Question:Question 1 (2500 words) ?1.Analysis – models can help to categorize issues?? 2.selection of theory- can be any study
Question 1 (2500 words)
1.Analysis – models can help to categorize issues
2.selection of theory- can be any study unit
3.Recommendations – make recommendations to resolve all the issues you identify – detailed recommendations -one recommendations may solve more than any problem
4.Demonstrate critical thinking by identifying potential risks/ challenges associated with recommendations
Service culture is the key of the case study*
Question 2 (700 words)
1.apply theory with personal experience
2.describe the encounter as succinct as possible focus on
3.evaluating the experience and analyzing why it was good or bad use one framework to do this
4.critique the framework in the context of your encounter. what strengths and limitation does it have
5.can you suggest an improvements to the framework?
Definitions, classifications, and trends Marketing Services and the Customer Experience Study unit 1
Size of the service sector
66% of world GDP
74% of GDP in developed countries
51% of GDP in developing countries
(World Bank, 2017)
Share of economic output in UK
(Office for National Statistics, 2018)
1948
2016
Services Manufacturing Construction Agriculture 46 42 6 6
% of GDP
79%
Services Manufacturing Construction Agriculture 79 14 6 1
Examples of service industries
Supply (retail, energy, transport)
Entertainment
Government and non-profit
Personal and maintenance
Tourism, Hospitality, Recreation
Healthcare
Communication and Information
Education and knowledge
Financial and insurance
What are services?
The production of an essentially intangible benefit, either in its own right or as a significant element of a tangible product, which through some form of exchange, satisfies an identified need
(Palmer, 2014)
What are services?
Services are deeds, processes, and performances…
economic activities whose output is not a physical product, is generally consumed at the time it is produced, and provides added value in forms (such as amusement, comfort, convenience) that are essentially intangible
(Wilson et al., 2016)
What are services?
Products of economic activity that you can’t drop on your foot, ranging from hairdressing to websites
(The Economist, 2013)
Product-service continuum
Tangible
Intangible
Tangible dominant
(service as add-on)
Intangible dominant
(product as add-on)
(Oliva and Kallenberg, 2003)
Distinction between the marketing of a service where service is the core product and where service is an add-on to a physical product
Servitization
With increasingly similar products, service becomes the differentiating factor and source of competitive advantage
Competing through service provision requires culture change
Physical product
Process-oriented service
Standardized services
Customized services
Transactional services
Relational services
(Kowalkowski et al., 2015)
New business models
Shift in lifestyle: car ownership forecast to decrease in developed economies (McKinsey, 2017)
Automotive manufacturers introducing service element to replace reduced revenues from manufacturing
Mercedes (and others) investing in shared mobility services
Open service innovation
Exchanging information and ideas with competitors and/or customers (i.e. external knowledge) to develop new services
(Myhren et al., 2018)
Ocado selling its automated warehouse technology, which uses robots and AI to fulfil online grocery orders, to supermarkets
Artificial Intelligence
AI increasingly used in services: robots and virtual bots in, for example, hospitality, healthcare, and call centres for mechanical and analytical tasks
Mechanical intelligence
Analytical
intelligence
Intuitive (creative)
intelligence
Empathetic
intelligence
Send scripted response after service failure
Analyse nature of failures
Understand contexts
Empathise and calm the customer
(Huang and Rust, 2018)
S-Commerce
Bricks and mortar commerce
Electronic
commerce
Social
Commerce
Social media used to promote online transactions
(Yusuf et al., 2018)
Molecular model
Many offerings are a combination of tangible and intangible:
cinema
visit
food and
drink
atmosphere
ticket purchase
and seat
reservation
method
of
delivery
building and
seating
the film –
entertainment
Screen size,
sound clarity
Classifying services
| People as recipients | Possessions as recipients | |
| Tangible actions | High-involvement personal services | Goods maintenance services |
| Intangible actions | Services for the mind | Intangible asset maintenance services |
(Palmer, 2014)
Classification criteria
| Low or high customization |
| Low or high customer participation |
| Low or high level of service provider judgement |
| One-time episodes or long-term relationship/contract |
| Utilitarian or hedonic service |
| Wide or narrow demand fluctuations |
| Capacity constrained or flexible |
| Customer to organization or organization to customer or remote interaction |
Based on Lovelock (1983)
Supplementary services
Core Service
Payment
Consultation
Hospitality
Safekeeping
Billing
Order-taking
Information
Exceptions
Facilitating
Enhancing
Lovelock (1995)
Empirically validated by Frow et al. (2014). Their revised model amalgamates billing with payment, and introduces a new supplementary service: sustainability and social responsibility.
