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Chapter Ten: Services: The Intangible Product Concept Review Generally, the concept questions are designed to achieve a single purpose – to encourage students to test their knowledge and understanding of the theoretical content of the chapter. These questions encourage recall and reflection, which will better prepare students to answer the marketing applications questions based on their understanding of the theory. 1. Describe the four dimensions in which services marketing is different from product marketing. Intangible – services cannot be touched, tasted, or seen Inseparable production and consumption - services are produced and consumed at the same time so are inseparable Inconsistent – service quality is variable and varies in consistency since it is provided by humans who are not perfect Inventory - services are perishable and cannot be held in inventory or stored for future use 2. Why is intangibility described as the most fundamental difference between products and services? Products can be seen, heard, touched, and tasted, allowing consumers to “test-drive” them and know what they are getting before they buy them. The fact that services are intangible means it makes it difficult to convey their benefits. Services can’t be shown directly to prospective customers, making them difficult to promote. 3. Discuss the actions companies can implement to minimize the potential negative impact of service variability on the delivery of customer service. Training programs for employees on the company’s services to ensure all staff members are knowledgeable and can perform the tasks associated with delivering the service Standardization of service delivery by setting service standards so that employees understand the standards they must meet Replace people with machines (technology) which is usually faster, more convenient and has far less variability 4. How can companies deal with the perishability of their services? Match supply and demand by: Offering promotional pricing in off-season or slower periods to increase demand Increasing facility usage, e.g. Cineplex showing NHL games Charging cancellation fees 5. Identify the components of the Services Gaps Model. Describe each component and explain the strategies companies can implement to reduce the gaps in service delivery. Knowledge gap - the difference between customers’ expectations and the firm’s perception of those expectations. Close this gap by matching customer expectations with actual service through research. Standards gap - the difference between the firm’s perceptions of customers’ expectations and the service standards it sets. Close this gap by setting appropriate service standards and measuring service performance. Delivery gap - the difference between the firm’s service standards and the actual service it provides to customers. Close this gap by getting employees to meet or exceed service standards. Communication gap - the difference between the actual service provided to customers and the service that the firm’s promotion program promises. Close this gap by being more realistic about the services provided and managing customer expectations effectively. 6. Describe the five dimensions of services quality that consumers often use to judge the quality of a service experience. Reliability – the ability to perform the service dependably and accurately Responsiveness – the willingness to help customers and provide prompt service Assurance – the knowledge and courtesy of employees and their ability to convey trust and confidence Empathy – the caring, individualized attention provided to customers Tangibles – the appearance of physical facilities, equipment, personnel, and communication materials 7. Explain how the use of technology can help companies deliver higher quality service. Technology enables customers to buy more quickly, more easily, and with more information than in the past. It provides access to a wider variety of services, a greater degree of control by the customer over the services, and the ability for the company to obtain information. Technology can also can strengthen customer relationships and enhance loyalty thereby resulting in higher quality service. 8. Discuss why underpromising and overdelivering is an important way to control the communication gap. By underpromising, a company will have a much better chance to exceed customers’ expectations and will be perceived as overdelivering instead of falling short of or just meeting expectations. Overpromising may attract customers to a business once, however, they will not return if they are disappointed. Worse than that, they may spread negative word of mouth to tell others about the underperformance. By managing customer expectations, the communications gap can be reduced and controlled. 9. What is meant by service recovery? How can companies use service recovery to ensure that a service failure does not lead to a lost customer? Service recovery is an attempt to make amends with customers when service providers fail to meet their expectations. Companies can use service recovery to prevent the loss of a customer by: listening to the customer finding a fair solution distributive fairness compensates customers with a fair amount for the service failure procedural fairness ensures efficient complaint procedures are in place and that providers follow specific company guidelines when resolving problems resolving problems quickly. 10. Explain the differences between distributive and procedural fairness in the context of service recovery. Distributive fairness pertains to a customer’s perception of the benefits he or she received compared with the costs (inconvenience or loss). The key to distributive fairness, of course, is listening carefully to the customer to understand what they feel is a fair amount of compensation. Procedural fairness refers to the perceived fairness of the process used to resolve them. Customers want efficient complaint procedures over whose outcomes they have some influence. Marketing Applications Companies from which you purchase products and services are not pure sellers of services, nor are they pure sellers of products. What services does a department store provide? What goods does a dentist provide? Department Store: Services Provided: A department store offers a range of services beyond simply selling products. These services may include: Customer assistance and support: Providing guidance, recommendations, and assistance to customers in finding products, answering queries, and offering personalized shopping experiences. Convenience services: Offering facilities such as restrooms, parking, gift wrapping, and in some cases, alterations or repairs. Loyalty programs: Implementing loyalty programs to reward frequent shoppers, providing discounts, special offers, or exclusive access to events. After-sales services: Handling returns, exchanges, and addressing customer concerns or complaints. Product demonstrations and events: Organizing events or demonstrations to showcase products, provide education, and engage with customers. Online and offline integration: Seamless integration of online and offline channels for shopping, including click-and-collect services or online ordering with in-store pickup. Goods Provided: While a department store offers services, its primary revenue comes from selling various goods. These goods may include: Apparel: Clothing, shoes, accessories, and fashion items for men, women, and children. Home goods: Furniture, home décor, kitchenware, bedding, and other household items. Electronics: Consumer electronics such as TVs, computers, smartphones, and appliances. Beauty and cosmetics: Skincare, makeup, fragrance, and personal care products. Toys and entertainment: Games, toys, books, and entertainment products for all ages. Food and beverages: Some department stores may also offer gourmet food items, snacks, and beverages. Dentist: Services Provided: A dentist offers a range of services related to oral health care, including: Preventive care: Regular check-ups, cleanings, and screenings to maintain oral health and prevent dental problems. Diagnostic services: Examination, X-rays, and other diagnostic procedures to identify dental issues such as cavities, gum disease, or oral cancer. Treatment services: Dental procedures such as fillings, root canals, extractions, and periodontal treatments to address dental problems. Cosmetic