Solution-services Management [14mbamm303]

SERVICES MARKETING 14MBAMM303

Dept. of MBA/SJBIT Page 1

VTU Question Bank and Answers

Module 1

1. What are Services? (June 13, Dec 14)

A service is any act or performance that one party can offer to another that is essentially

intangible & does not result in the ownership of anything its production may or may not

tied to a physical product.

2. Explain the types of Service Marketing? (June 13)

Service marketing involves 3 types of marketing:

External Marketing: "Setting the Promise" · Marketing to END-USERS. · Involves

pricing strategy, promotional activities, and all communication with customers. ·

Performed to capture the attention of the market, and arouse interest in the service.

Internal Marketing: "Enabling the Promise" · Marketing to EMPLOYEES. · Involves

training, motivational, and teamwork programs, and all communication with employees. ·

Performed to enable employees to perform the service effectively, and keep up the

promise made to the customer.

Interactive Marketing: (Moment of Truth, Service Encounter) · this refers to the

decisive moment of interaction between the front-office employees and customers, i.e.

delivery of service. · This step is of utmost importance, because if the employee falters at

this level, all prior efforts made towards establishing a relationship with the customer,

would be wasted.

3. Write the stages in process for setting Customer defined service standards? (June

15)

1. Identify existing or desired service encounter sequence

2. Translate customer expectations into behaviors/actions

3. Select behaviors/actions for standards

4. Set hard or soft standards

5. Develop feedback mechanisms Measure by audits or operating data Hard Soft Measure by

transaction- based surveys



6. Establish measures and target levels

7. Track measures against standards

8. Provide feedback about performance to employees

9. Update target levels and measures.

4. What are the Myths of Service Marketing? (June 14)

Myth is a popular belief which is over simplified that tends to explain only part of

phenomena. The following are the myths commonly held about services.

Myth1-A Service Economy produces services at the expense of other sector.

The service sector is growing at very fast pace. Eventually advanced countries will produce

only services and there will be no manufactured goods output at all. This belief is there

because sector is growing so rapidly that other sectors cannot grow at the same pace. This

fear is baseless. In fact both manufacturing and service sector have grown.

In manufacturing sectors there are more workers than before, the manufacture sector itself

needs services. Therefore service sectors support manufacturing sector and not growing at

the expense of manufacturing.

Secondly it is fact that need for services can be felt very easily modern day consumer spend

more money on services than for manufacturing of goods.

Thirdly some services in fact aid to improve and increase production and productivity.

Myth2-Service jobs are Low paying and Low level.

Many people think service jobs are of fast food employees, hairdressers, stores, clerks etc.

this is not true. There are service sectors like law, accounting, banking and medicine etc.

which are not of low pay category, another misconception about this sector is that service

business is small in size, though it may employ a large number of people and may dominate

GDP.

Myth3-Service production is labor intensive and low in productivity.

It is a myth service labor intensive; production is sluggish, creating a drag on the economy.

While hotel, travel agency may be less capital intensive, services like airlines,

telecommunication, insurance etc. are quite capital intensive.



Myth4-Service is necessary evil for manufacturing firms.

Traditionally many manufacturers were of view that so called after sales service was only

adding to cost and in no way it is profitable. The traditional view was that service was

equated to repair, maintenance and handling of complaints. Many manufacturers view

services as a profit centre and use it as a vehicle to differentiate their product from that of

competitors.

Myth5-Managing services is just like Managing manufacturing Business.

This myth will lead us to study of “service marketing” Many felt that there was not much

difference between product and services made out to be. It was only in 1980 that it was felt

by marketers and top management personal that there is a substantial difference between the

services and product marketing.

Module 2

1. Explain the Role of Service Quality in Offensive and Defensive Marketing? (June

14)

Offensive Marketing:

In this method, profit is obtained through sales, but the methodology adopted is sales increase

through repetition and higher market share. In this method, the services are charges higher

than that of competitive, Sales promotion and advertising are huge in this method.

This method is possible only for those companies which have a good reputation.

