Study Unit 5 - Chapter 8

Question 1

Service quality dimensions include:

Answer 1

• Assurance
• Empathy
• Reliability
• Responsiveness
• Tangibles

Question 2

Assurance

Answer 2

Knowledge, skill and courtesy of employees

Question 3

Empathy

Answer 3

Caring and the degree to which consumers receive individualised service from employees

Question 4

Reliability

Answer 4

Ability to perform a promised service dependably and accurately

Question 5

Responsiveness

Answer 5

Willingness of the provider to listen to the customer

Question 6

Tangibles

Answer 6

Physical facilities, equipment and appearance of staff

Question 7

3 levels of contact:

Answer 7

1. High-contact services
2. Medium- contact services
3. Low-contact services

Question 8

High-contact-level services

Answer 8

-customer is required to be physically present to interact with the service provider and its employees
-expected to play an active role in the entire service delivery process
* healthcare, hairdressing, counselling & legal services

Question 9

Medium-contact-level services

Answer 9

• Customer’s presence is not required for the entire duration of the service delivery
• Customer who has to take his or her car to a dealership to be serviced

Question 10

Low-contact-level services

Answer 10

• characterised by little to no physical contact between the consumer and the service provider
• banks offer internet banking services as alternatives to visiting at their branch offices

Question 11

3 Service delivery contact types

Answer 11

1. The customer visits the service provider
2. The service provider visits its customer
3. Delivering services at an arm’s length

Question 12

Customer channel preferences

Answer 12

1. Buying channels
2. Self-service and electronic

Question 13

Personal channels

Answer 13

-buying complex services (high degree of risk during the delivery process)
-strong social needs

Question 14

Self-service and electronic

Answer 14

-more knowledgeable (more confident using self-service and electronic channels )
- need for convenience

Question 15

Intermediaries used in the service delivery process

Answer 15

• Franchising
• Agents
• Brokers
• Electronic channels

Question 16

Franchising

Answer 16

-making their service available through franchises=service providers(called franchisors) offer intermediaries(called franchisees) the opportunity to use their brand name,business processes, services or reputation to provide services to customers in exchanged for an agreed fe or royalty

Question 17

Agents

Answer 17

-an intermediary who acts on behalf of either the service provider or a customer and has the necessary authority to formalise agreements between the service provider and the customer
-2 types of agents
1. Purchasing agents
- assist customers in evaluating and making purchases, such as agents appointed to find
* example art or antiques
2. Selling agents
-work with service provider and have contractual authority to sell its service offerings
* example travel and financial service agents

Question 18

Brokers

Answer 18

Intermediaries who bring sellers and buyers together and assist in negotiations

Question 19

Electronic channels

Answer 19

-banking services are probably best example of ow electronic channels have changed service delivery by introducing self-service
-four main types of electronic channels
1. Service machines
2. Cellphone and Telephone
3 The internet
4. Mobile channels

Question 20

Franchising of services from the franchisor’s perspective
-Advantages

Answer 20

1. Expanded operations & increased revenue
   - by offering its service through a franchise, a franchisor will obtain wider distribution = leads to increased brand awareness, market shares & revenue
2. Shared risk
   - risk associated with starting & operating a new business is reduced since franchisees have to provide the staff as well as the capital required for equipment & other capital expenditure
3. Knowledge of local markets
   - National service providers may find it difficult to understand the behaviour & trends in different geographic areas
   - Franchising offers the franchisor the opportunity to form a connection with local markets & customers

Question 21

Franchising of services from the franchisor’s perspective
-Disadvantages

Answer 21

1. Quality inconsistencies
   -franchisor may have contracts & procedures in place to regulate how the service should be delivered , some franchisees may ignore the requirements & offer the service in a manner that is different to what is required
   -this discrepancy can harm the reputation ,brand name/image of the franchise
2. Loss of control
   -franchisor does not own the outlets-does not have full control over every aspect of the franchisee’s operations & service delivery
   -loss of control in terms of service delivery & how customers experience the service may be undesireable for franchisors who wish to control the quality of their service strictly
3. Relationships with customers
   -controlled by the franchisee, not the franchisor
4. Legal disputes
   - franchisees often resent paying the high franchising fees/adhering strictly to the operational procedures
   -can result in disputes that often result in legal disputes between 2 parties

Question 22

Franchising of services from the franchisee’s perspective
-Advantages

Answer 22

1. National Marketing
   -advertising done on national basis by franchisor, franchisees receive immediate exposure, brand awareness & other marketing expertise
2. Running an established business
3. Reduced risk

Question 23

Franchising of services from the franchisee’s perspective
-Disadvantages

Answer 23

1. Encroachment
   -occurs when a franchisor allows the opening of new outlets (by same franchisor) in the same area/near an existing outlet without compensating the existing franchisee
2. Lower profits & revenue
3. High fees & royalties

Question 24

Agents and brokers
- Advantages

Answer 24

1. Reduced costs
2. Wide representation
3. Local market knowledfe
4. Customer preference
5. Special skills & knowledge

Question 25

Agents and brokers - Disadvantages

Answer 25

1. Are reduced control & the fact tat they market multiple services that may include those of competitors 2. Earn a commision & not a salary, & consequently are not bound to the service provider as an employee/ branch office would be

Question 26

Electronic channels -Advantages

Answer 26

1. Lower costs 2. Wider distribution 3. Consistent delivery of standard services 4. Customer convenience

Question 27

Electronic channels -Disadvantages

Answer 27

1. Trailing electronic services 2. Security & privacy concerns 3. Possible price competition 4. Increased competition 5. Inability to customers service offerings

Question 28

Managerial implications

Answer 28

-service providers have to select the most appropriate channels & intermediaries by balancing the expected advantaged against the disadvantages associated with each type of intermediary - in designing a service delivery & distribution network, service providers need to consider the impact their decisions will have on the resources required to implement & operate such a network