services: Procedures like teeth whitening, veneers, and dental bonding to improve the appearance of teeth and smile. Restorative services: Dental implants, crowns, bridges, and dentures to restore function and appearance in cases of missing or damaged teeth. Emergency care: Providing urgent dental care for issues like toothaches, broken teeth, or injuries to the mouth. Goods Provided: While the primary focus is on providing services, a dentist may also offer certain goods related to oral health care, including: Dental hygiene products: Toothbrushes, toothpaste, dental floss, mouthwash, and other oral care products recommended for maintaining oral hygiene. Orthodontic appliances: Braces, retainers, aligners, and other orthodontic devices used for correcting misaligned teeth or bite issues. Oral health education materials: Brochures, pamphlets, or digital resources providing information on oral hygiene practices, dental care tips, and preventive measures. These examples illustrate how companies often provide a combination of goods and services to meet customer needs and expectations, enhancing their overall value proposition. Instructor’s Notes: The service–product continuum concept discussed in this chapter notes that a company can be service dominant, product dominant, or somewhere in between. In addressing where department stores and dentists fall on the continuum, students enhance their understanding of how businesses provide both elements. Example answers: A department store provides services such as offering many different products from different manufacturers together in one store, which enhances the shopping convenience for the consumer, and providing customer assistance in response to questions about sizes, return policies, stock levels, and the location of particular products. A dentist provides products such as fillings for cavities and free toothbrushes and floss. You have been sitting in the waiting room of your doctor’s office for an hour. With the knowledge that products are different than services, develop a list of things the office manager could do to improve the overall service delivery. Consider how the office might overcome problems associated with the tangibility, separability, consistency, and inventory issues associated with services. There's a list of things the office manager could do to improve the overall service delivery, considering the unique characteristics of services: Implement Appointment Scheduling Software: Utilize advanced scheduling software to better manage patient appointments, minimize wait times, and optimize the flow of patients. Regular Staff Training: Conduct regular training sessions for staff members to enhance their customer service skills, including effective communication, empathy, and conflict resolution. Streamline Check-in Process: Simplify the check-in process by implementing self-service kiosks or online check-in options to reduce waiting times and improve efficiency. Provide Real-Time Updates: Keep patients informed about any delays or changes in scheduling through text messages, emails, or digital display boards in the waiting area. Offer Comfortable Waiting Area: Create a comfortable and inviting waiting area with adequate seating, reading materials, and refreshments to enhance the patient experience during the wait. Optimize Workflow: Analyze and optimize the workflow within the office to ensure seamless coordination between different departments, minimizing bottlenecks and delays. Implement Electronic Health Records (EHR): Transition to electronic health records to improve data accuracy, accessibility, and efficiency in managing patient information. Empower Frontline Staff: Empower frontline staff to address common inquiries and issues promptly without always needing to involve higher management, thereby improving responsiveness and customer satisfaction. Offer Virtual Consultations: Introduce virtual consultation options for routine check-ups or follow-up appointments to provide greater flexibility for patients and reduce the need for in-person visits. Collect Patient Feedback: Implement a system for collecting and analyzing patient feedback to identify areas for improvement and make data-driven decisions to enhance service delivery. Implement Quality Assurance Measures: Establish quality assurance measures to ensure consistency in service delivery across different staff members and shifts. Utilize Telemedicine for Triage: Use telemedicine services for initial triage or minor consultations to reduce the burden on in-person appointments and prioritize urgent cases. Provide Transparent Pricing: Clearly communicate pricing information for services and procedures to patients upfront to minimize misunderstandings and avoid surprises. Offer Flexible Payment Options: Provide flexible payment options, such as installment plans or online payment portals, to make it easier for patients to manage their medical expenses. Regularly Review and Improve Processes: Continuously evaluate service delivery processes and make necessary adjustments to address any issues or inefficiencies, ensuring a constant focus on improvement. By addressing these points, the office manager can enhance the overall service delivery experience for patients, overcoming challenges associated with the intangibility, separability, consistency, and inventory issues commonly associated with service industries like healthcare. Instructor’s Notes: Providing great service is not easy, so companies must make diligent efforts to analyze their service process closely to ensure all aspects work together to provide a positive customer experience. Example answers: The office manager could provide a television for patients to watch while waiting; offer refreshments such as water, juice, coffee, or tea; have a nurse practitioner meet with waiting patients to get preliminary information; and make the waiting room comfortable and inviting by providing soft reclining chairs and decorating it with nice pictures, plants, and perhaps an aquarium. Specifically, the office might overcome some of the problems associated with marketing a service as follows: Tangibility: Communicate service quality, which cannot be touched, tasted, or seen, by posting the doctor’s qualifications or diplomas. Separability: Involve patients in determining their own course of treatment. Variability: Train receptionists, nurses, and doctors to greet each patient and establish a high level of standardized care protocols. Perishability: Match patients’ demands for convenient office hours and appointments with a sufficient supply of personnel on staff during those times. You have conducted a zone of tolerance analysis for a local dry cleaner. You find that the length and width of the reliability and responsiveness boxes are much greater than those of the other three service quality dimensions. You also find that the dry cleaner is positioned above the zone box on reliability but below the box on responsiveness. What should you tell the manager of the dry cleaner to do? Based on the results of the zone of tolerance analysis, here are some recommendations for the manager of the dry cleaner: Address Responsiveness Issues: Since the dry cleaner is positioned below the zone box on responsiveness, it indicates that customers may perceive a gap between their expectations and the actual responsiveness of the service provided. The manager should focus on improving the timeliness of service delivery, ensuring that customers receive their cleaned items within the promised timeframe. This might involve streamlining processes, optimizing staffing levels, or implementing better communication systems to keep customers informed about the status of their orders. Maintain Reliability Standards: Although the dry cleaner is positioned above the zone box on reliability, it's important to maintain this position by consistently meeting or exceeding customer expectations in terms of service reliability. This includes delivering cleaned items accurately and reliably, without errors or delays. The manager should continue to monitor and reinforce quality control measures to ensure that the reliability of the service remains high. Balance Service Quality Dimensions: While it's crucial to address responsiveness issues, the manager should also strive to maintain a balance across all service quality dimensions. This means not neglecting other dimensions such as tangibles (e.g., cleanliness of the facility, appearance