Help Request

[Alvin]

Respected Sir,

KIndly help me to solve the following questions.

(1) Give examples of services that are high in credence qualilties. How do high credence qualities affect consumer behaviour for there services? Explain giving examples.

(2) Taking the example of a business hotel differentiate between core,facilitating and supporting services, Would the answer differ for an economy tourist hotel? Explain.

(3) Explain the role of non-monetary costs in pricing of services by taking the example of a service.

(4) Select a service we are familiar with.Explain the service offered & develop a good service gurantee for it. Discuss why our guarantee is a good one, and the possible benefits to the company in implementing it.

(5) Explain the importance of branding of financial services giving suitable examples.

Expecting your valuable answers.

Thanks,

Karthy.

[Brendis]

HERE  IS  SOME  SOME  USEFUL MATERIAL.

SOME  ANSWERS  HELD  BACK  DUE TO  SPACE CONSTRAINT.

PLEASE  FORWARD  THESE  BALANCE  QUESTIONS  TO  MY  EMAIL  ID   

[email protected]

I  will send  the balance  asap.

Regards

LEO  LINGHAM

==========================================  

1)   Give examples of services that are high in credence qualities. How do high credence qualities affect consumer behaviour for there se rvices? Explain giving examples. Credence qualities    

Aspects of services that cannot be evaluated by a consumer even after 'consumption' but have perceived value. For example, legal or medical advice.

FINANCIAL   SERVICES

Financial services are inherently intangible and high on experience and credence qualities. In order to promote them effectively, a service provider must first identify the dimensions used by consumers to evaluate the service quality of banks prior to becoming a customer. Based on responses from customers of a credit union, the current study identifies four dimensions – empathy/assurance, tangibility, routine transaction cost, and loan transaction cost – which form the domain of consumer's evaluation of search quality in the financial services industry. Further, the relationships between these search quality factors and overall assessment of respondents' current bank is also investigated. The results indicate that higher levels of importance accorded to search quality factors, especially loan transaction costs, were associated with extreme(good or bad) assessment of current bank. The importance accorded to these search quality factors was also tested against contingency variables such as gender, marital status, age, household income, employment status, education, and house ownership. Of these, gender and home ownership emerged as the strongest determinants. These findings suggest that bank managers should be cognizant of search quality factors and their relations with the appropriate contingency variables. LIBRARY  SERVICE

there are 3 kinds of qualities for goods and services: search, experience and credence. Search qualities are those that you can easily evaluate before you consume a good/service. Tangible goods are usually high in these qualities. For example, it's pretty easy to figure out what the features, design, speed, etc. of a computer is before you buy one. Services/goods high in experience qualities can be only be evaluated during or after purchase. A good example of this would be a haircut. You don't know if it's good one until after the deed is done. Finally, goods/services high in credence qualities are hard to evaluate even after you've purchased them. How, for example, would you evaluate medical services? How do you know you got the best check-up possible? Tricky...

The point of all this is that I would argue that most library services are rich in credence qualities. To use reference as an example, most patrons have no clue if they received the "best" answer(and a lot of librarians struggle with that issue too!). This ambiguity makes the reference transaction a somewhat risky one because patrons don't know how to evaluate the help they're given. How do they reduce the risk and figure out a way to assess us?

[harlan99]

: word of mouth. "The role of WOM communication is considered to be particularly significant in a service context because the predominance of experience and credence qualities in services suggests that consumers experience a higher degree of perceived risk in making a purchase decision." It makes sense to me that patrons rely on other patrons to help them figure out how good of a job we're doing. Not only that, but social technology like blogs and online communities helps them spread the word fast and to a large number of people. For those of you who are regular LM readers, you know that WOM frequently pops up in business news as marketers try to figure out how to manage WOM in an increasingly connected world. WOM, then, is important. And it's very important for librarians. For these reasons, I'm going to dedicate a substantial amount of this blog's real estate to investigating WOM further. I'm aiming for a post a week dedicated to WOM research, news and strategies to help us get a handle on WOM in a library context. I'll also look forward to hearing about your own WOM insights. ##################################################

2)   Taking the example of a business hotel differentiate between core, facilitating and supporting services. Would your answer differ for an economy tourist hotel? Explain. BUSINESS  HOTELS 1.CORE  SERVICES

-reservations for lodging.

