Chapter 4 Developing Service Concepts: Core and Supplementary Elements GENERAL CONTENT Multiple Choice Questions 1 the sequence of encounters that a customer has with a service organization can provide valuable insights into the nature of existing service. a. Flowcharting b. Establishing c. Comparing d. Deriving e. Shifting (a; Easy; p. 68) a facilitate use of the core product and add value and differentiation to the customer’s overall experience. Fixed services ‘Value-added provisions ‘Marketing theories Supplementary services Service providers (d; Moderate; p. 69) paose a supply the central, problem-solving benefit that customers seek. Core products Supplementary services Delivery processes Sustaining processes . Conditional services (a; Easy; p. 70) poop 4. augment the core product, both facilitating its use and enhancing its ‘value and appeal. Core products Supplementary services Delivery processes Sustaining processes Conditional services (b; Moderate; p. 70) aooe 75. A company’s helps to determine which supplementary services should be included. a. location b. delivery system c._ key service representative service atmosphere fe. market positioning strategy (e; Easy; p. 78) 6. The order-taking process should be and 50 that customers do not waste time and endure unnecessary mental sical efor. short; curt; abrupt simple; slow; effortful short; sweet; ineffective powerful; simple; abrupt polite; fast; accurate (e Easy; p. 78) to an gee Ps represent a special type of order taking that entitles customers to a specific unit of service Suggestions Reservations Trackers Repossessions Contacts (b; Moderate: 80) pangs 8 Atit’s simplest, consists of immediate advice from a knowledgeable service person in response to the request: “What do you suggest?” a. billing D. payment consultation @. hospitality e. selling (c; Easy; p. 81) 9. Which of the following is NOT considered an example of a hospitality element? Greeting Toilets and washrooms Advice Food and beverages Transport (cj Moderate: p. 82) Jeaoge 1810. Which of the following is NOT one of the eight basic steps to developing and delivering a branded customer experience? a. Target profitable customers, employing behavior segmentation rather than demographics . Achieve a superior understanding of what your targeted customers value. c. Design facilities that delight your customers and reduce complaints. 4. Give employees the skills, tools, and supporting processes needed to deliver the defined customer experience. e. Make everyone a brand manager. (c Moderate; p. 89) ‘True/False LL, Service marketers need to create a coherent offering in which each element is compatible with the others and all are mutually reinforcing. (True; Easy; p. 68) 12, The search for competitive advantage rarely centers on supplementary services. (False; Moderate; p. 69) 13. The greater the proportions of tangible service elements, the more necessary it is to provide tangible clues about the features and quality of the service. (False; Moderate; p. 70) 14, All service elements must be delivered in a prescribed sequence. (False; Moderate; p. 72) 15, Consumption of the core product is sandwiched between use of supplementary services that are needed earlier or later in the delivery sequence. (True; Easy; p. 72) 16. Core products are surrounded by supplementary elements from each of the eight clusters of supplementary services. (False; Easy; p. 17. To obtain full value from any good or service, customers need relevant information. (Tine; Moderate; p. 78) 18. Hospitality represents a more subtle approach to consultation because it involves helping customers better understand their situations. (False; Easy; p. 82) 19, “Exceptions” involve supplementary services that fall outside the routine of normal service delivery. (Tine; Moderate; p. 84) 1920. Information processing services tend to be the most demanding in terms of, supplementary elements. (False; Moderate; p. 85) Short Answer 21. What three components must the value proposition address and integrate? Cote products, supplementary services, and delivery processes. (Moderate; p. 70) 22. What four things must the design of the service offerings address? ‘How the different service components are delivered to the customer, the nature of the customer’s role in those processes, how long delivery lasts, and the prescribed level and style of service to be offered. (Moderate; p. 71) 23, List three examples of order-taking elements in order entry. (On-site orcer fulfillment. ‘Mail/telephone order placement. E-mail/Web site order placement. (Moderate; p. 79) 24, Give two examples of billing elements. Periodic statements of account activity. Invoices for individual transactions. (Verbal statements of amount due.) (Machine display of amount due.) (Self-billing computed by the customer.) (Moderate; p. 80) 25. Give an example of a consultation element. Advice—personal counseling, tutoring/training in product use, or management or technical consulting. (Easy; p. 82) 20Essay 26. Describe the four types of “exceptions” listed in the chapter. Special requests are one type of exception. These involve a departure from normal operating activities and are common in travel and hospitality industiies. Problem- solving refers to an exception where normal service fails to run smoothly as a result of accidents, delays, etc. Handling of complaints/complements/suggestions help service providers react quickly to failures and duive off of complements. Restitution is the final type of exception listed. This involves repaying customers for severe performance failures. (Challenging; p. 84) 27. Discuss the three factors that discriminate