of staff), assurance (e.g., competence and courtesy of staff), empathy (e.g., understanding and caring for customer needs), and tangibles (e.g., pricing, convenience). By addressing any shortcomings in these areas and striving for excellence in all dimensions, the dry cleaner can enhance overall customer satisfaction and loyalty. Continuous Improvement: Implement a system of continuous improvement where feedback from customers is regularly collected and analyzed to identify areas for enhancement. By staying proactive and responsive to customer needs and preferences, the dry cleaner can adapt and evolve its services to remain competitive and deliver exceptional customer experiences. Overall, the key message to the manager is to prioritize improving responsiveness while maintaining high standards of reliability, and to continuously strive for excellence across all dimensions of service quality. Instructor’s Notes: Determining customers’ perceptions of a service’s ability to meet or exceed their expectations is difficult, but the zone of tolerance offers an effective method. For the dry cleaner, students should examine the company’s performance relative to customers’ expectations regarding the five service quality factors. Example answers: The greater length of the reliability and responsiveness factors means that customers expect more of these factors but will accept a fairly low level. Their greater width also suggests customers consider reliability and responsiveness more important. In terms of reliability, the dry cleaner is surpassing customers’ expectations by performing its service dependably and accurately—perhaps too much so. However, it is not meeting customers’ responsiveness expectations, such as prompt service or willingness to help. Therefore, the dry cleaner should spend a little less energy on performing the service accurately and dependably and start focusing more on prompt, friendly, helpful customer service. Design a simple system for collecting customer information about the services of your dry cleaner client. There's a simple system for collecting customer information for a dry cleaning business: Customer Information Form: Create a customer information form that includes fields such as: Name Contact information (phone number, email address) Address (for pickup and delivery services, if applicable) Preferred method of contact Any special instructions or preferences (e.g., specific detergent, hanger preferences) Frequency of service (one-time, weekly, bi-weekly, etc.) Online Form: Offer an online version of the customer information form on the dry cleaner's website or through a mobile app. This makes it convenient for customers to provide their information at their own leisure. In-store Kiosk: Install a kiosk at the dry cleaner's physical location where customers can input their information directly into the system. This can be especially useful for walk-in customers who may not want to wait in line to fill out a form. Point of Sale Integration: Integrate the customer information form with the dry cleaner's point of sale (POS) system. This allows for seamless data entry and retrieval, making it easier to manage customer accounts and preferences. Privacy and Security Measures: Ensure that the system complies with data privacy regulations (such as GDPR or CCPA) and implement security measures to protect customer information from unauthorized access or breaches. Opt-in for Marketing Communications: Include an option for customers to opt-in to receive marketing communications, such as promotions, discounts, or newsletters. Make sure to obtain explicit consent for sending marketing messages. Consistent Data Collection: Train staff to consistently collect customer information and input it accurately into the system. Regularly review and update customer profiles to ensure accuracy and completeness. Feedback Mechanism: Implement a feedback mechanism where customers can provide comments or suggestions about the service. This can be done through the online form, email, or in-store suggestion box. Data Analysis and Customer Insights: Use the collected customer information to analyze trends, preferences, and demographics. This can help the dry cleaner tailor their services to better meet the needs of their customers. Customer Relationship Management (CRM) Integration: If the dry cleaner has a CRM system, integrate the customer information collected into the CRM to track customer interactions, manage appointments, and provide personalized service. By implementing this system, the dry cleaner can effectively collect and manage customer information to provide a better overall experience and build long-term relationships with their customers. Instructor’s Notes: How might this dry cleaner get customer feedback about its service quality? A well-designed system prompts a high customer response rate without making customers feel uncomfortable about giving the feedback. Example answers: The simplest system would be to attach a short, postage-paid comment card to each package of dry cleaning that goes out. The cleaner should give customers an incentive to fill it out and mail it, such as a weekly or monthly drawing for a prize. With this system, the customer does not have to provide feedback on the spot at the time of the service delivery but rather can do so in the comfort of his or her own home. Think back to your last job. What training did your employer provide regarding how to interact with customers and provide good customer service? What could your employer have done to prepare you better to interact with customers? In my last job, the training regarding customer interaction and providing excellent service was comprehensive. We underwent workshops and seminars that covered various aspects such as active listening, empathy, problem-solving, and conflict resolution. Role-playing exercises were also part of the training, allowing us to practice different scenarios we might encounter with customers. One thing that could have enhanced the training further would have been more emphasis on real-life examples and case studies. While the role-playing exercises were helpful, actual examples of challenging customer interactions from experienced employees could have provided valuable insights and practical strategies. Additionally, ongoing coaching and feedback sessions could have been beneficial to refine our customer service skills continuously. Instructor’s Notes: To deliver consistently high-quality service, firms must set specific, measurable goals based on customers’ expectations; to ensure these goals are met, they must train their employees to execute properly. By asking about students’ own experience, this question prompts them to consider the preparation they received to provide good customer service, as well as ways their service might have improved if they had received proper training. Example answers: When I worked in the corporate offices of a large software company, I did not receive any formal training about interacting with customers. To prepare me better, my employer could have created mandatory customer service training that taught how to greet customers, how to deal with common problems, how to handle irate customers, and what level of discretion I had to rectify any problems before calling in my manager. Such training would have helped me understand any service standards the company had and shown me how to meet them. Provide a specific situation in which a service provider could have avoided a service failure if he or she had been empowered by an employer to do so. What should that person have done? Let's consider a situation in a hotel where a guest has booked a room for a special occasion like a wedding anniversary. Upon arrival, the guest finds out that the room they booked is not available due to an oversight in the booking system, and the hotel is fully booked for the night. This is a significant service failure that could have been avoided if the front desk staff had been empowered to handle such situations effectively. In this scenario, the front desk staff member, empowered by their employer, could have taken the following steps to avoid the service failure: Apologize and Acknowledge the Situation: The staff member should apologize sincerely to the guest for the inconvenience and acknowledge the mistake made by the hotel. Offer Immediate Solutions: Instead of just stating the problem, the staff member should offer immediate