-boarding service

-check in and  check  out.

-breakfast  service

2.FACILITATION  SERVICES

-parking  

¬-porter

-meal  service

-room  service

-laundry service

-phone  service

-laundry  service

-billing  service

-information  service

-payment   service

-safe keeping   service

-lounge  facilities

-leisure  facilities.

etc

3.SUPPORTING  SERVICES

-inroom  movie  service

-internet  service

-spas

-children  needs  service

-dietary  requirements

-medical  needs

-religious  observance

-handling  complaints

Etc

ECONOMY  TOURIST   HOTEL

ONLY  LIMITED  SERVICES  WILL BE  AVAILABLE,

BECAUSE   OF   THE   COST  FACTOR.

1.CORE  SERVICES

-reservations for lodging.

-boarding service

-check in and  check  out.

2.FACILITATION  SERVICES

-meal  service

-room  service

-laundry service

-phone  service

-billing  service

-information  service

-payment   service

etc

3.SUPPORTING  SERVICES

-children  needs  service

-dietary  requirements

-medical  needs

-handling  complaints

etc

###################################################

3)   Explain the role of non-monetary costs in pricing of services by taking the example of a service of your choice. non-monetary price    

What it costs a customer(other than money) to buy a product, including the time spend on shopping and the risk taken in the assumption that the product will deliver expected or promised benefit. In transport economics, the generalised cost is the sum of the monetary and non-monetary costs of a journey.

Monetary(or "out-of-pocket") costs might include a fare on a public transport journey, or the costs of fuel, wear and tear and any parking charge, toll or congestion charge on a car journey.

Non-monetary costs refer to the time spent undertaking the journey. Time is converted to a money value using a value of time figure, which usually varies according to the traveller's income and the purpose of the trip.

The generalised cost is equivalent to the price of the good in supply and demand theory, and so demand for journeys can be related to the generalised cost of those journeys using the price elasticity of demand. Supply is equivalent to capacity(and, for roads, road quality) on the network

Contents

•   1 Basic form

•   2 Congestible networks

•   3 Weighting different types of time

•   4 Generalised time

•   5 Examples o   5.1 Generalised cost of car journeys(uncongested)

o   5.2 Generalised cost of car journeys(with congestion)

o   5.3 Generalised cost of public transport journeys

Basic form

In a basic form, the generalised cost(g) is composed of the following:

g = p + u(w)

•   p refers to the monetary(out-of-pocket) costs of the journey.

•   u(w) refers to the non-monetary(time) costs of an uncongested journey. This is a function of w(in the transport economic model, w is a measure of road standard or public transport service level, both of which are related to capacity). When the free-flow journey time is known, u(w) can be calculated as the product of the journey time(t) in uncongested conditions and the opportunity cost of the traveller's time(?), so that u(w) = ?t.

[edit] Congestible networks

In a congestible system, every traveller imposes a small delay on every other traveller, increasing the journey time for all travellers. The generalised cost function can be expanded to reflect this congestion delay.

g = p + u(w) + v(q,w)

The additional term v(q,w) refers to the opportunity cost of the additional journey time a traveller experiences because of congestion. In transport economic models, the parameter q is the demand and w is a measure of capacity(which is relevant when considering possible capacity expansion).

For example, if the travel time on a particular stretch of road increases by 10 minutes for every 1000 vehicles per hour that use the road, if q were measured in thousands of vehicles per hour, we would consider the congestion function to be v = 2q.

Weighting different types of time

It has been observed that travellers prefer time spent on some parts of their journey over time spent on others. A typical journey can be divided into four parts:

•   Walk from the origin

•   Wait for the vehicle

•   Ride in the vehicle

•   Walk to the destination

(All of these apply to public transport journeys; the wait for the vehicle does not generally apply to car or bicycle journeys, and for walk-only journeys, there is no division into parts.)

Typically, although travellers "dislike" all time spent travelling, they dislike walking and waiting parts of the journey more than in-vehicle journey time, and thus would be willing to pay more to avoid them. This results in a higher value of time for those parts of the journey than the main in-vehicle part of the journey. The function u(w) mentioned earlier can therefore be considered to consist of differing sets of valued time.