Defensive Marketing:

In this method the emphasis is on customer retention. This is because; we know that lost

customer must be replaced by a new customer when the replacement comes at the high cost

because of high advertising and promotion expenses. New customers may not be profitable in

the short term.

Eg: In cell phone industry, capturing the customer from other company is very expensive. A

greater degree of service improvement is necessary who make a customer switch from

competitor than to retain a current customer. In general, longer a customer remains with the

company, it is both profitable and companies‘ relationship with the customer will improve.



If the customer is served properly he generates more profits every year and stay with the

company. Longer the company keeps the customer, the more money it makes.

Cost, Volume, Price Premium and Word of Mouth.

2. What is Market Testing? (June 13)

Market Testing of the development process that a tangible product might be test marketed

in a limited number of trading areas to determine marketplace acceptance of the product

as well as other marketing mix variables such as promotion, pricing, and distribution

vehicles. Again, the standard approach for a new manufactured product is typically not

possible for a new service due to its inherent characteristics.

3. Explain search, experience, and credence qualities? (June 13)

One of the most significant differences between goods and services is that in goods

Search Qualities dominate while services are dominated by Experience and Credence

Qualities.

Search Qualities, Attributes that a consumer can determine before purchasing a product,

It includes color, style, price, fit, feel, hardness &smell.

Experience, Attributes that can be discerned only after purchase or during consumption,

It includes taste & wearability. Products such automobiles, clothing, furniture and jewelry

are high in search qualities because their attributes can be determined before purchase.

Credence includes characteristics that the consumer may find impossible to evaluate

even after purchase & consumption. Examples are Appendix operation & brake relining

on automobiles.

The following Figure gives a continuum of evaluation for different types of products

based on search, experience and credence qualities.

As services are rich in experience and credence qualities, the following important aspects

related to consumer decisions making process need to be understood.

4. What are the various types of Expectations? (Dec 13)

Here are several types of expectations about service. The first one could be termed as

Desired Service and the second one as Adequate Service.



Desired Service:

This is the level of service which customer hopes to receive or ―wished for level of

performance. desired service is a mixture of what customer believes “can be” and “should

be”.

E.g. Give a cloth to dry cleaner to remove dirt and stain. Desired service is to remove dirt and

stain. In the opinion of the customer this “can be done” and “should be done”.

Similarly if you go to a placement services to register your name, the following will be the

desired service.

a. Find you a Job.

b. Find you a right Job.

c. Find you right Job at right geographical location.

d. Find you right Job, right location & right salary.

That is what you hope and with for but you also know that due to economic reason or

availability of ideal job opening as above, you may have to think of something else. You

want something but you know pretty well that it is not possible. For this reason, a customer

holds another lower level expectation. This lower level of expectation is called “adequate

service”. This level of service is acceptable to the customer.

5. Define a customer? (Dec 14)

A Customer is the most important person in our office. A customer is not dependent on us,

we are dependent on him. A customer is not an interruption of/our work.

He is the purpose of it. We are not doing a favor by serving him. He is doing us a favor by

giving us an opportunity to do so. A customer is not someone to argue. No one has won an

argument with a customer.

A customer is a person who brings us his wants. It is our job to handle them profitably to him

and to ourselves. Customer is always right.

6. Define Zone of Tolerance? (June 15)

Zone of Tolerance is the variation between desired service and Adequate Service.

The extent to which customers recognize and are willing to accept this variation is called

Zone of Tolerance.



Module 3

1. Explain the types of Service Encounters? ( June 13)

A service encounter occurs every time a customer interacts with the service organization. There

are three types of service encounters.

1. Remote encounter,

2. Phone encounter,

3. Face to Face encounter.

A customer may experience any of these type of encounters alone or a combination of all the

three in his / her relations with the service firm.

Remote Encounter:

First, encounter can occur without any direct human contact such as when a customer interacts

with the bank through A.T.M. System. Or a Ticketing Machine. Remote encounter also occurs

when the firm sends billing statements or communications to customers by mail. Although there

is no direct human contact, each represents an opportunity for the company to establish quality

perception in the minds of the customers. In remote encounters the tangible evidence of the

service and the quality of technical process becomes the primary basis for judging the quality.