solutions to the guest. This could include offering a complimentary upgrade to a higher category room if available, or arranging a reservation at a nearby hotel of similar or higher standard. Provide Compensation or Amenities: To compensate for the inconvenience caused, the staff member could offer complimentary amenities such as a free dinner at the hotel restaurant, spa vouchers, or a bottle of champagne in the room. Follow-Up and Ensure Satisfaction: After providing the alternative solution, the staff member should follow up with the guest to ensure their satisfaction and address any further concerns they may have. This could involve checking in with the guest during their stay and offering any additional assistance they may need. By empowering the front desk staff with the authority to make decisions and provide immediate solutions to guest issues, the hotel could have avoided the service failure and turned a potentially negative experience into a positive one for the guest. This not only improves customer satisfaction but also enhances the hotel's reputation for excellent service. Instructor’s Notes: Empowerment in this case means allowing employees to decide how to provide service to customers. Students must consider what types of situations might warrant empowerment and what actions could result. Example answers: A customer in a health club complains about how crowded the last yoga class was, to the point that she did not receive the benefit she expected from the exercise. If the health club empowered its employees, the person at the front desk who receives the complaint could apologize for the crowded class and offer the customer a free yoga session in which her spot is guaranteed. What types of support and incentives could your university provide advisors to help make them more attentive to students’ needs? Universities can implement various support mechanisms and incentives to encourage advisors to be more attentive to students' needs. Some effective strategies include: 1. Training and Professional Development: Offer comprehensive training programs and ongoing professional development workshops for advisors. This could include courses on effective communication, active listening, empathy-building, and understanding diverse student needs. 2. Caseload Management: Ensure that advisors have manageable caseloads to prevent burnout and allow them to devote sufficient time and attention to each student. This might involve hiring additional advisors or reallocating resources to ensure a balanced workload. 3. Regular Feedback and Evaluation: Establish a system for collecting feedback from students regarding their advising experiences. Conduct regular evaluations of advisors' performance based on student feedback, and use this information to identify areas for improvement and provide targeted support. 4. Recognition and Rewards: Recognize and reward advisors who demonstrate exceptional commitment to student support and go above and beyond in their roles. This could include awards, bonuses, or other forms of recognition within the university community. 5. Peer Support Networks: Foster a sense of community among advisors by establishing peer support networks or mentorship programs. Encourage advisors to share best practices, seek advice from colleagues, and collaborate on strategies for supporting students effectively. 6. Technology and Resources: Provide advisors with access to cutting-edge technology and resources that facilitate efficient communication and information sharing with students. This might include CRM systems, online appointment scheduling tools, and virtual advising platforms. 7. Flexibility and Autonomy: Allow advisors flexibility in their approach to student support, recognizing that different students have unique needs and preferences. Empower advisors to tailor their advising strategies to meet the individual needs of each student, rather than adhering to rigid protocols. 8. Continued Support and Engagement: Maintain regular communication with advisors to ensure they feel supported and valued in their roles. Encourage open dialogue between advisors and university leadership to address any challenges or concerns that arise and collaborate on solutions. By implementing these support mechanisms and incentives, universities can empower advisors to better meet the diverse needs of their students and foster a culture of excellence in student support services. Instructor’s Notes: This question prompts students to recall that universities provide services too and that advisors, as service providers, often face the difficult task of dealing with unhappy students. Therefore, they must empathize with advisors and consider what possible supports and incentives could make their lives easier. Example answers: First, the university could provide emotional support to advisors who have to deal with difficult and sometimes unruly students. Second, the university should provide appropriate computer systems and an atmosphere that makes advisors feel well-equipped in comfortable settings. Third, the university could limit the number of students assigned to each advisor, so that the advisor does not feel overwhelmed. Fourth, it should provide a mechanism to reward advisors when students provide positive feedback about their performance. What technologies do you use that help facilitate your transactions with a specific retailer or service provider? Would you rather use the technology or engage in a face-to-face relationship with a person? How, if at all, would your parents’ answers be different to these two questions? Personally, I may use various technologies to facilitate transactions with retailers or service providers, such as: 1. Online shopping platforms and websites: These allow me to browse products, compare prices, and make purchases without leaving my home. 2. Mobile payment apps: These enable me to pay for goods and services using my smartphone, making transactions quick and convenient. 3. Customer service chatbots: These provide assistance and support for inquiries or issues I may have with products or services. 4. Online banking and financial management apps: These help me manage my finances, transfer money, and pay bills electronically. In general, my preference for using technology versus engaging in a face-to-face relationship with a person depends on several factors: 1. Convenience: Technology often offers greater convenience, allowing transactions to be conducted anytime and anywhere without the need to travel or wait in line. 2. Speed: Technology can expedite transactions, making them faster and more efficient than face-to-face interactions. 3. Personalization: While face-to-face interactions may offer a more personalized experience, technology can also provide personalized recommendations and tailored services based on my preferences and behavior. However, there are instances where I may prefer face-to-face interactions: 1. Complex transactions or inquiries: For complicated or sensitive matters, I may prefer speaking with a knowledgeable person who can provide detailed assistance and guidance. 2. Building relationships: Face-to-face interactions can foster a sense of trust and rapport, particularly in business or service settings where personal connections are valued. 3. Resolving issues: Some problems may be better resolved through direct communication with a person who can address concerns empathetically and offer immediate solutions. Regarding my parents' answers, they may differ based on factors such as their comfort level with technology, generational preferences, and individual experiences. Older generations may have a greater preference for face-to-face interactions due to familiarity and trust in traditional methods of conducting business. They may also place a higher value on personal relationships and may find technology less intuitive or reliable compared to younger generations who have grown up with digital technology. However, their preferences may vary depending on their individual attitudes and experiences with technology and face-to-face interactions. Instructor’s Notes: Technology has become an increasingly important means of service delivery. Most students probably rely more heavily on technology, whereas their parents likely consider face-to-face interactions important for key personal transactions. Example answers: I use the Internet and telephone to facilitate my transactions with my bank. I access my bank account and make simple requests of the customer service department via the Internet, and when I need to deal with a more complex transaction, I use the telephone and the bank’s automated phone routing system to find the right customer service agent who can address my need. I prefer to use these technologies rather interact face-to-face, primarily because I don’t want to take time out of my busy schedule to go to the bank and see someone in person. However, my parents probably would be more inclined to use the telephone or face-to-face interactions, and use the Internet only to a very limited extent, because of their lack of trust in its security and privacy. 