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Services Marketing

Question Bank Unit 1

1. What is a Service?
An act or performance offered by one party to another (performances are intangible, but
may involve use of physical products).
An economic activity that does not result in ownership.
A process that creates benefits by facilitating a desired change in customers themselves,
physical possessions, or intangible assets.
2. Definition of Services.
According to Kotler, a service is any activity or benefit that one party can offer to another
that is essentially intangible and does not result in the ownership of anything.
3. How i!ortant is the Service Sector in "ur #cono$?
In most countries, services add more economic value than agriculture, raw materials and
manufacturing combined.
In developed economies, employment is dominated by service jobs and most new job
growth comes from services.
obs range from high!paid professionals and technicians to minimum!wage positions.
"ervice organi#ations can be any si#e$from huge global corporations to local small
%ost activities by government agencies and nonprofit organi#ations involve services.
%. Wh$ Stu&$ Services Marketing?
"ignificantly different from goods mar&eting.
'elatively new discipline with a strong interdisciplinary base.
Importance of services sector
()* ! +)* ,-. in highly dev. economies
"ervice sector in India appro/ 0)*
'. #vo(ving of Services.
1hanging pattern of government regulations.
.rivati#ation of some public2 nonprofit service
3echnological innovations.
Question Bank Unit 1, Prepared by, Mr.K.Mohan Kumar, AP, SNSC Pa!e 1
Internationali#ation 4 ,lobali#ation.
5/pansion of leasing 4 rental business.
%anufacturers as service providers.
6iring of employees.
). #*a!(es of Service +n&ustries
6ealth 1are
a. 6ospital, medical practice, dentistry, eye care
.rofessional "ervices
b. Accounting, legal, architectural
7inancial "ervices
c. 8an&ing, investment advising, insurance
d. 'estaurant, hotel2motel, bed 4 brea&fast,
e. Airlines, travel agencies, theme par&
f. 6air styling, pest control, plumbing, lawn maintenance, counseling services,
health club.
,. -ive soe e*a!(es of .angi/(e Doinant.
"alt, "oft drin&s, -etergents, Automobiles, 1osmetics, 7ast food outlets.
0. -ive soe e*a!(es of intangi/(e Doinant.
Advertising agencies, airlines, investment management, consulting, and teaching.
1. 2ist the +!(ications of +ntangi/i(it$.
"ervices cannot be inventoried
"ervices cannot be easily patented
"ervices cannot be readily displayed or communicated
.ricing is difficult.
13. 2ist the i!(ications of Siu(taneous 4ro&uction an& 5onsu!tion.
1ustomers participate in and affect the transaction
Question Bank Unit 1, Prepared by, Mr.K.Mohan Kumar, AP, SNSC Pa!e "
1ustomers affect each other
5mployees affect the service outcome
-ecentrali#ation may be essential
%ass production is difficult
11. What is Heterogeneit$?
3hree separate meanings in the literature:
-ifferentiation, variability and diversity.
A professor may be perceived completely different at the same type by different students
A professor may deliver the same lecture in different ways over the time
12. 2ist the i!(ications of Heterogeneit$.
"ervice delivery and customer satisfaction depend on employee and customer actions
"ervice ;uality depends on many uncontrollable factors
3here is no sure &nowledge that the service delivered matches what was planned and
13. 2ist the +!(ications of 4erisha/i(it$.
It is difficult to synchroni#e supply and demand with services
"ervices cannot be returned or resold.
1%. What is the e*!an&e& arketing i* for services?
4eo!(e6 All human actors who play a part in service delivery and thus influence the
buyer<s perceptions: namely, the firm<s personnel, the customer, and other customers in
the service environment.
4h$sica( #vi&ence6 3he environment in which the service is delivered and where the
firm and customer interact, and any tangible components that facilitate performance or
communication of the service.
4rocess6 3he actual procedures, mechanisms, and flow of activities by which the service
is delivered$the service delivery and operating systems.
1'. What are the characteristics of Services 5o!are& to -oo&s?
