Service Marketing Assignment

Name- ABINASH BARIK

Enrolment number- 19BSP0112

SEC-C

1. SERVICES-A service is an intangible product involving a deed,

performance, or an effort that cannot be physically possessed. Dominant
component is intangible. Includes rental of goods, alteration and repair
of goods owned by customers, and personal. 
According to Philip Kotler and Bloom services is defined as “any
activity or benefit that one party can offer to another that is
essentially intangible and does not result in the ownership of
anything. Its production may or may not be tied to a physical
product.
Examples include international hotels and ocean liners with guest
accommodation, concierge, bars, restaurants, swimming pools,
gymnasiums and other supplementary services 

2. CHARACTERISTICS OF SERVICE MARKETING (IHIP)-

1) Intangibility- A service that cannot be seen, smelled, heard or
touched prior to purchase , example-university services, (2)
heterogeneity-Each time a service is performed in a different way
e.g.- waiter services, (3) inseparability-A service is performed and
consumed at the same time e.g.- tanning salon, and (4) perishability-
a service cannot be stored like a physical good. If it is not delivered, it
is lost or does not exist. E.g.- flight seats during a trip

3. Service Encounter / Moment of Truth

A moment of truth is usually defined as an instance wherein the
customer and the organization come into contact with one another in
a manner that gives the customer an opportunity to either form or
change an impression about the firm. Such an interaction could
occur through the product of the firm, its service offering or both.
Various instances could constitute a moment of truth - such as
greeting the customer, handling customer queries or complaints,
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 promoting special offers or giving discounts and the closing of the
interaction.

4. Service Blue Print or Service Mapping

A service blueprint is a diagram that visualizes the relationships
between different service components — people, props (physical or
digital evidence), and processes — that are directly tied to touch
points in a specific customer journey. Think of service blueprints as a
part two to customer journey maps.

5. Service Blue Print Components

Customer actions. This includes all the steps a customer takes during the
service delivery process. In a Service Blueprint, customer actions are
usually depicted in sequence, from start to finish. Customer actions are
central to the Service Blueprint, so they are described first.

• The onstage visible actions taken by employees. Onstage visible actions by

employees are the face-to-face contacts with the customer during the
service delivery. These are separated from the customer by the line of
interaction. Service delivery actions by frontline customer contact
employees are shown here. Each time the line of interaction is crossed
through an interaction between a customer and contact employee (or self-
service technology), a moment of truth occurs. During these moments of
truth, customers judge your quality and make decisions regarding future
purchases.

• Backstage actions taken by employees that are not visible to the

customer. The next part of the Service Blueprint is the “backstage”
invisible actions of employees that impact customers. Actions here are
separated from onstage service delivery by the line of visibility. Everything
above the line of visibility is seen by the customer while everything below it
is invisible. In our hotel example, these actions included taking the food
order (accurately) and preparing a quality meal.

• Company support processes used throughout the service delivery. The

fourth critical component of a Service Blueprint is the “support processes”
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that customer contacts employees rely on to effectively interact with the
customer. These processes are all the activities contributed by employees
within the company who typically don’t contact customers. These need to
happen, however, to deliver the service. Clearly, service quality is often
impacted by this below-the-line of interaction activities.

• Physical evidence of the service. Finally, for each customer moment of

truth the physical evidence of the service delivery at each point of customer
contact is recorded at the top of the blueprint.

6. QFD: Quality Function Deployment-Quality Function

Deployment (QFD) is a process and set of tools used to effectively define
customer requirements and convert them into detailed engineering
specifications and plans to produce the products that fulfil those
requirements. Also called: matrix product planning, decision matrices,
customer-driven engineering. Every organization has customers. Some
have only internal customers, some have only external customers, and some
have both. When you are working to determine what you need to
accomplish to satisfy or even delight your customers, quality function
deployment is an essential tool.

7. Service Encounter Service encounters are transactional interactions in

which one person (e.g., a vendor, office clerk, travel agent) provides
a service or good (e.g., a product, an appointment, airline tickets) to
another person.

