships
Customer Intimacy
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Chapter 7
SERVICE RECOVERY
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Illustrate the importance of recovery from service failures in building loyalty Discuss the nature of consumer complaints and why people do and do not complain Provide evidence of what customers expect and the kind of responses they want when they complain Provide strategies for effective service recovery Discuss service guarantees
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Figure 7-1
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Complaints Resolved
95%
Percent of Customers Who Will Buy Again
Source: Adapted from data reported by the Technical Assistance Research Program.
Figure 7-3
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Take Action
Do Nothing
Switch Providers
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Figure 7-5
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Pricing
High Price Price Increases Unfair Pricing Deceptive Pricing
Figure 7-6
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Inconvenience
Location/Hours Wait for Appointment Wait for Service
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Competition
Found Better Service
Ethical Problems
Cheat Hard Sell Unsafe Conflict of Interest
Involuntary Switching
Customer Moved Provider Closed
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Service Guarantees
guarantee = an assurance of the fulfillment of a condition (Websters Dictionary) for products, guarantee often done in the form of a warranty services are often not guaranteed cannot return the service service experience is intangible (so what do you guarantee?)
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Table 7-7
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Unconditional Meaningful
Source: Christopher W.L. Hart, The Power of Unconditional Guarantees, Harvard Business Review, July-August, 1988, pp. 54-62.
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Service Guarantees
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Service Guarantees
service guarantees work for companies who are already customer-focused effective guarantees can be BIG deals - they put the company at risk in the eyes of the customer customers should be involved in the design of service guarantees the guarantee should be so stunning that it comes as a surprise -- a WOW!! factor its the icing on the cake, not the cake
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Part 3
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CUSTOMER
Provider GAP 2
COMPANY
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Chapter 8
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Describe the challenges inherent in service design Present steps in the new service development process Show the value of service blueprinting and quality function deployment (QFD) in new service design and service improvement Present lessons learned in choosing and implementing high-performance service innovations
Figure 8-1
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Figure 8-2
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Idea Generation Screen ideas against new service strategy Concept Development and Evaluation Test concept with customers and employees Business Analysis Test for profitability and feasibility Service Development and Testing Conduct service prototype test
Implementation
Market Testing
Test service and other marketing-mix elements Commercialization Postintroduction Evaluation
Source: Booz-Allen & Hamilton, 1982; Bowers, 1985; Cooper, 1993; Khurana & Rosenthal 1997.
Figure 8-3
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Offerings
Existing Services
Current Customers
New Customers
SHARE BUILDING
MARKET DEVELOPMENT
New Services
SERVICE DEVELOPMENT
DIVERSIFICATION
Figure 8-4
Service Mapping/Blueprinting
A tool for simultaneously depicting the service process, the points of customer contact, and the evidence of service from the customers point of view.
Process
Service Mapping
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CONTACT PERSON CUSTOME PHYSICAL EVIDENCE (Back Stage) (On Stage) R
Customer Calls
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Deliver Package
Dispatch Driver
SUPPORT PROCESS
Fly to Destinatio n
Load On
Truck
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CUSTOMER PHYSICAL EVIDENCE Hotel Exterior Parking Cart for Bags
Arrive at Hotel
Sleep Shower
Receive Food
Eat
Deliver Bags
Deliver Food
Registration System
Prepare Food
Registration System
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Step 1
Identify the process to be blueprinted.
Figure 8-8
Step 3
Map the process from the customers point of view.
Step 4
Map contact employee actions, onstage and backstage.
Step 5
Link customer and contact person activities to needed support functions.
Step 6
Add evidence of service at each customer action step.
