Service Marketing 3

Front 1

How to recognize that effective pricing is central to the financial successof service firms?

Back 1

Effective pricing is central to the financial success of service firms. With prices you can:

1. gain profits and cover costs

2. build demand and develop a user base

3. support the firm’s positioningstrategy.

Front 2

What are the foundations of a pricing strategy as represented by thepricing tripod?

Back 2

1. The costs the firm needs to recover set the minimum or floor price.

2. The customer’s perceived value of the offering sets a maximum or ceiling price.

3. The price charged for competing services deter-mines where, within the floorto-ceilingrange, the price can be set.

Front 3

What are the different types of financial costs and what are the limitationsof cost-based pricing?

Back 3

Services frequently have high fixedcosts, varying capacity utilization, and large shared infrastructures that make itdifficult to establish unit costs.

Front 4

What is competition-based pricing?

Back 4

The price depends on what the competitor asks for similar services. It depends:

(1) number of competitors,

(2) number ofsubstituting offers

(3) distribution density of competitor and substitution offers

(4) amount of surplus capacity in the industry

Front 5

How does revenue management work?

Back 5

Revenue management increases revenue for the firm through better use ofcapacity and reservation of capacity for higher paying segments .

Front 6

What is the role of rate fences in effective revenue management?

Back 6

Well-designed rate fences are needed to define “products” for each targetsegment so that customers with high value for a service offer are unable to takeadvantage of lower price buckets. Rate fences can be physical and non physical

Front 7

What are the issues of ethics and consumer concernsrelated to service pricing?

Back 7

Service firms need to becareful that their pricing does not become so complex and so riddled with hiddenfees that customers perceive them as unethical and unfai

Front 8

When will the price-competion be reduced?

Back 8

1) Nonpricerelated costs of using competing alternatives are high

2) personalrelationships are important

3) switching costs are high, and serviceconsumption is time and location specific.

Front 9

What are the 5Ws of the Integrated Service Communications Mode?

Back 9

Who is our target audience?

What do we need to communicate and achieve?How should we communicate this?

Where should we communicate this?

When should the communications take place?

Front 10

What are the three broad target audiences?

Back 10

They are (1) prospects, which can be reached via traditional communicationsmedia just like in goods marketing, (2) current users, which can be reached viamore cost-effective communications channels such as the firm’s service deliverychannels and (3) employees as a secondary audience who can be highlymotivated with the right communications messaging.

Front 11

What are the most common strategic and tactical servicecommunications objectives?

Back 11

Marketing communication objects are to inform, educate, persuade, remind, shape behavior, and build relationships.

Front 12

What is ment with the Service Marketing Communications Funnel?

Back 12

Works with the Three-stage model:

(1) prepurchasestage (e.g., emphasize the importance of attributes in which the firm outperforms,and reduce perceived risk)

(2) service encounter stage (e.g., guide customersthrough service process, encourage proper queuing behavior, and manageperformance perceptions)

(3) post-encounter stage (e.g., shape customersatisfaction and encourage referral and loyalty behaviors).

Front 13

What are the the challenges of service communications?

Back 13

Abstractness — no one-to-one correspondence with a physical object.

Generality — items are part of a class of persons, objects, or events and are notspecific to the firm’s performance.

Non-searchability — cannot be inspected, or searched before purchase.

Mental impalpability — difficult to understand and interpret.

Front 14

What is the the marketing communications mix?

Back 14

- Traditional marketing channels (e.g., advertising, direct marketing, onlineadvertising), apps and social media (e.g., Web 2.0, and social media).

- Service delivery channels (e.g., service outlets, frontline employees, serviceapps, and self-service websites).

- Messages originating from outside the organization (e.g., WOM, social media,and blogs and coverage in traditional media).

Front 15

Understand when communications should take place?

Back 15

Communications tends to be more spread out and connected to the specificobjectives and their timing in the Service Communications Funnel (When).