Phone Encounter:

In many organizations for eg. Insurance companies, Telecommunications, the most frequent type

of encounter between the customer and the company occurs over the phone. Almost all

companies relay on phone encounters in the form of customer service, enquiry attending and

order booking. The judgment of quality in phone encounters is much more complex than in

remote encounters.

For eg., to ensure quality in a Telephone encounter, when a customer telephones the firm, if the

call received by a person who cannot handle the customer, the least he could do to transfer the

customer to another executive of the company who can handle the customer and answer all the

quires.

Face to Face Encounter:

A third type of encounter is the one that occurs between the employee and the customer in direct

contact. This normally happens in a shopping situation or in a hotel or any service organization.

Determining an understanding service quality issues in Face to Face context is very complex.

Verbal and Nonverbal behaviors are both important ingredients of quality.



2. Explain the Determinants of Customer Satisfaction? (Dec 14)

Product/Service Features:

Customer satisfaction is mainly influenced by the customer evaluation of product or service

features.

Eg:A Resort hotel features-The pool area, access to golf facilities, Restaurants,room comfort and

privacy, helpfulness and courtesy of staff, room price Etc.

In conducting satisfaction studies most firms will determine through some means the

important features and attributes for their service & then measure perceptions of those features as

well as overall service satisfaction.

Consumer Emotions:

Can also affect their perceptions of satisfaction with products and services.

These emotions can be stable, pre existing emotions.

(Eg: Mood state or life satisfaction)

Think of times when you are at a very happy stage of life (when you are on vacation) and your

good, happy mood and positive frame of mind have influenced how you feel about the services

you experience.

Attributions for Service Success or Failure:

Attributions-The perceived causes of events-Influence perceptions of satisfaction as well, when

they have been surprised by an outcome (service-much better or much worse than expected)

Consumers tend to look back for reasons and their assessments of the reasons can influence the

satisfaction level.

Eg: Customer of a weight lose organization (VLCC) fails to lose weight as hoped and likely

search for the

Perceptions of equity or Fairness:

Customers ask themselves

a) Have I been treated fairly compared with other customers?

b) Did other customers get better treatment better price or better quality service?

c) Did I pay a fair price for the service?

d) Was I treated well in exchange for what I paid and the effort I expended?

Particularly in service recovery situations notions of fairness are central to customers.



Perceptions of satisfaction with products & services

Satisfaction with a service provider following a service failure is largely determined by

perception of fair treatment.

Other consumers, family members &Co –Workers:

In addition to products & service features & one‘s own individual feelings & belief, consumer

satisfaction is often influenced by other people. Sometimes it is not possible to manage capacity

to match demand. It may be too costly for a health clinic to add additional facilities or hire

additional doctors to handle peak demand during the winter season when the flu is common and

many patients have to wait for the doctor. These are instances where demand is unpredictable

and the service capacity is very inflexible (it cannot be easily stretched to meet the demand)

Sometimes waiting may occur for eg., even through patients are scheduled by appointments in

the physician‘s office, frequently there is wait. This is because some patients take longer to serve

than the time allotted to them. For most service organization, waiting customers are a fact of life

at some point. Waiting can occur on the telephone – customers are put on hold when they call in

to ask for information, order something, and make complaint. The waiting can occur at a bank or

a post office or doctors clinic. Waiting can also occur with transactions like postal delay in

delivery.

To deal with the waiting line problem several strategies are adopted by the organization and they

are as follows:

Employ operational logic.

Establish a reservation process.

Make waiting fun or at least tolerable.

Differentiate waiting customers.

Module 4

1. Describe the four basic waiting line strategies, and given an example of each one

preferably based on your experience as a consumer? (June 13)

Employ operational logic.

Establish a reservation process.

Make waiting fun or at least tolerable.

Differentiate waiting customers.