"imultaneous .roduction and 1onsumption (Inseparability)
1). What is 4ro&uction an& 5onsu!tion 7+nse!ara/i(it$8?
Inseparable is from the point where it is consumed, and from the provider of the service.
7or e/ample, you cannot ta&e a live theatre performance home to consume it (a -=- of
the same performance would be a product, not a service).
1,. What is +ntangi/i(it$?
Question Bank Unit 1, Prepared by, Mr.K.Mohan Kumar, AP, SNSC Pa!e #
Intangibility cannot have a real, physical presence as does a product. 7or e/ample, motor
insurance may have a certificate, but the financial service itself cannot be touched i.e. it is
10. What is 4erisha/i(it$?
.erishability is that once it has occurred it cannot be repeated in e/actly the same way.
7or e/ample, once a >)) meters 9lympic final has been run, there will be not other for ?
more years, and even then it will be staged in a different place with many different
11. What is 9aria/i(it$?
"ince the human involvement of service provision means that no two services will be
completely identical. 7or e/ample, returning to the same garage time and time again for a
service on your car might see different levels of customer satisfaction, or speediness of
23. What is :ight of ownershi!?
'ight of ownership ! is not ta&en to the service, since you merely e/perience it. 7or
e/ample, an engineer may service your air!conditioning, but you do not own the service,
the engineer or his e;uipment. @ou cannot sell it on once it has been consumed, and do
not ta&e ownership of it.
21. Wh$ Stu&$ Services?
a. %ost new jobs are generated by services
i. 7astest growth e/pected in &nowledge!based industries
ii. "ignificant training and educational ;ualifications re;uired, but employees
will be more highly compensated
iii. Aill service jobs lost to lower!cost countriesB @es, some service jobs can
be e/ported.
22. What are tangi/(e acts?
.eople processing and .ossession processing are tangible acts.
23. What are intangi/(e acts?
%ental "timulus .rocessing and Information .rocessing are intangible acts.
2%. What are 4eo!(e 4rocessing?
1ustomers must:
a. .hysically enter the service factory
b. 1o!operate actively with the service operation
%anagers should thin& about process and output from customer<s perspective
Question Bank Unit 1, Prepared by, Mr.K.Mohan Kumar, AP, SNSC Pa!e $
c. 3o identify benefits created and non!financial costs:
i. 3ime, mental, physical effort.
2'. What is 4ossession 4rocessing?
o 1ustomers are less physically involved compared to people processing services
Involvement is limited
o .roduction and consumption are separable.
2). What is Menta( Stiu(us 4rocessing?
o 5thical standards re;uired when customers who depend on such services can
potentially be manipulated by suppliers. 5/ consulting services C Advise given on
o .hysical presence of recipients not re;uired C 5/ 3= "hows are created elsewhere
and transmitted to the consumer
o 1ore content of services is information!based 1an be DinventoriedE C 'ecord
2,. 2ist the i!ortance of service sector?
i. "ervices account for more than F) percent of ,-. worldwide
ii. Almost all economies have a substantial service sector
iii. %ost new employment is provided by services
iv. "trongest growth area for mar&eting
20. What are the ;actors Stiu(ating .ransforation of the Service #cono$?
,overnment .olicies
"ocial changes
8usiness trends
Advance in information technology.
21. 2ist the factors towar&s -overnent 4o(icies in service econo$.
a. 1hanges in regulations
b. .rivati#ation
c. Gew rules to protect customers, employees, and the environment
d. Gew agreement on trade in services.