References
Frow, P., Ngo, L., and Payne, A. (2014) Diagnosing the supplementary services model. Journal of Marketing Management. 30 (1-2) 138-171.
Huang, M. and Rust, R. (2018) Artificial intelligence in service. Journal of Service Research. 2 (2) 155-172.
Kowalkowski, C., Windahl, C., Kinstrom, D., and Gebauer, H. (2015) What service transition? Industrial Marketing Management. 45 (February) 59-69.
Lovelock, C. (1983) Classifying services to gain strategic marketing insights. Journal of Marketing. 47 (summer), pp. 9-20.
Lovelock, C. (1995) Competing on service: Technology and teamwork in supplementary services. Strategy and Leadership. 32 (4) 32-47.
McKinsey (2017) Shared mobility. Available from: https://www.mckinsey.com/industries/automotive-and-assembly/our-insights/how-shared-mobility-will-change-the-automotive-industry
Myhren, P., Witell, L., Gustafsson, A. and Gebauer, H. (2018) Incremental and radical service innovation. Journal of Services Marketing. 32 (2) 101-112.
Oliva, O. and Kallenberg, R. (2003) Managing the transition from products to services. International Journal of Service Industry Management. 14 (2) 160-172.
ONS (2018) Economy. Available from: https://www.ons.gov.uk/economy
Palmer, A. (2014) Principles of Services Marketing. 7th edition. Maidenhead: McGraw-Hill.
The Economist (2013) Economics A to Z. London: The Economist.
Wilson, A., Zeithaml, V., Bitner M.J., and Gremler, D. (2016) Services Marketing. 3rd ed. Maidenhead: McGraw Hill.
World Bank (2017) World Development Indicators. Available from: http://wdi.worldbank.org/table/4.2.
Yusuf, A., Hussin, A. and Busalim, A. (2018) Consumer purchase intentions in social commerce. Journal of Services Marketing. 32 (4) 493-504.
,
Service quality and satisfaction Part 1: Definitions and dimensions Marketing Services and the Customer Experience Study unit 4
Different perspectives
Quality is determined by the customer and is the extent to which the offering serves their needs and expectations
Quality is conformance to internally-specified standards
What is service quality?
The discrepancy [gap] between consumers’ perceptions of services offered by a particular firm and their expectations about firms offering such services
(Parasuraman, Zeithaml, and Berry, 1988)
Gap between consumers perceptions of services offered by a particular from and their expectations about firms offering such services
3
Dimensions of service quality
| Reliability (delivering on promises) | Dependable and accurate performance. Firm meets its promises (on delivery, price, problem resolution, service provision) |
| Assurance (inspiring trust and confidence) | Competent, courteous, credible, offering security |
| Tangibles (representing the firm physically) | Appearance of physical elements (inanimate and animate) |
| Empathy (treating customers as individuals) | Good communication, customer understanding, and caring individualised attention |
| Responsiveness (being willing to help) | Prompt and helpful employees |
Reliability ( delivering on promises)
Assurance- trust confidence
Tangibles- appearance of physical elements
Empathy – treating customers
Responsiveness – helpful employees
4
Examples of dimensions
| Reliability | Responsiveness | Assurance | Empathy | Tangibles | |
| Car repair | Problem fixed first time and ready when promised | No waiting. Responds to requests | Knowledgeable mechanics | Acknowledges customer by name. Remembers previous problems | Waiting area. Uniforms |
| Architecture | Delivers plans when promised and within budget | Returns telephone calls. Modifies designs when asked | Credentials and reputation. Knowledge and skills | Understands client’s industry (B2B). Friendly | Office area, plans, invoices, dress |
Alternative view
Grönroos (1984) says quality has two dimensions:
Technical or outcome dimension (‘what’)
Functional or process dimension (‘how’)
Excellent performance in one does not necessarily make up for failings in another.
Integrated model
Brady and Cronin (2001) attempted to combine previous models:
Interaction
Quality
Employee attitude
Employee behaviour
Employee expertise
Physical Environment Quality
Ambient conditions
Design
Social factors
Outcome
Quality
Waiting time
Tangibles
Valence
Service
Quality
Security
Privacy
Accuracy
Timeliness
Delivery condition
Responsiveness
Returns policy
Information quality
Navigation
Purchase process
E-service quality
(Blut et al., 2015)
E-Service Quality
Design
Security
Customer service
Fulfilment
What is satisfaction?
Satisfaction is the consumer’s fulfilment response. It is a judgement that a product or service provided a pleasurable level of consumption-related fulfilment
(Oliver, 1997)
Satisfaction is not an absolute. It is relative.