9. A local health club is running a promotional campaign that promises you can lose an inch a month off your waist if you join the club and follow its program. How might this claim cause a communications gap? What should the club do to avoid a service failure? This claim might cause a communications gap because it sets a specific expectation of losing one inch off your waist each month, which may not be realistic or achievable for everyone. People's bodies respond differently to exercise and diet programs, and factors such as genetics, metabolism, and starting body composition can greatly influence weight loss results. To avoid a service failure and bridge this communication gap, the health club should take several steps: Set Realistic Expectations: Instead of making a blanket promise of losing one inch per month, the club should communicate that weight loss results can vary and depend on individual factors. Educate Members: Provide information about how weight loss works, emphasizing that it's not solely about losing inches off the waist but also about overall health improvement, including muscle gain, fat loss, and cardiovascular fitness. Offer Personalized Plans: Create personalized fitness and nutrition plans tailored to each member's goals, fitness level, and body type. This approach acknowledges individual differences and increases the likelihood of success. Provide Ongoing Support: Offer continuous support and guidance through personal training sessions, nutrition consultations, and regular check-ins to monitor progress and make necessary adjustments to the program. Encourage Realistic Goal Setting: Help members set achievable short-term and long-term goals based on their starting point and desired outcomes. This approach promotes motivation and prevents discouragement if immediate results are not as expected. Focus on Health and Wellness: Shift the focus from just losing inches off the waist to improving overall health and wellness. Emphasize the benefits of regular exercise, balanced nutrition, stress management, and quality sleep. By adopting these strategies, the health club can manage expectations, provide effective support, and ultimately deliver a valuable service that prioritizes the well-being and success of its members. Instructor’s Notes: In examining how a health club’s promotional claim creates a difference between the service promised and the actual service delivered, students should recognize the difficultly of conveying a single message that encompasses all customers’ expectations. Example answers: This claim might create unrealistic expectations in the minds of consumers. Take, for example, a woman who only needs to lose 5–10 lbs to reach her ideal weight. There is no way the club can guarantee this woman will continue to lose an inch around her waist after the first month or so—at least not without causing health problems! In addition, much of the success of the claim depends not on the health club but on the customer’s dedication to the exercise program. In either case, customers’ expectations become unrealistic, and a communication gap occurs. The club could avoid such a service failure by changing the wording of the promotion to set more realistic expectations, perhaps by focusing on helping customers reach their ideal body weight rather than some arbitrary waistline measurement. 10. You are hired by a career consulting firm for new college graduates that promises to market them to high-paying employers. Job seekers pay a fee for the service, plus a finder’s fee if the consultant places them in a position. The firm aggressively markets its services and has achieved a large client base. However, you soon learn that the consultant takes submitted resumes and posts them to a variety of online job search engines, without ever contacting employers on its clients’ behalf. The CEO, a recent college graduate, tells you that the firm never actually promises it will contact potential employers but only that it has access to them. What do you think of the career consulting firm’s practices? The practices of the career consulting firm are deceptive and unethical. While the CEO may argue that they technically fulfill their promise of providing access to potential employers, the reality is that they are not actively representing their clients' interests or engaging in meaningful efforts to connect them with high-paying opportunities. By simply posting resumes online without any direct outreach or networking on behalf of their clients, the firm is essentially charging for a service that can easily be done by the clients themselves. This not only undermines the trust of their clients but also potentially harms their chances of securing desirable positions, as the passive approach taken by the firm is unlikely to yield significant results in a competitive job market. Moreover, the firm's aggressive marketing tactics, coupled with their lack of substantial effort in actually assisting their clients, raise serious ethical concerns. Charging fees for a service that does not deliver on its promises and taking advantage of vulnerable job seekers seeking assistance in launching their careers is exploitative and dishonest. In order to maintain integrity and truly serve the needs of their clients, the firm should be transparent about their methods and make genuine efforts to actively connect job seekers with potential employers. Otherwise, they risk damaging their reputation and facing legal repercussions for deceptive business practices. Instructor’s Notes: This scenario forces student to question to what degree the career consulting firm’s practices might violate their ethical standards. Using the ethical decision-making framework, students should evaluate these practices to determine an appropriate course of action. Example answers: In applying the ethical decision-making framework: “Have you thought broadly of any ethical issues associated with the decision in question?” I have thought broadly about the ethical issues, and I have concerns because the consulting firm is less than forthcoming with clients about the amount of effort expended on their behalf and gives the false impression that it actively markets each client to prospective employers. “Have you involved as many possible people who might have a right to offer input into or have actual involvement in making this decision and action plan?” The clients themselves have not been involved at all, and they are likely the most important stakeholders to keep in mind, because without them the firm would have no business. “Does this decision respect the rights and dignity of the stakeholders?” The clients believe that the firm is being honest and aboveboard about the amount of effort being put forth on their behalf, and they are not aware that the consulting firm is merely doing what they could do themselves—without any of the fees charged by the firm! “Does this decision produce the most good and the least harm to the relevant stakeholders?” The clients are not getting the type of service they think they are. They could be relying on the consulting firm to find them employment, which may never happen because of the lack of marketing actually being done on the clients’ behalf. “Does this decision uphold relevant conventional moral rules?” It likely violates the community’s standard for business disclosures and transparency. If the consulting firm portrays itself as marketing each client and then doesn’t, the community likely would feel outrage toward the firm and its practices. “Can you live with this decision alternative?” If the decision is to have the firm change its practices and actively market clients, as it implies in its marketing communications, then it is a decision I could live with as a client and an employee. Based on my answers, I