Consumer Behaviour

Assignment A

1. Define consumer behavior. Explain briefly the consumer buying decision process ?

Ans- Consumer behaviour is the study of when, why, how, and where people do or do not buy a product. It blends
elements from psychology, sociology, social anthropology and economics. It attempts to understand the buyer
decision making process, both individually and in groups. It studies characteristics of individual consumers such as
demographics and behavioural variables in an attempt to understand people's wants. It also tries to assess influences
on the consumer from groups such as family, friends, reference groups, and society in general.
Customer behaviour study is based on consumer buying behaviour, with the customer playing the three distinct roles
of user, payer and buyer. Relationship marketing is an influential asset for customer behaviour analysis as it has a
keen interest in the re-discovery of the true meaning of marketing through the re-affirmation of the importance of
the customer or buyer. A greater importance is also placed on consumer retention, customer relationship
management, personalisation, customisation and one-to-one marketing. Social functions can be categorized into
social choice and welfare functions
Categories that Effect the Consumer Buying Decision Process
A consumer, making a purchase decision will be affected by the following three factors:
Personal
Psychological
Social
The marketer must be aware of these factors in order to develop an appropriate MM for its target market.
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Personal
Unique to a particular person. Demographic Factors. Sex, Race, Age etc.
Who in the family is responsible for the decision making.
Young people purchase things for different reasons than older people.
Handout...From choices to checkout...
Highlights the differences between male and female shoppers in the supermarket.
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Psychological factors
Psychological factors include:
Motives A motive is an internal energizing force that orients a person's activities toward satisfying a need or
achieving a goal.
Actions are effected by a set of motives, not just one. If marketers can identify motives then they can better
develop a marketing mix.
MASLOW hierarchy of needs!!
Physiological
Safety
Love and Belonging
Esteem
Self Actualization
Need to determine what level of the hierarchy the consumers are at to determine what motivates their purchases.
2. What do you mean by post purchase behavior? Explain this with the help of suitable
examples.

Ans- Post purchase behavior

SUMMARY: Post-purchase behavior involves all the consumers' activities and the experiences that follow the
purchase. Usually, after making a purchase, consumers experience post-purchase dissonance. In other words, they
regret their purchase decision. The reasons for high post-purchase dissonance can be attractiveness and performance
of forgone alternatives, difficult purchase decision, large number of alternatives, etc.

A high level of post-purchase dissonance is negatively related to the level of satisfaction the consumer draws out of
product usage. While experiencing post-purchase dissonance, consumers become acutely aware of the marketers'
communication. To reduce post-purchase dissonance, consumers may sometimes even return or exchange the
product.
Marketers, therefore, can use these opportunities to reduce consumers' risk perception by way of good
return/exchange policies and reduce their post-purchase dissonance by messages targeted at this segment of their
consumers.

Consumers' retail store selection behavior depends on - store image Despite post-purchase dissonance, many
consumers proceed with consumption of the product. How consumers use the products is an important knowledge
source for marketers, as they can offer better products and reach more consumers based on these consumer usage
patterns.

In some cases, however, consumers initially use the product but after a period of time fail to do so. Marketers,
therefore, should not consider a product purchased as a product consumed. A non-used product is also more likely to
affect the repurchase pattern of the consumers negatively. Consumers need to dispose off the products or packaging
before, during, or after the use. The issue of disposal is gaining considerable importance for marketers as it directly
affects the repurchase pattern of the consumers.
However, many observers believe that these kinds of tactics, if not implemented properly, can fail to deliver what
they initially promised, resulting in frustrated consumers. Others also believe that marketers should classify their
consumers on the basis of their satisfaction thresholds and then treat each group differently.

3- What are the environmental factors influencing buyer behavior? Explain the reference
group with the help of suitable examples.

Ans- Environmental factors influencing buyer behavior

The influence of store environment

The study reported here examines how combinations of specific elements in the retail store environment influence
consumers’ inferences about merchandise and service quality and discusses the extent to which these inferences
mediate the influence of the store environment on store image. Results show that ambient and social elements in the
store environment provide cues that consumers use for their quality inferences.

