![]() The ambient conditions include things such as the lighting and background music. A car dealer might use its service environment to position it as upscale by decorating its showroom in the service environment: the ambient conditions, the spatial layout, and the signs and symbols. For example, a restaurant near a university campus might signal that it is catering to college students by putting college memorabilia and pictures of students on the walls. The service environment (Table 2.4) can also signal the intended market segment and position the organisation. Even though the customer doesn’t take any of that home it has an important impact on the service experience. The service environment is the physical backdrop that surrounds the service, sometimes referred to as a “services-cape.” For example, going to see a movie is more enjoyable if the theater is clean, has comfortable seats, and has a spacious, well-lit parking lot. All of these aspects of the firm’s interaction with customers must be planned, and they help determine the nature of the overall service experience. The cars come with strong service guarantees, and dealer personnel are trained and empowered to make exceptional efforts to keep customers happy and solve their problems. To further reduce anxiety, actual sales prices, set to be competitively low, are posted on the cars, so that customers don’t have to worry about negotiating the price, as at most other auto dealerships. Only when shoppers ask to speak to someone will a sales rep speak to them. For example, at some car dealer showrooms customers are allowed to look at the cars in the showroom without being approached by sales representatives. It refers to that part of the experience apart from the transfer of physical goods and typically includes interactions with the firm’s personnel’. The service product is the core performance purchased by the customer, the flow of events designed to provide a desired outcome. Spending time and effort on unnecessary engineering is known as “over-engineering,” and it is seen most often in technology- driven companies. By linking engineering design features to specific customer needs QFD assures that design improvements improve the product’s value to customers.Īt the same time, it helps the firm to avoid costly engineering improvements that “better engineering” but do not meet customer needs. The procedure was developed in Japan in the 1970s as a way to help marketing managers and engineers to talk to each other and to work toward a common goal of meeting customer needs. There is a well-developed method for ensuring that product design matches customer needs, called Quality Function Deployment (QFD), or more popularly, the House of Quality. As with the rest of the service offering, product design must be customer- oriented. ![]() Examples include houses, automobiles, computers, books, hotel soap and shampoo, and food. The physical product is whatever the organization transfers to the customer that can be touched. All of them must be managed to meet customer needs. To stress this point, we will refer to all the market offerings of firms as their services, and point out that these services can be broken down into four main components: physical product, service product, service environment, and service delivery (Figure 2.5). However, intangible components inevitably play a pivotal role in winning and maintaining a satisfied customer. The products that firms market do differ in the extent to which they involve the transfer of ownership of physical goods. ![]() The four main components of a service are as follows: 1.
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