MKTG Chapter 12

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Marketing Chapter 12 Study Guide

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Service
 
the result of applying human or mechanical efforts to people or objects
Four Unique Characteristics of Service
 
IntangibleInseparableHeterogeneousPerishable
Intangibility
 
the inability of services to be touched, seen, tasted, heard or felt in the same manner that goods can be sensed
Search Quality
 
a characteristic that can be easily assessed before purchase
Experience Quality
 
a characteristic that can be assessed only after use
Credence Quality
 
a characteristic that consumers may have difficulty assessing even after purchase because they do not have the necessary knowledge or experience
Inseparability
 
the inability of the production and consumption of a service to be separated. Consumers must be present during the production
Heterogeneity
 
the variability of the inputs and outputs of services, which causes services to tend to be less standardized and less uniform than goods
Perishability
 
the inability of services to be stored, warehoused, or inventoried
Four Unique Characteristics of Services
 
ReliabilityResponsivenessAssuranceEmpathy
Reliability
 
the ability to perform the service dependably, accurately, and consistently
Responsiveness
 
the ability to provide prompt service
Assurance
 
the knowledge and courtesy of employees and heir ability to convey trust
Empathy
 
caring, individualized attention to customers
Tangibles
 
the physical evidence of the service
Gap Model
 
a model identifying five gaps that can cause problems in service delivery and influence customer evaluations of service quality
Gap between what customers want and what management thinks customers want
 
This gap results from a lack of understanding or a misinterpretation of the customers' needs, wants, or desires.
Gap between what management thinks customers want and the quality specifications that management develops to provide the service
 
this gap is the result of management's inability to translate customers' needs into delivery systems within the firm
Gap between the service quality specifications and the service that is actually provided
 
due to the inability of management and employees to do what should be done. Poorly trained or poorly motivated workers can cause this gap
Gap between what the company provides and what the customer is told it provides
 
communication gap
Service as a Process (four categories)
 
People ProcessingPossession ProcessingMental Stimulus ProcessingInformation Processing
People Processing
 
takes place when the service is directed at a customer
EX: transportation, hairstyling, health clubs, dental and health care
Possession Processing
 
occurs when the service is directed at customers' physical possessions
EX: lawn care, car repair, dry cleaning, veterinary services
Mental Stimulus Processing
 
refers to service directed at people's minds
EX: entertainment, spectator events, theater performances, education
Information Processing
 
services that use technology or brainpower directed at a customer's assets
EX: insurance, banking, consulting
Core Service
 
the most basic benefit the consumer is buying
Supplementary Services
 
a group of services that support or enhance the core service
Mass Customization
 
a strategy that uses technology to deliver customized services on a mass basis
Distribution Strategies for Service
 
must focus on such issues as convenience, number of outlets, direct versus indirect distribution, location, and scheduling
Key factor influencing the selection of a service provider
 
convenience
Promotion Strategy
 
Stressing tangible cluesUsing personal information sourcesCreating a strong organizational imageEngaging in post-purchase communication
Price Strategy
 
it is important to define the unit of service consumption
Three Categories of Pricing Objectives
 
Revenue-oriented pricingOperations-oriented pricingPatronage-oriented pricing
Revenue-oriented pricing
 
maximizing the surplus of income over costs
Operations-oriented pricing
 
match supply and demand by varying prices
Patronage-oriented pricing
 
maximize the number of customers using the service
Relationship Marketing (Three Levels)
 
Level 1 - firm uses pricing incentives to encourage customers to continue doing business with itLevel 2 - uses pricing incentives but seeks to build social bonds with customersLevel 3 - uses financial and social bonds but adds structural bonds to the formula
Internal Marketing
 
treating employees as customers and developing systems and benefits that satisfy their needs
Nonprofit Organization
 
an organization that exists to achieve some goal other than the usual business goals of profit, market share, or return on investment
Nonprofit Organization Marketing
 
the effort by nonprofit organizations to bring about mutually satisfying exchanges with target markets
Three Issues Relating to Target Markets (Nonprofit)
 
Apathetic or strongly opposed targets
Pressure to adopt undifferentiated segmentation strategies
Complementary Positioning
Three Product-Related Distinctions (Nonprofit)
 
Benefit complexityBenefit strengthInvolvement
Promotional Resources (Nonprofit)
 
Professional volunteersSales promotion activitiesPublic service advertisingPeer to peer communications
5 Pricing Decisions (Nonprofit)
 
Pricing objectivesNon-financial pricesIndirect paymentSeparation between payers and usersBelow-cost pricing