Service Marketing

Service Marketing

¬  What is different about services to products? The main difference between services and products is that services provide intangible (efforts, actions) benefits to the customer while products are tangible. In the service industry, customers can co-produce services, and distribution can take place through channels that are non-physical.

¬  Explain the service profit chain, and what it means for services marketing? Business profitability and customer loyalty are strongly related to employee satisfaction and loyalty. The service profit chain suggests that customer loyalty results from customer satisfaction, loyal and satisfied employees add value to the business and contribute to customer loyalty

¬  What are critical incidents? How do they help in understanding service encounters? What is another name for them? Critical incident techniques are procedures that collect, analyse and classify human behaviour. They help in identifying the level of the customer’s satisfaction or dissatisfaction.

¬  What is a flow chart and how does it help with services marketing? Flowcharts are used in the service industry to analyse service processes. They help in knowing the time taken to perform a process and the cost of that process. They also identify any hold-ups that might be in the system.

¬  How is a flowchart different to a blueprint? Blueprints are more concerned with the customers’ perspective and they help identify weaknesses. Flowcharts on the other hand are concerned with service processes.

¬  What is customer satisfaction? it can be defined as the comparison between the customer expectation and perception in relation to the service experience.

¬  What is the key problem that has been found in relation to measuring customer satisfaction? Individuality – every person is different and each one has different perceptions.

¬  How is customer behaviour related to customer satisfaction in a service setting? The attitude that a customer has can have a direct impact to the experience that he or she will have. It will determine whether he experiences satisfaction and it will affect the way that the employees handle him.

¬  What is service quality and why would we measure it? This is the customer’s judgement of excellence of the service provided in relation to his or her expectations.

¬  How is customer behaviour related to service quality? Employees will generally be delighted to serve customers who do not complain about everything. They will therefore offer the best quality to those customers. Loyal customers also receive quality service.

¬  What would we use a service audit for? What might we include in our service audit? Components of a service audit includes customer loyalty and satisfaction, a firm’s revenue and measurement of value, data collection, the perception of the customer regarding the value of the firm and the gap between the customer’s expectation and perception. A business can use a service audit to know the level of its profitability, in addition to how it can raise that profitability in future.

¬  How might we avoid service failures? Provide excellent customer service. This will involve not only listening to the customers complaints but also solving them. This will avoid the recurring of the same problems.

¬  What are the most important aspects of service recovery? Identification of service failures, resolving the customers’ problems, categorizing the root causes of the problems and finding measures that can be used to improve the system.

¬  What is relationship marketing and how does it relate to services marketing? Relationship marketing stresses on retaining current customers and improving their satisfaction. it aims at attracting and maintaining customers who are loyal to the business.

¬  What should a service provider aim to achieve through positioning? A firm can encourage brand loyalty, customer loyalty and the firm’s consistency in providing quality and reliable services.

¬  Why is market segmentation and selective target marketing of particular importance to service organisations? People can be grouped into different categories depending on the demography, behavioural, geographic among other variables. Though each individual is different, the service providers can find common qualities and they can offer services that will appeal to these segments.

¬  Which is more important? Core or supplementary services? Core services are more important because they define what a business is all about.

¬  What is services cape? It is the physical and social environment that surrounds a service, event, transaction or experience. It provides physical evidence that assists the customers in evaluating the services offered to them.

¬  How important is services cape to services? It shapes the customer expectations, facilitates their goals and those of the employees and influences the customer experience.

¬  How has IT changed services cape? There is less contact between the firm and its client since the clients find it more convenient to use technology. Information technology has ensured that the client can get services at any time that he or she might need it, without the use of the firm’s employees.

¬  What is the importance of yield management to service firms? It helps in increasing revenue because the service providers maximize the use of their fixed available resources.

¬  Give examples of how service firms try to manage supply and demand? In case a firm experiences high demand and there is low supply, it can either increase the price of the service, employee part time employees to help in handling the large number of clients or change the working hours so that it can achieve more. If a firm experiences a high supply and there is a low demand, it can offer incentives to the customers such as promotions and free gifts with every purchase.

¬  How and what does a firm ‘communicate’ with customers through promotion and advertising? Firms involve their customers in the process when they offer promotions. They also educate and inform them about their products. Advertisements also remind customers about the service and promotions reward them. Both are also used to persuade the customer.

¬  Map out a plan for the best way to provide excellent service to customers. Customer service is one of the most important things in any organization. One of the ways through which an employee can provide excellent customer service is by paying them attention. Listening patiently to the customer’s complaints and making efforts to solve them also helps in providing good customer service. Employees should avoid any attempt to argue with the customers though the customers may be wrong. Instead, they should try to make the customers see their point of view. Although the customer is not always right, the employee should not let him or her know this.

¬  What makes international services marketing complicated (complex)? One of the reasons why marketing is so complicated is culture. Cultures are very different around the world. Marketers will therefore have to deal with cultural sensitivity. Firms may have to change their service and product offering and conform to the local regulations that may be contrary to those of the firm.