Environmental attitudes, and buying of organic foods

Results from a study with Danish school teachers on their values, environmental attitudes, and buying of organic
foods are reported. The objective was to investigate the applicability of the Schwartz value theory and measurement
approach (Schwartz, 1992) in explaining specific aspects of consumer behaviour. This theory was developed within
a general social psychology framework and has been tested cross-culturally for some 90 samples in 45 countries.
Using smallest space analysis, cluster and discriminant analysis, the explanatory power of values for environmental
attitudes, and the relationships between attitudes and buying of organic foods were assessed in order to determine
which values are relevant for environmentally concerned versus unconcerned consumer behaviour.
Environmental concern influence specific environmentally
The disappointment about the weak direct relationship between environmental concern and specific environmentally
related behaviors is due to the incorrect assumption that general attitudes like environmental concern are direct
determinants of specific behaviors. Because only situation-specific cognitions are direct determinants of
specific behaviors, future research should no longer view environmental concern as a direct, but as an
important indirect determinant of specific behavior. As a general orientation pattern it influences the
definition of a specific situation that is the generation of situation-specific cognitions. Results of a study
analysing high vs low environmentally concerned students’ decision to request an information brochure
about green electricity products confirms this assumption.
Group Influences
Humans are inherently social animals, and individuals greatly influence each other.
A useful framework of analysis of group influence on the individual is the so called reference group—the term
comes about because an individual uses a relevant group as a standard of reference against which oneself is
compared. Reference groups come in several different forms.
The aspirational reference group refers to those others against whom one would like to compare oneself. For
example, many firms use athletes as spokespeople, and these represent what many people would ideally like to be.
Associative reference groups include people who more realistically represent the individuals’ current equals or near-
equals—e.g., coworkers, neighbors, or members of churches, clubs, and organizations.

4- Explain the concept of motivation in the consumer behavior with the help of
suitable examples.

Ans- Motivation in the consumer behavior

Motivation and perception influence concumer behaviour in many ways. That is why companies spend such a lot of
money in creating the right message for their products.
Motivation can be anything from being one up on the neighbours, being the first with the latest technology, quality
and being part of an elite group of people who can obtain a certain product. It can also be wanting to be like
someone, which is why companies use celebrities to market products. Celebrities who have contact with a particular
group or age bracket can do a great deal to influence sales of goods. People like David Beckham appeal to the youth
market whilst people like Stephen Fry apeal to the more learned and discerning people.
A certain brand of lager, for example can be targetted at a particular goup of middle class, tasteful drinkers. The
lager costs more than others of the same calibre on the market but the marketing people tell you it is well worth a
little more, it will bring you a sense of achievement and that you will be part of a very discerning group. Adverts
will be of French war heroes, white horses on waves or herioc events being celebrated with the drink.
The identical lager, made the same way and costing the same to produce under a different brand is aimed at the
young, the people who want to appear cool, brave or a little bit different. This time, the group percieves that by
being seen to drink that brand, they are associated with vigour, energy and youuth. Marketting has loud music, high
energy pursuits like roller boarding or surfing and is aimed at a different clientelle altogether.
Motivation can also be from an eco or green perspective and people want to be seen to be doing their bit by buying
brands which are best known for low carbon foot prints and re-planting trees used for their toilet tissue so motivation
is not always about money. Your motivation can affect how you are percieved (or how you would like to be
percieved).
Whichever way you look at it, consumer behaviour is very heavily influenced by motivation and perception - and
don't the companies know it?
5- Write short notes on any three of the following.

B- Influence of Family and Friends

Prostate cancer is the most commonly diagnosed cancer in men, and it is the second leading cause of death from
cancer in the United States. Prostate cancer is diagnosed among African Americans more often than other ethnic
groups in the United States. In 2009, approximately 27,130 African-American men were diagnosed with prostate
cancer, and approximately 3,690 African-American men died of prostate cancer (American Cancer Society, 2009).
African Americans are approximately 2.4 times more likely to die from prostate cancer when compared to their
white counterparts (American Cancer Society, 2009). Prostate cancer screening, particularly screening for prostate-
specific antigen (PSA), remains highly controversial and has not yet been definitively proven effective through
randomized clinical trials. The American Cancer Society has recently updated its screening guidelines for
prostate cancer, which now places an emphasis on the informed and shared decision-making method (Wolf et al.,
2010). Family and friends may play an important role in the decision-making process (Davison, Oliffe, Pickles, &
Mroz, 2009; Jones, Steeves, & Williams, 2009a). Although evidence of prostate cancer screening effectiveness has
not been sufficient to recommend for or against routine screening, it does offer the only possibility at this time for
early detection, which is important among those individuals who are considered to be at higher risk, such as being
African American, men having a first-degree relative who has been diagnosed with prostate cancer before 65 years
of age, and men with multiple family members diagnosed with prostate cancer before 65 years of age.