A service encounter is any direct interaction between a service provider

and customers and may take varying forms. For example, a bank customer
wishing to make account inquiries may choose between an interaction with
an ATM or over the Internet, or with a bank employee by telephone, letter,
or face to face in a branch.

8. Tangibility Spectrum
All tangible goods have some intangible services, while all services include
some tangible goods. Hence some products are tangible dominant, while

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some are intangible dominant and there are some products which fall in the
middle.

9. Physical evidence and Servicescape

Physical evidence is the environment in which the service is delivered and
where the firm and the customer interact and any tangible commodities
that facilitates performance or communication of the service. Physical
evidence includes the services cape, a term used to describe the physical
facility where the service is produced and/or delivered.

10.7ps of Services (4P’s + People, Physical Evidence and Process)

Product: In case of services, the ‘product’ is intangible, heterogeneous and

perishable. Moreover, its production and consumption are inseparable.
Hence, there is scope for customizing the offering as per customer
requirements and the actual customer encounter therefore assumes
particular significance. However, too much customization would
compromise the standard delivery of the service and adversely affect its
quality. Hence particular care has to be taken in designing the service
offering.

Pricing: Pricing of services is tougher than pricing of goods. While the

latter can be priced easily by taking into account the raw material costs, in
case of services attendant costs - such as labor and overhead costs - also
need to be factored in. Thus a restaurant not only has to charge for the cost
of the food served but also has to calculate a price for the ambience
provided. The final price for the service is then arrived at by including a
mark up for an adequate profit margin.

Place: Since service delivery is concurrent with its production and cannot

be stored or transported, the location of the service product assumes
importance. Service providers have to give special thought to where the
service would be provided. Thus, a fine dine restaurant is better located in
a busy, upscale market as against on the outskirts of a city. Similarly, a
holiday resort is better situated in the countryside away from the rush and
noise of a city.

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Promotion: Since a service offering can be easily replicated promotion
becomes crucial in differentiating a service offering in the mind of the
consumer. Thus, service providers offering identical services such as
airlines or banks and insurance companies invest heavily in advertising
their services. This is crucial in attracting customers in a segment where
the services providers have nearly identical offerings.

People: People are a defining factor in a service delivery process, since a

service is inseparable from the person providing it. Thus, a restaurant is
known as much for its food as for the service provided by its staff. The
same is true of banks and department stores. Consequently, customer
service training for staff has become a top priority for many organizations
today.

Process: The process of service delivery is crucial since it ensures that the

same standard of service is repeatedly delivered to the customers.
Therefore, most companies have a service blue print which provides the
details of the service delivery process, often going down to even defining the
service script and the greeting phrases to be used by the service staff.

Physical Evidence: Since services are intangible in nature most service

providers strive to incorporate certain tangible elements into their offering
to enhance customer experience. Thus, there are hair salons that have well
designed waiting areas often with magazines and plush sofas for patrons to
read and relax while they await their turn. Similarly, restaurants invest
heavily in their interior design and decorations to offer a tangible and
unique experience to their guests.

11.SQI (Service Quality Indicators)

It can be defined as 'the totality of inherent characteristics of a product

or service that bear on its ability to increase the demand for that product
or service at a fixed price' and can best be measured by capturing customer
perceptions of the performance of those characteristics.

12. Tangibility Spectrum (least to high)

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Products defined as goods are arrayed on the tangible-dominant half of the
spectrum and products defined as services on the intangible dominant
halfPure goods and pure services lie at the extremities.

13. Service Delivery (Berner & Gronoos): -

Service delivery is a component of business that defines the interaction

between providers and clients where the provider offers a service, whether
that be information or a task, and the client either find value or lose value
as a result. Good service delivery provides clients with an increase in value.

14. Critical incidents and critical incidents techniques (Dissatisfied or

Delighted): -

A critical incident can be defined as any event that has a stressful impact

sufficient enough to overwhelm the usually effective coping skills of an
individual.

The Critical Incident Technique (or CIT) is a set of procedures used for
collecting direct observations of human behaviour that have critical
significance and meet methodically defined criteria.

