978-1259709074 Chapter 13 Part 2

Unlock access to all the studying documents.

View Full Document

Chapter 13 – Services: The Intangible Product Marketing 6th

McGraw-Hill Education.

2 If Uber or Lyft fails to pick up a customer in a timely fashion, what should they do to rectify the

service failure?

Both companies should follow these steps:

1. Listening to the Customers and Involving Them in the Service Recovery – allow the customer to

Additional Teaching Tips

In this chapter, students learn the difference between marketing a product vs. marketing a service.

Students find that since a service can’t be “seen” or measured with a quantifiable outcome, that the

marketing strategy must be different in marketing services. The building blocks of service quality are the

foundation of the chapter, which then dovetails into how to improve customer service through the

methods to reduce delivery gaps.

The Broadmoor Hotel example in the text is strongly recommended to allow students to apply the five

service quality areas. A good way to do this is to divide the class into 4 or 5 groups and have them

tackle the case. Then open classroom discussion by dialogue in comparing/contrasting the responses

from each of the groups. Of course, a good understanding of the five service qualities is needed before

assigning the case. One good way to do this after discussion/lecture on the topic is to divide the class into

groups. Have each group develop a role-play skit on (1) good customer service incorporating the five

service quality areas and an alternate skit on (2) bad customer service.

Students have fun with the skit exercise and it often brings out some humorous acting moments.

Instructors will want to assign different topics (popular food chain, hotel, college bookstore, retail chain,

etc.) to each group to get them focused on the skit and not thinking up “what” to complete the skit on.

Each group presents the “good” skit first in which the audience (the rest of the class) takes notes and

discussion takes place on how the five service qualities were present. The group then performs their “bad

service skit” in which discussion follows on how to incorporate good service techniques and improve the

service gaps.

On-line teaching tip: Instructors can have students complete this same exercise by having students

record individual skits/scenarios and uploading them to the online platform. Other learners in the online

environment can then post their analysis on the five service qualities and either their suggestions on

improving the delivery gaps or write a paper outlining the same concepts (meanwhile the other learners

are also preparing their own skits). Instructors may want to pair students on the responses in the online

forum. For fun, instructors may want to have the class use online voting to vote on the best

“performance.”

Chapter 13 – Services: The Intangible Product Marketing 6th

McGraw-Hill Education.

Connect Activities

Activity

Type

Learning Objectives 13–

Wegmans Services Its Employees and Its Customers

Case Analysis

Services Marketing Differs from Product Marketing

Click & Drag

Understanding Service Gaps

Click & Drag

Netflix: Service Excellence 24/7

Video Case

Sweetwater

Video Case

FedEx: Excellence in Customer Service

Video Case

Transportation Network Services: Uber vs. Lyft vs.

Taxis

Case Analysis

ISeeIt Video Case: Service Quality

Video Case

Wegmans Services Its Employees and Its Customers

▪ Activity Type: Case Analysis

▪ Learning Objectives: 13-01, 13-03

▪ Difficulty: Hard

▪ Activity Summary: This case describes the unique customer service approach of Wegmans, a

supermarket chain. Students answer questions applying chapter concepts to the case.

Activity

▪ Introduction: Many grocery stores strive to meet customers’ needs. However, for Wegmans, that is

not enough. Wegmans works to exceed customers’ needs and expectations on a daily basis. In an

industry where over three-fourths of consumers do not believe that traditional supermarkets can

provide anything different from nontraditional markets such as Walmart, Wegmans has been able to

develop a strong and loyal customer base.

▪ Concept Review: Providing good customer service can add value to a firm’s products. Even firms

that primarily sell tangible goods (such as clothing stores) view service as a way to establish a

sustainable competitive advantage. Firms can be pure services-based businesses or they can use

service as a differentiating tool to help them sell physical products. The marketing of services differs

from product marketing, however, in four fundamental ways: services are intangible, inseparable,

variable, and perishable.

Follow-Up Activity

For another, photo–intensive view of what’s good about Wegmans, show the following in class:

http://www.buzzfeed.com/rachelysanders/why-wegmans-is–the-greatest-supermarket-ever

You can ask students to note the following:

▪ Which items on the list are related to products, and which to services? The list points out that grocery

stores are somewhere in the middle of the product/service continuum. And note that Wegmans is

Chapter 13 – Services: The Intangible Product Marketing 6th

McGraw-Hill Education.

exemplary in both areas. The case talks mostly about services, but the product assortment is equally

attractive.

▪ The Wegmans formula truly creates loyal customers and fantastic word of mouth. Skim the

comments—when was the last time you saw such unanimously glowing comments on the Internet?

▪ Note the number of items that have to do with the Tangibles component of service quality.

Services Marketing Differs from Product Marketing

▪ Activity Type: Click & Drag

▪ Learning Objectives: 13–01

▪ Difficulty: Medium

▪ Activity Summary: Students are presented with eight statements about services—four related to a

health club and four related to a hotel. They must classify each of them in two ways: (a) by the

difference between products and services the statement represents, and (b) whether the statement

represents a customer experience or a marketing activity.

