FSM END SEM 2009

5.   This element of perceived risk is especially relevant for service that is high in experience or credence attributes and thus difficult to evaluate prior to purchase and consumption.

–     First-time users are especially likely to face greater uncertainty.

–     Risk perceptions reflect customer’s judgments of the probability of a negative outcome.

–     The worse the possible outcome and the more likely it is to occur, the higher the perception of risk.

6.  High Contact Services

§  Customers visit service facility and remain throughout service delivery

§  Active contact between customers and service personnel

§  Includes most people-processing services

Low Contact Services

§  Little or no physical contact with service personnel

§  Contact usually at arm’s length through electronic or physical distribution channels

§  New technologies (e.g. Web) help reduce contact levels

7.  Optimum capacity: point beyond which service quality declines as more customers are serviced

13.  Many services are so specialised and difficult to evaluate

(How do you know whether the plumber has done a good job?)

It is also a Perceived Risk.

15. The element of perceived risk is especially relevant for service that is high in experience or credence attributes and thus difficult to evaluate prior to purchase and consumption.

 Perceived Risks in Purchasing and Using Services

·        Functional – unsatisfactory performance outcomes

·        Financial – monetary loss, unexpected extra costs

·        Temporal – wasted time, delays lead to problems

·        Physical – personal injury, damage to possessions

·        Psychological – fears and negative emotions

·        Social – how others may think and react

·        Sensory – unwanted impacts to any of five senses

21.  Draw a map with X axis and Y axis with the attributes.

Consider the example

Positioning maps display relative performance of competing firms on key attributes

§  Research provides inputs to development of positioning maps

§  Challenge is to ensure that

Ø  attributes employed in maps are important to target segments

Ø  performance of individual firms on each attribute accurately reflects perceptions of customers in target segments

§  Predictions can be made of how positions may change in the light of new developments in the future

§  Simple graphic representations are often easier for managers to grasp than tables of data or paragraphs of prose

§  Charts and maps can facilitate a “visual awakening” to threats and opportunities and suggest alternative strategic directions

EXTRAS

Traditional 4 Ps

•         Product

•         Price

•         Place

•         Promotion

New 4 Ps

•         People

•         Process

•         Physical Evidence

Understand the relation between Company , Employees ,customers