Employ operational logic: If customer wait is common, then the first step for the organization is

to analyse the operational process to remove the influences. It may be possible to redesign the

system so that the queue can move faster Eg. Additional counters at bank, post office during all

hours or technological improvements to be made (use of computers or ATM) when queue is

inevitable, the organization should take a decision on ―What kind of queuing system to used or

how to configure the queue‖. Queue configuration refers to the number of queues, their location,

space requirement etc., There are several possibilities.

Establish a reservation process: When waiting cannot be avoided, a reservation system can

help to spread the demand. Hotels, transport companies. Theatres and many other service

providers use reservation system to avoid long waits. The idea behind reservation system is that

the service should be available positively when the customer arrives. In addition to the reduction

in the waiting time, the reservation system has the added benefit of potentially shifting the

demand to less desirable time periods.

The danger this system is that if the customer does not turn up then and alternative arrangement

has to be made. E.g., a customer ―who books a room in a hotel, does not turn up then the hotel

staff will be in a dilemma as to how long should they wait.

2. Define queue discipline? (June 14)

Customers need to wait the same length of time for service. One the basis of need or customer

priority organizations differentiates among customers, allowing some to have shorter waits for

service than others. This is known as queue discipline. This differentiation reflects management

policies regarding whom to select next for service. The most popular discipline is first come and

first served.

3. Explain Process for Setting Customer-Defined Standards? (Dec 14)

Identify existing or desired service encounter sequence

Translate customer expectations into behaviors/actions

Select behaviors/actions for standards

Set hard or soft standards

Develop feedback mechanisms Measure by audits or operating data Hard Soft Measure

by transaction- based surveys



Establish measures and target levels

Track measures against standards

Provide feedback about performance to employees

Update target levels and measures

Step 1: Customer defined standards is what customer expects, it is a link between customer

expressed expectations and company‘s action to deliver these expectation...To do these identify

the existing service encounter sequence.

Step 2: What do the customers expect further?

Step 3:

a) Which behavior or action of the employer is most important to the Customers Company and

offered products and services? Customer defined standard tells the company what is most

important to the customers. This is what company should concentrate on.

b) There may be attributes in which company needs to improve. This should be focused and

company should make every effort to improve it.

Step 4: Examine if hard/soft standard chosen are appropriate.

Examine the suitability of accepting to implement the standards-skills/suitability etc.

Step 5: Feedback should be developed once standards are implemented. For eg: Soft standards

need employee monitoring, I‘e., Employee monitoring is done by superior listening in when the

employee is attending to customers call. The purpose of this monitoring is to prove feedback to

employee on their performance superior monitoring an employee‘s handling of a customer

service call, for example, should focus not so much on how quickly the employee gets the

customer off the phone but how adequately he/she handles customer request.

Step 6: Establish a Standard and set target level

Without setting a target level, the company lacks a way to qualify whether the standards have

been met or not, this method adopted is as follows. Each time a complaint was made to the

company and each time problem was resolved, employee should log the time.

They should also ask the customer his/her satisfaction with the performance in resolving the

complaint. The company will then plot this information for each complaint on the chart to

determine how well the company was performing and where the company wished to be in the

future.



4. Explain the Five Dimensions of Service Quality? (Dec 13)

There are Five Dimensions of Service Quality,

They are,

Reliability

Tangible

Responsiveness

Assurances

Empathy

Reliability: Reliability means, ability to perform the promise to service dependably and

accurately. Reliability means that the company delivers as per the promises. Customers want to

do business with a company which keeps up the promise.

Tangible: Tangible means, appearance of physical facilities, equipments personnel and written

materials. All of these provide physical image of the service. This is very important particularly

to the new customers who will use this as criteria to evaluate quality. A Service industry

emphasizes tangibles in their strategy which includes hospitability in services when the

customers visit the establishment to receive services. While tangibles are used by

service companies to enhance their image, provide continuity and signal quality to the customers.

