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74 Cards in this Set

  • Front
  • Back
A service is
a deed, a performance, an effort
Simultaneity -
The provider and the customer are part of the product; production and consumption are simultaneous and inseparable;
For the customer:
Consistency of product quality is always suspect, and service provider relationship is critical.
For the marketer:
Customization is an opportunity; and frontline operations and customer skills training is critical.
Intangibility -
The product is a process, a deed or a performance; therefore,
For the customer:
Perceived risk is higher; harder to evaluate before (even during or after the service).
For the marketer
Harder to help customer visualize the product and differentiate from the competition.
Perishability -
The product cannot be stored and can be produced only after customer initiates; therefore,
For the customer:
Product needs to be available and produced when necessary.
For the marketer
Supply must match demand; otherwise (revenue) opportunity to produce is lost; the task is to manage rather than build demand.
Lovelock's Classifications?
Tangible acts on a person - Services such as health care, personal care, vacations, hotels, and airlines.
Intangible acts on a person - Services such as education, entertainment shows, and legal services.
Tangible acts on a thing - Services such as house cleaning, appliance repair, landscaping services, etc.
Intangible acts on a thing - Services such as financial and insurance services and tax preparation.
Service Encounter
In a service encounter, a customer interacts with a service organization, usually in a setting controlled by the organization.
Service workers –
interact with customers (frontstage)
contribute to the service delivery away from the customers' sight. (backstage)
Service setting –
The area where the service is provided to the customer and
areas of the organization to which the customer normally has little access.
Service customers –
The persons receiving the service (e.g., the diner or the depositor) and
others who share the service setting with them.
Service process -
The sequence of activities necessary to deliver the service.
Three Services Frameworks
Services Marketing Mix
Services Theater
Services Marketing Mix
Participants are all people, whether customers and workers, who are involved in the service production.
Physical evidence is the service environment and other tangible aspects of the service that facilitate or communicate the nature of the service.
Process of service assembly is procedures and flow of activities that contribute to the delivery of the service.
Services Theater Framework
Actors (service workers) are those who work together to produce the service for an audience (customers).
Setting (service environment) is where the action or service performance unfolds.
Performance is the dynamic result of the interaction of the actors, audience, and setting.
Many services are very people-intensive.
Many services are hard to standardize.
Many services are difficult to technologize.
Digesting new technology takes time.
Many changes are more qualitative than quantitative
Organizational transformations are possible.
Nurturing of intellectual resources.
Services Productivity:
Lags, Lulls, and Leaps
Customer Relationship Management
CRM is a combination of people, processes and technology
CRM integrates 3 main customer-facing initiatives: sales, marketing and customer care or customer service
CRM is a business strategy enabled by technology
CRM call centers move offshore.
cost of labor
Education of workforce
“real time” technology
Political stability
Characteristics of a service performance:
occurs over time.
involves a sequence of events.
exists only during its actual enactment.
likely to be a multifaceted phenomenon.
Supplementing the Basic Service Performance
In blueprinting terms, supplementing a service performance involves increasing its complexity.
Supplementing an organization’s basic service can occur as a response to competitive forces.
Elements are added to the core service to survive as the industry evolves.
Customizing the Service Performance
Increasing the degree of freedom, or divergence of the service performance can greatly enhance a service experience and the perception of service quality.
Customization: tradeoffs between effectiveness and efficiency.
Customization requires understanding of each customer's needs or wants.
Customization requires worker skills and technological support.
A service script is a
chronologically ordered representation of the steps that make up the service performance from the customer's point of view. 
The service blueprint is
graphic representation of the essential components of the service performance.
It identifies the customers, the service personnel, the points of interaction between customers and workers, the contact points between workers and other workers, and the frontstage evidence and backstage processes or activities. 
Number of Steps and
Decision Freedom
Deviation -
Unplanned Departure from complexity and/or Divergence
Servicescape –
all aspects of the physical environment in which the service provider and customer interact. Both:
The dimensions of the servicescape act as a
a package, similar to a product’s package, by:
conveying a total image
suggesting the potential usage
suggesting relative quality
of the overall service
Dimensions of the Servicescape
Ambient conditions (5 senses) and physiological response
Spatial layout and functionality
Symbols and Artifacts
Ambient conditions (5 senses) and physiological response
Importance increases with duration of exposure, extremes in condition and conflict with expectations
Spatial layout and functionality
Importance increases with time pressures, complex tasks and in self-service settings
Signs (Implicit or explicit)
Communicate image, can reduce perceived crowing and stress
Symbols and artifacts (quality of materials, desk size, diplomas)
Importance increases for first impressions, new service concepts, and for competitive differentiation
Considerations in Service Setting Design
Operational Tool
Service Identifier
Orientation tool
Worker’s “home away from home”
Approach vs. avoidance environment
Factors to consider when locating your service business:
Business objective
Does service require customer’s physical presence?
