5questions about Strategic Services Marketing
JasonB
StrategicServicesMarketing_Lecture_3.pptAutumn 2020
Associate Professor Francois Carrillat
Marketing Discipline Group
UTS Business School
24706 Strategic Services Marketing
A Customer Experience Perspective
Lecture 3: Customer expectations (Ch. 3) and Customer perceptions (Ch. 4).
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(see ‘Program’ in the 24706 Subject Outline)
Sessions 1 and 2
Chapter 1: Introduction to services
Chapter 2: The Gaps model of service quality
Chapter 8: Service innovation and design (blueprinting)
Chapter 9: Customer-defined service standards
Chapter 3: Customer expectations of services
Chapter 4: Customer perceptions of service
Chapter 10: Physical evidence and the servicescape
Chapter 6: Building customer relationships
Chapter 7: Service recovery
Chapter 11: Employees’ roles in service delivery
Chapter 12: Customers’ roles in service delivery
Chapter 13: Managing demand and capacity
Chapter 15: Pricing of services
Chapter 14: Integrated marketing communications
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NOTE: Chapters 5 and 16 are not explicitly discussed in lectures
Subject Overview: Textbook Readings & Exams
Sessions 3, 4 and 5
Title: Services Marketing, Integrating
Customer Focus Across the Firm
Authors: Valerie Zeithaml, Mary Jo Bitner, Dwayne Gremler
Publication Details:
2017, 7th Edition, McGraw Hill
Textbook: show and tell US view but will complement with examples international and australian.
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The Gap Model
Expectations: a notion of something: a mental image of something expected, often compared to its reality
The Customer Gap
The difference between what customers expects to receive and their perception of the service that is actually delivered
(the service quality gap)
The Provider Gaps
In order to close the ‘Customer Gap’ the following provider gaps must be closed:
Gap 1: Not knowing what customers expect (the knowledge gap OR listening gap)
Gap 2: Not selecting the right service designs and standards (the service design and standards gap OR policy gap) = the blueprint from group project; the participant part of the data.
Gap 3: Not delivering to service designs and standards (the service performance gap OR delivery gap) = the blueprint from group project; the observation part of the data.
Gap 4: Not matching performance to promises (the communication gap) = ask for an example from the Sydney FC perspective.
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The Gaps Model of Service Quality: Key Concepts
A model to position key concepts, strategies and decisions in services marketing
The Customer Gap
The difference between what customers expects to receive and their perception of the service that is actually delivered
(the service quality gap)
NOTE: Trying to close this gap is the focus of the Gaps Model
The Provider Gaps
In order to close the ‘Customer Gap’ the following provider gaps must be closed:
Gap 1: Not knowing what customers expect (the knowledge gap OR listening gap)
Gap 2: Not selecting the right service designs and standards (the service design and standards gap OR policy gap)
Gap 3: Not delivering to service designs and standards (the service performance gap OR delivery gap)
Gap 4: Not matching performance to promises (the communication gap)
Expected
Service
Perceived
Service
Need
Recognition
Information
Search
Evaluation of
Alternatives
Purchase
Decision
SERVICE
ENCOUNTER
POST-PURCHASE
STAGE
Post-Purchase
Behaviour
PRE-PURCHASE
STAGE
1
2
3
The Service Encounter: Moments of Truth
- Moments of truth are the time and place when and where the service provider has the opportunity to demonstrate to the customer the quality of its services (Grönroos, 2000, p. 72)
- Build trust
- Reinforce quality
- Build brand identity
- Increase loyalty
5 main types of expectations
Ojasalo, J. (1999): Quality Dynamics in Professional Services. Doctoral Dissertation. Publications of the Swedish School of Economics and Business Administration, No 76, Helsinki.
Mostly apply to the marketing of goods not services
| Expectation | Characteristic | Typical service |
| Explicit | Clear, conscious picture of what they wish for. Know if they are met or not. | Search type |
| Implicit | Do not actively think of all aspects of the service. Become explicit (revealed) when not met. | Credence type |
| Fuzzy | Expect something without being sure what it is. Unmet expectations dissatisfy but no reason can be identified. | Experiential |
| Unrealistic | Impossibly high level; unlikely to be met. Need to be lowered. | Opportunities (entertainment) |
| Realistic | Likely to be met if standards are appropriate and processes are well executed. | Problem solving (medical, law, etc.) |
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Expected Service: Sources of Desired and Adequate Service Expectations
Adequate service
Desired service
Zone of Tolerance
Self-perceived
service role
Situational
factors
Perceived service
alternatives
Temporary service
intensifiers
Lasting service
intensifiers
Personal needs
Predicted service
Explicit service
promises
Implicit service
promises
Word-of-mouth
Past experience
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How can service marketers influence customer expectations? (1)
| Factor | Some possible influence strategies |
| Explicit service promises | Check to make sure promises are accurate and realistic |
| Implicit service promises | Ensure service tangibles reflect type and level of service provided |
| Lasting service intensifiers | Market research to determine sources of service expectations |
| Personal needs | Educate customers on ways the service addresses their needs |
| Temporary service intensifiers | Increase service delivery during peak periods |
| Perceived Service alternatives | Be aware of competitive offerings and try to match them |
How can service marketers influence customer expectations? (2)
| Factor | Some possible influence strategies |
| Self- perceived service role | Educate customers to understand their roles and perform them better |
| Word-of-mouth communications | Stimulate word of mouth in advertising by using testimonials and opinion leaders |
| Past experience | Use market research to profile customers’ previous experience with similar services |
| Situational factors | Use service guarantees to assure customers about service recovery |
| Predicted service | Tell customers when service provision is higher than would normally be expected |
- Where should the bar be set in terms of expectations?