Responsiveness: Responsiveness means willingness to help customers and provide prompt

service. This deals with attentiveness and promptness in dealing with customer request questions,

complaints and problems. Responsiveness is communicated to the customers in an indirect way

as follows,

Assurances: Assurance means, employee‘s knowledge and courtesy and their ability to inspire

trust and confidence. This dimension is likely to be particularly important for services that

customer perceives as having high risk and feel uncertain about their ability to evaluate

outcomes. e.g., Medical, Banking and Legal Services

Empathy: Empathy means caring and individualized attention to the customers. The essence of

empathy is to convey the message that the customers are unique and special. Customers want to

feel that he is important to the company and to the service provider.

Personnel at small service firms often know the customers by name and build relationship with

them and meet their requirements and preferences. Such a small firm competes with large firms;

the ability to empathetic may give the small firm a clear advantage.



Module 5

1. Explain the Benefits and Challenges for Franchisers of Service? (June 14)

Benefits:

Leveraged business format for greater expansion and revenues

Consistency in outlets

Knowledge of local markets

Shared financial risk and more working capital

An established business format

National or regional brand marketing

Minimized risk of starting a business

Challenges:

o Difficulty in maintaining and motivating franchisees

o Highly publicized disputes and conflict

o Inconsistent quality

Control of customer relationship by intermediary

o Encroachment

o Disappointing profits and revenues

o Lack of perceived control over operations

o High fees

2. What type of behavior are influenced by the service scape? (Dec 13)

Individual behavior : It is observed that when individuals react to places. The behavior takes 2

forms. 1. Approach 2. Avoidance.

Approach behaviours include all positive behaviours that might be directed at a particular place

such as desire to stay. Avoidance behavior reflect the opposite, a desire not to stay. This behavior

is influenced by the environment.

The environment, in addition to attracting or determining entry can also influence the customers,

and employees in executing their plan once inside the servicescape. Each individual comes to a

particular service organization with a goal or purpose that may be aided or hindered by setting.

Take a hotel situation when a customer enters. He needs easy access to parking, clear sign

boards, directing him to reception, efficient food service, clean rooms etc., The ability of an



employee to do their hobs is also influenced by the servicescape. Adequate space, proper

equipment, comfortable temperature all these contribute to employee‘s comfort and job

satisfaction.

Social Interaction: In addition to the effect of servicessape on individual behavior, servicescaoe

influence the nature and quality of employee interactions, most directly in interpersonal service.

The social interaction is affected by the physical container in which it occurs. The ‗physical

container‘ can affect the nature of social interaction in terms of the duration of interaction and

progression of events. In some service situation, the firm may want to limit the duration of

service. Environmental variables such as seating arrangements, size, time limit the social

interaction occurring between customers and other customers (Cinema) or in a train. The close

physical proximity of passengers on the train will in itself prescribe certain patterns of behavior.

The physical setting decides the nature of social interaction. Friendship formation,

participation, helping others have are been influenced by environment conditions. It is also found

that proper physical setting will also help employees in developing friendship, group work etc.,

One of the challenges in designing environments is to enhance individual approach behaviours

and encourage the appropriate social interactions is that the best design from one person or group

may not be best design for others.

3. What are the various managerial issue regarding various type of behavior? (Dec 14)

Self service firms want to predict and manage customer behavior.

Main concern for manager would be

1. Customer attraction

2. Customer satisfaction

3. Customer retention

Remote service firms Managerial problem will be

1. Productivity

2. Increase in efficiency

3. Team work

Interaction service a. Behaviour of customers and employees

Environment and behavior

People respond to environment in different ways i.e., they 1. Respond 2. Cognitively 3.

Emotionally. 4. Psychologically



The response of customer influence ―how they behave in he environment. We will discuss one

by one. 1. Environment and Cognition 2. Environment and emotion 3. Environment and

physiology.

4. Define Penetration pricing, Prestige pricing & Skimming pricing? (June 13)

Penetration Pricing:

Penetration pricing is a strategy in which new services are introduced at low prices to stimulate

trial and widespread use. The strategy is appropriate when (1) sales volume of the service is very

sensitive to price, even in early stages of introduction (2) a service faces threats of strong

potential competition very soon after introduction; and (3) there is no class of buying willing to

pay a higher price to obtain the service.