Traffic interception
Cumulative competitive attraction
Competitive compatibility
Managing Tangible Evidence
Carefully consider the potential impact of even the smallest physical element.
Frontstage Versus Backstage Decisions
The frontstage area of a service setting is always on display to customers, while the backstage is typically concealed from their view.
Experimenting with the Service Setting
Allows managers to try out new setting features on a limited basis before embracing them on a full scale.
Functions of Service Personnel/Actors
Add tangibility to the service.
Customer satisfaction is influenced by the quality of the interpersonal interaction between the customer and the contact employee
Act as source of information in the commonly ambiguous service situation and help the customer to cognitively frame the service encounter.
Often perceived as the service itself.
Boundary spanners
the frontstage employees who link an organization with its customers. They represent the service in the customers’ eyes.
Technical skills
the proficiency with which service employees perform their tasks.
Social skills -
the manner in which service employees interact with customers and fellow workers.
Empowerment is
the management practice of sharing information, rewards, knowledge, and power with frontline employees so that they can better respond to customers’ needs and expectations. 
Benefits of Empowerment
Quicker responses to customer needs during service delivery.
Quicker responses to dissatisfied customers during service recovery.
Employees are more satisfied with their jobs and themselves.
Employees will act more warmly and enthusiastically with customers.
Empowered employees are a great source of ideas.
Great word-of-mouth communication and retention.
Costs of Empowerment
Greater monetary investment in selection and training.
Higher labor costs.
Slower or less consistent service delivery.
Possible violations of fair play.
Giveaways and bad decisions.
Discretionary effort
the difference between the maximum effort one can bring to a task and the minimum effort needed simply to get by. 
Internal marketing
the policy of treating employees as internal customers of the organization, responding to employees' needs or wants, and promoting the organization and its policies to the employee.
What Is Service Quality?
Provider’s perspective: the degree to which the service’s features conform to the organization’s specifications and requirements.
Customer’s perspective: how well the service meets or exceeds expectations. Issues: both process and outcomes.
Customer-Focused Productivity
Operations vs. customer focus
Costs and efficiency plus flexibility and adaptation

Short-term vs. long-term orientation
Small profits now or large and sustained profits
a scale designed to measure customer perceptions of service quality along five key dimensions: tangibles, reliability, responsiveness, assurance, and empathy of the service provider.
a.k.a.: RATER model
Ability to perform the promised service dependably and accurately.
Knowledge and courtesy of employees and their ability to convey trust and confidence.
Physical facilities, equipment, and appearance of personnel.
Caring, individualized attention the firm provides its customers.
Willingness to help customers and to provide prompt service.
Why a Service Guarantee Works
Forces the company to focus on customers.
Sets standards for employees and customers.
Generates feedback.
Builds loyalty and discourages switching behavior. -
Service Quality – Diagnostics and Management
Measure gaps between customers / frontline / managers.
Delivering as promised? Blueprint for fail points.
Manage customer expectations.
Guarantee your promises.
Frontline empowerment?
Customer service and service recovery.
Expose managers to the trenches.
Customer mix -
the array of people of differing demographic characteristics who patronize a service organization.
Customer-to-customer interactions are
often challenged by crowding and long waits.
Which kinds of service settings require the most customer training?
Self-service facilities (interactive kiosks)
Highly customized services
Customer-Employee Interactions
A. Friendly Interactions – the optimal interaction.
B. Unfriendly Interactions – Unfriendly interactions can be highly disruptive.
C. Too Friendly Interactions – Such interactions may delay the service provided to subsequent customers.
Compatibility management -
The practice of selecting the appropriate customer mix in an effort to encourage satisfying customer-to-customer relationships when customers are in proximity to one another and are likely to interact yet have different reasons for using the service or different backgrounds. Can contribute to relationship marketing efforts and service quality
Diverse customer bases offer
opportunities for capacity management and better utilization of fixed costs
However, diverse customer bases have
different needs, and have compatibility issues
Factors driving incremental profits:
Increased purchases
Reduced operating costs
Referrals to other customers
Price premium