An alternative approach to applying different values of time to each part of the journey is to apply a weighting to time spent on each different part of the journey which quantifies the level of dislike a traveller has for time spent on that bit of the journey relative to time spent in-vehicle. For example, if a traveller considers 12 minutes' walk to be "as bad" as 10 minutes in a vehicle, then each minute of walking time is equivalent to 1.2 minutes of in-vehicle time. In this manner, all parts of the journey can be converted into their equivalent in-vehicle time.

Once the equivalent in-vehicle time for the whole journey is calculated, this can be converted to a monetary value as described earlier.

Generalised time

If the monetary cost of the journey(p) is considered to be irrelevant for the purposes of the exercise(for example, when comparing different journey options through a public transport network when fares are constant), there is no need to convert the generalised cost to a currency value - instead, it can be left in units of time, as long as all time is equivalent(for example, if all time is converted to in-vehicle time). These units of time may be referred to as generalised time.

Examples

Generalised cost of car journeys(uncongested)

A shopper decides to make a night-time visit to the 24-hour supermarket, which is 8 km away. His car uses petrol such that the cost of the petrol is £0.10/km. The journey takes 12 minutes, and the shopper has a value of time of £4.50/hour.

In this case, p = £0.80, t = 0.2hrs and ? = £4.50/hr, so u = £0.90 and therefore g = £0.80 + £0.90 = £1.70.

Generalised cost of car journeys(with congestion)

A commuter drives to work 50 km along a busy motorway, which includes a bridge with a toll of £2. She has a value of time of £12/hr and spends £0.15/km on fuel. The journey time is 40 minutes when few other cars are around, but it increases by 3 minutes for every 1000 vehicles on the motorway. At the time she travels, the motorway carries 10,000 vehicles per hour.

Here the monetary cost includes both fuel and a fixed toll, so p = £2 +(£0.15/km × 50 km) = £9.50. The uncongested journey time is 40 minutes, so as she values time(?) at £12/hr, u = £8. The additional journey time(in hours) due to congestion(can be calculated as 0.05q where at this time of day, q = 10, so the journey is 30 minutes longer because of congestion delays. This makes v = £6.

Therefore the generalised cost of the journey is £9.50 + £8 + £6 = £23.50.

NB: the function v(q) is usually rather more complicated than suggested here, because the relationship between journey time and congestion is rarely linear!(see traffic engineering(transportation))

Generalised cost of public transport journeys

A teacher uses the Tube as the main part of his journey from home to his school. There are two ways he could get there:

•   Walk to a nearby Tube station(5 minutes away) which has trains every 8 minutes to the station closest to the school(4 minutes' walk away) and which take 20 minutes to reach that station.

•   Walk to a farther Tube station(10 minutes away) which has a better service(every 3 minutes) but runs to a station further away from the school(7 minutes' walk), taking 15 minutes to reach that station.

The fares are the same on both routes, and the teacher dislikes waiting time 1.2 times more than in-vehicle time(IVT), and dislikes walking time 1.5 times more than IVT.

We can calculate which route is preferable by comparing generalised time(measured in terms of IVT) for each.

For the first route, waiting time is, on average, 4 minutes, and total walking time is 9 minutes. Therefore the total generalised time for this route is 4×1.2 + 9×1.5 + 20 = 38.3 minutes.

For the second route, waiting time is an average of 1.5 minutes, and total walking time is 17 minutes. Generalised time is 1.5×1.2 + 17×1.5 + 15 = 42.3 minutes.

Therefore the teacher should choose the first route, even though the frequency of service is lower and the journey time is longer.

Not all costs and benefits can be measured in monetary terms, as no market value exists for them. In this section we consider the non-monetary costs and benefits associated with each

of the identified options. A ‘weighting and scoring’ approach has been adopted to illustrate how each option performs against identified non-monetary criteria. Non Monetary Costs and Benefits

Criteria and Weightings

A qualitative assessment of the identified options has been carried out through a weighted scoring method using the criteria and weightings identified in  below.

Non Monetary/Qualitative Assessment Criteria and Weightings

Criterion

Weighting

Improving service patronage, accessibility and sustainability

20

Maximising integration of public transport system

20

Setting clear boundaries for policy, ownership, regulation, service specification and

operational delivery

25

Establishing effective levers to incentivise and influence performance and

outcomes, focusing more closely on the needs of service users

25

Facilitating controlled private-sector involvement in the market where this is appropriate

10

Total

100

We have developed weightings for each criterion dependent on our assessment of how important each criterion is to the success of the programme and the impact it will have on the programme’s likely beneficiaries.

