Services Marketing Chapter 1 Exercise Answers

Q: Are the concepts in Chapter 1 relevant to the marketing of a church, religious institution or non-profit organization such as World Vision? Explain.

A:         The short answer to this question is a definite “yes”.  Churches and other religious institutions, many of which are experiencing declining attendances and financial support yet are correspondingly faced with increased social problems and demands, can very much benefit from the services marketing discipline. 

Many, of course, have already discovered this.  Consider how, in recent years, the marketing effectiveness of many non-denominational Christian care and welfare organizations has been dramatically enhanced. 

Similarly, non-profit organizations such as World Vision still have payrolls to meet, revenue to generate, clients to serve and staff to train – all areas that would benefit from services marketing expertise.

Correspondingly, performing arts groups, facing reduced public funding and ever-increasing competition for disposable and discretionary spending, are also being forced to become more marketing oriented.

Q: Consider quick service restaurants such as KFC, McDonalds or even Starbucks coffee shops.  Would you classify them as a good or a service?  Why?

A:            Take-away food restaurants provide both goods and services (see Figure 1.5) and would be considered balanced.  The provision of the food and beverage goods is very much dependent on the standard of service, the support and facilitating systems, and subject to the same problems of demand and supply that face all service organizations.  

Furthermore, the place of service delivery, the interpersonal skills of staff, internal culture and morale, and the consistent maintenance of service (and product) standards, are just as important in this context as in any other service setting. 

Customers will evaluate the quick service restaurant on both the quality of the food, and the timeliness and friendliness of its service.

Q: Explain the key differences between services which possess (a) search qualities; (b) experience qualities; and (c) credence qualities.

A:            Intangible performances, which are likely to vary from one execution to another, are harder to evaluate than physical goods: 

(a) search qualities – where a customer can assess quality prior to purchase and consumption; 

(b) experience qualities – have attributes which can only be discerned during consumption and 

(c) credence qualities – where quality is difficult to evaluate, even after purchase and consumption.  The answer is further explained on page 18 and in Figure 1-11.

Q: A private health and fitness club wishes to operate in a geographical area not renowned for active participation in such a venture.  In recommending a strategy to attract customers, what advice would you give the club on the perceived risk by potential new customers, and how this may be reduced?

A:            In answering this question students should be encouraged to consider what kinds of risks potential customers might be likely to sense, and then to think of possible initiatives that might serve to ameliorate these risks.  For example:

  • Offer 2-3 free visits to enable prospective customers to experience the place first-hand
  • Offer money-back guarantees
  • Display the qualifications of instructors prominently
  • Show before and after photographs of previous or current clients
  • Display testimonials from current clients
  • Provide incentives for current members to sign-up new members
Q: How can a theatre for performing arts deal with the intangibility, inseparability, variability, and perishability of the service it provides?  Give examples.

A:            The issue of intangibility can be addressed effectively with programs, brochures and periodic flyers, professional ticketing, personal contact with the organization’s members and representatives, and merchandising opportunities, and through the theatre’s physical facilities and servicescape.  

The characteristics of inseparability and variability mean that the interpersonal and communication skills of all staff must be well developed, closely monitored and managed, that the standards of what is produced and presented both on stage and off are consistently maintained.

And that the manner in which patrons (especially regulars or subscribers) are dealt with is at all times suitable and appropriate to their personal characteristics, needs and requirements.  

The issue of perishability means that estimation of the total number of seats likely to be sold, per day/night, for the run of each show or season is crucial, that time and effort must be invested in ensuring adequate advance notice and pre-bookings.

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