Activity

▪ Introduction: Two national firms, the Prestige Hotel and Pro Fitness chains, strive to deliver quality

service to their customers. To do so, they address the four core differences between services and

goods. In the following scenario, you will be asked to categorize statements about the customer’s

experiences and the firm’s marketing efforts by the core difference they represent.

▪ Concept Review: Economies of developed countries like the United States have become

increasingly dependent on services. For example, service industries like retail and information

services account for about two-thirds of the U.S. gross domestic product (GDP) and the lion’s share

of U.S. jobs. The marketing of services differs from goods marketing because of the four fundamental

ways in which services differ from goods: They are intangible, inseparable, variable, and perishable.

Follow-Up Activity

In small groups, have students discuss how the four characteristics of services apply to university

education. Some ideas:

▪ Intangibility: Although education has tangible elements, the actual learning process is intangible, and

it can sometimes be difficult to assess its long-term value until much later.

▪ Inseparability: The instructor and the student both have important roles in the delivery of educational

services. Classroom education is “more inseparable” than asynchronous online classes since the

student can, at least up to a point, set his/her own schedule for learning.

▪ Perishability: If a class ends up having two or three empty spaces in the fall, those spaces can’t be

“saved” until the spring, when the class may have a waiting list.

▪ Variability: Many factors can contribute to variability in the educational experience. Obviously,

variability can come from differences in instructors’ approaches, or in differences in mood or alertness

of the instructor from one day to the next. An old, broken-down classroom with uncomfortable desks

may lead to a different experience from one in a comfortable, bright, attractive room. Different

Chapter 13 – Services: The Intangible Product Marketing 6th

McGraw-Hill Education.

students may experience the same class in different ways because of variation in their knowledge,

experience, interest level, and degree of effort.

Understanding Service Gaps

▪ Activity Type: Click & Drag

▪ Learning Objectives: 13–02

▪ Difficulty: Medium

▪ Activity Summary: The student is presented with four examples of problems caused by service

gaps, and four possible solutions for problems related to gaps, and must classify these items

according to the related gap.

Activity

▪ Introduction: Apartment complexes often look for ways to recruit new tenants and retain current

tenants. Although apartment complexes offer the tangible benefit of shelter to their tenants, many

apartment complexes also offer additional services to tenants to encourage tenants to stay or to

support the rent prices. The following scenario identifies the several service gaps of a company that

runs an apartment complex as well as solutions for reducing these service gaps.

▪ Concept Review: Customers have certain expectations about how a service should be delivered. A

service gap occurs when the delivery of a service fails to meet customer expectations. There are four

types of service gaps: knowledge gap, standards gap, delivery gap, and the communications gap. It is

important for marketers to identify these gaps and develop strategies for minimizing them.

Follow-Up Activity

Divide the students into groups and have one student in each group briefly describe a service failure s/he

experienced (either as the customer or as the provider). Ask the group to decide which gap(s) caused the

problem, and identify what could have been done differently to prevent the problem. Then share the

stories and analysis.

This topic could also be assigned as an individual writing prompt.

Netflix: Service Excellence 24/7

▪ Activity Type: Video Case

▪ Learning Objectives: 13–02

▪ Difficulty: Medium

▪ Activity Summary: This case explains how Netflix delivers quality service to its customers. After the

video ends, students are asked questions about the video and related course concepts.

Chapter 13 – Services: The Intangible Product Marketing 6th

McGraw-Hill Education.

Activity

▪ Introduction: Netflix is an online movie rental service that distributes more than two million DVDs per

day. Customers are offered a variety of experiences as part of the service at the Netflix.com website:

They can rate movies, create a personalized movie queue, and watch previews customized to their

tastes.

▪ Concept Review: A knowledge gap occurs when marketers don’t understand what their customers

want. They may not be providing customers enough service or the right kind of service, in which case

customers will be disappointed. To understand customer expectations, marketers analyze service

quality through comprehensive studies and by interacting with customers.

▪ Video: The video is presented to the student below the introductory information. The video plays

embedded on the page, after which questions are presented.

Follow-Up Activity

Class discussion: What new challenges does Netflix face in delivering quality service, now that so much

of its business involves streaming video instead of DVD shipments? What gap(s) do these challenges fall

into? (For this discussion to work, you need to have some Netflix customers in your class; it’s a popular

enough service that you will probably have at least a few.)

Some possible answers:

▪ The streaming service has fewer movies available than does the DVD service; this is especially true

for the newest and oldest titles. A DVD customer who switches to streaming might be disappointed if

they were expecting a comparable selection. This is a communication gap, not a knowledge gap:

Netflix certainly understands that customers want more movies, but they have contractual issues to

work out with movie studios.

▪ With the DVD service, Netflix’s service quality is dependent on good performance by the US Postal

Service. The company has worked closely with the USPS to ensure fast delivery, and located

distribution centers close to as many customers as possible.

But with streaming, Netflix’s performance depends on every Internet provider that sits between its

servers and its customers’ computers, creating major potential for delivery gaps. (You may also want

to discuss the net neutrality debate if you’re up to date on it.)