C- Primary Vs. Secondary Reference Groups

Primary groups

It is the hypoteneuse of the first group that has the effect. A primary group is a
typically small social group whose members share close, personal, enduring relationships. These
groups are marked by members' concern for one another, and shared activities and culture. Examples
include family, childhood friends, and highly influential social groups. You do not choose to be part of
these groups you just are. Primary groups play an important role in the development of personal
identity. A primary group is a group in which one exchanges implicit items, such as love, caring,
concern, animosity, support, and such. Examples, of these would be family groups, love relationships,
crisis support groups, church groups and such. Relationships formed in primary groups are often long-
lasting and goals in themselves. They also are often psychologically comforting to the individuals
involved and provide a source of support and encouragement.

Secondary groups

People in a secondary group interact on a less personal level than in a primary group, and their
relationships are temporary rather than long lasting. Since secondary groups are established to perform
functions, people’s roles are more interchangeable. A secondary group is one you have chosen to be a
part of. They are based on interests and activities. They are where many people make can meet close
friends or people they would just call acquaintances. Secondary groups are groups in which on
exchanges explicit commodities, such as labor for wages, services for payments, and such. Examples
of these would be employment, vendor-to-client relationships, and such.

D- Organizational Buying Behavior

Organization buying is the decision-making process by which formal organizations establish the need
for purchased products and services and identify, evaluate, and choose among alternative brands and
suppliers. (Webster and Wind)

 Some of the characteristics of organizational buyers are:

 1. Consumer market is a huge market in millions of consumers where organizational buyers are
limited in number for most of the products.

2. The purchases are in large quantities.

3. Close relationships and service are required.

 4. Demand is derived from the production and sales of buye5. Demand fluctuations are high as
purchases from business buyers magnify fluctuation in demand for their products.

6. The organizational buyers are trained professionals in purchasing.

7. Several persons in organization influence purchase.

Assignment B

1- Explain the Cognitive Learning Theory with the help of suitable examples.

Ans- Definition

Cognitive development is the construction of thought processes, including remembering, problem

solving, and decision-making, from childhood through adolescence to adulthood.

Piaget's Theory of Cognitive Development

The most well-known and influential theory of cognitive development is that of Swiss psychologist
Jean Piaget (1896–1980). Piaget's theory, first published in 1952, grew out of decades of extensive
observation of children, including his own, in their natural environments as opposed to the laboratory
experiments of the behaviorists.

Infancy

As soon as they are born, infants begin learning to use their senses to explore the world around them.

When to Call the Doctor

If, by age three, a child has problems understanding simple directions or is perplexed when asked to
do something simple, the parents or primary caregiver should consult a physician or pediatrician. The
child may have a delay in cognitive development. Parents should also consult a healthcare professional
if, after age three, their child's cognitive development appears to be si

Cognitive development
Age Activity
SOURCE: Miller-Keane Encyclopedia and Dictionary of Medicine, Nursing, and Allied Health, 5th ed.
and Child Development Institute, http://www.childdevelopmentinfo.com.
One month Watches person when spoken to.
Two months Smiles at familiar person talking. Begins to follow moving person with eyes.
Four months Shows interest in bottle, breast, familiar toy, or new surroundings.
Five months Smiles at own image in mirror. Looks for fallen objects.
 Cognitive development
Age Activity
Six months May stick out tongue in imitation. Laughs at peekaboo game. Vocalizes at mirror image. May
act shy around strangers.
Seven months Responds to own name. Tries to establish contact with a person by cough or other noise.
Eight months Reaches for toys out of reach. Responds to "no."
Nine months Shows likes and dislikes. May try to prevent face-washing or other activity that is disliked.
Shows excitement and interest in foods or toys that are well-liked.
Ten months Starts to understand some words. Waves bye-bye. Holds out arm or leg for dressing.
Eleven months Repeats performance that is laughed at. Likes repetitive play. Shows interest in books.
Twelve May understand some "where is...?" questions. May kiss on request.
months

2- Write short notes on the following:

a) FIRO b) The structured interview c) The Global talent search

Ans- A- FIRO

Fundamental Interpersonal Relations Orientation (FIRO) is a theory of interpersonal relations,

introduced by William Schutz in 1958. This theory mainly explains the interpersonal underworld of a small
group. The Theory is based on the belief that when people get together in a group, there are three main
interpersonal needs they are looking to obtain - affection/openness, control and inclusion. Schutz developed a
measuring instrument that contains six scales of nine-item questions that he called FIRO-B. This technique was
created to measure or control how group members feel when it comes to inclusion, control, and
affection/openness or to be able to get feedback from people in a group.

