Published on March 6, 2014
Welcome to the Presentation of
PRESENTED FOR Mr. Kazi Mahfuz Mamtazur Rahman Course Instructor Course Title: Service Marketing Course Code: MKT 402
We Are THE MEGAMINDS Md. Shafaeth Zaman (802) Nafiz Imtiaz Noor (816) Md. Ashiqul Islam (1332) Md. Asiful Islam (1985) Muqtadir Fattah Nayeeb (807) Md. Saidur Rahman (792) Aniqa Tahsin Anchal (787)
LEARNING OBJECTIVES Recognize that customers hold different types of expectations for service performance. Discuss the sources of customer expectations of service, including those that are controllable and uncontrollable by marketers. Acknowledge that the types and sources of expectations are similar for end consumers and business customers, for pure service and productrelated service, for experienced customers and inexperienced customers. Delineate the most important current issues surrounding customer expectations.
1 • Meaning and Types of Expected Service 2 • Factors That Influence Customer Expectations of Service 3 • Current Issues Involving Customer Service Expectations
1. Meaning and Types of Expected Service
Customer Expectations of Service Customer Expectations Beliefs about service delivery Serve as standards or reference points against which performance is judged. Customers compare their perceptions of performance with these reference points when evaluating service quality. Thorough knowledge about customer expectations is critical to services marketers.
Expected Service: Levels of Expectations Possible Levels of Customer Expectation Ideal Expectations or Desires Normative “Should” Expectations Experience Based Norms Acceptable Expectations Minimum Tolerance Expectations
Possible Levels of Customer Expectations
Dual Customer Expectation Levels Desired Service: Level of service that customer hopes to receive Adequate service: Level of service the customer will accept
Global Feature: Global Outsourcing of Personal Services: what are Customers’ Expectations? Offshoring of Personal Consumer Services Once customer wanted to create a short, but professional looking video to show at his sister’s wedding. He found a graphic artist in Romania who created a two minute video with a space theme set to the music of star wars a hit at he wedding. The cost for everything? Only $59. A man was looking for a graphic artist to illustrate a children’s book his grandmother had written for her grandchildren about her early childhood experiences in New York City. Rather than search for a graphic artist through a local telephone directory, he described his project on the guru.com website. Within a week he received 80 bids from artists in countries like Malaysia, Ukraine, and Lebanon. He ended up hiring a woman from the Philippines who offered to do 25 drawings for $300. One family hired an online tutor for their daughter. after obtaining quotes around $40/hour for local tutoring services, they found an online tutor from India who charged $99/month for two hour, five day per week sessions. The lessons simply required the family to have a digital tablet, instant messaging and a headset for communication.
The Zone of Tolerance Range or window in which customers do not notice service performance When service falls outside this range(either very high or very low), the service gets the customer’s attention in either a positive or negative way
Different customers possess different Zone of tolerance Some customers have narrow zones of tolerance They require tighter range of service from providers Others allow a greater range of service An individual customer’s zone of tolerance vary for a number of factors e.g. price, personal needs, behavior etc.
Tolerance zones vary for different dimensions The more important the factor the narrower the zone of tolerance is likely to be The zone of tolerance for the most important service dimension is smaller & the desired & adequate service levels higher.
Zones of Tolerance for Different Service Dimensions Desired Service Desired Service Level of Expectation Zone of Tolerance Zone of Tolerance Adequate Service Adequate Service Most Important Factors Least Important factors Source: Berry, Parasuraman, and Zeithaml (1993)
2. Factors That Influence Customer Expectations of Service
Factors That Influence Desired Service Expectations
Factors That Influence Desired Service
Factors That Influence Adequate Service Expectations These influences are short term and tend to fluctuate more than the factors that influence desired service. In this section we explain the five factors that influence adequate service: (1) temporary service intensifiers (short-term, individual factors that make a consumer more aware of the need of service) (2) perceived service alternatives (As the number of alternatives increases, the level of adequate service increases and the zone of tolerance narrows) (3) customer self-perceived service role (how well the customer perceives they are performing their own role in service delivery) (4) situational factors (Temporary changes in the normal state of things ---- tends to lower the level of adequate service expected and widen the zone of tolerance) Example: Reason for purchase, Consumer mood, Weather, Time constraints ,Emergency (5) predicted service.
Factors That Influence Adequate Service
Technology Spotlight: Customer Expectations of New Technology Services at the Airport
Sources of Both Desired and Predicted Service Expectations Explicit Service Promises Implicit Service Promises Word of Mouth Past Experience particular service within the same industry related services More experience the narrower the Zone of Tolerance Explicit --- personal and no personal statements from the organization (Advertising, personal selling, contracts, other communications) --- usually increases desired level and narrows zone Implicit--- ---service related cues -Tangibles - Price -- price directly related to predicted service and inversely related to width of zone. Distribution - multiple outlets
Factors That Influence Desired and Predicted Service
3. Current Issues Involving Customer Service Expectations
TABLE 4.1: How Services Marketers Can Influence Factors Factor Possible Influence Strategies Explicit service promises Make realistic and accurate promises that reflect the service actually delivered rather than an idealized version of the service. Ask contact people for feedback on the accuracy of promises made in advertising and personal selling. Avoid engaging in price or advertising wars with competitors because they take the focus off customers and escalate promises beyond the level at which they can be met. Formalize service promises through a service guarantee that focuses company employees on the promise and that provides feedback on the number of times promises are not fulfilled. Implicit service promises Ensure that service tangibles accurately reflect the type and level of service provided. Ensure that price premiums can be justified by higher levels of performance by the company on important customer attributes. Lasting service intensifiers Use market research to determine sources of derived service expectations and their requirements. Focus advertising and marketing strategy on ways the service allows the focal customer to satisfy the requirements of the influencing customer. Use market research to profile personal service philosophies of customers and use this information in designing and delivering services. Personal needs Educate customers on ways the service addresses their needs. Temporary service intensifiers Increase service delivery during peak periods or in emergencies.
