Service marketing 2013

1. How might consumers handle perceived risk? Perceived risk is that level of risk a consumer believes exists regarding the purchase of a specific product from a specific retailer, whether or not that belief is factually correct. Negative or unexpected consequences a consumer fears may occur as a result of making the wrong purchase decision. A high-priced, complex, durable goods like an automobile or personal computer, has a higher perceived risk than a low-priced, consumable commodity like hand soap. The greater the perceived risk, the more likely it is that the consumer will seek information about the product and the recommendations and experiences of peers before buying. In a situation with high perceived risk, the consumer is more likely to purchase the same brand repeatedly or to purchase a leading brand or one with performance guarantees and warranties; new products or brands will be avoided. Perceived risk is a significant barrier in adoption for high tech products. These products are considered risk due to high uncertainties of technology and market the fear of obsolescence. Risk leads to anxiety and may lead to postponement or cancellation of purchase. Risk is closely related to involvement and is considered as its antecedent. With high technology products, the risk involved is high and hence the customer involvement is also high. The perceived risk may be divided into various aspects: Social risk: For smart phone social risk may be of very high importance as the product is used in public domain, with friends and family, and possessing the right phone with a good brand may be of great importance to the customers. Hence, the customer would put in more efforts to gather information.

Time risk: It could be said that customers need to invest a lot of time in information search and trying to learn the operation of the smart phone but in today's world the customer is tech-savvy and is well versed in using different gadgets as well as the products are themselves user-friendly and hence this argument may not hold water. Time risk is no longer considered a very salient feature.

DEVAN NAIR MANI BABM YEAR 2 SEM 2

Page 1

Service marketing 2013

Financial risk: If the consumers base their decision to reject the product on the high financial risk involved with it, they might not be keen to obtain information about the product. As such, the risk of finances may discourage consumer from seeking information.

Physical risk: This feature is of very less importance in case of a smart phone as there is no perceivable physical risk on using it and would not influence information seeking and hence it need not be considered while evaluating overall risk.

Performance risk: consumers evaluate performance risk based on their knowledge about the product and cognitive abilities. However these concerns are lessened by their interest in the product and expertise. The performance of the smart phone available at various trusted show rooms is taken for granted and hence the relationship of this dimension of risk with information seeking is insignificant.

Psychological risk: The assurance about the product performance, the vast amount of information present in the market and user-friendly product make the consumer at ease and free from psychological anxiety. Hence this risk may not be a salient attribute in the relationship between perceived risk and informational search.

DEVAN NAIR MANI BABM YEAR 2 SEM 2

Page 2

Service marketing 2013

2. Explain the flower of service concept and identify each of its petals. What insights does this concept provide for service marketers?

Core product Information Consultation Order taking Hospitality Safekeeping Exceptions Billing Payment

Roles of supplementary services Facilitating service Information Order taking Billing Payment Enhancing services consultation hospitality safekeeping exception

i.

Information elements

Directions to service site Schedules/ service hours Prices Instruction on using core products/ supplementary services Reminders Warnings
Page 3

DEVAN NAIR MANI BABM YEAR 2 SEM 2

Service marketing 2013

Condition of sale/ services Notification of changes Documentation

ii.

Order taking elements:

Application

Membership in clubs or programs Subscription services Prerequisite-based services

Order entry

On-site order fulfillment Mail/ telephone order placement Email/ web site order placement

Reservation and check in

Seats/tables/rooms Vehicles or equipment rentals Professional appointment Admission to restricted facilities

iii.

Billing elements

Periodic statements of account activity Invoices for individual transactions Verbal statements of amount due
Page 4

DEVAN NAIR MANI BABM YEAR 2 SEM 2

Service marketing 2013

Machine display of amount due Self-billing

iv.

Payment elements

Self service

Insert card, cash, or token in machine Electronic funds transfer Mail a check Enter credit card number online

Direct to payee or intermediary

Cash handling and change giving Check handling Credit / charge/ debit card handling Coupon redemption Tokens voucher, etc.

Automatic deduction from financial deposits Automated systems Human systems

v.