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CIT is a flexible method that usually relies on five major areas. The first is
determining and reviewing the incident, then fact-finding, which involves
collecting the details of the incident from the participants. When all of the
facts are collected, the next step is to identify the issues. Afterwards a
decision can be made on how to resolve the issues based on various possible
solutions. The final and most important aspect is the evaluation, which will
determine if the solution that was selected will solve the root cause of the
situation and will cause no further problems.

15. Service Quality: -

It is a combination of two words, Service and Quality where we find

emphasis on the availability of quality services to the ultimate users. The
term quality focuses on standard or specification that a service generating
organisation promises. We can’t have a clear-cut boundary for quality. Sky
is the limit for quality generation. Scientific inventions and innovations
make the ways for the generation of quality. More frequency in
innovations, less gap in the process of quality up-gradation.

16. ServQual Dimensions (5 dimensions of service quality): -

 Tangibility: -Since services are tangible, customers derive their

perception of service quality by comparing the tangible associated
with these services provided. It is the appearance of the physical
facilities, equipment, personnel and communication materials. In this
survey, on the questionnaire designed, the customers respond to the
questions about the physical layout and the facilities that FFR offers
to its customers.

 Reliability: -It is the ability to perform the promised service

dependably and accurately. Reliability means that the company
delivers on its promises-promises about delivery, service provision,
problem resolutions and pricing. Customers want to do business with
companies that keep their promises, particularly their promises
about the service outcomes and core service attributes.

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  Responsiveness: -It is the willingness to help customers and provide
prompt service. This dimension emphasizes attentiveness and
promptness in dealing with customer’s requests, questions,
complaints and problems. Responsiveness is communicated to
customers by length of time they have to wait for assistance, answers
to questions or attention to problems.

 Assurance: -It means to inspire trust and confidence. Assurance is

defined as employees’ knowledge of courtesy and the ability of the
firm and its employees to inspire trust and confidence. This
dimension is likely to be particularly important for the services that
the customers perceives as involving high rising and/or about which
they feel uncertain about the ability to evaluate.

 Empathy: -It means to provide caring individualized attention the

firm provide its customers. In some countries, it is essential to
provide individual attention to show to the customer that the
company does best to satisfy his needs. Empathy is an additional plus
that the trust and confidence of the customers and at the same time
increase the loyalty

17. Search Quality, Experience Quality and Credence Quality: -

Search Quality: Search quality is the perception in the mind of the

consumer of the quality of the product prior to purchase through making a
series of searches. So this is simple in relation to a tangible product because
you might look at size or colour for example. Therefore search
quality relates more to products and services

Experience Quality: It is the value of experience to the customers. It is a

measure of customer perceptions that can be applied to diverse services
including areas as medicine, technology, travel, entertainment and
hospitality.

Credence Quality: Credence quality is quality that is difficult for customers

to evaluate even after they have consumed a product or service. It is
associated with products and services that require special skills to evaluate
or where results aren't immediately apparent.

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18. Triangle of Services Marketing (Internal, External and Interactive
Marketing): -

External Marketing: Companies use external marketing to make promises

to customers. External marketing is any communication to customers (or
potential customers) that happens before service delivery starts.

Forms of external marketing include:

Advertising

 Personal selling

 Public relations (PR)

 Direct marketing

Internal Marketing: Within a services business, we view employees

as internal customers. They are a market which we must please first
as a company. The leadership team should be focused on satisfying
its employees so that they want to better serve customers. Internal
marketing involves motivating employees to work as a team to make
customers satisfied. This is obviously true for customer service
representatives. It can equally be applied to all employees.

Key components of internal marketing include:

 Motivating employees

 Teaching customer satisfaction techniques

 Communicating company goals regularly

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  Management of change

 Training staff on how to use the company’s services

 Good pay and working conditions.

Interactive Marketing: Interactive marketing occurs when employees and

customers interact. It is here where the promises made during external
marketing are either kept or broken by employees or sub-contractors.

