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70 Cards in this Set

  • Front
  • Back
what are the Characteristics of services:
What are the Differences from product costing:
Variability of inputs
Variability of outputs
Timing can add value
Typically higher ratio of FC to VC
Difficulty assessing benefits (intangibility)
Complexity and hidden fees in pricing
what is the Customers purchase value?
value = perceived benefits/ perceived price
The following pricing modifications are often used by services businesses:
Differential Pricing
Yield Management ( a special case of differential pricing)
Multiple Use Discounts
Price Bundling
what is the goal of Differential Pricing?
To shift demand so as to increase revenue. Cover VC and make contribution to FC.
What are the aspects of differential pricing?
Time of service
Target markets (price discrimination)
Class of service (higher margin segments with differentiated service)
Time of reservation/purchase
What is yield management?
the practice of maximizing profits from the sale of perishable assets by controlling price and inventory and differentiating product and service.
What is yield managment based on?
The differentiation of tariffs/rates/margin
Segmentation of consumers, understanding of consumer lifetime value and understanding specific consumer needs
Differentiation of products and services
Statistical modelling and forecasting demand
How does Yield management interact with Customer Loyalty?
Loyalty programs are designed to lock-in consumers to the product. The frequent customer therefore, could based on his profile, deserve a different treatment and price than a less frequent customer.

Loyal customers expect a consistent discounted price all year long. Yield management policies should therefore have special long-term strategies for loyal customers enforcing repeat visits.
What are multiple use discounts?
Price reductions or special bonuses given to customers for repeat usage of a service
-Volume discounts
-Unlimited use within defined time
-“Frequent Flyer” programs
What is price bundling?
refers to linking several service offerings or features under one attractive price so that customers from different segments can be given a packaged service offering, which includes services features that may not have been desirable when priced individually (Guiltinan 1987).
what is the The Promotional Mix?
Sales Promotions
Personal Selling
Publicity and Public Relations
what is Tangibilizing the Service?
Tangibilizing the service means making the service more concrete, thus enabling customers to understand it better.
what are Guidelines for Advertising Services?
Provide tangible cues.
Capitalize on word-of-mouth communication.
Make the service understood.
Establish advertising continuity.
Advertise to employees.
Promise what is possible.
What is a vividness strategy?
A vividness strategy is an advertising approach for service offerings that uses concrete language, tangible objects, and dramatization techniques to tangibilize the intangible.
what is Interactive Imagery?
Interactive imagery uses pictorial representations, verbal associations, and letter accentuations that combine an organization's name and its service to establish a strong link between service name and performance in customer minds.
what are Sales Promotions and Services designed for?
Attract customers.
Accommodate cyclical demand.
Enhance customers’ perception of the service.
Add tangibility.
Encourage repeat patronage.
what is personal selling?
Frontline and other encounter points
Service delivery and prospecting
Cross-selling other products/usage levels/patronage
Establishing realistic expectations and feedback
What are the aspects of word of mouth?
The overlooked marketing tool
Ambassadors (customers, employees, and intermediaries)
Opinion leaders (media and industry figures)
Stimulate and reward referrals (trial vs. purchase)
Look for cross-selling opportunities
What Is Customer Service?
All customer-provider interactions other than proactive selling

Excludes core product/service itself
Includes manner of core product/service delivery
A moment of truth is ?
any contact point with a service organization that the customer uses to evaluate the service delivery. Some moments of truth are more important than others and are called critical incidents.
Customer Service as a Strategic Function?
Traditionally for complaint handling and refund/exchange
Marketing research source
Input for service design improvements
Proactive better than reactive
Prioritizes attention - most valuable (customers) relationships
Elevates status of customer service function within firm
Makes it everyone’s responsibility
What is service recovery?
the effort an organization expends to win back customers’ goodwill once it has been lost due to service failure.
What are the steps to service recovery?
A. Apology
B. Urgent Reinstatement C. Empathy
D. Symbolic Atonement
E. Follow-Up
How to handle a dissatisfied customer...
Isolate complaining customer in shared services.
Apologize and let customer vent.
Explain without being defensive.
Allow customer to choose options.
Personalize follow-up for satisfaction and suggestions
How do you develop a customer service culture?
When the customer service function is elevated to a strategic level, the service organization signals its importance to all employees.