Can have transaction-specific satisfaction and cumulative satisfaction.
Expectancy disconfirmation model
Performance/ experience exceeds expectations
Satisfaction or delight
Positive disconfirmation
Performance/
experience
lower than
expectations
Dissatisfaction
Negative disconfirmation
Performance/
experience meets expectations
Confirmation (zero disconfirmation)
Satisfaction
Based on Oliver (1981)
Satisfaction and service quality
Satisfaction
Service Quality
Service Quality
Satisfaction
Satisfaction
Service Quality
OR
OR
Satisfaction and service quality
Confusion because service quality and satisfaction both conceptualised as a comparison of what is received with what was expected
Prevailing view (e.g. Grönroos, 2007) is that service quality is a cognitive judgement that contributes to satisfaction
Satisfaction is influenced by both cognitive judgments of performance, but also emotions that result from the service experience (e.g. pleasure, surprise, relief)
Satisfaction and service quality
Service Quality
Product Quality
Value
Reliability
Responsiveness
Assurance
Empathy
Tangibles
Satisfaction
Emotional response
(Wilson et al., 2016)
Why is satisfaction important?
Satisfaction or delight
Loyalty and/or positive WOM
Dissatisfaction
Switching and/or negative WOM
‘Leaders who do not actively work to increase customer satisfaction will be responsible for damaging their companies’ future earnings and shareholder value’
(Hart, 2007)
Satisfaction and retention
On average, 65-85% of customers who ‘defect’ to competitors claim they were satisfied with their previous service provider.
Reichheld (1996) says we fall into the ‘satisfaction trap’, thinking that satisfaction is the end in itself. What really matters is loyalty.
Delight
Customer delight means delivering what is unexpected by the customer (Oliver et al., 1997)
Delight means surprise, excitement, pleasure
However, once customers have been delighted, their expectation levels are raised
Results in extra effort and cost to the firm
The strategy of under-promising to over-deliver (UPOD) can backfire. Some customers may go elsewhere because the quality level signalled by the firm is below what they consider adequate (Topaloglu and Fleming, 2017)
Delight
Surprise
Joy
Employee effort
Employee expertise
Tangibles
Delight
Barnes et al. (2016)
Expectations
Customer expectations are beliefs about service delivery that serve as standards or reference points against which performance is judged
Zeithaml et al. (1993) distinguish two levels of expectation:
Desired Service Level
The level of service the customer hopes to receive, consisting of a blend of what the customer believes can and should be delivered
Adequate Service Level
The level of service the customer will accept. The minimum service that can be delivered and still meet a customer’s basic needs
Zone of tolerance
Zone of tolerance: difference between desired and adequate service levels
Zone of tolerance expands and contracts across customers and even within the same customer (depending on the situation)
When service falls below adequate level customers will be frustrated. When it is higher than the desired level, customers will be delighted
Desired Service
(ideal expectation)
Adequate Service
(minimum expectation)
Zone of tolerance
Factors influencing expectations
Predicted service expectations:
Provider promises
WOM
Past experience
Personal needs
Situational factors
Perceived alternatives
References
Barnes, D., Collier, J., Howe, V., and Hoffman, D. (2016) Multiple paths to customer delight. Journal of Services Marketing. 30 (3) 277-289.
Blut, M., Chowdry, N., Mittal, V. and Brock, C. (2015) E-service quality: A meta-analytic review. Journal of Retailing. 91 (4) 679-700.
Brady, M. and Cronin, J. (2001) Some new thoughts on conceptualising perceived service quality. Journal of Marketing. 65 (3) 34-49.
Cronin, J. and Taylor, S. (1992) Measuring service quality: a re-examination and extension. Journal of Marketing. 56 (3) 55-68.
Grönroos, C. (2007) Service Management and Marketing. 3rd ed. Chichester; Wiley.
Grönroos, C. (1984) A service quality model and its implications. European Journal of Marketing. 18 (4) 36-44
Hart, C. (2007) Beating the market with customer satisfaction. Harvard Business Review. 85 (3) pp. 30-32.
Oliver, R. (1981) Measurement and evaluation of satisfaction processes in retail settings. Journal of Retailing. 57 (Fall) 25-48.
Oliver, R. (1997) Satisfaction: A Behavioural Perspective on the Consumer. New York: McGraw-Hill.
Oliver, R., Rust, R. and Varki, S. (1997) Customer delight. Journal of Retailing. 73 (3) 311-336.
Parasuraman, A., Zeithaml, V., and Berry, L.L. (1988) SERVQUAL: A multiple-item scale for measuring consumer perceptions of service quality. Journal of Retailing. 64 (1) 12-40.