believe the practices of the career consulting firm are unethical and dishonest. To charge fees for something that the clients can do themselves is disgraceful. The consulting firm should come clean about its practices and rectify the situation for clients who might have been harmed by either refunding their money or actually providing the service it said it would for free. I would give up my job, because I do not want to be associated with such unethical practices, and contact the Better Business Bureau to report the firm. Net Savvy What services does WestJet (www.westjet.com) offer? Compare its services to those offered by Air Canada (www.aircanada.ca) using the five service quality dimensions (tangibility, responsiveness, reliability, assurance, and empathy). Tangibility: WestJet: The website provides a user-friendly interface with clear navigation, allowing customers to easily book flights, manage reservations, and access additional services such as seat selection and baggage options. The airline also offers a mobile app for convenient booking and managing flights. Air Canada: Similar to WestJet, Air Canada's website offers a user-friendly interface and a mobile app for booking and managing flights. Both airlines provide tangible amenities such as in-flight entertainment, Wi-Fi, and comfortable seating options. Responsiveness: WestJet: WestJet's customer service is known for being responsive and accessible. Customers can reach out for assistance via phone, email, or social media channels. The airline also provides real-time flight status updates and proactive notifications in case of delays or cancellations. Air Canada: Air Canada also offers responsive customer service through various channels, including phone, email, and social media. The airline provides timely updates on flight status and offers assistance to customers affected by disruptions. Reliability: WestJet: WestJet strives to maintain a reliable flight schedule and minimize disruptions. The airline provides options for flight protection and flexibility in case of changes or cancellations. However, occasional delays or cancellations may still occur due to factors beyond their control. Air Canada: Air Canada aims to uphold reliability in its flight operations and minimizes disruptions. The airline offers options for flight protection and flexible booking policies. However, like any airline, there may be occasional delays or cancellations due to unforeseen circumstances. Assurance: WestJet: WestJet emphasizes safety and customer satisfaction. The airline invests in modern aircraft and maintenance practices to ensure passenger safety. Additionally, WestJet offers travel insurance options and a satisfaction guarantee to provide peace of mind to customers. Air Canada: Air Canada prioritizes safety and customer assurance. The airline maintains a modern fleet and adheres to rigorous safety standards. Air Canada also offers travel insurance options and customer support to address any concerns or issues. Empathy: WestJet: WestJet demonstrates empathy by understanding and addressing the needs of its customers. The airline offers flexible booking options, compassionate policies for customers facing unforeseen circumstances, and personalized customer service to ensure a positive experience. Air Canada: Air Canada also shows empathy by accommodating the needs of its customers. The airline provides assistance to passengers with special requirements, offers support during disruptions, and strives to make travel comfortable and stress-free. Overall, both WestJet and Air Canada offer a range of services aimed at providing high-quality travel experiences for their customers, with each airline having its own strengths in different areas of the service quality dimensions. Instructor’s Notes: This exercise reinforces the concept of evaluating service providers on the basis of the five service quality dimensions. Example answers: WestJet offers services that allow consumers to book their air travel online, track flight status, observe which cities the company operates in, change reservations, reserve a hotel or car, establish their expectations about what will happen at the airport, and consider vacation packages. Air Canada offers the same services but also provides a wide range of additional services that a small, low-cost carrier like WestJet cannot, such as a private airport club in which some passengers may wait between flights, a more comprehensive rewards program that offers travel on affiliated airlines, and cargo and business services.
WestJet Air Canada
Tangibility Modern, streamlined design is intuitive and pleasing to the eye. Same basic color scheme that AC has always used, with a lot of design clutter leading to confusion for the customer.
Responsiveness Few customer service agents to respond to customer issues and slow response time on customer requests sent through the website. Many customer service agents available to talk to customers as the need arise.
Reliability Offers basic travel service for cost-conscious travelers. Offers more features and options for travelers to tailor their travel experience to suit their needs.
Assurance Informal staff who is more relaxed in their approach. Professional staff who maintain consistent service standards.
Empathy More focused on individual customers. Less concerned about individual customers and more interested in following established protocols.
Evaluate the ease with which you can make hotel reservations using Fairmont’s (www.fairmont.com) Internet reservation system. Check out the hotel’s privacy policy. Are you comfortable with their use of “cookies” to identify visitors when they return to the site? When evaluating the ease of making hotel reservations online, consider factors such as: 1. User Interface: Is the website easy to navigate? Are the reservation steps clear and intuitive? 2. Booking Process: How many steps are involved in making a reservation? Is it straightforward to select dates, room types, and other preferences? 3. Availability: Does the system accurately display room availability? Is it easy to see different room options and prices? 4. Payment Process: Is the payment process secure? Are multiple payment options available? 5. Confirmation: Do you receive a confirmation email promptly after making a reservation? As for privacy policies, it's important to review how the website handles your personal information. Look for information on: 1. Data Collection: What types of information does the website collect from visitors? 2. Use of Cookies: Many websites use cookies to enhance the user experience and track visitor behavior. Review how Fairmont uses cookies and whether they are used for advertising purposes or solely for improving site functionality. 3. Data Sharing: Does Fairmont share your personal information with third parties? If so, for what purposes? 4. Security Measures: What measures does the website take to protect your personal information from unauthorized access or misuse? 5. Opt-Out Options: Does Fairmont provide options for visitors to opt-out of certain data collection or marketing communications? Ultimately, your comfort level with Fairmont's use of cookies and handling of personal information will depend on your individual preferences and concerns regarding privacy and data security. Instructor’s Notes: Students must consider why Fairmont would want to use “cookies” on its website. In exploring possible reasons, students should address who visits the site, what fears those consumers might have. Example answers: The online hotel reservation system seems very intuitive and easy to use, with multiple options for hotel locations near common points of interest. The hotel’s privacy policy stresses the importance of privacy and its commitment to adopting high standards to protect personal information. The privacy policy clearly states that “cookies” are used to help customize the online experience. For example, they can help to recognize clients when they log on, welcome a returning visitor back to the site and provide a high level of service by remembering visitor preferences by preloading information stored in the guest’s profile. End-of-Chapter Case Puttin’ on the Ritz Questions 1. Using the building blocks of service quality (Exhibit 10.4) discussed in this chapter, evaluate the Ritz-Carlton Hotel chain. Students will refer back to Exhibit 10.4 below and use critical thinking skills to apply the concepts to the case.
