service
TRANSCRIPT
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Service Marketing Management
Session-2
Types of Marketing for Service
Enabling thepromise
Delivering the promise
Setting the promise
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Consumer Behaviour: Service
Consumers are rarely involved in manufacture of goods but often participate in service creation & delivery
Challenge for service marketers is to understand how customers interact with service operations
Does differences among Services affect Consumer behavior & if so, then how?
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Consumer Behavior: Service
Based on differences in nature of service act (tangible/intangible) & who or what is direct recipient of service (people/possessions), four categories of services:
– People processing
– Possession processing
– Mental stimulus processing
– Information processing
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Service: Four Categories
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Information processing
(services directed at intangible assets):
Accounting
Banking
Nature of Service Act People Possessions
Tangible Actions People processing
(services directed at people’s bodies):
Hair cut
Health care
Who or What is Direct Recipient of Service?
Possession processing
(services directed at physical possessions):
Package Transport
Laundry ServiceMental stimulus processing(services directed at people’s minds):
Education
Advertising/PR
Intangible Actions
Service: People Processing
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People ProcessingCustomers must:– Physically enter service factory
– Co-operate actively with service operation
Managers should think about process & output from customer’s perspective – To identify benefits created &
non-financial costs (time, mental, physical effort)
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Service: Possession Processing
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Possession Processing
Customers are less physically involved compared to people processing services
Involvement is limited
Production & consumption are separable
Service: Mental Stimulus Processing
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Mental Stimulus Processing
Ethical standards required when customers who depend on such services can potentially be manipulated by suppliers
Physical presence of recipients not required
Core content of services is information-based
Can be “inventoried”
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Service: Information Processing
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Information Processing
Information is the most intangible form of service output
But may be transformed into enduring forms of service output
Line between information processing & mental stimulus processing may be blurred.
Purchase Process
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Prepurchase StageService
Encounter Stage
Post-
Encounter Stage
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Purchase Process for Services
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Prepurchase Stage
Service Encounter Stage
Post-Encounter Stage
Prepurchase Stage: Overview
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Prepurchase Stage
Service Encounter Stage
Post-Encounter Stage
Customers seek solutions to aroused needs
Evaluating a service may be difficult
Uncertainty about outcomes increases perceived risk
What risk reduction strategies can service suppliers develop?
Understanding customers’ service expectations
Components of customer expectations
Making a service purchase decision
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Perceived Risks in Purchasing Services
Functional—unsatisfactory performance outcomes.
Financial—monetary loss, unexpected extra costs .
Temporal—wasted time, delays leading to problems.
Physical—personal injury, damage to possessions.
Psychological—fears and negative emotions.
Social—how others may think and react
Sensory—unwanted impact on any of five senses.
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How Consumer can handle Perceived Risk?
Seeking information from respected personal sources
Relying on a firm that has a good reputation
Looking for guarantees & warranties
Visiting service facilities or trying aspects of service before purchasing
Asking knowledgeable employees about competing services
Examining tangible cues or other physical evidence
Using the Internet to compare service offerings & search for independent reviews & ratings
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Marketing Action to Manage Risk Perceptions
Offer performance warranties, guarantees to protect against fears of monetary loss
For products where customers worry about performance, sensory risks:
Offer previews, free trials (provides experience)
Advertising (helps to visualize)
For products where customers perceive physical or psychological risks:
Institute visible safety procedures. Ex. Airline – O2 bags.
Deliver automated messages about anticipated problems
Websites offering FAQs & more detailed background
Train staff members to be respectful & empathetic
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Customers evaluate service quality by comparing what they expect against what they perceive they have received (service experience)
When usually Expectation gets formed?– Search & decision making;
– Shaped by information search & evaluation of attributes
Is it constant or evolving?– Evolving & Dynamic
– Expectations vary from one business to another, and among differently positioned service providers in the same industry.
– Expectations change over time depending on innovation, price, advertisement etc.
Customer Expectation
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What could different types of Expectation?
