Module Review 1

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 Todays Objectives
Describe the format of the exam
Review key aspects of the module content

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 Exam Format
Three hours
Choice of 8 essay-style questions
Answer 3 questions
All questions carry equal marks
However, the paper is split into:
Section A: Services Marketing (4 questions)
Section B: Business-to-Business Marketing (4 questions)
You must answer at least one question from each section
You are not permitted to answer three questions from the
same section

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 Assessment Criteria
To achieve 70% or above:
Addresses and answers the question fully
Demonstrates a considerable ability to analyse, evaluate,
and synthesize, and reach effective conclusions
Clear, accurate, well-structured, and well-argued answers
with a convincing and persuasive tone and relevant
examples
Evidence of wider reading outside of recommended text
Demonstrates excellent depth of knowledge, insight, and
comprehension of key issues
Theory applied and integrated in a relevant and critical way

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 Guidance
The best revision strategy is to be familiar with all the
module content as topics are interlinked (e.g.
capacity/demand and pricing; characteristics of services and
consumer behaviour)
We will review the module topics with you AND give you
examples of the style of questions that could appear
We will look at these practice questions in the seminars
There has been a change in module leader this year so it
would be better to use the examples we give you as a guide
to question style rather than look at last years exam paper

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 Guidance
As you only have to answer three questions, we
are looking for reasonable depth in your answers
However, if you find you are running out of time,
better to write down key points (bulleted) than to
write one beautifully-crafted sentence. You will
get some marks for showing knowledge
While it is good to reference where you can, we
appreciate that this is not always easy in exam
conditions

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 Key topic areas - Services
Characteristics of services (lectures 1 and 2)
Consumer behaviour (lecture 3)
Developing service offerings (lecture 4)
Service encounter (lecture 5)
Service design and delivery (lecture 6)
Capacity and demand (lecture 7)
Service quality and satisfaction (lectures 8 and 9)
Service failure and recovery (lecture 10)
Physical environment (lecture 11)
People (lecture 12)
Pricing (lecture 13)
Promotion (lecture 14)

There will NOT be any questions on the global marketing of services

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 Key topic areas B2B
Organizational buying behaviour
Relationships and relationship marketing
Channels and networks
Marketing planning (STP and the 4 Ps, and
differences versus B2C)

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 Distinguishing Features
(lectures 1 and 2)
Intangibility
Inseparability
Variability (heterogeneity)
Perishability

What are the problems for consumers and the

implications for marketers as a result of these
characteristics?
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 Risk and Consumer Behaviour
(lecture 3)
Lack of standardization (variability) increases
risk
Lack of tangibility increases risk: services are
generally low in search attributes
Co-production role (inseparability) increases
risk

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 Risk Reduction Strategies (Customer)
Advice (WOM) from trusted references groups
Advice from independent reviews and ratings
via internet
Firms reputation
Guarantees and warranties
Tangible cues

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 Risk Reduction Strategies (Firm)
Offer free trials for Display
services with high credentials, Offer guarantees
experience portfolio, and and warranties
attributes endorsements

Encourage
Use tangible cues
prospective
(e.g. furniture, Advertise
buyers to visit the
dress)
service facilities

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Developing Service Offerings (lecture 4)
Service products consist of:
1. Core Product central component that
supplies the principal, problem-solving benefits
2. Supplementary Services augment the core
product, facilitating its use and enhancing its
value and appeal
3. Delivery Processes used to deliver both the
core product and each of the supplementary
services

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Supplementary services: Delivery
value added features Parking processes: to
and benefits deliver the core/
supplementary
Customer benefits
processing
Room Baby
service sitters
Check- Overnight Level of
in/out Packaging
rental of service
times a bedroom provided

Customer Spa
TV role

Core Product: Mini Bar

the problem-solving
benefits
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The Flower of Service

Information
Order-
Billing Core
Safekeeping taking

Lovelock and Wirtz (2011)

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Service Encounter (lecture 5)
Typology of Service Encounters

Palmer (2011)
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 Servuction Model
Back- Front-
stage/office stage/office

Servicescape
(inanimate
environment)

Operations Other
Customer
infrastructure customers

Contact
personnel

Based on Langeard et al. (1981)

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 Theatre Metaphor
Idea that service delivery is a performance or drama
(Grove and Fisk, 1992), placing greater emphasis on the
customer experience:
Setting (stage and props): service facilities and physical
environment
Actors: employees
Audience: customers
Performance: employees and customers each with a
role and script to follow
Back-stage production team: support staff
Post-performance reviews: WOM
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 Managing Encounters
Employees can be trained and empowered to act
and react to meet expectations
Physical surroundings can be designed to create
appealing and appropriate environments
Technology can be used to introduce efficiency
Customers can be educated to play their role
Service providers should aim to turn a service
encounter into a memorable experience that
engages and is worth recounting
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Service Design and Delivery (lecture 6)
Problems with designing an efficient delivery
process:
Customization and lack of standardization
Variability of the demand cycle
Variability of service demand
Customer and contact personnel mood and
emotions
Involvement of customer in service process
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 Blueprinting
A graphical approach to draw a map of the service process
including:
All of the functions required to make and distribute a service
Those responsible for each function (including interactions)
Sequencing and relationship of functions
Timing of functions
Acceptable tolerances (variations from standard)
Potential fail points (and necessary fail-safes to prevent failure)
and bottlenecks (increased waiting time)
Invisible elements in the process

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 Delivery
Where should services be made available?
When should they be available?
How should they be made available?