Each significant interaction between an employee and a customer is known

as a service encounter.

Interactive marketing is important because it establishes both short-term

and long-term satisfaction. That is, if the customer is satisfied with the
service they received in the short-term, they are more likely to be satisfied
over the longer term.

19. National Customer satisfaction index (USA): -

American Customer Satisfaction Index Jump to navigation Jump to search.

The American Customer Satisfaction Index (ACSI) is an economic
indicator that measures the satisfaction of consumers across the U.S.
economy. It is produced by the American Customer Satisfaction Index
(ACSI LLC) based in Ann Arbor, Michigan. For example, adding the
customer survey scores for responsiveness, cleanliness, product quality and
price then dividing by four. This gives an index with the same range as
each of the attribute scores. The main issue with this approach is
determining how important each attribute is in driving customer
satisfaction.

20. Consumer confidence index: -

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The Consumer Confidence Index is a survey, administered by The
Conference Board that measures how optimistic or pessimistic consumers
are regarding their expected financial situation.

The Consumer Confidence Index (CCI) is based on the premise that if

consumers are optimistic, they will spend more and stimulate the economy
but if they are pessimistic then their spending patterns could lead to a
recession.

21. American Customer Satisfaction Index

The American Customer Satisfaction Index provides unique customer

experience benchmarking capabilities that come from the Index’s one-of-a-
kind, cross-industry structure. For over two decades, the ACSI has used its
science-based, proprietary methodology to analyse customer satisfaction
for 10 economic sectors and 46 key industries that together represent a
broad swath of the national economy.

22. Customer perception definition:

“Marketing concept that encompasses a customer’s impression, awareness,

or consciousness about a company or its offerings. “Customer collects
information about a product and interprets the information to make a
meaningful image about a particular product. This is called as customer
perception.

Factors affecting customer perceptions:

Price: customers have a high probability of favouring a product or service

that is economically priced

Quality: if the product completely satisfies a customer then it enhances

his/her perception towards it.

Packaging and branding: these significantly affect customer perceptions

depending on how the product is presented during purchasing.
Attractiveness and display quality increases perceptions.

Reputation: reputation of products develops over time and depends on the

experience with the product and intensive marketing campaigns that raise

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the status and brand identity. This determines customer’s product
perceptions.

23. Customer expectation and factors effecting customer expectations

Customer expectation encompasses everything that a customer expects

from a product, service or organisation. Customer expectations are created
in the minds of customers based upon their individual experiences and
what they have learned, combined with their pre-existing experience and
knowledge.

Factors affecting customer perceptions:

Explicit service promises: Explicit service promises are personal and non-
personal statements about the service made by the organization to
customers. The statements are personal when they are communicated by
salespeople or service or repair personnel; they are non-personal when they
come from advertising, brochures, and other written publications.

Implicit service promises: Implicit service promises are service-related cues

other than explicit promises that lead to inferences about what the service
should and will be like. These quality cues are dominated by price and the
tangibles associated with the service.

Word-of-mouth communications

Past experience: The customer’s previous exposure to service that is

relevant to the focal service, is another force in shaping predictions and
desires. The service relevant for prediction can be previous exposure to the
focal firm’s service.

24. Customer satisfaction and customer delight

Customer satisfaction: a short-term emotional reaction to a specific service

performance. Customer delight is the process of exceeding a customer's
expectations to create a positive customer experience with your product or
brand to improve loyalty.

25. Relationship marketing: activities aimed at developing long-term, cost

effective links between an organization and its customer for the mutual
benefit of both parties. Example- Ikea
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26. Customer Relationship Management (CRM)

(CRM) is a technology for managing all your company’s relationships and

interactions with customers and potential customers. The goal is simple:
Improve business relationships. A CRM system helps companies stay
connected to customers, streamline processes, and improve profitability.

27. Know Your Customer (KYC)

The process of knowing your customer, otherwise referred to as KYC, is

what businesses do in order to verify the identity of their clients either
before or during the time that they start doing business with them. The
term KYC can also reference the regulated bank practices that are
similarly used to verify clients’ identities.

