2nd bap exam revision

7/29/2019 2nd BAP Exam Revision

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SERVICES MARKETING

2nd EXAM REVISION

BAP - April 2008Last updated April 1st 2008

Trn Tun Anh


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Lovelock, Patterson, Walker: Services Marketing 3e 2004 Pearson Education Australia 2

Exam Detailsz Date: Pls see the Facultys website

postingszTime: 2.5 hours

z Format: Part A: 40 Multiple choice questions (60

marks)

Part B: 1 long answers (20 marks)

2 short answers (10 marks each = 20 marks)


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Chapter 1 Objectives

z Identify reasons for changes occurring

in the economy

z Distinguish between goods and services

z Describe key tasks and challengesfacing service marketers

z Explain expanded mix for services


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Services Defined

z An act or performance (or experience)

which is essentially intangible and doesnot result in ownership of anything

z Economic activities that add time, placeor form utility (value)

z

Something that may be bought or soldbut cannot be dropped on your foot



Services as Performance

z Service delivery is like staging a play

zThe service providers or personnel are

the plays performers or actors

z

The service consumers or customersare the audience

(Grove, Fiske and Bitner (1992)



Factors responsible for thetransformation of the service

economy (Figure 1.7)

z Internationalisation (e.g. Hollowing out effect,Increased services trade, Global customers)

z Government Regulation (e.g. Deregulation/privatisation, New trade agreements in services)

z Social Changes (e.g. Increased customerexpectations, Increased affluence and leisure time,More women in the workforce)



Factors responsible for thetransformation of the service

economy (Figure 1.7)

z Business trends (e.g. Relaxation of professionalassociation standards, Marketing emphasis by non profit organisations, Outsourcing of non-coreservices, Services quality movement, Franchising

and service chains)

z Advances in technology (Convergence ofcomputers and telecommunications, Miniaturisation,Digitalisation, Enhanced software)



Difficulties in Evaluating

Service Qualityz Physical goods are rich in search

qualities (qualities perceived fromtangible cues)

z Services are poorer in search qualitiesthan physical goods

Search qualities Experience qualities

Credence qualities



The Traditional Marketing

Mix (four Ps)z Product

z Price

z Promotion

z Place


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Figure 1.12 An expanded marketing

mix for services

Customers PricePlace &Time

Promotion

Product

(Service)People Process

Physical Evidence

Customers PricecustomersPlace,Cyber-

space

& Time


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The Additional Marketing

Mix Elements for Servicesz People: direct contact between customers and

service personnel, some services involve high levelsof contact, high levels of trust and dependency.

z Physical evidence: this may be an actual physicalcomponent or a cue to indicate or represent theexistence quality of the service purchased (often

referred to as Servicescape).

z Process: the order and/or system of service delivery.


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The Actions of Efficient

Companiesz Evaluate and select market segments.

z Research customer needs andpreferences.

z Monitor competitors performance,strategies, strengths and weaknesses.

zTailor the product to suit the chosenmarket segment


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Chapter 4

CustomerSatisfaction and

Service Quality


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Chapter 4 Objectivesz Define customer satisfaction and quality in

service industriesz Explain the significance of customer

satisfaction in achieving a competitive

advantagez Describe various models of satisfaction and

service quality

z List the major drivers or determinants ofsatisfaction and quality in services

z Describe how to measure and monitor

satisfaction


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Defining Customer

Satisfactionz Satisfaction is derived from Latin satis

(good enough or sufficient) and facio (todo or make).

z Satisfaction is a post-purchaseevaluation of the overall serviceexperience.

z Satisfaction is an emotive state orfeeling reaction


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Figure 4.3 Benefits of Customer

Satisfaction and Service Quality

Customersatisfaction

(& service

quality)

Insulates

customers from

competition

Encourages

repeat patronage

& loyalty

Enhances/promot

es positive WOM

Lowers costs ofattracting new

customers

Reduces failure costs

Can create

sustainable

advantage


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Other Influences on

Satisfactionz Prior attitudes towards brands are

thought to influence expectationsz Attribution theory

Causal: who is to blame for satisfaction ordissatisfaction?

Control: is the cause of dissatisfaction in

the control of the company? Stability: is the satisfaction or

dissatisfaction likely to recur?