Inclusion types.

1. the undersocial (low EI, low WI)

2. the oversocial (high EI, high WI)
3. the social (moderate EI, moderate WI)

Control types

1. the abdicrat (low EC, high WC)

2. the autocrat (high EC, low WC)
3. the democrat (moderate EC, moderate WC)

Affection types

1. the underpersonal (low EA, low WA)

2. the overpersonal (high EA, high WA)
3. the personal (moderate EA moderate WA)

B- The structured interview

 A structured interview (also known as a standardised interview or a researcher-administered survey) is a
quantitative research method commonly employed in survey research. The aim of this approach is to ensure that
each interview is presented with exactly the same questions in the same order. This ensures that answers can be
reliably aggregated and that comparisons can be made with confidence between sample subgroups or between
different survey periods.

Structured interviews are a means of collecting data for a statistical survey. In this case, the data is collected by
an interviewer rather than through a self-administered questionnaire. Interviewers read the questions exactly as
they appear on the survey questionnaire. The choice of answers to the questions is often fixed (close-ended) in
advance, though open-ended questions can also be included within a structured interview.

A structured interview also standardises the order in which questions are asked of survey respondents, so the
questions are always answered within the same context. This is important for minimising the impact of context
effects, where the answers given to a survey question can depend on the nature of preceding questions. Though
context effects can never be avoided, it is often desirable to hold them constant across all respondents.

C- The Global talent search

Global Talent Search is specialising in the selection and recruitment of executive and middle management profiles
with an international background and experience. The approach is pragmatic and mainly consists of direct search
projects for Headquarters and Regional Offices of US and European Corporates.

With an entrepreneurial and multicultural vision and approach, Global Talent Search is working for clients based in
different countries in Europe, who are looking at bringing in or developing diversity in their organization, whilst
focusing on skills and international experience gained in specific industries, regardless of current location or
nationality.
We search through industries rather than on a geographical basis and believe in a lean, consistent and transparent
approach, which is enhanced by the fact that one consultant is responsible for the full process from discussions with
the client and the different stakeholders, through the research and interviews up to the presentations of candidates to
our clients."

3-Identify the main methods of performance appraisal and give a detailed account of 360 degree
feedback.

Ans- Alternative performance reviews

The best performance reviews let managers and employees communicate -- share ideas, opinions, and
information. Unfortunately, most traditional reviews put managers into the position of uncomfortable judges,
ostensibly telling employees how their work either fit the bill -- or didn't. Possibly because of this, most
traditional reviews are no better than the manager's off-the-cuff judgements, and some may be illegal.

What is 360 Degree Feedback?

360 Degree Feedback is a system or process in which employees receive confidential, anonymous feedback from the
people who work around them. This typically includes the employee's manager, peers, and direct reports. A mixture
of about eight to twelve people fill out an anonymous online feedback form that asks questions covering a broad
range of workplace competencies. The feedback forms include questions that are measured on a rating scale and also
ask raters to provide written comments. The person receiving feedback also fills out a self-rating survey that
includes the same survey questions that others receive in their forms.
What a 360 Feedback Survey Measures
 360 feedback measures behaviors and competencies
360 assessments provide feedback on how others perceive an employee
360 feedback addresses skills such as listening, planning, and goal-setting
A 360 evaluation focuses on subjective areas such as teamwork, character, and leadership effectiveness

What 360 Feedback Surveys do not assess:

360 feedback is not a way to measure employee performance

objectives (MBOs)
360 feedback is not a way to determine whether an employee is
meeting basic job requirements
360 feedback is not focused on basic technical or job-specific skills
360 feedback should not be used to measure strictly objective
things such as attendance, sales quotas, etc.
How is 360 Degree Feedback Used?
Companies typically use a 360 feedback system in one of two ways:
360 Feedback as a Development Tool to help employees recognize strengths and weaknesses and become more
effective.