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Service Marketers
creating realistic customer expectations
service system design promotion
Operations Management
rendering the service as promised
managing fail points training systems quality control
System Technology
providing necessary tools:
system specifications personal preference databases
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Chapter 9
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Differentiate between company-defined and customer-defined service standards Distinguish among one-time service fixes and hard and soft customer-defined standards Explain the critical role of the service encounter sequence in developing customer-defined standards Illustrate how to translate customer expectations into behaviors and actions that are definable, repeatable, and actionable
Figure 9-1
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Internal Metric
% Repair Call
Follow-Up
(10%)
Delivery Interval Meets Needs (30%) Does Not Break (25%) Installed When Promised (10%) No Repeat Trouble Fixed Fast Kept Informed Accuracy, No Surprise Resolve On First Call Easy To Understand (30%) (25%) (10%) (45%) (35%) (10%)
15% Repair
15% Billing
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Form a group of four people Use your schools undergraduate or graduate program, or an approved alternative Complete the customer-driven service standards importance chart Establish standards for the most important and lowest-performed behaviors and actions Be prepared to present your findings to the class
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Service Encounter
Service Quality
Figure 9-2
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Low
Dig Deeper
Dimensions
Dig Deeper
Attributes
Dig Deeper
Figure 9-3
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Hard
Soft
6. Establish Measures and Target Levels 7. Track Measures Against Standards 8. Update Target Levels and Measures
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HIGH 10.0
Importance/Performance Matrix
Improve
Does whatever it takes to correct problems (9.26, 7.96)
Maintain
Gets project within budget, on time (9.31, 7.84)
9.0
Gets back to me when promised (9.04, 7.63)
Importance
8.0
Provides equipment that operates as vendor said it would (9.24, 8.14) Takes responsibility for their mistakes (9.18, 8.01) Delivers or installs on promised date (9.02, 7.84)
Gets price we originally agreed upon (9.21, 8.64) Tells me cost ahead of time (9.06, 8.46)
LOW
7.0
8.0 9.0 10.0
HIGH
Performance
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S A 10 T 9 I S F 8 7 6 5 4 3 2
Figure 9-5
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Linkage between Soft Measures and Hard Measures for Speed of Complaint Handling
A
C T I
O 1 N 0
12
16
20
24
WORKING
HOURS
Figure 9-6
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48 Hours
Report Lost Card Receive New Card
40 Days
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Chapter 10
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Explain the impact on customer perceptions of physical evidence, particularly the servicescape Illustrate differences in types and roles of servicescapes and their implications for strategy Explain why the servicescape affects employee and customer behavior Analyze four different approaches for understanding the effects of physical environment Present elements of an effective physical evidence strategy
Table 10-1
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Other tangibles
Business cards Stationery Billing statements Reports Employee dress Uniforms Brochures Internet/Web pages
Table 10-2
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Hospital
Airline
Express mail
Building exterior Parking Signs Waiting areas Admissions office Patient care room Medical equipment Recovery room Airline gate area Airplane exterior Airplane interior (dcor, seats, air quality) Not applicable
Tickets Food Uniforms Packaging Trucks Uniforms Computers Signs Tickets Program Uniforms
Sporting event
Parking, Seating, Restrooms Stadium exterior Ticketing area, Concession Areas Entrance, Playiing Field
Table 10-3
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Typology of Service Organizations Based on Variations in Form and Use of the Servicescape
Complexity of the servicescape evidence
Servicescape usage
Self-service (customer only)
Elaborate
Golf Land Surf 'n' Splash
Lean
ATM Ticketron Post office kiosk Internet services Express mail drop-off Dry cleaner Hot dog stand Hair salon
Hotel Restaurants Health clinic Hospital Bank Airline School Telephone company Insurance company Utility Many professional services
Figure 10-3
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BEHAVIOR
Individual Behaviors
Physiological
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Part 4
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CUSTOMER
Provider GAP 3
Service Delivery
COMPANY
GAP 3
Part 4 Opener
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Chapter 11
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Illustrate the critical importance of service employees in creating customer satisfaction and service quality Demonstrate the challenges inherent in boundaryspanning roles Provide examples of strategies for creating customer-oriented service delivery Show how the strategies can support a service culture where providing excellent service is a way of life
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Service Employees
They are the service They are the firm in the customers eyes They are marketers Importance is evident in
The Services Marketing Mix (People) The Service-Profit Chain The Services Triangle
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Service Employees
Who are they?
boundary spanners
Figure 11-3
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Internal Environment
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Figure 11-4
Figure 11-5
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Service Culture
A culture where an appreciation for good service exists, and where giving good service to internal as well as ultimate, external customers, is considered a natural way of life and one of the most important norms by everyone in the organization.