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Other Influences on

Satisfactionz Equity theory is concerned with

perceived fairness or a comparison ofthe ratio of the buyers inputs to theoutputs received

z Personal Involvement: the degree of thecustomers involvement with the service

will affect their expectations andevaluation


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Expectationsz Provide a standard of comparison- this

may be purely subjective or based oncollective previous experiences

z Are dynamic- they will change with newexperience and information

z

Must be managed- it is critical for anorganisation to predict, understand andmanage their consumers expectations


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Chapter 5

Handling Customer

Complaints andManaging Service

Recovery


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zTo outline the courses of action open to

a dissatisfied customerz Explain the factors influencing complaint

behaviour

z Identify the principles of an effectiveservice-recovery system

z Explain the techniques for identifyingthe root cause of service failures


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Customer Response to

Service Failurez Do nothing, but the service providers

reputation is diminishedz Complain to the service firm

zTake action with a third party such asACCC

z Defect and do not use the provideragain

Factors Influencing Complaining


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Factors Influencing ComplainingBehaviour

z Level of dissatisfaction i.e. does it seem

worth it?z Cost of complaining e.g. time and effort

z Benefits of complaining i.e. value of the

outcome?z Likelihood of resolution i.e. belief that the

problem will/can be solved satisfactorily

F t I fl i


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Factors Influencing

Complaining Behaviourz Available resources for making a complaint

z Access to a means of registering a complaint

z Knowing who is to blame for the problem

z Demographics e.g. younger and bettereducated people are more likely to complain


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Chapter 11

Managing Capacityand Demand


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z Explain and use capacity managementtechniques to meet variations indemand

z Explain the patterns and determinantsof demand

z Formulate demand managementstrategies and techniques

M i C it Th


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Managing Capacity: The

ChallengeProductive capacity may concern:

z Physical facilities such as hotels, medicalclinics, entertainment facilities, and transport

z Service provision equipment such as

telephones, hairdryers, scanners, and cashregisters

z People processing services in which the

capacity to serve is constrained by thenumber, experience and expertise ofpersonnel employed


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Productive Capacityz Physical facilities:

Medical clinics, hotels, entertainment facilities, transport(seats on a bus )

z Service provision equipment Telephones, computers, scanners

z Labor: refer to the number of staff, experience andexpertise. Labor constraints may include inadequate staffing level

leading to overtaxed or unhappy staff

The capacity of facility, service provision equipment andservice personnel must be in balance.

z Time

Adj sting s ppl to meet


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Adjusting supply to meet

demandz Physical facilities:

zTactics for high demand:

Rent additional space

Share facilities Add seats (airlines, restaurants)

z

Tactics for low demand: Decrease space (airline sublease planes)

Service Provision


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Service Provision

Equipmentz High demand:

Hire/ outsource/ rent additional equipment

z Low demand:

Hire/ outsource/ rent additional equipmentto others


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Labourz High demand:

Employ casual or part time staff Multi-skilling (cross-training) Increase working hours, overtime working J ob specialization (cappuccino machine) Outsource another party Reduce interaction with staff

z Low demand: Schedule vacations, reduce working hours/ lay off

staff, engage staff training, ask staff to work invaried job roles.


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TimezTactics for high demand:

Extending operating hours (restaurants,zoos).

Increase customer participation

Develop a peak hour operating schedule(banks, supermarkets)

z

Tactics for low demand: Reduce operating hours

Schedule downtime for maintenance


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Creating Flexible Capacity

z Provide for additional capacity : some

capacity has an elastic ability to absorbextra demand

z

Increase the number of casual and part-time employees: hire extra staff duringbusy seasons such as Christmas

z Outsource facilities: rent facilities &equipment


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Managing Capacity

z Create flexibility in what is offered:

review what is offered at different timesand consider what might be gained by

offering more or less at those timesz Review the hours of business: consider

extending or shortening hours


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Managing Capacity

z Schedule downtime in periods of low

demand: carry out data-processing,repair and maintenance activities when

demand is expected to be lowz Cross-train employees: employees who

can perform several functions can bemoved to bottle neck points whenneeded

Understanding the patterns


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g pand determinants of demand

1. Does the level of demand for the

service follow a predictable cycle?Does the cycle duration vary by thehour, day, week, month or season?

2. What are the underlying causes ofthese cyclical variations? Employment

schedules, payment dates, schoolholidays, public holidays, naturalcycles?

Understanding the patterns


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g pand determinants of demand

3. Do demand patterns seem to changerandomly? Are the underlying causes due toweather patterns, health events, accidents,a force majeur?

4. Can continual demand for a particular

service be disaggregated by marketsegments to reflect such components asuse patterns by a particular type of

customer for a particular purpose orvariations in net profitability of eachcompleted transaction

Using the Marketing Mix Elements to


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Us g t e a et g e e ts toShape Demand Patterns

z Product variations: high demand Modify

the product offering (restaurant menu) Reduce augmented products

z Modifying the timing and location of

delivery involving three basic options:1. No change

2. Varying the times when the service is available

3. Offering the service to customers at a new location4. Increase the augmented products, add value,

5. Modify the offerings to different segments

Using the Marketing Mix Elements to


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Using the Marketing Mix Elements toShape Demand Patterns

z Pricing strategies:

Increase price, charge full price (highdemand)

Reduce price, price reductions (cinematickets on Tuesday)

effective pricing depends on the marketing

manager having an understanding of howthe demand responds to increases ordecreases in the price per unit


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Promotionsz High demand:

Advertise busy times, the benefits of non-demand usage

z

Low demand: Advertise to stimulate demand

Use short term promotions (cut off price,

one for two, coupons )

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