Prestige Pricing

This is a special from demand – based pricing by service marketers who offer high – quality or

status services. For certain services – restaurants, health clubs, airlines, and hotels – a higher

price is charged for the luxury end of the business. Some customers of service companies who

use this approach may actually value the high price because it represents prestige or a quality

images. Others prefer purchasing at the high end because they are given preference in seating or

accommodations and are entitled to other special

benefits. In prestige pricing, demand may actually increase as price increases because the costlier

service has more value in reflecting quality or prestige.

Skimming Pricing

This is a strategy in which new services are introduced at high prices with large promotional

expenditures. In this situation many customers are more concerned about obtaining the service

than about the cost of the service allowing service providers to skim the customers most willing

to pay the highest prices.



Module 6

1. Explain Models of Buyer Behavior? (Dec 14)

Buyers Characteristics:

Cultural Factors:

Culture refers to the values; practice or customs of the people in the society. It is the social

heritage of the society & influences the life style of the people. Every culture evolves unique

patterns of food habits, clothing and social interaction, in some cases value becomes enforced

through legal system.

Cultural factors are influenced by religion. Ethnic groups, fashion, leisure time etc.Cultural

factors are not static but adaptive.

Increased value in health in western society is an emerging cultural norm. This reflects on

changes in food consuming patterns like low calorie food, hormone free meat etc.Also growth of

gum and other health care centers increase in leisure time also has influence on use of many

services like resorts, types of holidays etc.

While in india, a higher rate of literacy in women & more working women. This gives rise

to changes in banking hours which are more convent, availability of domestic service & growth

for child care centers.

Social Factors

a. Reference Group: Primarily in the form of friends and work colleagues or secondary in the

form of remote personalities with whom there is no two way interaction.

b. Family: Marketers are interested in the roles & influence of husband, wife, children & parents

on the purchase of goods & service.

Decision regarding package holidays are dominated by wives where as decisions on financial

investments are dominated by husbands.

Personal Factors

Buyers age & life cycle

Food & choice of restaurant, type of insurance required, banking facilities etc.

(Bachelor, married or retired stage)

Occupation & Economic Circumstances

Lifestyle

Time is valued



Psychological Factors

Determinants are motivation, perception, liking & beliefs & attitudes influence buying

behavior.

Motive or Drive is a need that is sufficiently pressing to direct the person to seek

satisfaction of need.

Perception is a process by which an individual selects, organizes & interprets information

to create a meaningful picture of what he/she has seen or heard.

Learning Theory-Suggests that a learning is produced through interplay of drives, stimuli,

cues, responses etc. This helps service firms to answer.

2. Explain the Service Marketing Triangle? (June 14)

The triangle shows the three interlinked groups that work together to develop, promote and

deliver services. These key players are labeled on the points of triangle: the company (or SBU or

Department or Management): the customers: and the providers.

Providers can be the firm‘s employees, subcontractors or outsourced entities who actually deliver

the company‘s services. Between these points on the triangle, three types of marketing must be

successfully carried out for a service to succeed: External Marketing, Interactive Marketing &

Internal Marketing.

On the right side of the triangle are the ―external marketing ―efforts that the firm engages in to

set up its customers expectations & make promises to customers regarding what is to be

delivered. But external marketing is just the beginning for services marketers. Promise made

must be kept.

Interactive Marketing or Real time marketing. Here is where promises are kept or broken by the

firm‘s employees, subcontractors or agents. People are critical at this juncture. If promises are

not kept, customers become dissatisfied and eventually leave.

Recruiting, training, motivating, rewarding & providing equipment and technology. Unless

service employees are able & willing to deliver on the promises made, the firm will not be

successful, and the services triangle will collapse.



3. Explain The Gaps Model In Service Marketing? (June 15)

Theory of the Gaps Model

Perceived service quality can be defined as, according to the model, the difference between

consumers‘ expectation and perceptions which eventually depends on the size and the direction

of the four gaps concerning the delivery of service quality on the company‘s side.