1. Which of the following services could be said to be the most intangible?

¬              a. Airlines

¬              b. Hotel

¬              c. A consultancy firm

¬              d. A fast food outlet

¬              e. A taxi firm

2. In a car maintenance and repair service which of the following could not be considered as a supplementary service?

¬              a. Explanation of the bill

¬              b. Advice on car maintenance

¬              c. Free use of a courtesy car

¬              d. Identification of problems and correct repair of the car

¬              e. A free car wash after repair

3. For an overseas student selecting an Australian or New Zealand university to study at, which of the following information sources is likely to be the least important to the student in making his/her decision?

¬              a. The Internet site of the university

¬              b. Discussion with the university staff members over the telephone

¬              c. Opinion of friends who have visited and experienced the university

¬              d. Opinion of potential employers at the student’s home country

¬              e. Opinion of academic staff at the student’s home school

4. Which of the following statements may not be true?

¬  a. Delighted customers shows more loyalty and relationship commitment

¬  b. Delighted customers spread positive word of mouth

¬  c. Delighted customers are more forgiving

¬  d. Delighted customers expect more

¬  e. Delighted customers are less susceptible to being seduced by competitive offerings

5. Which of the following is the customer satisfaction formula?

¬  a.         Effective service production + effective service delivery = total customer satisfaction

¬  b.         Effective service production + effective complaint handling = total customer satisfaction and loyalty

¬  c.         Doing the job right + effective listening of complaints = total customer satisfaction

¬  d. Doing the job right the first time + effective service delivery = increased customer satisfaction and loyalty

¬  e. Doing the job right the first time + effective complaint handling = increased customer satisfaction and loyalty

6.   In a hotel stay which of the following could be called the core product and not the supplementary service?

¬              a. A fax machine in the room

¬              b. The night accommodation

¬              c. Meals at the restaurant of the hotel

¬              d. A safety deposit box in the room

¬              e. A swimming pool within the hotel

7. Customer service is:

¬  a. Something that happens at a complaints desk

¬  b. Something that happens in a customer service department

¬  c. Something that is built into the very fabric of the total service delivery system

¬  d. Something that happens in a service marketing department

¬  e. None of the above

8. In examining service encounters, we should acknowledge that:

¬  a. Customers are never right

¬  b. Customers are always right

¬  c. Customers are not always right

¬  d. Customers always tell lies

¬  e. Customers never tell lies

9. Which of the following may be true of a highly scripted service?

¬  a. A set of ‘mindless behaviour

¬  b. Mindfulness

¬  c. Good for responding quickly to varying customer needs

¬  d. All of the above

¬  e. a and c above

10. Why may some customers be satisfied by organisations that offer relatively low levels of service?

¬  a. Because the price is so low

¬  b. Because of the intangibility of the service

¬  c. Because the consumer had low levels of expectations

¬  d. Because of the advertising of the service organisation

¬  e. Because of the complexity of the service

11. Customer service function should be designed, performed and communicated with the following two goals in mind.

¬  a. Customer satisfaction and customer relationship

¬  b. Customer satisfaction and operational efficiency

¬  c. Customer relationship and operational efficiency

¬  d. Human relationship and operational relationship

¬  e. Employee relationship and customer relationship

12.  Which of the following is not one of the four generic differences between goods and services?

¬  a. Homogeneity

¬  b. Intangibility

¬  c. Simultaneity

¬  d. Perishability

¬  e. Variability

13. To a service organisation, all of the following are benefits of flowcharting their service experience, except:

¬              a. Identification of opportunities for improving efficiency and productivity.

¬              b. Identification of opportunities for cross selling.

¬              c. Management and control of individual parts of the service delivery process.

¬              d. Understanding of the nature of the service process.

¬              e. Understanding of the nature of the customer’s personal experience.

14. A service culture in an organisation exists if there is existence of the following, except:

¬  a. An ‘appreciation for good service’

¬  b. Company has an advertising campaign that stresses the importance of service

¬  c. Good service is given to internal as well as external customers

¬  d. Good service comes naturally as ‘a way of life’

¬  e. None of the above

15. In a stay in a hotel which of the following is not a tangible component?

¬              a. The restaurant meal

¬              b. The towels

¬              c. The hotel bed

¬              d. The wake up call

¬              e. The room key

16. What is a critical incident and how is it utilised in service marketing? Critical incident techniques are procedures that collect, analyse and classify human behaviour. They help in identifying the level of the customer’s satisfaction or dissatisfaction.

¬  17. What is service recovery? Why has a service recovery process? It is the process of identification of service failures, resolving the customers’ problems, categorizing the root causes of the problems and finding measures that can be used to improve the system.

18. Explain why you would use a blueprint a services firm? Blueprints are more concerned with the customers’ perspective and they help identify weaknesses. I would therefore use them to improve the customer service in the organization.



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Order Management