33. 2ist the factors towar&s Socia( changes in service econo$.
a. 'ising consumer e/pectations
b. %ore affluence
c. %ore people short of time
d. Increased desire for buying e/periences versus things
e. 'ising consumer ownership of high tech e;uipment
f. 5asier access to information
g. Immigration
h. ,rowing but aging population
31. 2ist the factors towar&s Business tren&s in service econo$.
a. .ush to increase shareholder value
b. 5mphasis on productivity and cost savings
Question Bank Unit 1, Prepared by, Mr.K.Mohan Kumar, AP, SNSC Pa!e %
c. %anufacturers add value through service and sell services
d. %ore strategic alliances and outsourcing
e. 7ocus on ;uality and customer satisfaction
f. ,rowth of franchising
g. %ar&eting emphasis by nonprofits
32. 2ist the factors towar&s <&vance in inforation techno(og$ in service econo$.
a. ,rowth of the Internet
b. ,reater bandwidth
c. 1ompact mobile e;uipment
d. Aireless networ&ing
e. 7aster, more powerful software
f. -igiti#ation of te/t, graphics, audio, video
33. 2ist the factors towar&s -(o/a(i=ation in service econo$.
a. %ore companies operating on transnational basis
b. Increased international travel
c. International mergers and alliances
d. D9ffshoringE of customer service
e. 7oreign competitors invade domestic mar&ets
3%. What is custoer service?
D1ustomer service is a series of activities designed to enhance the level of customer
satisfaction C that is, the feeling that a product or service has met the customer
3'. What are service offerings?
61I has cross industry e/pertise. Ae are predominantly present in 8an&ing, Insurance,
.ublishing, %anufacturing, 8.9, I3, Iife !"ciences 4 ,overnment and other verticals.
'eliance 8.9 services customers in various industries:
1ommunications (%obile, 8road band)
8an&ing and financial services (Account %aintenance, 3ransaction .rocessing,
Accounting 4 'eporting, 1ustomer services)
Insurance (9ur process delivers end!to!end solutions to all sta&eholders C the insured,
insurance company, agent, bro&er and the ban&ing interface.)
Jtilities (leading energy provider in the utility)
5ntertainment (3heatres 4 9nline ,aming)
3). What are the 04s of Services Marketing?
a. .roduct 5lements
b. .lace and 3ime
c. .rice and 9ther Jser 9utlays
d. .romotion and 5ducation
e. .rocess
f. .hysical 5nvironment
g. .eople
h. .roductivity and Kuality
3,. What are the :easons for stu&$ing services?
Question Bank Unit 1, Prepared by, Mr.K.Mohan Kumar, AP, SNSC Pa!e &
i. "ervice sector dominates economy in most nations, many new industries
ii. %ost new jobs created by services
iii. .owerful forces$government policies, social changes, business trends, I3
advances, and globali#ation$are transforming service mar&ets
iv. Jnderstanding services offers personal competitive advantage
30. What are the eight coon &ifferences in Services 4ose Distinctive Marketing
%ost service products cannot be inventoried
Intangible elements usually dominate value creation
"ervices are often difficult to visuali#e and understand
1ustomers may be involved in co!production
.eople may be part of the service e/perience
9perational inputs and outputs tend to vary more widely
3he time factor often assumes great importance
-istribution may ta&e place through nonphysical channels.
31. What are the ro(es in eeting nee&s of service custoers?
3hree management functions play central and interrelated roles in meeting needs of
service customers
9perations %anagement
%ar&eting %anagement
6uman 'esources %anagement.
%3. What are the >ua(ities of services?
Search >ua(ities6 3he buyer can evaluate before purchase.
#*!erience >ua(ities6 3he buyer can evaluate after purchase.
5re&ence >ua(ities6 3he buyer normally finds hard to evaluate even after consumption.
%1. 2ist the Differentiation in services.
"ffer6 3he 9ffer can include innovation features.
De(iver$6 A service company can hire and train better people to deliver its service. It can
develop a more attractive physical environment in which to deliver the service.
+age6 Images are differentiated through symbols 4 branding.
%2. 2ist the Managing of Service >ua(it$.
,ap between management perceptions and consumer e/pectations.
,ap between management perceptions and service ;uality specifications.
,ap between service ;uality specifications and service delivery.
,ap between service delivery and e/ternal communication.
,ap between e/pected service and perceived service.
%3. 2ist the Deterinants of service >ua(it$.