#####################################################

4]Select a service you are familiar with. Explain the service offered & develop a good service guarantee for it. Discuss why your guarantee is a good one, and the possible benefits to the company in implementing it. What is a good service guarantee?

With a good guarantee, you tell your customers where and how to complain, and that complaining is worth their time and effort. It also shows that you care. A good guarantee is:

1.   Unconditional

Customers should not need a lawyer to explain the "ifs, ands and buts" of a guarantee because ideally there should not be any conditions; a customer is either satisfied or is not.

If a company cannot guarantee all elements of its service unconditionally, it should unconditionally guarantee the elements that it can control. Airlines cannot promise on-time arrival, but they can guarantee passengers will be satisfied with airport waiting areas, service on the ground and in the air, and food quality.

2.   Easy to Understand and Communicate

A guarantee should be written in simple, concise language that pinpoints the promise. Customers then know precisely what they can expect and employees know precisely what is expected of them. "Five-minute" lunch service, rather than "prompt" service, creates clear expectations.

3.   Meaningful

A good service guarantee is meaningful in two respects. First, it guarantees those aspects of your service that are important to your customers. It may be speedy delivery at lunch time, when many customers are in a hurry to get back to the office, but not at dinner, when fast service is not considered a priority to most patrons.

Second, a good guarantee is meaningful financially. It calls for a significant and fair pay out when the promise is not kept. What should it be? A full refund? An offer of free service next time? The answer depends on factors such as the cost of the service, the seriousness of the failure, and customers' perception of what is fair.

Example

At one point, Domino's Pizza promised "delivery within 30 minutes or the pizza is free." Management found that customers considered this too generous; they felt uncomfortable accepting a free pizza for a mere 5- to 15- minute delay and did not always take advantage of the guarantee. Consequently, Domino's changed the guarantee to "delivery within 30 minutes or $3 off," and customers appear to consider this commitment reasonable. The important point here is that you want your customers to use your warranty as much as possible. It a sure way to discover cracks in your service or products and avoid customer defection.

4.   Easy to Invoke

A customer who is already dissatisfied should not have to jump through hoops to invoke a guarantee; dissatisfaction is only exacerbated when the customer has to talk to different people, fill out forms, make telephone calls, send in written proof of purchase with a full description of the events, wait for a written reply, and go somewhere else to see someone to verify all the preceding facts, and so on.

Similarly, customers should not be made to feel guilty about invoking the guarantee. A company should encourage unhappy customers to invoke the guarantee, not put up roadblocks to keep them from speaking up.

5.   Easy to Collect

Customers should not have to work hard to collect a pay out. The procedure should be easy and, equally important, quick: on-the-spot, if possible.

In your guarantee, you should not: o   promise something your customers already expect

o   shroud a guarantee in so many conditions that it loses its point

o   offer a guarantee so mild that it is never invoked

A guarantee that is essentially risk free to the company will be of little or no value to your customers, and may be a joke to your employees.

Why is a service guarantee important?

A guarantee is a powerful tool - both for marketing service quality and for achieving it - for five reasons.

1.   A guarantee forces you to focus on customers

Knowing what customers want is essential to offering a service guarantee. A company that wants to guarantee its service, but that lacks this knowledge, may very well guarantee the wrong things.

2.   A guarantee sets clear standards

A specific, unambiguous service guarantee sets standards for your organization. It tells employees what the company stands for, and it forces the company to define each employee's role and responsibilities in delivering the service. This clarity and sense of identity have the added advantage of creating employee team spirit and pride. A guarantee is far more than a simple piece of paper that puts customers at ease. It sets the tone, externally and, perhaps more importantly, internally, for your commitment to your customers and workers.

A pay out that creates financial pain when errors occur is also a powerful statement, to employees and customers alike, that management demands customer satisfaction. A significant pay out ensures that both middle and upper management will take the service guarantee seriously; it provides a strong incentive to take every step necessary to deliver. A manager who must bear the full cost of mistakes has ample incentive to figure out how to prevent them from happening.