360 Feedback as a Performance Appraisal Tool to measure employee performance

Assignment ‘C’
1- A

2- B

3- C

4- A

5- D

6- A

7- C

8- B

9- B

10- D

11- A

12- C

13- C
14- A

15- D

16- A

17- C

18- A

19- C

20- A

21- B

22- B

23- C

24- A

25- C

26- A

27- B

28- A

29- C

30- A

31- C

32- A

33- C

34- D

35- A

36- C

37- A

38- B
39- A

40- A

Marketing of Services
Assignment A

1. Define ‘Services’. Distinguish between services with goods/products. What are the different
challenges for services marketing? Discuss briefly the characteristics of Services.

ANS- Define ‘Services’

Use DEFINE SERVICE to define a new WebSphere MQ service definition, and set its parameters. A service is used
to define the user programs that are to be started and stopped when the queue manager is started and stopped. You
can also start and stop these programs by issuing the START SERVICE and STOP SERVICE commands.
 Distinguish between services with goods/products

What are some of the main differences between products and services? And when are these relevant?
Tangibility versus Intangibility
Products are tangible. You can buy pork as a tangible product. You buy it, you ship it and sell it. In the same way as
you buy stamps, cigarettes and cars.
Financial service companies however, make it possible to exchange pork bellies Futures, on the Chicago Mercantile
Exchange (CME). A future is (not the most simple example of) a service with which you can hedge your risk. In this
last case, most of the people trading on the CME will never see or smell the pork bellies.
The ownership between products and services is different. A stock could be called a financial product that you own.
You can place a stock order which might result in a transaction later on. Your bank services a depot fee for saving
you a lot of work. You cannot own a service.
Where the product is much more standardized, the service is tailor-made. Companies differentiate in offering
products and services, but the variations between similar products of different producers are less prominent than the
variations between services.
You can count products in the same way as you can count your money (or have your bank service you this
information). A service is not countable, but is "leveled;" better than the best service is not possible. There is a limit
in what a service can offer.

SPECIAL CHARACTERISTICS OF SERVICES

Services are said to have four key characteristics which impact on marketing programmes.
These are:
Intangibility
Inseparability
Heterogeneity variability
Perish ability (simultaneous production/consumption)
It is helpful to consider each of these characteristics briefly:
Intangibility
Services are said to be intangible - they cannot be seen or tasted, for example. This can cause lack of confidence on
the part of the consumer As was apparent earlier, in considering pricing and services marketing, it is often difficult
for the consumer to measure service value and quality. To overcome this, consumers tend to look for evidence of
quality and other attributes, for example in the decor and surroundings of the beauty salon, or from the qualifications
and professional standing of the consultant.
Inseparability
Services are produced and consumed at the same time, unlike goods which may be manufactured, then stored for
later distribution. This means that the service provider becomes an integral part of the service itself. The waitress in
the restaurant, or the cashier in the bank, is an inseparable part of the service offering. The client also participates to
some extent in the service, and can affect the outcome of the service. People can be part of the service itself, and this
can be an advantage for services marketers.

2-What do you mean by marketing-mix in terms of services? Explain the marketing-mix elements
in Services Marketing with suitable examples.

ANS- Marketing mix

The term "marketing mix" was coined in 1953 by Neil Borden in his American Marketing Association presidential
address. However this was actually a reformulation of an earlier idea by his associate, James Culliton, who in 1948
described the role of the marketing manager as a "mixer of ingredients", who sometimes follows recipes prepared by
others, sometimes prepares his own recipe as he goes along, sometimes adapts a recipe from immediately available
ingredients, and at other times invents new ingredients no one else has tried. [1] A prominent marketer, E. Jerome
McCarthy, proposed a Four P classification in 1960, which has seen wide use. The Four P's concept is explained in
most marketing textbooks and classes.
Elements of the Marketing Mix
The elements of the marketing mix are also referred to as the 5 P's of marketing. For years marketers referred to the
4 P's of marketing. Only recently has a 5th P been added. Whether you subscribe to the theory that there are four p's
or five p's of marketing, this is essentially referred to as your "marketing mix".
have been renamed a bit over the years) that were the elements of a marketing mix are:
Product – The products or services offered to your customer: Their physical attributes, what they do, how they differ
from your competitors and what benefits they provide.
Price – How you price your product or service so that your price remains competitive but allows you to make a good
profit.
Place (Also referred to as Distribution) – Where your business sells its products or services and how it gets those
products or services to your customers.
Promotion – The methods used to communicate the features and benefits of your products or services to your target
customers.
The 5th P of Marketing
Some marketing theorists have added a 5th P of marketing to the elements of the marketing mix: People
When referred to as an element in the marketing mix, this 5th P refers to how your level of service and the expertise
and skills of the people who work for you can be used to set you apart from your competitors.
Also Known As: 5 P's of Marketing; 4 P's of Marketing
Examples:
My company's marketing mix takes advantage of the original 4 P's of marketing - product, price, place and
promotion - as well as the 5th P of marketing - people - to set us apart from our competitors and better promote our
services.