- How does a company exceed customer service expectations?
- Expectations and service innovations
- What does a service marketer do if customer expectations are “unrealistic”?
- Should a company try to delight the customer?
- Do customer service expectations continually escalate?
- How does a service company stay ahead of competition in meeting customer expectations?
Managing Customer Expectations: Opportunities and Challenges for Marketers
- Where should the bar be set in terms of expectation content and level?
Managing Customer Expectations: Opportunities for Marketers
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- How does a company exceed customer service expectations?
Managing Customer Expectations: Challenges for Marketers
https://venturebeat.com/2013/10/11/awesome-netflix-customer-service-conversation/
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- How does Uber play on expectations to gain a competitive advantage?
Opportunity: expectations and service innovations
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- Where should the bar be set in terms of expectations?
- How does a company exceed customer service expectations?
- Expectations and service innovations
- What does a service marketer do if customer expectations are “unrealistic”?
- Should a company try to delight the customer?
- Do customer service expectations continually escalate?
- How does a service company stay ahead of competition in meeting customer expectations?
Managing Customer Expectations: Opportunities and Challenges for Marketers
- What does a service marketer do if customer expectations are “unrealistic”?
Managing Customer Expectations: Challenges for Marketers
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- Should a company try to delight the customer?
Managing Customer Expectations: Challenges for Marketers
“Most people return small favors, acknowledge medium ones and repay greater ones - with ingratitude.” Benjamin Franklin
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What are customer perceptions?
Services marketing managers are interested in customer perceptions of:
- Satisfaction
- Service Quality
SERVQUAL: measuring the “customer gap” of service quality
Expected
Service
Perceived
Service
Why do fast food restaurants get away with overpromising?
What does the video suggest about the source of the customer gap (ads versus reality)?
https://www.youtube.com/watch?v=ArLtWU19u6A
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Service Quality Dimensions (R—A—T—E—R)
- Reliability
accurate service;
no mistakes; delivers what is promised; on time - Assurance
employee behaviour gives customers confidence and makes them feel safe; courteous employees with necessary knowledge to respond to questions - Tangibles
the appeal of facilities, equipment, and material used by the service firm; the appearance of employees
- Empathy
understand customers’ problems ; performs in their best interests; individual personal attention; convenient opening hours - Responsiveness
willingness to help customers and respond to requests; inform customers when service will be provided, and then give prompt service
An Alternative View: Rental / Non-Ownership View (1)
Post-purchase stage: satisfaction
What is satisfaction?
- The consumer’s fulfilment response. It is a judgement that a product or service feature, or the product or service itself, provides a pleasurable level of consumption-related fulfilment.
What drives satisfaction?
- Product and service features
- Customer emotions
- Attributions for service success or failure
- Perceptions of equity or fairness
- Other customers, family members, co-workers
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The service value chain (Carrillat et al. 2009)
Carrillat, François A., Fernando Jaramillo, and Jay Prakash Mulki. (2009), "Examining the impact of service quality: a meta-analysis of empirical evidence." Journal of Marketing Theory and Practice 17, no. 2, 95-110.
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The cost of increased service quality
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- Carrillat, François A., Fernando Jaramillo, and Jay Prakash Mulki. (2009), "Examining the impact of service quality: a meta-analysis of empirical evidence." Journal of Marketing Theory and Practice 17, no. 2, 95-110.
- Dixon, Matthew, Karen Freeman, and Nicholas Toman (2010), "Stop trying to delight your customers." Harvard Business Review 88, no. 7/8, 116-122.
- East, Robert, Jenni Romaniuk, and Wendy Lomax (2011), “The NPS and the ACSI: A critique and an alternative metric." International Journal of Market Research, 53, no. 3
- Punj, Girish, and Narasimhan Srinivasan. (1992) "Influence of problem recognition on search and other decision process variables: A framework for analysis." Advances in Consumer Research 19, no. 1.
- Grove, Stephen J., and Raymond P. Fisk. (1992). The service experience as theater. Advances in Consumer Research, Vol 19 (1), 455-462.
An Alternative View: Rental / Non-Ownership View (1)
Further Reading
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Autumn 2020
Associate Professor Francois Carrillat
Marketing Discipline Group
UTS Business School
24706 Strategic Services Marketing
A Customer Experience Perspective
Next lecture:, Chapter 10 (Servicescape)
Next workshop: Saturday 18th of April
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