Reichheld, F. (1996) The Loyalty Effect. Boston: Harvard Business School Press.
Topaloglu, O. and Fleming, D. (2017) Under-promising and over-delivering: Pleasing the customer or strategic blunder? Journal of Services Marketing. 31 (7) 720-732.
Wilson, A., Zeithaml, V., Bitner, MJ., Gremler, D. (2016) Services Marketing. 3rd ed. Maidenhead: McGraw-Hill.
Zeithaml, V., Berry, L., and Parasuraman, A. (1993) The nature and determinants of customer expectations of service. Journal of the Academy of Marketing Science. 12 (1) 1-12.
,
Service failure and recovery Marketing Services and the Customer Experience Study unit 7
What is service failure?
Service performance falls below a customer’s expectations
Can be due to employees, technology, customer co-production errors, and other customer behaviour
The real test of a service provider takes place after a service failure has occurred
Failure is inherent in services
Intangibility
Subjective expectations
Variability
Variations in service delivery
Perishability
Inability to match supply to demand
Inseparability
Customer and provider face-to-face
Lots of opportunity for failure
| Pre-sales | Initial telephone/web enquiry Making reservation Issue of ticket |
| Post-sales, pre-consumption | Baggage check-in/issue of boarding pass Advice of departure gate Quality of waiting conditions |
| Consumption | Welcome on boarding aircraft Assistance in finding seat Assistance in stowing baggage Reliability of departure time Attentiveness of in-flight service Quality of food service Comfort |
| Post-consumption | Baggage reclaim Information for forward travel |
Service failure in restaurants
| Group 1 | Service delivery failures | Product defects, slow service, cleanliness | 45% |
| Group 2 | Response to customer requests | Food not cooked to order, seating problems | 18% |
| Group 3 | Unprompted employee actions | Inappropriate behaviour (e.g. rude), wrong order, mischarged | 37% |
(Hoffman et al., 1995)
In 21% of service failure incidents, employees did not implement recovery strategies
Where recovery took place, customer retention rate was 75%
Customer response options
Unsatisfactory service encounter
No action
Some form of private action
Some form of public action
Negative WOM
Defect
(switch provider)
Complain to third party
Take legal action to seek redress
Complain to service firm
Complaining
45% of dissatisfied customers complain to frontline employees
5% of dissatisfied customers complain to firm’s head office
Why don’t more unhappy customers complain?
Too much effort
Don’t know the complaint procedure
Don’t believe it will make any difference
Avoid confrontation – embarrassed
Believe they may be partly responsible
(Luria et al., 2009)
Complaining
‘Thank goodness I’ve got a dissatisfied customer
on the phone.
The ones I worry about are the ones I never hear from.’
(Anon)
Omni-channel failure and recovery
Customers are channel-blurring: complaining on social media about in-store issues
More transparency means the stakes are high for service recovery
Service providers need a joined-up and rapid approach to tracking, and responding to, failures
Facebook complaints for department stores
(Rosenmayer et al., 2018)
Failure category
Percentage of total failures
Switching Factors (% of respondents mentioning)
| Core Service Failure: 44% (service mistakes; billing errors) |
| Service Encounter Failure: 34% (uncaring, impolite, unknowledgeable staff) |
| Pricing: 30% (unfair or deceptive or high) |
| Inconvenience: 20% (inconvenient access/hours) |
| Response to Service Failure: 17% (reluctant, or no, response to failure) |
| Competition: 10% (attracted by competition) |
| Ethical Issues: 7% (unethical behaviour) |
| Involuntary Switching: 6% (provider or customer moved) |
(Keaveney, 1995)
Recovery
Systematic efforts of a firm to correct a problem following a service failure and to retain a customer’s goodwill.
True test of a firm’s commitment to quality and satisfaction
Costs of obtaining new customers are three to five times higher than retaining existing customers (Reichheld, 1996)
Service recovery paradox
Customers who experience a service failure and then have it resolved are sometimes more satisfied than customers who had no problem in the first place
But research suggests this only works for the first service failure
Moderated by the severity of the service failure
(De Matos et al., 2007)
Service recovery framework
(Vaerenbergh et al., 2019)
Compensation
Monetary compensation
New/exchanged goods
Favourable employee behaviour
Courtesy
Justification
Organizational procedures
Recovery time
Flexibility
Reperformed service
Apology
Effort
Empathy
Employee empowerment
Customer participation
Customer evaluation of recovery
Satisfaction is maximised and potential for negative WOM minimised when service recovery is:
Handled swiftly
Implemented by a courteous and caring employee
(Hocutt et al., 2006)
Customer evaluation of recovery
BUT, appropriate recovery strategy may depend on emotional state of customer:
High-intensity negative emotional state
Delayed economic and psychological recovery
(Tang et al., 2018)
Low-intensity negative emotional state
Swift economic recovery
Service guarantees
A service guarantee is an explicit promise made by the service provider to:
deliver a certain level of service to satisfy the customer
remunerate the customer if the service is not sufficiently delivered.
