test 2

Question 1

Relationship Marketing

Answer 1

is a philosophy of doing business, a strategic orientation, that focuses on keeping current customers and improving relationships with them

Question 2

Service ladder of marketing

Answer 2

Acquiring, Satisfying, retaining, Enhancing

Question 3

What are the four levels of relationship stratagies

Answer 3

Financial bonds, social bonds, customization bonds, structural bonds

Question 4

Financial bonds (level 1)

Answer 4

Customers are loyal to firm through financial incentives (Lower price for greater volume) ex. frequent flyer miles.

Limitations: Do not usually result in long term advantage since it is easy to replicate by competitors

Question 5

Social bonds (level 2)

Answer 5

Customer is tied to the firm by social and interpersonal bonds..seeks to build long term relationships (Example of the professor being loyal to his dentist because he talks personably with him)

Question 6

Customization bonds (level 3)

Answer 6

Loyalty is created through customer intimacy (Pandora takes the songs you listen to and find similar songs)

Question 7

Structural bonds (level 4)

Answer 7

Providing services to the client that are designed right into the service delivery system. Usually B2B
(ex. Walmart’s Electronic Data Interchange (EDI) system manages the relationships with suppliers.)

Question 8

Service failure

Answer 8

occurs when service performance that falls below a customer’s expectations in such a way that leads to customer dissatisfaction.

Question 9

Service recovery

Answer 9

The actions taken by a firm in an effort to recover from the failure

Question 10

Passives vs Voicers

Answer 10

Passives: least likely to say anything to employees if something has gone wrong. Spread bad WOM

Voicers: actively complain to the provider, but not likely to spread negative WOM; believe in the positive consequences of complaining - the service provider’s best friends!

Question 11

Irates vs Activists

Answer 11

Irates: More angry, less likely to give the provider a second chance. More likely to spread negative WOM to friends and family and then switch providers

Activists: above average propensity to complain on all levels; more likely to complain to a third party; feel most alienated from the marketplace compared to other groups; in extreme cases can become “terrorists”

Question 12

Characteristics of a successful service guarantee?

Answer 12

Limited Restrictions and exclusions, Meaningful, Easy to understand, Easy to Invoke

Question 13

Fixing the customer: Respond quickly

Answer 13

Research conducted shows that 1/3 of customers who have problems resolved within 24 hours are “completely satisfied” by the action taken by the provider

Question 14

Fixing the customer: Provide Appropriate communication

Answer 14

It is important to be understanding and accountability.

Question 15

Fixing the customer: Supply adequate explanations

Answer 15

Customers want to know why a failure occurred. The content of the explanation must be appropriate as well as the style as to which it is delivered

Question 16

3 specific types of justice that customers are looking for following their complaints?

Answer 16

Outcome fairness, procedural fairness, and interactional fairness

Question 17

Outcome fairness

Answer 17

The result that the customer gets after they complain (The food comes out cold they should at least get another meal or free drink)

Question 18

Procedural fairness

Answer 18

The timeliness, rules and policies of the complaint process. (not being able to reach a customer service phone line would be bad procedural fairness)

Question 19

Interactional fairness

Answer 19

The interpersonal treatment received during the complaint process (just simply be nice and personable with the customer)

Question 20

Fixing the problem: Encourage and track complaints

Answer 20

This allows you as a business to know what you did wrong.

Question 21

Fixing the problem: Learn from Recovery experiences

Answer 21

This allows managers to conduct root-cause analysis and eliminate the need for a recovery in the first place

Question 22

Fixing the problem: Learn from lost customers

Answer 22

It is hard to conduct research as to why a customer left, but if you can it can be a real help to what can be fixed

Question 23

Service Guarantee: Limited Restirctions and Exclusions?

Answer 23

Guarantees with a large number of restrictions are generally not effective, and they tend to lose power with the more conditions there are

Question 24

Service Guarantee: Meaningful

Answer 24

It should be something of high value that the customer is receiving. (Money back on poor service for a 3 credit hour class would be meaningful to students)

Question 25

Service Guarantee: Easy to Understand

Answer 25

Should be easy to communicate with both customers and employees

Question 26

Easy to Invoke

Answer 26

Should be easy to get point across that the service guarantee failed. If the customer has to write a letter or documented proof of a failure, it is not easy to invoke

Question 27

Service blueprinting

Answer 27

A tool for simultaneously depicting the service process, the points of customer contact, and the evidence of service from the customer’s point of view

Question 28

Service blueprinting components

Answer 28

Physical Evidence, Customer actions, Employee actions,(visible) Employee actions,(invisible) Support processes

Question 29

Customer actions

Answer 29

This encompasses the steps, choices, activites and interactions that the customer performs in the process of purchasing the service (hotel ex. checking in, going to room, sleeping/showering)

Question 30

Onstage employee actions

Answer 30

This is what employees do for the customer that is visible in the service. (Hotel ex. Greeting the customers, taking their bags, checking in at registration desk)

Question 31

backstage Employee actions

Answer 31

Employees completing service for customer that they cant see. (Hotel ex. Making the food in the kitchen, cleaning the hotel room)

Question 32

Support processes

Answer 32

Covers the internal services, steps and interactions that take place to support the contact employees. (ex. Mail service - Flying to sort center, sorting packages, loading on airplane, flying to destination)

Question 33

Steps in building a blueprint

Answer 33

1. Identify the process to be blueprinted 2. identify the customer or customer segment 3. Map the process from the customers point of view 4. Map contact employee actions or technology actions 5. Link contact activities to need support functions 6. Add evidence of service at each customer action step

Question 34

Reasons to fire a customer (3)

Answer 34

The wrong segment, Not profitable in the long term, difficult customers

Question 35

What are the two types of switching barriers?

Answer 35

Customer Inertia and Switching costs

Question 36

Customer Inertia

Answer 36

This is the idea that people stay with a company even if they are unhappy because it takes too much effort to switch.

Question 37

Switching costs

Answer 37

It may cost more money to switch to a different provider. (patient may incur setup costs when changing doctors or new X-rays when switching dentists)

Question 38

Relationship benefits for customers

Answer 38

Confidence Benefits, Social benefits, and Special Treatment benefits

Question 39

Confidence beneifts

Answer 39

This comprises feelings of trust and confidence that the service will be done correctly and the customer will be treated right. (most important to customers)

Question 40

Social Benefits

Answer 40

A benefit for the customer because they create a friendship with these people and want to do business with people they know (hairdressers often provide this)

Question 41

Special treatment benefits

Answer 41

Giving customers who are important special benefits is something that firms can do.