KYC helps companies to:

 Track Customers’ Real-Time Behaviour

 Identify the different categories of your Customers

 Invest on Social Media Customer Engagement

 Leverage Customer Service Interactions

28. Life time value of customers (LTVC)

Lifetime value of a customer, or customer lifetime value (CLV), represents

the total amount of money a customer is expected to spend in your
business, or on your products, during their lifetime.

29. Customer acquisition- refers to gaining new consumers. Acquiring new

customers involves persuading consumers to purchase a company’s
products and/or services. Companies and organizations consider the cost of
customer acquisition as an important measure in evaluating how much
value customers bring to their businesses.
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30. Customer Retention strategies- It refers to the activities and actions
companies and organizations take to reduce the number of customer
defections. The goal of customer retention programs is to help companies
retain as many customers as possible, often through customer loyalty and
brand loyalty initiatives. It is important to remember that customer
retention begins with the first contact a customer has with a company and
continues throughout the entire lifetime of the relationship.

31. Customer enhancement

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 Customer Experience Enhancement means looking at each step in
the customer experience to determine how to manage the experience at
each customer touch point. Just as important, it means evaluating the
transitions between touch points.

Customer Service Enhancement-This programme provides you with an in-

depth external review of the standard of customer service delivered by
your business and provides you with a manageable plan for improvement.

32. Customer Defection

It is when customers take their business to competitors when they feel that
their needs or wants are not met or if they encounter breakdowns in
customer service or poor-quality products.

33. Types of customer complaints

*Performance/Operations related complaints

*Customer Touch Point related complaints
*Marketing related complaints
*Business/Firm/Company service-related complaints
*Illegitimate/False Complaints

34. Complaint as a Gift.

Complaints also tell you that the customer still wants to do business with
you — she still cares about the relationship she has with your company and
she wants you to fix the problem so she can continue to do business with
you. Most customers don’t complain — they just take their business
elsewhere, because they’ve given up hope of getting what they need from
you. That’s why a complaint is really a gift. Just as we thank someone who
gives us a birthday gift, we should thank someone who brings us a
complaint. They have given us something valuable, something useful,
something that can help make our business stronger and more profitable
— and we should treat their complain as the gift that it really is.

35. Service Recovery

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Service recovery refers to the 'actions taken by an organisation in response
to a service failure'. The goal of service recovery is to identify customers
with issues and then to address those issues to the customers' satisfaction to
promote customer retention.

36. Service Recovery Strategies

37. Service Recovery Paradox

Service recovery paradox – every failure is an opportunity

The service recovery paradox (SRP) refers to the seemingly absurd

phenomena when a customer thinks more highly of a company after
a service failure compared to how he or she would regard the company if
non-faulty service had been provided.

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38. Service Guarantee

Service guarantee' as defined, “an assurance of the quality of or length of

use to be expected from product offered for sale, often with a promise of
reimbursement.” A guarantee is a particular type of recovery tool.

39. Stages in New Service Development

It generally consist of the following seven steps: (1) formulation of new

service development strategy; (2) idea generation; (3) screening and
evaluation; (4) business analysis; (5) concept development; (6)
concept testing; and (7) commercialization.

40. Customer Defined Service Standards (CDSS)

Standards that fill the GAP 2 are customer defined standards-operational

goals and measures based on pivotal customer requirements that are visible
and measured by customers.

41. One Time Fixes

It means what aspect of services need to be changed, the requirements that

can be met using one-time fixes. (Technology, policy, procedures,
equipment’s, furnishing)

42. Hard Service Standards & Soft Service Standards

Hard service standards-Things that can be counted, timed, or observed

through audits (time, no. of events), e.g. - Dell computers

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Soft service standards-Opinion based measures that cannot be observed
and must be collected by talking to the customers (perceptions and beliefs),
e.g.-American Express services

43. Customer as a partial employee

A partial employee is defined as a customer who temporarily participates

in the service delivery process, contributing resources to the service.