Reduces perception of risk
Indicates to employees the required level of service
(Hogreve and Gremler, 2009)
If you aren’t satisfied with something, please let us know during your stay and
we’ll make it right or you won’t pay.
It’s guaranteed.
Service guarantee
References
De Matos, C., Henrique, J., and Rossi, C. (2007) Service recovery paradox: Meta analysis. Journal of Service Research, 1 (August), 60-77.
Hocutt, M., Bowers, M., and Donavan, D. (2006) The art of service recovery: fact or fiction. Journal of Services Marketing, 20 (3), 199-207.
Hoffman, K.D., Kelley, S., and Rotalsky, M. (1995) Tracking service failures and employee recovery efforts. Journal of Services Marketing, 9 (2), 49-61.
Hogreve, J. and Gremler, D. (2009) Twenty years of service guarantee research. Journal of Service Research, 11 (4), 322-343.
Keaveney, S. (1995) Customer switching behaviour in service industries: an exploratory study. Journal of Marketing, 59 (April), pp. 71-82.
Luria, G., Gal, I., and Yagil, D. (2009) Employees’ willingness to report service complaints. Journal of Service Research, 12 (2), 156-174.
Reichheld, F. (1996) The Loyalty Effect. Boston: Harvard Business School Press.
Rosenmayer, A., McQuilken, L., Robertson, N., and Ogden, S. (2018) Omni-channel service failures and recoveries: Refined typologies using Facebook complaints. Journal of Services Marketing, 32 (3), 269-285.
Tang, X., Chang, E., Xing, H., and Zhang, M. (2018) Timing and compensation strategies in service recovery. Journal of Services Marketing, 32 (6), 755-766.
Vaerenbergh, Y., Varga, D., Keyser, A., and Orsingher, C. (2019) The service recovery journey. Journal of Service Research, 22 (2), 103-19.
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Distinguishing features of services Marketing Services and the Customer Experience Study unit 2
Four distinguishing features
Intangibility
Inseparability
Variability (heterogeneity)
Perishability
These four features have been identified by a variety of authors, but Zeithaml, Parasuraman, and Berry (1985) provide an excellent review of the features and a summary of their implications (you can cite these authors, if you need to, when discussing the four features)
Intangibility
Abstract experiences, activities, and processes, so can’t be seen or touched
Probably the most fundamental characteristic
3
Implications of intangibility
Difficult to evaluate, which increases buyer risk
Difficult to promote/communicate
Impossible to build up an inventory
Issues for marketing:
Brand image
Physical cues
Price as a quality proxy
Guarantees and endorsements
Free trials
WOM
4
Implications of intangibility
The ease or difficulty of evaluating a service depends on its attributes:
Search attributes (attributes that can be evaluated prior to purchase)
Experience attributes (attributes that can only be evaluated during/after consumption)
Credence attributes (attributes that can’t be evaluated easily even after purchase)
5
Intangibility
(Zeithaml, 1981)
Restaurant Meals
Vacation
Haircut
Entertainment
High In Experience
Attributes
Computer Repair
Education
Legal Services
Complex Surgery
High In Credence
Attributes
Inseparability
Customer consumption often simultaneous with service production/delivery
Customers interact with service provider
Can include customer co-production
Implications of inseparability
Service providers require different skill set
Co-production can influence service outcome
Other customers can be present
Difficulty selling to geographically widespread market
Difficult to correct defective service
Issues for marketing:
Employee and customer management
Multi-site locations
Opportunity for customization
Variability (Heterogeneity)
No two service provisions are ever identical
Affected by personnel delivering service, time of day, other customers present, etc.
Individual customer perceptions of service delivery will vary
Implications of variability
Consistently perfect quality difficult to achieve
Service delivered to the customer may not match what was promoted or planned
Implications for brand image
Greater risk for customer
Issues for marketing:
Training and/or technology to reduce variability
Standardise wherever possible
However, customers of more ‘hedonic’ services expect a customized approach (Ding and Keh, 2015)
Perishability
Services are time-bound. Cannot be stored or saved, and sold later
Little or no inventory
Implications of perishability
Lost revenue (excess capacity)
Lost customers (excess demand)
Issues for m
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