Reliability Employ the motto “Never say no to a guest”
Responsiveness Highly trained employees Extensive employee training Uses CRM system – Mystique that collects information on guests from special requests
Assurance Review service values daily
Empathy Receives info. from CRM system to relate with customers
Tangibles Well trained staff in uniform Recipient of the Malcolm Baldridge Award for service quality
Reliability: The Ritz-Carlton is known for its consistent delivery of high-quality service. Guests can rely on the hotel to consistently meet their expectations in terms of room cleanliness, comfort, amenities, and overall experience. The chain has established rigorous standards and processes to ensure that each guest receives the same level of exceptional service. Responsiveness: The Ritz-Carlton excels in responsiveness by promptly addressing guest needs and requests. Whether it's providing additional amenities, arranging transportation, or resolving issues, the hotel staff is trained to be attentive and responsive to guest inquiries and concerns. Assurance: The Ritz-Carlton instills confidence in its guests through its well-trained and professional staff. Employees undergo extensive training to ensure they have the skills and knowledge to provide exceptional service. Guests can trust that they will receive personalized attention and assistance from competent staff members throughout their stay. Empathy: The Ritz-Carlton is known for its empathetic approach to guest service. Staff members are trained to anticipate guest needs and preferences, allowing them to tailor their service accordingly. Whether it's remembering a guest's name, dietary preferences, or special occasions, the hotel staff goes above and beyond to make guests feel valued and appreciated. Tangibles: The Ritz-Carlton offers luxurious accommodations and amenities that meet the highest standards of quality. From elegantly appointed rooms to fine dining options and spa facilities, the hotel chain pays attention to every detail to ensure a memorable guest experience. The physical environment reflects the brand's commitment to excellence and creates a sense of luxury and comfort for guests. Overall, the Ritz-Carlton Hotel chain demonstrates a strong commitment to service quality across all dimensions. By consistently delivering exceptional service and creating memorable experiences for guests, the chain has established itself as a leader in the luxury hospitality industry. 2. Compare the Ritz-Carlton’s service quality performance with that of the most recent hotel in which you stayed. Student answers will vary depending on the most recent hotel they stayed at. However, the Ritz-Carlton is likely to rank high in quality performance. The purpose of the questions is to allow students to compare and contrast service quality factors. While I don't have access to specific data on your most recent hotel stay, I can offer a general comparison between the service quality performance of the Ritz-Carlton and typical hotels. The Ritz-Carlton is renowned for its exceptional service quality, often setting the standard for luxury hospitality. They prioritize personalized attention to detail, anticipate guests' needs, and strive to exceed expectations at every touchpoint. From the moment guests arrive until they depart, the Ritz-Carlton aims to provide a seamless and memorable experience, often tailored to individual preferences. In contrast, service quality in other hotels can vary widely depending on factors such as the hotel's brand, location, management, and target market. While some hotels may prioritize customer service and offer similar levels of attention and care, others may focus more on efficiency and cost-effectiveness, resulting in a different service experience. It's essential to consider factors such as staff training, amenities, cleanliness, responsiveness to guest needs, and overall atmosphere when comparing service quality between hotels. While the Ritz-Carlton may set a high bar for service excellence, other hotels can still provide enjoyable stays with their own unique offerings and strengths. 3. Using the Gap Model, identify the service gaps you might have noticed during your most recent hotel stay. How might this other chain close those gaps? The purpose of this exercise is to allow students to synthesize the concepts presented in Exhibit 10.7 below. Student answers may include providing more amenities for no charge, quicker service during check-in/check-out, complimentary breakfast, free Internet, etc. The Gap Model, also known as the "Gaps Model of Service Quality," identifies five potential gaps that can occur in the delivery of a service. These gaps are: 1. Gap 1: The Gap between Customer Expectations and Management Perceptions: This gap occurs when management does not accurately understand or anticipate customer expectations. 2. Gap 2: The Gap between Management Perceptions and Service Quality Specifications: This gap happens when management fails to translate their understanding of customer expectations into clear service quality standards and specifications. 3. Gap 3: The Gap between Service Quality Specifications and Service Delivery: This gap arises when there is a discrepancy between the service quality standards set by management and the actual service delivered by frontline employees. 4. Gap 4: The Gap between Service Delivery and External Communications: This gap occurs when the communication about the service promised to customers does not match the actual service delivered. 5. Gap 5: The Gap between Customer Expectations and Customer Perceptions: This final gap emerges when customers' perceptions of the service received do not align with their initial expectations. In your most recent hotel stay, you may have noticed one or more of these gaps. For example: • Gap 3: If you experienced inconsistencies in service delivery, such as delayed room cleaning or rude staff behavior, this could indicate a gap between service quality specifications and actual delivery. • Gap 4: If the hotel advertised amenities or services that were not available or not as described, such as a malfunctioning gym or misrepresented room features, there could be a gap between service delivery and external communications. • Gap 5: If your expectations of the hotel experience were not met due to factors such as cleanliness, comfort, or overall service quality, this could indicate a gap between your expectations and perceptions. To close these gaps, the hotel chain could take several steps: • Implement comprehensive training programs for frontline staff to ensure they understand and can consistently deliver on service quality specifications. • Improve communication channels between management and staff to ensure that service standards are effectively communicated and monitored. • Conduct regular audits and quality assessments to identify and address any discrepancies between service quality specifications and actual delivery. • Enhance