Services Marketing (OAM 105)Hint for your Comprehensive Exam Viva

Q.1 a) Review each of the different ways in which services can be classified. How would explain the usefulness of each frameworks to managers?

Services Classification:

a) People processingb) Possession processing,c) Mental stimulus processingd) Information processing services

In people processing, customers must physically enter the service system in the service factory (the physical location) to receive the service and benefits. They are “worked upon” by service providers and must be prepared to cooperate actively with the service operation. For example, during an eye exam, the optometrist will ask you to submit to a number of tests to check the acuity of your vision and report what you see on the chart or other display. Managers should be thinking about process and output from the standpoint of what happens to the customer. They need to identify the benefits created at each point in the process and the non-financial costs incurred to customers such as time, fear and pain.

In possession processing, the activities involved do not involve simultaneous production and consumption. This means that they are separable. For example, customers may drop off an item at the post office, request a service like hedge trimming, and return later to pay the bill as they do not have to be physically present during the production. Essentially, their involvement level is lower. Managers need to take care that they can process customers’ possessions satisfactorily, handling them carefully to prevent any damage. Otherwise, customers will lose confidence in the service.

Mental stimulus processing refers to services directed to people’s minds such as education, news, and entertainment. They have the power to shape attitudes and influence people’s behavior. Perhaps the key feature of such a service is its high application of technology. For example, entertainment services such as music may be downloaded from the internet, while educational lessons may be conducted online. Therefore, customers don’t necessarily have to be physically present in a service factory. Because these services are directed at people’s minds, managers must maintain strong ethical standards.

Information processing services work on the intangible assets of customers. Some examples include financial services, accounting, and law. These services are highly dependent on the effective collection and processing of information. As information is an importance source of power in many instances, managers need to ensure that the privacy of their customers are kept by protecting their personal information while providing such services, they also need to ensure that the integrity of the information is not compromised in any way that can harm their customers.

Understand why different types of service processes require different approaches to marketing strategy

The four broad categories of service presented in Figure 2.1 have very different implications for marketing, operations, and human resource management.

People processing involves tangible actions to people’s bodies. To receive this type of service, customers must physically enter the “service factory” and cooperate actively with service personnel and/or systems. This means that managers must be aware of the effects of the physical environment, and the effects front-line employees have on customers. They also need to educate customers to participate effectively and efficiently in co-producing the service.

Possession processing involves physical actions to goods and other physical possessions belonging to the customer. These activities are quasi-manufacturing operations, and do not always involve simultaneous production and consumption. Customers are less physically involved with this type of processing than with people-processing services. Thus, their co-production role is not as great

Mental stimulus processing refers to intangible actions directed at people’s minds. The customer must invest time and mental effort to receive these services, but may not need to be physically present in the service provider’s factory. Because these services have the capability to shape attitudes and influence behaviors, managers must establish and enforce high ethical standards in service delivery

Information processing describes intangible actions directed at a customer’s assets. Although information is the most intangible form of service output, it can be processed by machines (most notably computers) or by people (professionals who use their brains and skills) into more enduring, tangible forms like reports, books, disks, videos, or CDs. Tradition and habit often dictate delivery of information-processing services. Managers need to consider these factors when service processes are designed so that productivity and quality initiatives fit with customer expectations about their level of involvement in service operations

b) Make a list of at least 12 services that you have used during the past month. a) Categorize them by type of process.b) In which instances could you have avoided visiting the service factory and instead obtained

service at arm’s length? Comment.c) How did other customers affect your own service experiences—either positively or

negatively?Ans:

Students should be able to come up with a reasonable number of services to analyze. Their lists are likely to include a number of food, entertainment, and leisure services in addition to such activities as using a telephone, mailing letters, riding public transportation, going to school, using library and athletic services, visiting a bank or ATM, getting a haircut, taking clothes to the cleaners or to a self-service Laundromat, and so forth. There may also be use of professional services (e.g., lawyer, doctor, and counselor).

Some students may be confused about the distinctions between the four processing categories, so it’s worth spending some time reviewing their examples. The key, of course, is to focus on the core service. For instance, the core product of a movie theater is providing mental stimulus even though the nature of this form of entertainment is that it requires customers to come to the service factory in person for an experience that may also include eating popcorn, ice cream, or beverages. Students may also identify several types of processes for the same service—visiting a retail bank branch, using an ATM, making transactions by telephone, and doing home banking on the Internet.

1. Describe search, experience, and credence attributes and give examples of each.

Students need to grasp the distinction between search, experience, and credence attributes. Product attributes include all features (both tangible and intangible) of a good or service that can be evaluated by customers. Most goods are high in search attributes, which make it easier for customers to evaluate their quality. Many services are high in experience and/or credence attributes, reflecting two of the basic differences between goods and services discussed in Chapter 1—the dominance of intangible elements and the variability of operational inputs and outputs, leading to quality control problems. As a result, service marketers need to find ways to reduce the perceived uncertainty and risk (functional, financial, temporal, physical, psychological, social, and sensory) of purchasing services, especially for a first time customer.

These attributes can be divided into three different categories:

1) Search attributes—characteristics that can be readily evaluated prior to purchase. These include such tangible elements as color, texture, taste, sound, and the visible elements of style.

Examples:

Attributes for goods: color, style, fit, price, smell, design etc. E.g., furniture, jewelry, dress

Attributes for services: price, convenience, mannerism etc. E.g., Restaurant

2) Experience attributes—features that can be evaluated only during service delivery. These include the nature of interactions with service personnel and other customers, the ambience of a service facility, the amount of time spent in different activities and the customer’s comfort level during each, how the customer reacts to different stimuli, and finally the outcome of the service process—the appearance of a haircut, newly cleaned clothes, or landscaping work; knowledge learned in a course, physical and mental feelings after medical treatment, and whether a package was delivered on time .

Example: Taste of home delivered food and wear-ability of the dress from the boutique .Example: vacation or airline, theater, theme park etc.

3) Credence attributes—characteristics that are difficult to evaluate even after service purchase and consumption. These may include a variety of professional services where the

customer is dependent on the expertise of the service provider but may be unsure for some time (or ever) if their work was of good quality. Examples include legal advice, investment counseling, and complex medical interventions.

Example (for goods): If you buy a breakfast cereal how can you know the efficacy of nutrition claimed by manufacturers? Example: (For services) doctors and consultants, car servicing

Note: It is just a hint try to reframe the answers as per questions