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Essay Exam Questions-Marketing 723 Mid term 1.docx

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Ryerson University
MKT 723
Jane Saber

Essay Exam Questions: Chapter 1: Discussion Question 6: Again, think of a service job that you have had or currently have. How did or does the organization handle relevant challenges listed in table 1.3? I. Here, you will have to describe all the elements of table 1.3 in full II. And then describe how the job (and the organization itself) handles these challenges. Answer: I. Here, you will have to describe all the elements of table 1.3 in full Table 1.3 summarizes the differences between goods and services and the implications of these characteristics. The four characteristics for services that the table outlines which makes them different from goods are; 1) Heterogeneity 2) Intangibility 3) Inseparability: simultaneous production and consumption 4) Perishability I will now discuss each of the four service characteristics in detail, and then I will explain how a specific organization handles these relevant challenges. Heterogeneity: • Not all people, even in one service delivery organization do everything the same. • Service delivery and customer satisfaction depend on employee and customer actions • Because services are performances, frequently produced by humans, no two services will be precisely alike • Heterogeneity also results because no two customers are precisely alike, each will have unique demands or experience the service in unique way • Thus, the heterogeneity connected with services is largely result of human interaction between and among employees and customers and all of vagaries that accompany it Resulting Marketing Implications: • Because services are heterogeneous across time, organizations and people, ensuring consistent service quality is challenging • Service quality depends on many uncontrollable factors • There is no sure knowledge that service delivered matches what was planned and promoted • Quality depends on many factors that cannot be fully controlled by the service supplier, such as ability of consumer to articulate his or her needs, • Because of these complicating factors, the service manager cannot always know for sure that the service is being delivered in manner consistent with what was originally planned Intangibility: • Not easy to pick up by the senses • The most basic distinguishing characteristic of services is intangibility • Because services are performances or actions rather than objects, they cannot be seen, felt, tasted, or touched in some manner that you can sense tangible goods Resulting Marketing Implications: Intangibility presents several marketing challenges • Services cannot be inventoried, and therefore fluctuations in demand are often difficult to manage • Services cannot be easily patented, and new service concepts can therefore easily be copied by competitors • Services cannot be readily displayed or easily communicated to customers, so quality may be difficult for consumers to assess • Pricing is difficult • The actual costs of “unit of service” are hard to determine, and price –quality relationship is complex Inseparability: Simultaneous Production and Consumption • Services are consumed and produced simultaneously, and people don’t differentiate • Whereas most goods are produced first, then sold and consumed, most services are sold first then produced and consumer simultaneously • Frequently this situation also means that customer is present while the service is being produced and thus views may even take part in the production process • Another outcome of simultaneous production and consumption is that service producers find themselves playing a role as part of the product itself • Customers participate in and affect the transaction • Customers affect each other • Employees affect the service outcome Resulting Marketing Implications: • Because services are often produced and consumed at the same time, mass production is difficult • The quality of service and customer satisfaction will be highly dependent on what happens in “real time” • Simultaneous production and consumption also means that it is not usually possible to gain significant economies of scale through centralization • Often operations need to be relatively decentralized so that the service can be delivered directly to consumer in convenient locations Perishability: • Perishability refers to the fact that services cannot be saved, stored, resold, or returned • Perishability is in contrast to goods that can be stored in inventory or resold another day, or even returned if the consumer is unhappy Resulting Marketing Implications: • Aprimary issue that marketers face in relation to service Pershability is the inability to inventory • The fact that services cannot typically be returned or resold also implies need for strong recovery strategies when things do go wrong II. And then describe how the job (and the organization itself) handles these challenges I do not work or had worked in a service job before. So therefore I will relate these relevant challenges to a summer camp in which I volunteered last summer. This summer camp was for students in kindergarten to grade eight, the camp consisted of teachers and volunteers who taught students both English and math, and it also involved a lot of fun activities. This summer camp is expanding each year, every year it adds a new location with a new facility. All the facilities are located in Brampton. I will explain in detail how this camp deals with the challenges of each of the four service characteristics. Challenge #1: Heterogeneity As a volunteer at this summer camp, the challenges with heterogeneity that I observed were that just like most employees in different service organizations, there were good teachers and volunteers as well as not so good teachers and volunteers. Those that were good teachers and volunteers had the children under control, excited to learn and excited about coming to camp. Those teachers and volunteers which were not so good, could