Consultation elements

Customized advice Personal counseling

Page 5

DEVAN NAIR MANI BABM YEAR 2 SEM 2

Service marketing 2013

Tutoring / training In product use Management or technical consulting

vi.

Hospitality elements Greetings Food and beverages Toilets and washrooms Waiting facilities and amenities Transport Security

vii.

Safekeeping elements:

Caring for processions customers bring with them

Child or pet care Parking facilities, valet parking for vehicles Coat rooms Baggage handling, storage place, safe deposit boxes Security personnel

Caring for goods purchased or rented by customers

Packaging Pickup Transportation and delivery Installation Inspection and diagnosis Cleaning

DEVAN NAIR MANI BABM YEAR 2 SEM 2

Page 6

Service marketing 2013

Refueling Preventive maintenance, repairs and renovation Upgrade

viii.

Exceptions elements Special requests in advances of service delivery Childrens needs Dietary requirements Medical or disability needs Religious observances Deviation from standard operating procedures

Handling special communication

Complaints, compliments, suggestion

Problem solving

Warranties and guarantees against product malfunction Resolving difficulties that arise from using the product Resolving difficulties caused by accident, failures, etc Assisting customers who have suffered an accident or medical emergency

Restitution Refunds Compensation in kind for unsatisfactory goods and services Free repair of defective goods

DEVAN NAIR MANI BABM YEAR 2 SEM 2

Page 7

Service marketing 2013

3. Discuss with examples the seven types of Jay customers?

Jay customers are undesirable. At worst, a firm needs to control or prevent their abusive behavior. A jay customer is the one who acts in a thoughtless or abusive way, causing problems for the firm, its employees, and other customers.

The Thief No intention of payingsets out to steal or pay less Services lend themselves to clever schemes to avoid payment For example: by passing electricity meters, circumventing TV cables, riding free on public transportation Firms must take preventive actions against thieves, but not alienate honest customers by degrading their service experience Make allowances for honest but absent-minded customers The Rule breaker Many services need to establish rules to guide customers safely through the service encounter Government agencies may impose regulations that service suppliers must enforce Some rules protect other customers from dangerous behavior For example: Vail and Beaver Creek, Coloradoski patrollers issue warnings to reckless skiers by attaching orange stickers on their lift tickets Ensure company rules are necessary, not bureaucratic

DEVAN NAIR MANI BABM YEAR 2 SEM 2

Page 8

Service marketing 2013

The Belligerent Expresses resentment, abuses service employees verbally or even physically Confrontations between customers and service employees can easily escalate Firms should ensure employees have skills to deal with difficult situations In a public environment, priority is to remove person from other customers May be better to make a public stand on behalf of employees than conceal for fear of bad publicity

Family Feuders and Vandals Family Feuders: People who get into arguments with other customers often members of their own family The Vandal: Service vandalism includes pouring soft drinks into bank cash machines; slashing bus seats, breaking hotel furniture Bored and drunk young people are a common source of vandalism Unhappy customers who feel mistreated by service providers take revenge Prevention is the best cure

DEVAN NAIR MANI BABM YEAR 2 SEM 2

Page 9

Service marketing 2013

The Deadbeat Customers who fail to pay (as distinct from thieves who never intended to pay in the first place) Preventive action is better than curefor example: insisting on prepayment; asking for credit card number when order is taken Customers may have good reasons for not paying If the client's problems are only temporary ones, consider long-term value of maintaining the relationship

DEVAN NAIR MANI BABM YEAR 2 SEM 2

Page 10

Service marketing 2013

4. Explain with diagrams six types of queuing configurations. Queuing Configurations

Single Line/Single Servers/Single Stage

Single Line/ Single Servers at Sequential Stages

Parallel Lines to Multiple Servers

Designated Lines to Designated Servers

DEVAN NAIR MANI BABM YEAR 2 SEM 2

Page 11

Service marketing 2013

Single Line to Multiple Servers (Snake)

28 30 Take a number (single or multiple servers ) 31

29

21 20 23 24

25
26 32 27

DEVAN NAIR MANI BABM YEAR 2 SEM 2

Page 12