customer feedback mechanisms to capture and address customer expectations and perceptions more effectively. • Invest in technology and infrastructure improvements to streamline service delivery processes and minimize errors or inconsistencies. By addressing these gaps and implementing strategies to improve service quality across the organization, the hotel chain can enhance the overall guest experience and build stronger relationships with customers. ADDITIONAL TEACHING TIPS In this chapter, students learn the difference between marketing a product vs. marketing a service. Students find that since a service can’t be “seen” or measured with a quantifiable outcome, that the marketing strategy must be different in marketing services. The building blocks of service quality is the foundation of the chapter which then dovetails into how to improve customer service through the methods to reduce delivery gaps. The Ritz Carlton case study is an excellent exercise for this chapter and is strongly recommended to allow students to apply the five service quality areas. A good way to do this is to divide the class into 4 or 5 groups and have them tackle the case. Then open classroom discussion by dialogue in comparing/contrasting the responses from each of the groups. Of course, a good understanding of the five service qualities is needed before assigning the case. One good way to do this after discussion/lecture on the topic is to divide the class into groups. Have each group develop a role play skit on (1) good customer service incorporating the five service quality areas and also to prepare an alternate skit on (2) bad customer service. Students have fun with the skit exercise and it often brings out some humorous acting moments. Instructors will want to assign different topics (popular food chain, hotel, college book store, retail chain, etc.) to each group to get them focused on the skit and not thinking up “what” to complete the skit on. Each group presents the “good” skit first in which the audience (the rest of the class) takes notes and discussion takes place on how the five service qualities were present. The group then performs their “bad service skit” in which discussion follows on how to incorporate good service techniques and improve the service gaps. On-line teaching tip: Instructors can have students complete this same exercise by having students record individual skits/scenarios and uploading them to the online platform. Many institutions have hand-held types of portable video recording devices for students to check-out and use. Some students have their own equipment or a cell phone that allows shooting short videos that can then be downloaded. Other learners in the online environment can then either post their analysis on the five service qualities and their suggestions on improving the delivery gaps or write a paper outlining the same concepts (meanwhile the other learners are also preparing their own skits). Instructors may want to pair students on the responses in the online forum. For fun, instructors may want to have the class use online voting to vote on the best “performance.” Video Activities Video: 1) Netflix: Service Excellence 24/7 2) Netflix Canada
Learning Objective: LO1, LO2
Page Number in Text: 324, 330
Description: 1) Netflix provides rental films to its customers and maintains high customer satisfaction. Their use of technology helps consumers to learn about movies and make recommendations to others resulting in customer loyalty. 2) Netflix provides streaming video via the internet to Canadian consumers for only $8 a month. The videos are available on demand (addresses the matter of inventory) and gives customers what they want when they want it.
Key Words: 1) service, customer loyalty, added value, customer service, service quality, voice-of-the-customer 2) services, inventory (perishability), new service causes consumer behaviour change, technology to deliver a service, customer service
Activity: Poll students to find out if they rent movies and if so, how/where they do this. Determine how many students signed up for Netflix because of the free one month trial. Then ask if any of them continued to subscribe after their trial was over. Have them compare the services offered by Blockbuster (now defunct in Canada) versus Netflix from the perspective of intangibility, inseparability, inconsistency and inventory. Ask students if they think Blockbuster would still be in business had they embraced technology to deliver movies electronically before Netflix arrived on the scene. Activity: 1. Poll students to find out if they rent movies and if so, how/where they do this. Determine how many students signed up for Netflix because of the free one-month trial. Then ask if any of them continued to subscribe after their trial was over. 2. Have students compare the services offered by Blockbuster (now defunct in Canada) versus Netflix from the perspective of intangibility, inseparability, inconsistency, and inventory. 3. Ask students if they think Blockbuster would still be in business had they embraced technology to deliver movies electronically before Netflix arrived on the scene. Answers: 1. The poll will provide insight into students' movie rental habits and their experience with Netflix. It will show whether the free trial effectively attracted subscribers and if the service quality encouraged continued subscription. 2. Comparing Blockbuster and Netflix: • Intangibility: Netflix offers a service that is intangible (streaming content) compared to Blockbuster's tangible product (physical DVDs). Netflix's intangible service allows for greater convenience and accessibility. • Inseparability: Netflix's service is inseparable from its technology platform, whereas Blockbuster's service was primarily delivered in-store. This means Netflix can offer 24/7 accessibility, while Blockbuster's availability was limited to store hours. • Inconsistency: Blockbuster's service quality could vary between locations and staff interactions, leading to inconsistencies in the customer experience. Netflix, being an online platform, offers a consistent experience across all users. • Inventory: Blockbuster had a finite inventory of physical DVDs, subject to availability and stockouts. In contrast, Netflix's streaming service offers an extensive virtual inventory with no physical limitations. 3. Blockbuster's failure to adapt to the changing landscape of movie rental services, particularly the shift towards digital streaming, contributed significantly to its demise. Had Blockbuster embraced technology to deliver movies electronically before Netflix emerged, it could have potentially remained competitive and retained its market share. However, its failure to innovate and adapt ultimately led to its downfall in the face of competition from more agile and forward-thinking competitors like Netflix. Solution Manual for Marketing Dhruv Grewal, Michael Levy, Shirley Lichti, Ajax Persaud 9780071320382, 9780070984929