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Chapter 12
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Illustrate the importance of customers in successful service delivery Enumerate the variety of roles that service customers play Productive resources Contributors to quality and satisfaction Competitors Explain strategies for involving service customers effectively to increase both quality and productivity
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Lack of understanding of their roles Not being willing or able to perform their roles No rewards for good performance Interfering with other customers Incompatible market segments
Figure 12-2
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Competitors
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Customers as Competitors
customers may compete with the service provider internal exchange vs. external exchange internal/external decision often based on: expertise resources time economic rewards psychic rewards trust control
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Customer Production
Joint Production
Firm Production
Gas Station Illustration 1. Customer pumps gas and pays at the pump with automation 2. Customer pumps gas and goes inside to pay attendant 3. Customer pumps gas and attendant takes payment at the pump 4. Attendant pumps gas and customer pays at the pump with automation 5. Attendant pumps gas and customer goes inside to pay attendant 6. Attendant pumps gas and attendant takes payment at the pump
Figure 12-3
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1. Define customers jobs - helping himself - helping others - promoting the company
2. Individual differences: not everyone wants to participate
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1. Recruit the right customers 2. Educate and train customers to perform effectively 3. Reward customers for their contribution 4. Avoid negative outcomes of inappropriate customer participation
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Chapter 14
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Explain: the underlying issue for capacity-constrained services the implications of capacity constraints the implications of different types of demand patterns on matching supply and demand Lay out strategies for matching supply and demand through: shifting demand to match capacity or flexing capacity to meet demand Demonstrate the benefits and risks of yield management strategies Provide strategies for managing waiting lines
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Capacity Constraints
Time, labor, equipment and facilities Optimal versus maximal use of capacity
Charting demand patterns Predictable cycles Random demand fluctuations Demand patterns by market segment
Figure 14-3
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Use signage to communicate busy days and times Offer incentives to customers for usage during non-peak times Take care of loyal or regular customers first Advertise peak usage times and benefits of non-peak use Charge full price for the service--no discounts
Use sales and advertising to increase business from current market segments Modify the service offering to appeal to new market segments Offer discounts or price reductions Modify hours of operation Bring the service to the customer
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Figure 14-4
169
Stretch time, labor, facilities and equipment Cross-train employees Hire part-time employees Request overtime work from employees Rent or share facilities Rent or share equipment Subcontract or outsource activities
Perform maintenance renovations Schedule vacations Schedule employee training Lay off employees
Table 14-1
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Peak demand can 1 usually be met Electricity without a major Natural gas delay Telephone Hospital maternity unit Police and fire emergencies Peak demand regularly exceeds capacity 4 Accounting and tax preparation Passenger transportation Hotels and motels Restaurants Theaters
3 Services similar to those in 2 but which have insufficient capacity for their base level of business
Source: Christopher H. Lovelock, Classifying Services to Gain Strategic Marketing Insights, Journal of Marketing, 47, 3 (Summer 1983): 17.
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Time
Table 14-2
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Labor
Equipment
Facilities
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Part 5
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CUSTOMER
Provider GAP 4
COMPANY
Service Delivery
GAP 4
Part 5 Opener
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Chapter 15
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Introduce the concept of Integrated Services Marketing Communication Discuss the key reasons for service communication problems Present four key ways to integrate marketing communication in service organizations Present specific strategies for managing promises, managing customer expectations, educating customers, and managing internal communications Provide perspective on the popular service objective of exceeding customer expectations
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Figure 15-1
Employees
Interactive Marketing
Personal Selling Customer Service Center Service Encounters Servicescapes
Customers
Source: Parts of model adapted from work by Christian Gronroos and Phillip Kotler
Figure 15-3
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Figure 15-4
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Figure 15-8
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Figure 15-9
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Teach Customers to Avoid Peak Demand Periods and Seek Slow Periods
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Figure 15-10
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Chapter 17
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Objectives for Chapter 17: The Financial and Economic Impact of Service
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Examine the direct effects of service on profits Consider the impact of service on getting new customers Evaluate the role of service in keeping customers Examine the link between perceptions of service and purchase intentions Emphasize the importance of selecting profitable customers Discuss what is know about the key service drivers of overall service quality, customer retention and profitability Discuss the balanced performance scorecard to focus on strategic measurement other than financials
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Figure 17-1
Service Quality
Profits
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Figure 17-2
Service Quality
Market Share
Reputation
Profits
Sales
Price Premium
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Figure 17-3
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Costs
Service Quality
Customer Retention
Margins
Word of Mouth
Profits
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Figure 17-5
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Margins
Customer Retention
Service
Behavioral Intentions
Word of Mouth
Profits
Sales
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Figure 17-6
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Best Customers
Other Customers
Least Profitable Customers
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What segment costs us in time, effort and money yet does not provide the return we want? What segment is difficult to do business with?
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Figure 17-7
Platinum Gold
What segment spends more with us over time, costs less to maintain, spreads positive word of mouth?
Iron
What segment costs us in time, effort and money yet does not provide the return we want? What segment is difficult to do business with?
Lead
Least Profitable Customers
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Key Drivers
Figure 17-8
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Service Encounter
Service Quality
Service Encounter
Behavioral Intentions
Customer Retention
Profits
Service Encounter
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Figure 17-9
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Customer Perspective
Service Perceptions Service Expectations Perceived Value Behavioral Intentions:
Operational Perspective:
Right first time (% hits) Right on time (% hits) Responsiveness (% on time) Transaction time (hours, days) Throughput time Reduction in waste Process quality
Innovation and Learning Perspective Number of new products Return on innovation Employee skills Time to market Time spent talking to customers
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Figure 17-10
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Defensive Marketing
Margins
Service Quality
Customer Retention
Word of Mouth
Profits
Sales
Market Share
Offensive Marketing
Reputation
Price Premium
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