not control their students, students were unmotivated and unwilling to learn and unsatisfied with the overall experience at the camp. The characteristic of heterogeneity explains that not all people, even in one service delivery organization do everything the same and because services are performances, frequently produced by humans, no two services will be precisely alike. This explains why there were some good teachers and volunteers as well as bad teachers and volunteers. Some of the challenges that were raised were that, ensuring the same experience for all the children at the camp was challenging. Every teacher and volunteer was different in terms of the way that they taught and handled certain situations. Therefore it was difficult for the manager of the camp because of these complicating factors; the service manager cannot always know for sure that the service is being delivered in manner consistent with what was originally planned. What the organization has done to handle these challenges was that managers at the camp would go into each classroom to observe and asses the teachers and volunteers. They would provide feedback and constructive criticism on how they can improve their teaching skills and give them tips on classroom management.Another improvement they made for providing better quality and experience for students was having regular meetings with teachers and volunteers at the end of each week. The managers would ask the teachers if were any problems during the week, and perhaps help them solve those problems and give them solutions. Challenge #2: Intangibility The purpose of this camp is to provide knowledge to students in a fun and exciting way. Students at the camp are taught both math and English by teachers, and they also participate in fun activities such as field trips and planned events at camp. Providing knowledge cannot be seen, tasted, felt or touched there it is intangible. Because of this, parents of children must rely on tangibility cues such as do the teachers and volunteers look somewhat professional, the size of the camp, does it look clean, appealing, safe as well as advertising, and word of mouth cues. The organization does a great job with handling these relevant challenges, the camp has three facilities, and these facilities are public schools which are rented out for the camp. These three schools are located in safe neighbourhoods in Brampton. This shows that this camp is professional, in the sense that it operates in schools rather than rented out warehouses or small office buildings. The teachers and volunteers all wear camp shirts, the teachers where blue shirts and the volunteers wear red shirts, which are used to distinguish one from the other. This shows organization as well as organization rules and norms. This prevents parents from judging teachers and volunteers based on what they’re wearing, since everyone wears the same shirts. The organization also does a great a job in terms of advertising; it has T.V commercials and radio ads on Indian networks. The organization also does a great job in terms of pricing. It has number of different price options for parents. Parents can enroll their children in the camp for just a week, two weeks, or a month. It gives the parents the flexibility to choose which option they can afford, and which option is more suitable for them. Challenge #3: Inseparability The organization (camp) consists of teachers, volunteers and students. The service consists of teaching as well as learning. The teachers are responsible for teaching the information to students who are responsible for learning. The organization deals with inseparability by hiring teachers that have attended or are currently attending University, have some sort of teaching experience, and have achieved good grades throughout school. This makes the providers of the service more capable of being trustworthy in knowing the information that they are teaching, as well as confident in the material, as well as caring for their students. Because they are teaching at the same time learning some of the material, they could teach the class incorrect material. Therefore by hiring the correct personnel will give manager confident that the teacher would be confident towards teaching and caring for their students. Challenge #4: Pershability: The organization does a great job in dealing with Pershability challenges. Perishability refers to the fact that services cannot be saved, stored, resold, or returned. The camp does a great job in hiring the right amount of teachers and volunteers to do the job before the camp starts. The camp goes from kindergarten to grade eight, and each grade has two classes, one for by boys and one for girls. Therefore before the camp starts, the managers hire two teachers for each grade, and two volunteers for each class. They do a good job in managing the supply which are the students and demands the teachers and volunteers. There are no extra teachers or volunteers sitting around doing nothing. The teachers are on contract so therefore; in order for them to get paid they need to come every day, unless they are really sick. Chapter 2: Discussion Question 5 Here, first describe all of the four provider gaps in full. Then describe which gap you believe is hardest to close and why? As explained in chapter two and illustrated in figure 2.1, The Customer Gap consist of the space between Expected service and Perceived service. To close the all important Gap between Expected service and Perceived service, the gaps model suggests that four other gaps- the provider gaps need to be closed. As explained in the chapter two, these gaps occur within the organization providing the service. This essay will explain each of the four Provider Gaps in detail, as well as explain which Provider gap is the hardest to close. Part I Provider Gap 1: Not Knowing What Customers Expect Provider Gap 1 is about “Not Knowing What Customers Expect”. This may be a result of:  Inadequate marketing research  Lack of upward communication  Insufficient relationship focus  Inadequate service recovery • Provider Gap 1 is the difference between customer expectations of service and company understanding of those expectations • An inadequate marketing research orientation is one of the critical factors for Gap 1 • When management or empowered employees do not acquire accurate information about customers expectations, Provider Gap 1 is large • Another key factor that is related to Provider Gap 1 is lack of upward communication • Front line employees often know great deal about customers, if management is not in contact with front line employees, and does not understand what they know, gap widens • Also related to Provider Gap 1 is lack of company strategies to retain customers and strengthen relationships with them, an approach called relationship marketing • The final key factor associated with Provider Gap 1 is lack of service recovery • Even the best companies, with the best intentions and clear understanding of customers expectations, sometimes fail • It is critical for the organization to understand the importance of service recovery, why people complain, what they expect when they complain Provider Gap 2: Not Having the Right Service Designs and Standards Provider Gap 2 may result in:  Poor service design  Absence of customer driven standards  Inappropriate physical evidence and services cape • Recurring theme in service companies is difficulty in translating customer expectations into service quality specifications that employees can understand and execute • These problems are reflected in Provider Gap 2, the difference between company understanding of customer expectations and development of customer driven service designs and standards • As shown in Figure 2.3, Provider Gap 2 exists in service organizations for variety of reasons • Those people for setting standards typically management, sometimes believe that customer expectations are unreasonable and unrealistic • Because services are intangible, they are difficult to describe and communicate • One of the most important ways to avoid Provider Gap 2 is to clearly design services without oversimplifications, incompleteness, subjectivity, and bias Provider Gap 3: Not Delivering to Service Designs and Standards Provider Gap 3, consist of:  Deficiencies in human resource policies  Customers who do not fulfill roles  Problems with service intermediaries  Failure to match supply and demand • The firm must have systems, processes, and people in place to ensure that service delivery actually matches (or is even better than) the designs and services • Provider Gap 3 is the discrepancy between development of customer-driven service standards and actual service performance by company employees • Standards must be backed by appropriate resources (people, systems, and technology) and employees must be measured and compensated basis of performance along standards • Thus, even when standards accurately reflect customers expectations, if the company fails to provide support for those standards • If it does not facilitate, encourage, and require their achievement- standards do no good • When level of service delivery falls short of the standards, it falls short of what customers expect as well • Research has identified many of the critical inhibitors to closing Gap 3 (see figure 2.4) • These factors include;  Employees who do not clearly understand the roles they are to play in the company  Employees who experience conflict between customers and company management  Poor employee selection  Inadequate technology  Inappropriate compensation and recognition  Lack of empowerment and teamwork • These factors all relate to the company’s human resource function and involve internal practices such as; recruitment, training, feedback, job design, motivation, organizational structure • Another important variable in Provider Gap 3 is the customer • If customers do not perform their roles appropriately, if for example they fail to provide all the information necessary to the provider or neglect to read and follow instructions • Service quality is then jeopardized • Athird difficulty associated with Provider Gap 3, involves the challenge in delivering service through such intermediaries such as retailers, franchisees, agents and brokers • Most service companies face an even more formidable task: attaining service excellence and consistency in presence of intermediaries who represent them and interact with their customers • Yet are not under their direct control • With franchises and other types of intermediaries, someone other than the producer is responsible for the fulfillment of quality service • For this reason a firm must develop ways to either control or motivate these intermediaries to meet company goals • Another issue in Provider Gap 3 is the need in service firms to synchronize demand and capacity • Because services are perishable and cannot be inventoried, service companies frequently face situations of over demand and under demand Provider Gap 4: Not Matching Performance to Promises Provider Gap 4 consists of:  Lack of integrated services marketing communications  Over promising  Ineffective management of customer expectations  Inadequate horizontal communications • Provider Gap 4 illustrates the difference between service delivery and the service providers external communications • Promises made by a service company through its media advertising, sales force, and other communications can raise customer expectations • The discrepancy between actual and promised service therefore has an adverse effect on customer gap • Broken promises can occur for many reasons:  overpromising in advertising or personal selling,  inadequate coordination between operations and marketing  differences in policies and procedures across service outlets • One of the major difficulties associated with Provider Gap 4 is that communications to consumers involve issues that cross organizational boundaries • Because service advertising promises what people do, and because what people do cannot be controlled like machines • This type of communication involves more than they marketing department • This type