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Adequate Service
Desired Service
Zone ofTolerance
Expectation LevelsZone of Tolerance
Components of Customer Expectations
Desired Service Level: – Wished-for level of service quality that customer believes can & should be
delivered
Adequate Service Level:– Minimum acceptable level of service
Predicted Service Level:– Service level that customer believes firm will actually deliver
Zone of Tolerance:– Range within which customers are willing to accept variations in service
delivery
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Can Zones of Tolerance be different?
Zone of Tolerance for Different Service Dimensions
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Most Important Factors Least Important Factors
Leve
l of E
xpe
ctat
ion
Adequate Service
Desired Service
Zone ofTolerance
Zone of
Tolerance
Desired Service
Adequate Service
Customer Expectation
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Factors: Desired Expectation
•Derived expectation•Personal Service philosophies
Factors: Adequate Expectation
•Emergencies•Service Problem
•Bad Weather•Catastrophe•Random Overdemand
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Factors: Desired & Predicted Expectation•Advertising•Personal selling•Contracts•Other Communication
•Tangibles•Price
•Personal•Expert Review
PredictedService
Explicit ServicePromises
Implicit ServicePromises
Word-of-Mouth
Past ExperienceZone of
Tolerance
Desired Service
Adequate Service
Self-PerceivedService Role
Situational Factors
Perceived ServiceAlternatives
Temporary ServiceIntensifiers
Personal Needs
Lasting ServiceIntensifiers
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Service Encounter Stage: Overview
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Prepurchase Stage
Service Encounter Stage
Post-Encounter Stage
Service encounters range from high- to low-contact
Role in high-contact vs. low-contact delivery
Moment of Truth
Customer Experience
High-Contact vs Low-Contact Services
High-Contact Services
– Customers visit service facility & remain throughout service delivery
– Active contact between customers & service personnel
– Includes most people-processing services
Low-Contact Services
– Little or no physical contact with service personnel
– Contact usually at arm’s length through electronic or physical distribution channels
– New technologies (e.g. Web) help reduce contact levels
Medium-Contact Services
– Lie in between These Two
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Service Encounter: High-Contact vs Low-Contact
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High-Contact Service: Marketing System
Most parts of operations, service delivery, & marketing systems are exposed to customers
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TheCustomer
TechnicalCore
Interior & Exterior Facilities
Equipment
Service People
Other Customers
Advertising
Sales Calls
Market Research Surveys
Billing/Statements
Misc. Mail, Phone Calls, E-mails, Faxes, etc.
Website
Random Exposure to Facilities/Vehicles
Chance Encounters with Service Personnel
Word of Mouth
Service Delivery System Other Contact Points
Service Operations System
Backstage(invisible)
Front Stage(visible)
Other Customers
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Low-Contact Service: Marketing System
Some parts of systems are invisible to customers
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TheCustomer
Backstage(invisible)
Front Stage(visible)
Advertising
Market Research Surveys
Billing/Statements
Random Exposure to Facilities/Vehicles
Word of MouthPhone, Fax, Web-site, etc.
Self Service Equipment
Technical Core
Other Contact PointsService Delivery System
Service Operations System
Contact points between customers & service providers.
“Portals” from which customers get to interact with providers & influence their overall experience.
Represent skill, motivation, & tools employed by firm’s representative and expectations & behavior of client, which together will create service delivery process.
What are “moments of truth”?
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Post-Encounter Stage: Overview
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Prepurchase Stage
Service Encounter Stage
Post-Encounter Stage
Evaluation of service performance
Future intentions
Customer Satisfaction
Satisfaction defined as attitude-like judgment following a service purchase or series of service interactions
Customers have expectations prior to consumption, observe service performance, compare it to expectations
Satisfaction judgments are based on this comparison
– Positive disconfirmation if better than expected
– Confirmation if same as expected
– Negative disconfirmation if worse than expected
Satisfaction reflects perceived service quality, price/quality tradeoffs, personal & situational factors
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Delight: Going Beyond Satisfaction
Research shows that delight is a function of three components:
– Unexpectedly high levels of performance
– Arousal (e.g., surprise, excitement)
– Positive affect (e.g., pleasure, joy, or happiness)
Getting feedback during service delivery help to boost customer loyalty
Is it possible for customers to be delighted by mundane services?
Is delivering delight to Customers good or bad?
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