Sweetwater

▪ Activity Type: Video Case

▪ Learning Objectives: 13-02, 13-03, 13-05

▪ Difficulty: Medium

▪ Activity Summary: This case discusses Sweetwater Sound, an online retailer of audio equipment

and music-related products. After the video ends, students are asked questions about the video and

related course concepts.

Chapter 13 – Services: The Intangible Product Marketing 6th

McGraw-Hill Education.

Activity

▪ Introduction: Sweetwater Sound was started in 1979 as a professional recording studio. Now named

simply Sweetwater, it has evolved into one of the leading online retailers of recording and audio

equipment, musical instruments, and accessories. Central to its success is the company’s passion for

exceptional customer service. Sweetwater offers free shipping and a free 2-year warranty on all items

sold. It hires staff with real-world experience in music and recording and then extensively trains them

on delivering exceptional service. Sweetwater’s sales engineers personally follow up on all customer

orders. Sweetwater also offers extensive post-sales support. By fully understanding customer service

quality, Sweetwater is among the best at actually delivering it.

▪ Concept Review: Today, services account for almost 80% of U.S. GDP. Beyond this economic

impact, providing exceptional customer service is a critical component in delivering value to

customers. Marketing services has some fundamental differences from marketing tangible goods. To

deliver exceptional service, marketers need to understand and reduce various service gaps. They

also need to understand the five dimensions of service quality. If things go wrong with the service

delivery, prompt and fair service recovery is imperative. In this activity, you will be applying your

knowledge of marketing services to the specific case of Sweetwater.

▪ Video: The video is presented to the student below the introductory information. The video plays

embedded on the page, after which questions are presented.

FedEx: Excellence in Customer Service

▪ Activity Type: Video Case

▪ Learning Objectives: 13-02, 13-03, 13-05

▪ Difficulty: Medium

▪ Activity Summary: FedEx prides itself on excellent customer service. This video case describes

some of its initiatives. After the video ends, students are asked questions about the video and related

course concepts.

Activity

▪ Introduction: Delivering high-quality service is a top priority at FedEx. The company seeks to offer

excellent, consistent service across all communication channels and through the entire customer

experience. This philosophy permeates the entire organization. Attention to service quality helps to

generate customer loyalty and repeat business, which is one key to FedEx’s success.

▪ Video: The video is presented to the student below the introductory information. The video plays

embedded on the page, after which questions are presented.

Follow-Up Activity

With an operation as large and complex as FedEx’s it is important to design and operate their services

efficiently and effectively. Have the students work in groups, with each group choosing one of the gaps in

the Gaps Model. If they were managers at FedEx responsible for closing that gap, what problems would

they look out for, and what actions would they take?

Chapter 13 – Services: The Intangible Product Marketing 6th

McGraw-Hill Education.

Transportation Network Services: Uber vs. Lyft vs. Taxis

▪ Activity Type: Case Analysis

▪ Learning Objectives: 13-01, 13-02, 13-03, 13-04

▪ Difficulty: Medium

▪ Activity Summary: This case discusses how Uber and Lyft operate, how they compare to taxi

services, and the challenges they face. Students answer questions applying chapter concepts to the

case.

Activity

▪ Introduction: Local transportation options have expanded recently due to the launch of Uber and

Lyft; these services seek to address some of the problems with taxi services. The goal of this

exercise is to check your understanding of services marketing and management frameworks by

applying these frameworks to the services offered by Uber and Lyft. This activity is important because

services represent a large portion of our economy, and effective management and marketing of

services is crucial to the success of many businesses.

Follow-Up Activity

Ask the class if anyone has used Uber or Lyft, and how the service experienced performed on the five

building blocks of service quality (reliability, responsiveness, assurance, empathy, and tangibles). Also,

ask if any students have driven for Uber or Lyft, or have considered doing so, and to discuss the

challenges of driving for the companies in terms of the gaps model. Although both companies enforce

some standards to try to standardize service quality, the rating system is probably the most powerful tool

for closing any delivery gap, since drivers know that low ratings will cause them to be dropped by the

service.

ISeeIt Video Case: Service Quality

▪ Activity Type: Video Case

▪ Learning Objectives: 13-01, 13-03

▪ Difficulty: Easy

▪ Activity Summary: This video case explores different aspects of service quality for a coffee shop.

Activity

▪ Introduction: Service quality is difficult to measure given that each customer has a different

expectation about a service experience. While the service gap, which is the difference between

customers’ expectations and the service experienced, can be difficult to analyze, Martha can still

focus on ensuring that every customer has a similar quality experience. To do this, she focuses on

the tangibles—making sure dirty tables are cleaned, and ensuring the reliability of the Coffee

Collective’s coffee by training her baristas on how to make each cup of coffee taste the same. Martha

makes sure her servers are responsive to the needs of the customer by making sure that they know

their jobs well. She also encourages employees to have empathy for their customers so that

Chapter 13 – Services: The Intangible Product Marketing 6th

McGraw-Hill Education.

employees can put themselves in the customer’s shoes. By focusing on these service quality

attributes, she hopes to ensure that every customer leaves satisfied and becomes a loyal customer

who talks positively about their experiences.

▪ Video: The video is presented to the student below the introductory information. The video plays

embedded on the page, after which questions are presented.