of marketing is what we call interactive marketing- the marketing between contact people and customers and must be coordinated with conventional types of external marketing • Another issue in Provider Gap 4 is associated with pricing of services • With services, customers often have no internal reference points for prices before purchase and consumption • Techniques for developing prices for services are more complicated than those for pricing tangible goods Part II: I believe that Provider Gap 3 is the most difficult gap to close, because it requires more of the stakeholders of the service organization to fulfill their roles in order to close Provider Gap 3 compare to the other three Provider Gaps. For example, it involves providing internal practices by management within the organization such as Human Recourses in recruitment, training, feedback, job design, motivation, organizational structure. Management must make sure that employees clearly understand the roles they are to play in the company; HR also needs to be careful on the employees they select and hire in the organization and the organization also needs adequate technology.All these are internal problems that the service organization must deal with and is only one part of the solution. What makes Provider Gap 3 more difficult is that, customers also need to fulfill their roles in order to close the Gap. Unlike Provider Gap 1, where the company has control within the organization to close the gap, simply by having more adequate market research, having management in contact with front line employees, and dealing with customer complaints, the management in Provider Gap 3 has to rely on uncontrollable factors such as the expectation that customers will fulfill their roles, for example if they fail to provide all the information necessary to the provider or neglect to read and follow instructions service quality is then jeopardized. Another challenge that makes Provider Gap 3 more difficult compared to the other Gaps is that it has to deal with service intermediaries such as retailers, franchises, agents and brokers in which the organization may have little or no control over in terms of providing service quality. This makes it difficult compared to other Provider gaps, because unlike most of the other Provider Gaps, it has to deal with a third party, rather than the customer directly. In Provider Gap four, it involves interaction with cross organizational boundaries, with different departments within the organization. However, Provider Gap 3 involves interaction with third parties who may not understand the Organization goals or be from the organization. Somewhat other than the producer is responsible for the fulfillment of service quality. Another challenge that makes Provider Gap 3 more challenging is the need in service firms to synchronize demand and capacity. Because services are perishable and cannot be inventoried, service companies frequently face situations of over demand and under demand. Unlike the other Provider Gaps, Provider Gap 3 has to deal with controlling demand which is more difficult in services compared to goods. In conclusion, Provider Gap 3 is more difficult to control than the other Provider Gaps because it is affected by more number of stakeholders who also need to fulfill their roles in ensuring service quality. Most of the other Gaps service organizations can close their Gaps by controlling and fixing problems within the organization internally. In closing Provider Gap 3 the organization has to rely on external stakeholders like customers and intermediaries for them to fulfill its role. Chapter 4: Discussion Question 1 What is the difference between desired service and adequate service? Why would a services marketer need to understand both types of service expectations? Part I Here you need to fully define desired service and adequate service? Desired Service: is a blend of what the customer believes “can be” and “should be” • Customers typically hold similar desired expectations across categories of service • Among subcategories of restaurants are expensive restaurants, ethnic restaurants, fast- food restaurants, and airport restaurants • Acustomers desired service expectation for fast food restaurants is quick, convenient, tasty food in clean setting • The desired service for expensive restaurant, on the other hand, usually involves elegant surroundings, gracious employees, candlight and fine food • The desired service level is less subject to change than the adequate service level Adequate Service: represents the “minimum tolerable expectation” the bottom level of performance acceptable to the customer • The adequate service expectation level, on the other hand, may vary for different firms within a category or subcategory • Within fast food restaurants, a customer may hold higher expectation for McDonalds than for Burger King Part II Then state what the differences are between the two. The differences between desired service and adequate service can be based on the differences in factors that influence each one. • Two of the largest influences on desired service level are: 1) Personal needs 2) Philosophies about the service • Personal needs: are pivotal factors that shape what customers desire in service • They include physical, social, psychological, and functional categories • One of the most important of these factors can be called derived service expectations, which occur when customers expectations are driven by another person or group • Business-to-business customers may also derive their expectations from their managers and supervisors • For example: purchasing agents may increase demands for faster delivery at lower costs when company management is emphasizing cost reduction in the company Another factor that has influence on desired services is Philosophies about the service. • Personal service philosophy: The customers underlying generic attitude about the meaning of service and proper conduct of service providers • Personal service philosophies and derived service
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