between successful and unsuccessful new financial services. ‘The three factors that lead to success in new financial services are market synergy, organizational factors, and market research factors. Market synergy refers to the ability of new offerings to fit well with the existing image of a firm, to meet customer needs, and to receive strong support from a firm and its branches. Organizational factors include strong interfunctional cooperation and coordination and a clear direction for the development team. Finally, market research is conducted early in the development process with a clear idea of the type of information needed. (Challenging; p. 95) APPLICATION CONTENT Multiple Choice Questions 28, systems, based on telephone or Web site reservations, provide enormous cast savings for airlines because there are no a. Ticketless; gross revenue charges b. Partial; gross revenue charges c. Ticketless; travel agent commissions a e |. Partial; travel agent commissions Ticketle: (c Easy; p. 80) net revenue charges a29, came up with the novel idea of an arrivals lounge for its terminals to ‘serve passengers amiving early in the moming after a long overnight flight from the Americas, Asia, Africa, and Australia. a. Singapore Airlines b. British Airways c. Delta Airlines @. Continental Airlines e. Trans World Airlines (b; Moderate; p. 83) 30, Which of the following is an example of a special request in advance of service delivery? a. Dietary requirements b. Complaints c. Warranties d. Refunds e. Suggestions (a; Easy; p. 84) 31, Singapore Airlines Raffles Class is an example of a(n) . a. branded house b.endorsed brand c.house of brands disub-brand, e.clear strategy (4; Challenging; p. 87) 32. Which of the following is NOT one of British Airways seven distinct air travel products? a. Deluxe service (First Class) b.Club World (Business Class) c.Club Britain (Business Class) d.Club Europe (Business Class) e.Euro-Traveler (Economy Class) (G Moderate; p. 88) ‘TrueFalse 33, Firms actually benefit from late payments, because they reduce the amount of accounts payable, (False; Moderate; p. 81) 34, Singapore Airlines is well recognized for both their superior meals and attentive cabin crew. (True; Moderate; p. 83) 2235. Quick service restaurants are sometimes described as “quasi-manufacturing” operations because they produce physical output combined with value-added service. (ime; Moderate; p. 86) 36. Westin hotels are wholly owned subsidiaries of Marriott Group that are usually not identified as part of Marriott to protect Westin’s exclusive image. (False; Moderate; p. 87) 37. The term “branded house” is used to describe firms like Virgin Group, that uses distinct individual brand names to cover a range of diverse service offerings in unrelated fields. (False; Moderate; p. 88) Short Answer 38, Draw the flowchart that might be involved in staying at a motel. Park Car -> Check in > Spend Night > Breakfast > Check Out ‘A A Housekeeping Breakfast Gleans Room’ Prepared (Moderate, p. 74) 39. What ate the two roles of supplementary services? Facilitating or enhancing. (Moderate; p. 77) 40. Give two examples of facilitating services. Information, order-taking (billing, payment). (Moderate; p. 77) 41. Give two examples of enhancing services. Consuhation, hospitality (safekeeping, exceptions). (Moderate; p. 77) 42. Why do firms benefit from prompt payments? Itreduces the amount of accounts receivable that is counted as a liability. (Moderate; p. 81) 23Essay 43, Explain how the core product, supplementary services, and delivery processes are integrated in the context of an overnight hotel stay. ‘The core product refers to the overnight rental of a bedroom. Its components are service level (e.g. luxury versus economy), scheduling (how long the room is available), nature of the process (in this case people processing), and the customer’s role in consumption of the room. Supplementary services include things like parking, room service, reservations, and a breakfast buffet. Delivery of both the core and the supplementary services is provided electronically, via hotel employee, or by the customer. Phone use and pay TV are automatically billed to the room. Room service and check-in are provided by a hotel employee. Most breakfast buffets are self-service, requiring the customer to take action. (Moderate; p. 71) 44, Discuss how multi-brand strategies can succeed and what the strategies should be >ased on in the hotel industry. Many hotel chains offer groups of sub-brands or endorsed brands. For example, Hilton Hotels Corporation has seven sub-brands, while Marriott International has twelve. To succeed, each sub-brand must offer a distinct value to customers. For example, catering to the ultra wealth at one end of the spectrum with one brand and also serving the economy class with another brand, Accomodations, amenities, and service must be consistent with the level of customer sought. Target considerations include, short-term versus extended stay, business versus pleasure, and ability to pay matched with customer needs and desires. (Challenging; p. 87) 43, Explain where Sun Microsystems falls on the spectrum of branding alternatives and discuss what their strategy involves. Sun Microsystems utilizes a sub-branded strategy. The company offers a comprehensive hardware and software support program with four different levels of support, These range from bronze to platinum. Different levels of support give customers the flexibility to tradeoff price for increased service. For example, 24/7 service is costly, but potentially necessary for some high-powered business customers. (Challenging; p. 87) 24