Customer service when done well is a major corporate asset.
Service success is difficult because:
Services are dynamic and experiential in nature.
Services exist only when they are rendered.
Services occur in real time.
what are the Research Objectives for Services?
Identify dissatisfied customers and attempt recovery
Monitor service performance both internally and relative to competition
Assess gaps between customer requirements/expectations and service delivery
Gauge effectiveness of changes in service delivery
Evaluate, motivate and reward service employees
Forecast success of new services
A comprehensive services research program should include:
Qualitative and quantative research
Customer perceptions and expectations
Balance cost of information with benefits
Timing/frequency of research
Measures importance of attributes
Measures behavior and loyalty
What are the links in the service profit chain?
Top management leadership to
Internal quality to
Employee loyalty to
Employee productivity to
Value to
Customer Satisfaction to
customer loyalty
What are the Criteria for Choosing Market Segments?
Six Strategic Challenges for Services
Six Strategic Challenges for Services
Service performances must be carefully planned with such techniques as blueprinting, scripting, and dramatization.
Services must develop very flexible systems to make their service supply meet the demand.
Recruiting, training, compensating, and motivating employees are essential strategic factors for services.
Setting –
The setting is often the only tangible representation of the service organization's quality.
Because most service organizations have more direct contact (than manufacturers) with customers, they must be very sensitive to customer needs.
Service quality
Numerous techniques are available to measure and improve service quality.
Surpass Your Competition
The term sur/petition was coined by Edward de Bono (1992) to describe his concept of surpassing the normal kinds of competition by surpassing competitors.
Dramatize Your Performance
The most effective service organizations learn to stage their performances.
Build Relationships
Strong customer relationships can lead to customer loyalty.
harness technology
Modern communication and transportation technology allow service organizations to operate in multiple countries, but maintain close contact with employees and customers.
Jazz your delivery
Like great jazz musicians, great service organizations are great improvisers.
Common Promotional Objectives in Service Settings...
Create memorable images
Build awareness or interest
Build preference over competitors
Reposition service
Manage demand
Encourage trial
Reduce uncertainty by giving info
Familiarize customers in advance
Reward valued customers and employees
Maximum Number of customers servable =
Total production time over demand cycle / Average time needed per customer
Smoothing Demand to Fill Service Capacity...
shifting patronage to times when a service's productive capacity is underused
deflecting or discouraging patronage when its capacity is oversubscribed.
Perishability is ?
Services exist only for the time during which they are performed.
What are demand cycles?
the behavioral patterns of the customer. Some behavior is predictable, some random.
Service Capacity has three aspects:
Physical Facility
What is capacity utilization?
a measure of operational efficiency
Occupancy rate
Billable hours
What are the elements of a queing system?
Customer population
Arrival process
Queue Configuration
Customer selection policies
The service process
Set different priorities for customers in different market segments based on:
Urgency of the job
Duration of the transaction
Payment of a premium price
Importance of the customer
Trade in services accounts for ???% of all the world's trade.
In the industrialized world, services represent more than ??? the gross domestic product (GDP).
Measuring the global significance of the service sector is very difficult:
As organizations grow, they frequently incorporate services internally that were previously supplied by independent service firms.
When a customer travels to a service provider's country to be served, the transaction is foreign trade.
As more women enter the work force, many services that were previously performed in the household are now performed by professionals.
Organizations often combine their services data with nonservices data.
An outbound service export strategy involves
sending the service provider to other countries.
An inbound service export strategy involves
bringing foreign customers to the service provider’s country.
A teleservice export strategy refers to
exporting services by delivering them electronically.
Considerations for Services in a Global Market
Product strategy elements (concept and delivery)
Labor, equipment, and facility issues
Intermediaries and relevant institutions
Competitive factors
Culture, economy, and technology factors
Foreign exchange factors
Political risk
Adaptation refers to
the strategy of tailoring service offerings to accommodate conditions in the local market.
Standardization refers to
the strategy of selling the same service in the same manner around the world.
4P’s Applied to Global Service
4P’s Applied to Global Service
often standardized core service, adapt supplemental.
varying cost structure. Strategic tradeoff between standardization of fees and local affordability
localized frontstage operations, consolidated backstage
consistency to achieve recognition and reassurance. Symbolic branding message should be transferable across languages
+ 3 P’s Applied to Global Service
+ 3 P’s Applied to Global Service
Importance of local labor and knowledge of customs. Export of key labor practices
physical evidence
often standardized to support global branding
process of service assembly
export processes creating competitive advantage