Customer Gap = f (Gap 1, Gap 2, Gap 3, Gap 4)

The magnitude and the direction of each gap will affect the service quality. For instance, Gap 3

will be favorable if the delivery of a service exceeds the standards of service required by the

organization, and it will be unfavorable when the specifications of the service delivered are not

met.

The key points for each gap can be summarized as follows:

Customer gap: The difference between customer expectations and perceptions – the service

quality gap.

Gap 1: The difference between what customers expected and what management perceived about

the expectation of customers.

Gap 2: The difference between management‘s perceptions of customer expectations and the

translation of those perceptions into service quality specifications and designs.

Gap 3: The difference between specifications or standards of service quality and the actual

service delivered to customers.

Gap 4: The difference between the services delivered to customers and the promise of the firm to

customers about its service quality

Module 7

1. Explain the Strategies for Enhancing Customer Participation? (June 14)

Strategies for Enhancing Customer Participation:

I. Define customers’ jobs: The organization first determines what types of participation it wants

from customers, thus beginning to define the customer‘s job. Identifying current level of

customer participation can serve as a starting point.

Once the desired level of participation is clear the organization can define more specifically what

the customer‘s job entails. The customers‖ job description‖ will vary with the type of service &

the organizations desired position within its industry. The job might entail.,



Recruit, Educate and Reward Customers: Once the customer role is clearly defined the

organization can think in terms of facilitating that role.

In a sense the customer becomes a ―partial employee‖ of the organization at the same level. As

with the employees customer participation in service production & delivery will be facilitated

when.

1. Recruit the right customers

2. Educate and train customers to perform effectively

3. Reward customers for their contributions

4. Avoid negative outcomes of inappropriate customer participation

II. Manage the customer mix: E.g., Single college students who want to party & families with

small children who want quiet-it may find two groups do not merge.

The process of managing multiple & sometimes conflicting segments is known as compatibility

management (C.M).

Compatibility management will be critically important for some businesses (such as Public

transportation, hospitals & clubs)

2. Explain the Elements in Effective Research Program? (Dec 14)

A good service marketing research program includes multiple types of research studies. The

particular portfolio for any company will match company resources and address the key areas

needed to understand the customer of the business. So that it will be easier for the company to

identify the appropriate type of research for different research objectives.

Types of Research

Complaint solicitation, Critical incident studies, Requirements research.

Relationship & SERVQUAL survey. Trailer call or post translation surveys, Service expectation

meeting & Reviews, Process checkpoint evaluations, Market-Oriented Ethnography.

Complaint Solicitation Good service organizations take complaints seriously. Not only do they

listen to complaints-they also seek complaints as communication about what can be done to

improve their services & their service employees. Firms that use complaints as research &

document them, then use the information to identify dissatisfied customers, correct individual

problems where possible, and identify common service points.



Research on complaints is one of the easiest type of research for firms to conduct, leading many

companies to depend solely on complaints to stay in touch with customers. ―complaint‖ broadly

to include all comments—both negative & positive –as well as questions from customers.

3. What is Physical Evidence? (June 13)

Physical Evidence is the environment in which service is delivered. It is the environment in

which customers and firm interact. Physical evidence is any tangible commodity which

facilitates communication.

Physical evidence includes all aspects of the organizational physical facility physical facility is

also called as servicescape.

There are 2 elements of servicescape.

1. Exterior

2. Interior .

Exterior refers to parking, signboard, landscape etc.,

Interior refers to layout, decor and equipment.

Some service communicate heavily through physical evidence eg., hospital, resorts. Some other

services provide limited service evidence e.g., Insurance.

4. Explain the levels of Retention Strategies? (Dec 13)

Level 1: At level 1 the customer is tied to the firm primarily through financial incentives lower

prices for greater volume purchases or lower prices for customers who have been with the firm a

long time. Examples of level 1 relationship marketing are not hard to find. Think about the

airline industry and related travel service industries like hotels and car rental companies Frequent

flyer programs provide financial incentives and rewards for travelers who bring more of their

business to a particular airline.