TABLE 4.1: (Continued) How Services Marketers Can Influence Factors Factor Possible Influence Strategies Perceived service alternatives Be fully aware of competitive offerings, and where possible and appropriate, match them. Self-perceived service role Educate customers to understand their roles and perform them better. Word-of-mouth communications Simulate word of mouth in advertising by using testimonials and opinion leaders. Identify influencers and opinion leaders for the service and concentrate marketing efforts on them. Use incentives with existing customers to encourage them to say positive things about the service. Past experience Use marketing research to profile customers’ previous experience with similar services. Situational factors Use service guarantees to assure customers about service recovery regardless of the situational factors that occur. Predicted service Tell customers when service provision is higher than what can normally be expected so that predictions of future service encounters will not be inflated.
Frequently Asked Questions About Customer Expectations What does a service marketer do if customer expectations are “unrealistic”? Should a company try to delight the customer? How does a company exceed customer service expectations? Do customer service expectations continually escalate? How does a service company stay ahead of competition in meeting customer expectations?
What does a service marketer do if customer expectations are “unrealistic”? • Under promise • Reality check after purchase
TABLE 4.2: Service Customers Want The Basics Type of service Type of customer Principal expectations Car repair Consumers • • • Car insurance Consumers • • • • • • Hotel Consumers Be competent. (‘Fix it right the first time.‘) Explain things. (‘Explain why I need the suggested repairs – provide an itemized list.‘) Be respectful. (‘Don’t treat me like a dumb female.‘) Keep me informed. (‘I shouldn’t have to learn about insurance law changes from the newspaper.‘) Be on my side. (‘I don’t want them to treat me like a criminal just because I have a claim.‘) Play fair. (‘Don’t drop me when something goes wrong.‘) Protect me from catastrophe. (‘Make sure my family is provided for in the event of a major accident.‘) Provide prompt service. (‘I want fast settlement of claims.‘) • Provide a clean room. (‘Don’t have a deep-pile carpet that can’t be completely cleaned . . . you can literally see germs down there.‘) • Provide a secure room. (‘Good bolts and peephole on door.‘) • Treat me like a guest. (‘It is almost like they’re looking you over to decide whether they’re going to let you have a room.‘) • Keep your promise. (‘They said the room would be ready, but it wasn’t at the promised time.‘)
TABLE 4.2: Service Customers Want The Basics (Continued) Type of service Type of customer Principal expectations Property and accident insurance Business customers • • • • Equipment repair Business customers • • • Vehicle rental/leasing Business customers • • • Fulfil obligations. (‘Pay up.‘) Learn my business and work with me. (‘I expect them to know me and my company.‘) Protect me from catastrophe. (‘They should cover my risk exposure so there is no single big loss.‘) Provide prompt service. (‘Fast claim service.‘) Share my sense of urgency. (‘Speed of response. One time I had to buy a second piece of equipment because of the huge downtime with the first piece.‘) Be competent. (‘Sometimes you are quoting stuff from their instruction manuals to their own people and they don’t even know what it means.‘) Be prepared. (‘Have all the parts ready.‘) Keep the equipment running. (‘Need to have equipment working all of the time – that is the key.‘) Be flexible. (‘The leasing company should have the flexibility to rent us equipment when we need it.‘) Provide full service. (‘Get rid of all the paperwork and headaches.‘)
Should a company try to delight the customer? O Musts O Satisfiers O Delights Have Both costs & benefits O
HOW DOES A COMPANY EXCEED CUSTOMER SERVICE EXPECTATIONS? Honor promises don’t work on exceeding expectations
HOW DOES A SERVICE COMPANY STAY AHEAD OF COMPETITION IN MEETING CUSTOMER EXPECTATIONS? • Meet customer’s expectations better than the competition
DO CUSTOMER SERVICE EXPECTATIONS CONTINUALLY ESCALATE? Desired service expectations are relatively stable Adequate service expectations rise as quickly as service delivery or promise rise
INDIAN SERVICE STRATEGY INSIGHT: TCSEXPERIENCE CERTAINTY “The global marketing and brand building image goes beyond advertising campaigns… which helps to familiarize and internalize the brand promise throughout these 85,000 strong organizations. This is being rolled out and cascaded through the organizations across over 40 countries using a combination of physical and digital methods and using the many channels of employee communication that exists to create a nurture a close alignment of the company’s brand promise and its brand ambassadors- the employees who interact with customer organizations everyday” - Vandrevala, Head of Corporate Affairs “When TCS says it has 99.6% on time delivery record, it represents only one of the dimensions of delivery. We have evolved a number of other dimensions like quality expressed in terms of defect free software, availability of systems, the ability to deliver systems with budget, total cost of ownership, faster time to market etc” - Chandrasekaran, Head of Global Sales and Operations
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