3.   A guarantee generates feedback

A guarantee creates the goal; it defines what you must do to satisfy your customers. Next, you need to know when you go wrong. A guarantee forces you to create a system for discovering errors.(The Japanese call errors "golden nuggets" because they are opportunities to learn).

4.   A guarantee forces you to demand why you fail

In developing a guarantee, managers must ask questions such as the following: What failure points exist in the system? If failure points can be identified, can their origins be traced and avoided? A company that wants to promise timely service delivery, for example, must first understand its operation's capability and the factors limiting that capability. Many service executives, lacking understanding of such basic issues as system throughput time, capacity, and process flow, tend to blame workers or customers - anything but the service-delivery process.

Even if workers are a problem, managers can do several things to "fix" the organization so that it can support a guarantee, such as designing better recruiting, hiring and training processes.

5.   A guarantee builds marketing muscle.

Perhaps the most obvious reason for offering a strong service guarantee is that it can boost marketing: it encourages consumers to buy your product or service by reducing the risk of the purchase decision, and it generates more sales to existing customers by enhancing loyalty.

Do all companies need to offer a guarantee?

Of course, guarantees may not be effective or practical for all firms. In general, organizations that meet the following tests probably have little to gain by offering a service guarantee:

•   The company is perceived by the market to be the quality leader in its industry.

•   Every employee is inculcated with the "absolute customer satisfaction" philosophy.

•   Employees are empowered to take whatever corrective action is necessary to handle complaints.

•   Errors are few.

•   A stated guarantee would be at odds with the company's image.

How can I set up my own unconditional guarantee?

To establish an effective unconditional guarantee, you must start with a vision of error-free service. Review every step of your delivery system to identify obstacles preventing you from offering an unconditional guarantee, and design your entire organization to support your guarantee.

The success of "Bugs" Burger Bug Killer(BBBK), a Miami-based pest-extermination company, is an example of how a company can turn its situation around by analyzing the elements of its service-delivery process. By asking, "What obstacles stand in the way of our guaranteeing pest elimination?" management discovered that clients' poor cleaning and storage practices were one such obstacle. The company now requires customers to maintain sanitary practices and, in some cases, even make physical changes to their property(such as putting in walls). By changing the process, the company can guarantee the outcome.

BBBK's service guarantee to hotel and restaurant clients promises several things:

•   You don't owe one penny until all pests on your premises have been eradicated.

•   If you are ever dissatisfied with BBBK's service, you will receive a refund for up to 12 months of the company's services - plus fees for another exterminator of your choice for the next year.

•   if a guest spots a pest on your premises, BBBK will pay for the guest's meal or room, send a letter of apology, and pay for a future meal or stay.

•   If your facility is closed down due to the presence of roaches or rodents, BBBK will pay any fines, as well as all lost profits, plus $5,000.

How successful is this guarantee? The company, which operates throughout the United States, charges up to 10 times more than its competitors and yet has a disproportionately high market share in its operating areas. Its service is so outstanding that the company rarely needs to make good on its guarantee.(In 1986 it paid out only $120 000 on sales of $33 million - just enough to prove that its promises are not empty ones).

While most of BBBK's competitors claim they will reduce pests to "acceptable levels," BBBK promises to eliminate them entirely because it has a delivery mechanism in place to support its warranty.

While most of BBBK's competitors claim they will reduce pests to "acceptable levels," BBBK promises to eliminate them entirely because it has a delivery mechanism in place to support its warranty.

Example #2

Pearle Vision customer service guarantee

We want you to be happy with your new glasses. That’s why we’ll repair or exchange them for up to 30 days at no charge to you. This guarantee does not cover accidental damage, scratches or breakage. Valid at participating locations.

Example #3

Comcast Customer service guarantee

Since 1963, Comcast has been dreaming big.

We want our customers to be amazed with the choice Comcast offers, excited by the innovation Comcast provides and satisfied with the service and reliability of every interaction with Comcast. Our goal is to provide you with a consistently superior customer experience—whether at sign-up, during the normal course of business or during a service visit. The Customer Guarantee lets you know what you can and should expect from Comcast—and what we’re doing to hold ourselves accountable every day.