44. The customer who complains is your friend.

A friend is someone who tells you when something is wrong. A customer

complaint is that friend. A complaint is not a problem. A complaint is an
opportunity to improve, to better train your staff, to audit your products
and processes, to better service your customers.

45."A complaint is a gift. !?"

Complaints give us something valuable, something useful, something that

can help make our business stronger and more profitable — and we should
treat their complain as the gift that it really is.

46. Customer is the King!

In my opinion, the customer is the king because every product or service is

innovated is completely based on customer needs. If a customer is not
satisfied then the product or service will be shut down or out of the market.
Even we do market research to know the customer requirement and
promotional activities are also for grabbing the customer's attention. For
e.g. the success of Patanjali as it grabbed the customers attention by
knowing their requirement i.e., organic products and lower prices
compared to other brands.

47. Customer is always right 

The phrase the customer is always right is an ideal that many stores try to
adhere to as their customer service policy. It means that if the customer is

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unhappy about a product, the business will try to fix the problem and make
the customer happy.

48. Zone of Tolerance

The zone‐of‐tolerance (ZOT) is an innovative concept that has attracted

recent attention in the services marketing domain. The ZOT represents a
range of service performance that a customer considers satisfactory, which
recognizes multiple expectation standards, specifically adequate and
desired expectations.

49. Gaps Model of Service Quality (5 Gaps Model – Customer Gap- The
Listening Gap- The Service Design and standard Gap- The service
Performance Gap and the Communication Gap).

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GAP Model creates a roadmap for the overall service delivery process and
identifies the gap between the processes so that the complete model works
efficiently and effectively. This helps the service providers to map the
inefficiency that is occurring in the service delivery process.

GAP 1: Gap between Management Perception and Customer Expectation

This gap arises when the management or service provider does not

correctly analyze what the customer wants or needs. It also arises due to
insufficient communication between contact employees and managers.
There is a lack of market segmentation. This Gap occurs due to insufficient
market research. For Instance- A café owner may think that the consumer
wants a better ambience in the café, but the consumer is more concerned
about the coffee and food they serve.

GAP 2: Gap between Service Quality Specification and Management

Perception 

This gap arises when the management or service provider might correctly
comprehend what the customer requires, but may not set a performance
standard. It can be due to poor service design, Inappropriate Physical
evidence, Un-systematic new service Development process.

An example would be restaurant Managers who may tell the waiters to

provide the order of the consumer quick, but do not specify “How Quick”.

GAP 3: Gap between Service Quality Specification and Service Delivery

This gap may arise in situations existing to the service personnel. It may
occur due to improper training, incapability or unwillingness to meet the
set service standards. It can be due to inappropriate evaluation and
compensation systems. Ineffective Recruitment is the main cause of this
gap.

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The failure to match the supply and demand can create this gap. There is
also a lack of empowerment, Perceived Control, and framework.  An
example would be a restaurant having very specific standards of the food
communicated but the restaurant staff may not be given proper instruction
as to how to follow these standards.

GAP 4: Gap between External Communication and Service Delivery

Consumer Expectations are highly influenced by the statements made by

the company representatives and advertisements. This gap arises when
these assumed expectations are not fulfilled at the time of Delivery of
Service. 

An example would be a restaurant that has printed on its menu that it

serves 100% Vegetarian Food but in reality, it serves Non-Vegetarian Food
as well. In this situation, consumer expectations are not met. 

GAP 5: Gap between Experienced Service and Expected Service

This gap arises when the consumer misunderstands the service quality. For
Instance, a Restaurant Manager may keep visiting their consumer to
ensure quality check and consumer satisfaction, but the consumer may
interpret this as an indication that something is fishy or there is something
wrong in the service provided by the restaurant staff.

50. Service Culture

A service culture exists when you motivate the employees in your

organization to take a customer-centric approach to their regular duties
and work activities. Sales and service employees put customer needs first
when presenting solutions and providing support.

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51. The Perception Gap

Gap between Expected Service and Perceived Service:

This is the gap between what customers expect from the service and what

they think they have received. This gap arises when the consumer
misinterprets the service quality. This may happen due to customer's own
bias or prejudice.