Consider influencing factors and considerations

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 Capacity and Demand (lecture 7)
Scenarios
Demand exceeds maximum capacity
Demand exceeds optimum capacity
Demand and supply well-balanced
Capacity exceeds demand

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 Special Challenges for Services
Perishability of service output
Inseparability
Less of an issue where demand levels are stable
However, most services suffer from demand
fluctuation both in terms of level and pattern
(daily, weekly, seasonal and cyclical, or random).
Important to understand causes of fluctuation.

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 Special Challenges for Services
Infrequently occurring peaks are expensive to
provide for
Quality of service may suffer when
organization needs to increase output beyond
optimal levels
Can lose valuable core business if do not cater
for demand

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 Service Management Strategies
Match: Match capacity exactly to fluctuating demand (a
capacity management strategy).
Provide: Maintain capacity at a level that serves the
maximum demand level (a capacity management
strategy)
Control: Control demand to be at a constant (average)
level
Influence: Influence demand to reduce the magnitude
of peaks and troughs and match capacity to the
resulting pattern (Crandall and Markland, 1996)

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 Yield (Revenue )Management
Yield (revenue) management is the process of
maximizing yield from a fixed, perishable
resource
Involves finding the best balance at a
particular point in time between price,
segments sold to, and the capacity used

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 Service Quality and Satisfaction
(lectures 8 and 9)
GAPS model. Conceptual model showing potential gaps
between expectations and perceptions in five areas
Expected Service
Consumer Gap 5
Perceived Service

External
Service Delivery
Communications
Company Gap 3
Service Standards Specification
Gap 2
Management perception of
customer expectations
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 Using SERVQUAL to measure SQ
PZB identified 22 items, spread across the five
dimensions, that provide a reliable and valid measure
of service quality
22 items for expectations of a typically high quality
service provider in the particular sector* and 22 for
actual perceptions of the performance from the service
provider used
P (perception) and E (expectation scores) scores for
each item are compared to arrive at a gap score
The larger the gap, the further perceptions are from
expectations, and the lower the quality evaluation

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 Closing the Gaps
Market research; customer feedback; monitor complaints; interaction
between customers and management; communication between contact
Gap 1: Market personnel and management; benchmarking; management by walking
Intelligence gap around

Systematic, customer-centric process to design service process; specify

Gap 2: Standards tasks, sequences, and timings as tightly as possible; standardize repetitive
gap tasks to improve consistency

Improve recruitment, training, and rewards; clarify roles; empower where

appropriate; ensure employees understand and accept goals and
Gap 3: Delivery standards; introduce or improve technology and equipment; manage
gap customers so they perform their roles; monitor hard measures such as
late delivery, inaccurate deliveries, damaged goods. Complaints recovery
procedures
Gap 4: Dont over-promise realistic expectations; seek input from contact
Communications personnel; pre-test advertising where possible
gap
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Expectancy Disconfirmation Model
Perceptions Perceptions Perceptions
meet exceed lower than
expectations expectations expectations

Positive Negative
Confirmation
disconfirmation disconfirmation

Neutral or
Satisfaction Dissatisfaction
Satisfaction

(Oliver, 1981)
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Types of Expectation
Desired Service
(ideal expectation)

Zone of
tolerance

Adequate Service
(minimum expectation)

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 Factors Influencing Expectations
Predicted service expectations:
Explicit promises: service provider promotional messages
Implicit promises: tangibles and price
WOM: reference groups
Past experience: with the provider or similar providers
Personal needs: physical, psychological, and social
Derived expectations: our expectations can be influenced by the
expectations of others
Situational factors: we may be more understanding of a lack of products in
store if it has snowed
Perceived alternatives: our zone of tolerance narrows if there is a large
number of alternatives
Self-perceived service role: if I have performed the role expected of me to
a high degree, my expectations of the service provider will be high

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 Failure and Recovery (lecture 10)
Why are failures inherent in services?
Intangibility: customer comparison of perceptions
to expectations is highly subjective
Variability: variations in delivery will occur
Perishability: supply wont always match demand
Inseparability: customer and service provider will
frequently be face-to-face

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 Categorization of Failure Types
Service Firm Errors
Task errors Unavailable, incorrect, or slow service
Treatment errors Failure to acknowledge, listen to, or react appropriately to the
customer, or to respond to their special needs or preferences
Tangible errors Inadequate conditions in the physical environment
Customer Errors
Preparation errors Failure to attend, failure to bring necessary material to the
encounter
Encounter errors Failure to follow steps in the process or follow instructions;
disruptive other customers
Resolution errors Failure to signal service failures (no feedback), failure to adjust
expectations, failure to learn from experience

Chase and Stewart (1994)

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 The Art of Service Recovery
Aim to identify service failures before the customer
Actively encourage, and make it easy for, customers to complain to
the service firm
Plan for service failure
Respond quickly
Policy on size of compensation
Train employees
Empower the frontline
Close the loop (tell the customer how systems/procedures have
been altered to minimize risk of mistake happening again)
Learn from complaints and drive service improvements

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