We make the following guarantees:

1. We will give you a 30-day, money-back guarantee on all our services.

If you’re not satisfied and wish to cancel service for any reason, you can do so in the first 30 days and get your money back. Simply return all equipment in good working order and we’ll refund the monthly recurring fee for your first 30 days of service and any charges you paid for standard installation.

2. We will treat you and your home with courtesy and respect.

Our technicians will display their Comcast identification clearly when they arrive at your home. They will be trained and equipped to complete the job on the first visit. Our Customer Account Executives will be courteous and knowledgeable when you contact us.

3. We will answer your questions at your convenience.

You can contact us 24 hours a day, 7 days a week regarding any service-related issue by calling 1-800-COMCAST              1-800-COMCAST       or in any of the following ways:

•   Online, via Ask Comcast

•   Live Chat online with a Comcast Technician

•   Online community forum

•   Send us an e-mail and receive a response within 24 hours

4. We will offer easy-to-understand packages and provide you with a clear bill.

Our packages are designed to be straightforward. A call or visit to our website makes it easy to find a package that’s right for you. We aim for the same clarity with our bills. You may view your monthly statement and service details anytime by visiting www.comcast.com.

5. We will continually offer the best and most video choices.

We’re working hard to bring more choices to our customers instantaneously by using the full power of our advanced network and decades of television experience. We will use On Demand to bring customers dramatically more content choices, including more movies, more sports, more kids programs, more network TV shows and more HD than anyone else.

6. We will quickly address any problem you experience.

After the first visit to your home, if we do not satisfactorily complete installation or can’t resolve a routine issue, we will extend a complimentary service to your account. Additionally, we won’t charge you for a service visit that results from a Comcast equipment or network problem.

7. We will schedule appointments at your convenience and be mindful of your time.

As a courtesy, we will call you before we arrive at your home. And if we fail to arrive for a scheduled visit during the appointment window, we will credit $20 to your account.*

*Subject to any local restrictions or requirements.

Every Comcast employee is dedicated to meeting the commitments above and to exceeding your expectations. We are working very hard to serve you better and listen carefully to your feedback. If you have any thoughts or ideas about this Guarantee or about your experience with us, we invite you to share them with us by sending us an e-mail. ================================

THIS  IS  MY OWN  EXAMPLE.

A good website design service has a Customer service guarantee Each of our website services components are individually guaranteed to perform("as agreed" in our services agreement), or your component fee will be refunded. Valid web page markup

Every web page on your website(including custom error pages) will conform to formal html or xhtml W3C markup standards, be immediately corrected, or your component fee will be refunded. Graphics Quality

Your written confirmation is required to approve any graphics that we provide.

Text Quality

Search engine optimized websites require careful editing to achieve maximum search engine ranking results. We will edit every web page for page title, proper use of headings, meta tags useand key concept development. Your verification of formal markup validation and acceptance of each web page text content is required before the page is considered complete and ready to be published.

Hyperlinks

Your outgoing hypertext links will function properly for the full year, be immediately repaired, or your fee will be refunded.

Accessibility features

Every web page on your web site will conform to the level of accessibility you choose(A, AA, AAA). If after your first notification of non-conformity, the deficiency is not immediately corrected, your accessibility fee will be refunded. Search Engine Optimization

New Website: If your web site fails to achieve the agreed performance statistics* in the agreed time, your optimization fee will be refunded. Existing Website Optimizing: If your website fails to achieve the agreed search engine ranking increase and visitor statistics increase(in the agreed time), your fee will be refunded. * Statistics We will both monitor your website's performance statistics during the term of our services. Once your web site achieves the guaranteed "agreed results," you will be notified by email and asked to verify our report. THIS  IS  AN  EXCELLENT   EXAMPLE  OF   CUSTOMER  SERVICE  GUARANTEE,

BECAUSE

1.   Unconditional

Customers should not need a lawyer to explain the "ifs, ands and buts" of a guarantee because ideally there should not be any conditions; a customer is either satisfied or is not.

2.Easy to Understand and Communicate

3.Meaningful

A good service guarantee is meaningful in two respects. First, it guarantees those aspects of your service that are important to your customers. Second, a good guarantee is meaningful financially. It calls for a significant and fair pay out when the promise is not kept. 4.Easy to Invoke

A customer who is already dissatisfied should not have to jump through hoops to invoke a guarantee. ###################################################