Revision questions

Question one:

Discuss the types of service innovation. Pick a local service organization and explain
what type of service innovation they use to strengthen the relationship between
their service and customers. Use realistic examples.

Service innovation has been defined in various ways. Sometimes when people talk
about service innovation, they are referring to innovation and improvement
related to service offerings themselves. Types of offering service innovation is

• Service line extensions represent increacment of the existing service line,

such as a restaurant adding new menu items, a law firm offering additional
legal services, and a university adding new courses or degrees.
• Service improvements represent perhaps the most common type of service
innovation. Changes in features of services already offered might involve
faster execution of an existing service process, extended hours of service, or
additions such as adding treats in a hotel room.
• Style changes: represent the most modest service innovations, although they
are often highly visible and can have significant effects on customer
perceptions, emotions, and attitudes. Changing the color scheme of a
restaurant, revising the logo for an organization or redesigning a website.
• Major or radical innovations; Many current and future examples of radical
innovations will be provided through the Cloud and mobile apps.
• Start-up businesses for a market already served by existing products that
meet the same generic needs.
• New services for the currently served market present attempts to offer
existing customers of the organization a service not previously available from
the company (although it may be available from other companies).
 Example on offering service would be on Netflix implementing style change
and shifting its service from delivering DVDs to customer’s doors to adapting
the digital world and streaming movies and shows online.

Question two:

Discuss the types of complainers and how they respond to service failures. Also, how
can marketers treat customers fairly. Support your answer with examples from your
experience.

Types of Complainers:
1) Passives: least likely to take any action, say anything to the provider, spread
negative word of mouth (WOM), or complain to a third party; doubtful of the
effectiveness of complaining
2) Voicers: actively complain to the provider, but not likely to spread negative
word of mouth (WOM); believe in the positive consequences of complaining
- the service provider’s best friends!
3) Iratest ‫المغتاظين‬: more likely to engage in negative word of mouth (WOM) to
friends and relatives and to switch providers; average in complaints to
provider; unlikely to complain to third parties; more angry, less likely to give
provider a second chance
4) Activists: above average propensity to complain on all levels; more likely to
complain to a third party; feel most alienated from the marketplace
compared to other groups; in extreme
cases can become “terrorists”

Treating customers fairly:

a) Outcome fairness : Outcome
(compensation) should match the
 customer’s level of dissatisfaction; equality with what other customers
receive
b) Procedural fairness: Fairness in terms of policies, rules, timeliness of the
complaint process; clarity, speed, no hassles; choices: “What can we do to
compensate you…?”
c) Interaction fairness ‫ عدالةنتفاعلية‬:‫نن‬Politeness, care, and honesty on the part of the
company and its employees; rude behavior on the part of employees may be
due to lack of training and empowerment.
Examples on treating the customers fairly would be, giving the customers what
they paid for, don’t take advantages of customers and offer the customer the best
product you can.

Question three:

What is service guarantee and its characteristics and its benefits of an effective
guarantee? Also, discuss when to use or not use a guarantee.

What is service guarantee?

In a business context, a guarantee is a pledge or assurance that a product offered by
a firm will perform as promised and, if not, then some form of reparation will by
undertaken by the firm. For tangible products, a guarantee is often done in the form
of a warranty.
What is characteristics of an Effective Service Guarantee?
1. Limited Restrictions and Exclusions:
The guarantee should make its promise free of “if, and or but” conditions or
exclusions associated with many legal documents.
2. Meaningful:
The firm should guarantee elements of the service that are important to
customers. Also, the payout should cover fully the customer’s dissatisfaction.

Service guarantee benefits.

  Information generated through the guarantee can be tracked and integrated
into continuous improvement efforts.
 A service guarantee reduces customers’ sense of risk and builds a confidence
in the organization.

When to use or not use a guarantee?

Reasons companies might NOT want to offer a service guarantee:

• Existing service quality is poor
• A guarantee does not fit the company’s image
• Service quality is truly uncontrollable
• Potential exists for customer abuse of the guarantee
• Costs of the guarantee outweigh the benefits
• Customers perceive little risk in the service

Question four:

Define physical evidence and how does it affect customer experience, Also, explain
the roles of service scape with its effect on behavior and environmental dimensions
of the service scape.

Physical evidence defined as the environment in which the service is delivered and
where the firm and the customer interact, and any tangible commodities that
facilitate performance or communication of the service.

How Does Physical Evidence Affect the Customer Experience?

Physical evidence affects the customers flow, meaning, satisfaction, and Clue
management: the process of clearly identifying and managing all the various clues
that customers use to form their impressions and feelings about the company.

The roles of servicescape: Note: Physical facility = Servicescape

 1. Package: Similar to a tangible product’s package, the servicescape and other
elements of physical evidence essentially “wrap” the service and convey to
consumers an external image of what is “inside.” Product packages are
designed to portray a particular image as well as to evoke a particular
sensory or emotional reaction.
2. Facilitator: the setting is designed can enhance or inhibit the efficient flow
of activities in the service setting, making it easier or harder for customers
and employees to accomplish their goals. For example, an international air
traveler who finds himself in a poorly designed airport with few signs, poor
ventilation, and few places to sit or eat will find the experience quite
dissatisfying, and employees who work there will probably be unmotivated
as well.
3. Socializer: The design of the facility can also suggest to customers what their
role is relative to employees, what parts of the servicescape they are
welcome in and which are for employees only, how they should behave
while in the environment, and what types of interactions are encouraged.
4. Differentiator: The design of the Servicescape aids in the socialization of
both employees and customers in the sense that it helps convey expected
roles, behaviors and relationships.

Understanding Servicescape Effects on Behavior

 Stimulus-organism-response theory
 Stimulus = multidimensional environment
 Organism = customers and employees
 Response = behaviors directed at the environment

Environmental Dimensions of the Servicescape environmental dimensions of the

physical surroundings can include all the objective physical factors. There is an
endless list of possibilities: lighting, color, signage, textures, quality of materials,
style of furnishings, layout, wall decor, temperature, and so on. It includes:
 1. Ambient Conditions: include background characteristics of the
environment such as temperature, lighting, noise, music, scent, and color.
As a general rule, ambient conditions affect the five senses.
2. Spatial Layout and Functionality: size, shape, and arrangement of
machinery, equipment, and furnishings and the ability of such to facilitate
customer and employee goals. Accessibility, aesthetics.
3. Signs, Symbols, Artifacts: explicit or implicit communication of meaning.
Way-finding, labels, rules of behavior, creating aesthetic impression

Question five:

Explain the services design and standards several forms of action. Also, explain what
happens when there’s a gap between customers driven service design and
management perception of customer expectations and the factors that leads to this
gap.

Explain the services design and standards several forms of action?

Meeting customer expectations of service requires not only understanding what the
expectations are but also taking action on that knowledge.

-Action takes several forms:

1. designing innovative services
2. service improvements based on customer requirements
3. setting service standards to ensure that services are performed as customers
expect,
4. Providing physical evidence that creates the appropriate cues and ambience
for service.
When action does not take place, there is a
gap—service design and standards gap as
shown in the figure.

The gap between customer-driven service

designs and standards and management
perceptions of customer expectations is
called provider gap.

The factors leading to provider gap are as follows:

1. Poor service design, which includes
unsystematic new service development
process; vague, undefined service designs;
and failure to connect service design to
service positioning.
2. Absence of customer-driven standards, which
include lack of customer driven service standards, absence of process
management to focus on customer requirements, and absence of formal
process for setting service quality goals.