'eliability C delivering on promises
'esponsiveness C willing to help
Assurance C inspiring trust and confidence
5mpathy C individuali#ing customers
Question Bank Unit 1, Prepared by, Mr.K.Mohan Kumar, AP, SNSC Pa!e '
3angibles! physical representation.
%%. What are the ;our 5ategories of Services?
.eople processing (services directed at people<s bodies).
.ossession processing (services directed at physical possessions):
%ental stimulus processing (services directed at people<s minds)
Information processing (services directed at intangible assets).
%'. 2ist soe e*a!(es for 4eo!(e !rocessing.
Airlines, hospitals, haircutting, restaurants hotels, fitness centers, beauty salons, lodging,
funeral services.
%). 2ist soe e*a!(es for 4ossession !rocessing.
7reight, repair, cleaning, landscaping, retailing, recycling, retail distribution, laundry and
dry cleaning, refueling.
%,. 2ist soe e*a!(es for Menta( Stiu(us 4rocessing.
8roadcasting, consulting, education, psychotherapy, advertising, music concerts, arts and
%0. 2ist soe e*a!(es for +nforation 4rocessing.
Accounting, ban&ing, insurance, legal, research, data processing.
%1. 2ist the 5ha((enges for Services.
-efining and improving ;uality
1ommunicating and testing new services
1ommunicating and maintaining a consistent image
%otivating and sustaining employee commitment
1oordinating mar&eting, operations and human resource efforts
"etting prices
"tandardi#ation versus personali#ation.
'3. 2ist soe Service firs.
8an&ing, stoc& bro&ing
'estaurants, bars, catering
Gews and entertainment
3ransportation (freight and passenger)
.ostal service
6ealth care
Aholesaling and retailing
Iaundries, dry!cleaning
'epair and maintenance
.rofessional (e.g., law, architecture, consulting)
'1. What is Service Doinant 2ogic?
Question Bank Unit 1, Prepared by, Mr.K.Mohan Kumar, AP, SNSC Pa!e (
D%a&e it together with the customerE
"ervice industries gain more and more importance
Ideas generated in the service field spread to other sectors (li&e industrial
mar&eting, mar&eting for consumer goods)
DIntangible product featuresE.
'2. What are the +ssues in services?
"ervice product or pac&age
.hysical evidence.
'3. What is the nature of services?
Ahichever means of classifying services is used, and whether or not there is agreement
that the uni;ue characteristics of services really represent uni;ue distinctions, ultimately
both physical goods and services provide benefits and satisfactions C both goods and
services are Lproducts< or offerings. 1onsider the following brea&down of service
o Jtilities: gas, power, water
o 3ransport and communications
o 'ecreation and leisure
o Insurance, ban&ing and finance
o 8usiness, professional and scientific 7or most of these categories it is easy to
thin& of Lproducts< associated with themM insurance policies, heating and light,
pac&age holidays and so on. 3his has implications for services mar&eting
'%. Differentiate /etween !h$sica( goo&s an& services.
.hysical goods "ervices
3angible Intangible
6omogeneity (uniform in composition
or character)
6eterogeneous (Iac&s Jniformity)
Question Bank Unit 1, Prepared by, Mr.K.Mohan Kumar, AP, SNSC Pa!e )
.roduction and distribution are
separated from consumption
.roduction, distribution and consumption are
simultaneous processes
A thing An activity or process
1ore value processed in factory 1ore value produced in the buyer!seller
1ustomers do not participate in the
production process
1ustomers participate in production
1an be &ept in stoc& 1annot be &ept in stoc&
3ransfer of ownership Go transfer of ownership
''. What wi(( /e the core !ro&uct an& su!!(eentar$ services for a 2u*ur$ Hote(?
5ore 4ro&uct6 A bed for the night in an elegant private room with bathroom
Su!!(eentar$ services6 'eservation, =alet par&ing, 'eception, 8aggage service,
coc&tail bar, restaurant, entertainment ("ports, 5/ercise, television), telephone, wa&e up
call, room service, business center.
Question Bank Unit 1, Prepared by, Mr.K.Mohan Kumar, AP, SNSC Pa!e 1*