Chapter 1 - Intro Flashcards Preview

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Flashcards in Chapter 1 - Intro Deck (48):

What do instagram and lambo have in common?

Both companies are worth about a billion dollars. But Instagram is primarily a service, and Lambo is a product


Are services growing?

Dramatically, yes


What are 4 reasons services matter?

1. Services are growing

2. Lead to customer retention and loyalty

3. Service leads to profits

4. Services help manufacturing companies differentiate themselves


How does service lead to cust retention?

Cust satisfaction and loyalty driven by service excellence


Why does service lead to very high profits?

Can provide high profit margins and growth potential than products


For automobile dealers, how does services lead to profits?

After-sale services and parts account for nearly 80% of all revenue opportunities


How is tangibility a spectrum?

Salt for exampe is very tangible,

Fast-food is in the middle

Teaching is intangible


What is a SERVICE?

Includes every interaction between any customer and anyone representing the ecompany including:



-web site


-billing and accounting personnel

-service employees

-receptionists and schedulers

-management and executives


What can all these mean?


product such as MBA

customer service

service value add for goods

Service embedded in a tangible product



What makes a service intangible?

They are performed, not produced!


It means it cannot be touched or physically examined


What are the marketing implications of intangibility? (3 things)

Using tangible symbols to communicate benefits of service

apply branding straategies to differentiate

offer samples to allow them to experience beforehand




What is an implication

Production and consumption of services are often simultaneous. Such as getting haircut


sometimes called inseparability


The implication is that services cannot be seperated from the person that performs them


What is the marketing implication of simultaneity?


3 things

aBecause they cannot be separated from the preson that performs them, service provider=service


Atmospherics such as where the service is performed plays an important role

Quality of entire service performed is


What is heterogeneity?

This is when services are slightly different each time they are performed


sometimes called inconsistency


cannot be standardized to the extent that goods can be


What are the marketing implications of heterogeneity?


3 things

The quality of service depends upon:

provider, client, and situation


Traning, standards are important

empahise personalized nature of service


What is perishability?

Means services cannot be stored? No shelf life, cannot be returned or resold


Sometimes called inventory restrictions


What is the marketing implications of perishability?

Use price and promotion to match supply and demand

  • hire part time employees
  • pre-selling
  • self-service strategies

such as barista cant presell, but instead must sell one at a time


What three things are services evaluated on?

1. search qualities

2. Experience qualities

3. Credence qualities


For service evaluation, what are the search qualities?

These can be assessed before purchase and are easy to evaluaate, but they are often not present of low presense


For service evaluation, what are the experience qualities?

These can be assessed only after purchase, but are more difficult to evaluate.


Service tend to be high in experience qualities, such as you will absolutely know after your haircut if you will like it or not


For service evaluation, what are the credence qualities?

These cannot be evaluated, even after purchase and consumption.


An example is surgery, you don't really know, or is very difficult to evaluate. 


For the 3 service evaluation metrics, which are high in service and which are low?

Usually services are high in experience and credence qualities, but not search qualities


What are 9 challenges for services marketing?

1. Defining and improving quality

2. Designing and testing a new sercie

3. Communicating a consistent image for yourself

4. accomodating fluctauting demand

5. Motivating and sustaining employee committment

6. Coordinating marketing, operations, and HR

7. Setting prices

8. Finding a balance between standardization versus personalization

9. Ensuring the delivery of consistent quality








What are the 7 P's?

1. Product

2. Price

3. Place

4. Promotion

5. People

6. Physical evidence

7. Process


Describe people of the 7Ps

It is all human actors who oplay part in service delivery, and influence buyers perception. Also customers, and other people in environment


Describe the physical evidence part of 7Ps?

IT is the environment in hwich the service is delivered and where the firm and customer interact, and any tangible coponents that facilitate performance and quality


Describe last part of 7Ps

Look it up


Is there opportunity about services industry?

Yup, many have a hard time doing it. And it has a negative vibe in the US, but there is a big opportunity for any comany that can successfully pull it off


Define services

deeds, processes, and performances provide by one entity or person for another entity or person



wide range of intangible product offerings such as Cossette selling campaigns and petsmart selling shampoo services


Is Customer service free?

usually, and it should not be confused with services provided for sale by the company


What is Derived service?

This is a big different way to look at services, and says that everything is service. So even tangible razor provides shaving service


In 2009, how much of employement and GDP was service based in the US?

80% employment

75% GDP


Why are traditional product based companies now focusing on services? 3 things

1. Price and margin pressure on goods (like amazon to retail)

2. Customer demand for services

3. Services have higher profit margins than products

4. Can be differentiator in highly competitive markets


Specific demand for service marketing concepts has come from where?

Deregulated industries and professional services


Is services profitable?

YES! the Service-profit chain is large and in charge with customer satisfaction creating huge profits


What are some explanations as to why there is a decline in customer satsifaction with services?

  1. Many customers getting less esrvice cause of tiered service based on profitbaility
  2. Self service is decreasing human interaction
  3. Many tech based services are poorly designed and hard to use
  4. Customer service expectations are super high now
  5. Organizations becoming to lean to offer good service
  6. Talented workers don't stay as frontline service people for long
  7. Many companies tell employees about good customer esrvice, but don't properly train them


Is the internet a service?



What are 4 characteristics of goods?

  1. Tangible
  2. Standardized
  3. Production seperate from consumption
  4. Nonperishable


What are the 4 characteristics of services?

1. Intangible

2. Heterogenous

3. Simultaneous production and consumption

4. Perishable


What are some marketing implications of services being intangible?

Cannot be inventoried, so unused rooms in the winter will just sit there

Cannot be easily patented, can be copied

Cannot be easily communicated to customers

CCost of a "unit of service" is hard to determine


What are the marketing implications of heterogeneity?

Well, depending on current demand, factors in environment, how fresh service providor etc, the service quality will always fluctaute, and it's hard to deliver in consistent manner


What is a marketing implicaton for simulatenaous production and consumption?

Well customer sees all processes, which could be negative or positive. Such as seeing the subway girl wipe her snot with her gloves than make your sandwich


What is a marketing implicatoin with perishability?

Since they really cant forecast utilization and demand perfectly, they have to be away of services performed at what time. Also if something goes bad like a bad haircut, it can't be returned so the haircutter is going to need to know how to restore goodwill


For the extended marketing mix, what is the people?

These are all human actors involved. So employees, you, and other customers


For the extended marketing mix, what is the Physical evidence?

This is the environment in which service is delivered. So like Lydias needles and chair and whatnot and her studio itself


For the extended marketing mix, what is the process?

The service delivery and operating systems. So McDonalds is a good example of one that is very defined

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