CH09: Designing and Managing Services

Question 1

service

Answer 1

any act or performance one party can offer to another that is essentially intangible and does not result in the ownership of anything

Question 2

levels on the good/service spectrum

Answer 2

• a pure tangible good
• a tangible good with accompanying services
• hybrid
• major service with accompanying minor goods/services
• a pure service

Question 3

4 major characteristics of services

Answer 3

• intangibility
• inseparability
• variability
• perishability

Question 4

intangibility

Answer 4

services cannot be seen, tasted, felt, heard, or smelled (i.e. we cannot see the end result until after the service is performed)

Question 5

how to tangibilize the intangible

Answer 5

• place
• people
• equipment
• communications material
• symbols
• price

Question 6

inseparability

Answer 6

services are typically produced and consumed simultaneously (e.g. a haircut cannot be stored)

Question 7

variability

Answer 7

the quality of services depends on who provides them, when, where, and to whom

Question 8

3 ways to reduce variability

Answer 8

• invest in good hiring and training procedures
• standardize the service-performance process throughout the org
• monitor customer satisfaction

Question 9

perishability

Answer 9

services cannot be stored; time and capacity are limited

Question 10

yield pricing

Answer 10

used to account for perishability; adjusting prices as demand fluctuates (e.g. Uber surge pricing)

Question 11

service blueprint

Answer 11

flowchart depicting the service process in detail; helpful in identifying potential pain points for customers and for identifying points of potential improvement

Question 12

demand-side methods to account for perishability

Answer 12

• differential pricing
• nonpeak demand
• complementary services
• reservation services

Question 13

supply-side methods to account for perishability

Answer 13

• part time employees
• peak time efficiency routines
• increased consumer participation
• shared services
• facilities for future expansion

Question 14

4 new services realities

Answer 14

• increasing role of technology
• importance of increasingly empowered customer
• customer coproduction
• need to engage with employees as well as customers

Question 15

customer citizenship

Answer 15

having customers help each other, e.g. following the rules at a golf course; separate concept from customer empowerment

Question 16

characteristics of a strong customer orientation

Answer 16

• pamper customers
• read customer needs
• develop personal relationships with customers
• deliver high-quality services

Question 17

external marketing

Answer 17

marketing activities related to customers

Question 18

internal marketing

Answer 18

training and motivating customers to serve customers well

Question 19

interactive marketing

Answer 19

employees’ skill in serving the client; teamwork is key

Question 20

customer centricity

Answer 20

seeing the world from the customer’s POV; helps develop a clear sense of customer needs

Question 21

voice of the customer measurements

Answer 21

use comparison shopping, mystery shopping, customer surveys, suggestion/complaint forms, customer letters, etc. to gauge customer sentiment

Question 22

importance-performance analysis

Answer 22

rates various elements of the service bundle and identifies required actions for improvement where necessary

Question 23

high-value customer perks

Answer 23

• special discounts
• promotional offers
• special service (e.g. valet)

Question 24

strategies to manage complaints

Answer 24

• extra-role behaviors
• call centers
• customer service reps

Question 25

ways to differentiate services

Answer 25

• ease of ordering
• speed/timing of delivery
• installation, training, consulting
• maintenance and repair
• generous return policies

Question 26

what is “vital in services as in any industry”?

Answer 26

innovation [note: only including this as it was a question on the chapter test]

Question 27

gap between consumer expectation and management perception

Answer 27

management may not correctly perceive what customers want

Question 28

gap between management perception and service-quality specification

Answer 28

even if management correctly identifies customers’ wants, they may not set an appropriate performance standard

Question 29

gap between service-quality specifications and service delivery

Answer 29

employees may be poorly trained or unwilling/unable to meet the standard; employees may be held to conflicting standards

Question 30

gap between service delivery and external communications

Answer 30

communications with customer may not accurately reflect service, thus setting incorrect customer expectations

Question 31

gap between perceived and expected service

Answer 31

the customer may mis-perceive the service quality

Question 32

key product-service bundle differentiators

Answer 32

• ordering
• delivery
• installation
• customer training
• customer consulting (more for B2B)
• maintenance
• repair