52. SSTs (Self Service Technologies)

Self-Service Technologies (SSTs) are technological interfaces allowing

customers to produce services independent of involvement of direct service
employee.] Self-Service technologies are replacing many face-to-face service
interactions with the intention to make service transactions more
accurate, convenient and faster. E.g.-ATM

53. Jay Customers

Customer who intentionally act in a thoughtless or abusive manner,

causing problem for the company (Lovelock)

60. Public Relations

The Public Relations or PR is a practice of maintaining and shaping the

image of an individual or an organization to the public in such a way that a
favourable point of view is developed for the concerned entity.

61. Sales Promotion

Sales promotion is a marketing strategy where the product is promoted

using short-term attractive initiatives to stimulate its demand and increase
its sales.

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62. Product Placement

Product placement is a form of advertising in which branded goods and

services are featured in a video production that targets a large audience.

63. Celebrity endorsement

A form of brand or advertising campaign that involves a well known
person using their fame to help promote a product or service.
Manufacturers of perfumes and clothing are some of the most common
business users of classic celebrity endorsement techniques, such as
television ads and launch event appearances, in the marketing of their
products.

64. Direct Marketing

Direct marketing is an advertising strategy that relies on the individual
distribution of a sales pitch to potential customers. Mail, email, and texting
are among the delivery systems used. It is called direct marketing because
it generally eliminates the middleman such as advertising media.

65. Digital marketing and tools

Digital marketing is a form of direct marketing which links consumers with
sellers electronically using interactive technologies like emails,
websites, online forums and newsgroups, interactive television, mobile
communications

66. Yield Management or Revenue Management

Yield management is a variable pricing strategy based on anticipating and
influencing consumer behavior. The goal is to maximize revenue from a
fixed, time-limited resource such as airline seats, hotel room reservations,
or advertising inventory.
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67. Four Value definitions of Pricing of Service
Premium pricing: high price is used as a defining criterion. Such pricing
strategies work in segments and industries where a strong competitive
advantage exists for the company. Example: Porche in cars and Gillette in
blades.

Penetration pricing: price is set artificially low to gain market share

quickly. This is done when a new product is being launched. It is
understood that prices will be raised once the promotion period is over and
market share objectives are achieved. Example: Mobile phone rates in
India; housing loans etc.

Economy pricing: no-frills price. Margins are wafer thin; overheads like

marketing and advertising costs are very low. Targets the mass market and
high market share. Example: Friendly wash detergents; Nirma; local tea
producers.

Skimming strategy: high price is charged for a product till such time as

competitors allow after which prices can be dropped. The idea is to recover
maximum money before the product or segment attracts more competitors
who will lower profits for all concerned. Example: the earliest prices for
mobile phones

68. Boundary spanning roles interact with individuals and groups outside

the organization to obtain valuable information to help the innovation
process. Boundary spanning roles allow a company to gain more
innovation information from other businesses. It's useful to gain insight
from other organizations that you may not be aware of. Not just

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management is involved in boundary spanning; all employees can get
information from one or more companies and bring information back to
their business to help improve innovation.

69. Spontaneity (Service Recovery)

Service recovery is a company's resolution of a problem from a dissatisfied

customer, converting them into a loyal customer. It is the action
a service provider takes in response to service failure.

70. Mystery Shopping

Mystery Shopping is a process in which a person visits a retail store,

restaurant, bank branch or any such location with the objective of
measuring the quality of customer experience. Many companies define
detailed processes and parameters to ensure that customers will have a
good experience in their sales locations.

71. Service script

A service script, as defined in this study, is a detailed guide for front-line

employees to follow during a service encounter. A script includes a
predetermined set of specific words, phrases, and gestures, as well as other
expectations for the employee to use during each step of the service process.

72. Franchising

Franchising is an arrangement in which the franchisor gives the franchisee

the right to distribute and sell the franchisor’s goods or services and use its
business name and business model for a specified period, and possibly
covering a geographical area.

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