Hotels and car rental companies do the same. One reason these financial incentive programs

proliferate is that they are not difficult to initiate and frequently result in at least short term

advantages to a firm since, unless combined with and other relationship strategy, they don‘t serve

to differentiate the firm from its competitors in the long run. Many travelers belong to several

frequent flyer programs and don‘t hesitate to trade off among them. And there is considerable

customer switching every month among the major telecommunication suppliers. While price and



other financial incentives are important to customers, they are generally not difficult for

competitors to imitate since the only customized element of the marketing mix is price. Eg.

Swiss air, Luftansa offer big gifts and discounts for fliers exceeding certain Kilometers in a year.

Level 2: Level 2 strategies bind customers to the firm through more than pricing incentives.

While price is still assumed to be important, level 2 retention marketers build long-term

relationships through social as well as financial bonds. Customers are viewed as ―clients‖ not

nameless faces and become individuals whose needs and wants the firm seeks to understand.

Services are customized to fit individual needs and marketers find ways of staying in touch with

their customers, thereby developing social bonds with them. For example in a study of customer

firm relationships in the insurance industry, it was found that behaviours such as staying

Level 3: Level 3 strategies are the most difficult to imitate and involve

(1) Structural as well as

(2) Financial and

(3) Social bonds between the customer and the firm.

5. Explain the Sources of Conflict? (June 14)

Person/role conflicts

Organizational/Client conflicts

Interclient conflicts

Person/Role Conflicts: Arises when employees are required to wear specific clothing or change

some aspect of their appearance to confirm to the job requirements. A young lawyer, just out of

school, may feel an internal conflict with his new role when his employer requires him to cut his

long hair & trade his casual clothes for a three-piece suit.

Organizational/Client conflicts: A common type of conflict for front line service employees is

the conflict between their two bosses, the organization and the individual customer.

Service employees are rewarded for following certain standards, rules, & procedures. Ideally

these rules and standards are customer based.

For E.g., employees who depend on tips or commission are likely to face greater levels of

organization/client conflict because they have greater incentives to identify with the customer.

Interclient Conflict: Sometimes conflict occurs for boundary spanners when incompatible

expectations and requirements arise from two or more customers. This situation occurs most



often when the service provider is serving customers in turn (a bank teller, a ticketing agent, a

doctor) or is serving many customers simultaneously (teachers, entertainers).

6. Explain the Strategies for Enhancing Customer Participation? (Dec 13)

I. Define customers’ jobs: The organization first determines what types of participation it wants

from customers, thus beginning to define the customer‘s job. Identifying current level of

customer participation can serve as a starting point.

Once the desired level of participation is clear the organization can define more specifically what

the customer‘s job entails. The customers‖ job description‖ will vary with the type of service &

the organizations desired position within its industry. The job might entail.,

1. Helping oneself

2. Helping others

3. Promoting the company

Recruit, Educate and Reward Customers: Once the customer role is clearly defined the

organization can think in terms of facilitating that role.

In a sense the customer becomes a ―partial employee‖ of the organization at the same level. As

with the employees customer participation in service production & delivery will be facilitated

when.,

1. Recruit the right customers

2. Educate and train customers to perform effectively

3. Reward customers for their contributions

4. Avoid negative outcomes of inappropriate customer participation

II. Manage the customer mix: E.g., Single college students who want to party & families with

small children who want quiet-it may find two groups do not merge.

The process of managing multiple & sometimes conflicting segments is known as compatibility

management (C.M).

Compatibility management will be critically important for some businesses (such as Public

transportation, hospitals & clubs)



6. Explain Service Blue Printing? (June 13)

A tool for simultaneously depicting the service process, the points of customer contact, and the

evidence of service from the customer‘s point of view.

A service blue print is a picture or a map that shows the service system. So that the different

people involved in providing the service can understand their roles clearly.

Blue Print Components:

The Blueprint components are shown in the figure below,

They are:

1. Customer Actions-line of interaction

2. Onstage contact employee action-line of visibility

3. Back stage employee action-line of internal interaction

4. Support Process

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