3-How can service quality be used in a manufacturing context for competitive advantage? Think
of your answer in the context of automobiles or computers or some other manufactured product
you have actually purchased.

ANS- Service quality be used in a manufacturing

Suggests that, in many cases, where formerly excellent manufacturing companies have suffered a decline in their
fortunes, they failed because they did not change with their customers; their operations were too remote. Considers
how this might be avoided by applying a service quality model to manufacturing. Examines the differences between
service and manufacturing operations and highlights the difficulties which manufacturing companies have in being
close to their customers. Provides definitions of quality for products and services before presenting the model.
Describes the features of the model – taking a total view, achieving a balance between expectations and delivery,
system design and response to change-as they apply both to service and manufacturing. Highlights the need to
exceed expectations to maintain a competitive edge. Argues that, whilst this is achieved through committed staff in
service industries, this same commitment can, with appropriate communication, be achieved in manufacturing
companies.
The EU exports consist mainly of manufactured products: their share has annually been around 85 % of total EU
exports. In 2008, machinery and vehicles made up almost half of total exports while other manufactured products
accounted for 24 % and chemical products for 15 %.
More than half of EU imports are manufactured goods, but their share is decreasing. The breakdown diverges from
exports: machinery and vehicles and chemical products account for a smaller share while the share of other
manufactured products is similar to that for exports. The surplus in trade of manufactured goods nearly quadrupled
from 1999 to 2008.
Chemicals
The chemicals sector (SITC Section 5) contains various chemical goods such as organic chemicals, inorganic
chemicals, plastics and pharmaceutical products.
Trade in chemicals has grown steadily every year since 2003 but its share of the total EU trade has remained quite
stable: in 2008, chemicals accounted for 15 % of exports and 8 % of imports. Besides machinery and vehicles, the
chemicals sector is the only product group where the EU posts a trade surplus. The surplus reached EUR 74.5 billion
in 2008.
The majority of imports come from a small number of countries: in 2008, the eight biggest suppliers accounted for
over three quarters of total EU imports. The USA was the main source, with a proportion of 29 %, followed by
Switzerland with 21 %.
The USA (27 % in 2007) and Switzerland (9 %) were also the main partner countries for exports.
Machinery and vehicles
‘Machinery and vehicles’ (SITC Section 7) includes power generating and industrial machinery, computers, electric
and electronic parts and equipment, road vehicles and parts, ships, airplanes and railway equipment.
‘Machinery and vehicles’ is the most important individual product group in the external trade of the EU, accounting
for 44 % of total EU exports and 27 % of imports in 2008. The group records also the largest surplus in EU trade:
EUR 154 billion in 2007.
Other manufactured goods
‘Other manufactured products’ (SITC Sections 6 and 8) is a heterogeneous group consisting of manufactured
products which range from basic semi-manufactured products such as leather, rubber, wood, paper, textiles, metals,
building fixtures and fittings to more labour-intensive products like clothes, shoes and accessories, scientific
instruments, clocks, watches and cameras.
The structure of exports and imports, in terms of products, differs to some extent. The EU exports more semi-
manufactured products such as metals and metal products while, for imports, manufactured products are more
relevant, in particular clothing.

4-What is the difference between desired service and adequate service? Why would a services
marketer need to understand both types of service expectations?

ANS- Difference between desired service and adequate service

Purpose – Aims to address the concept of the “zone of tolerance” in judgments of hotel service quality. The
present study describes the zone of tolerance for customers’ service expectations and determines the customer
satisfaction level in Northern Cyprus hotels – which is a new emerging market as an island destination.

Design/methodology/approach – The sample of the study consisted of customers visiting four-star, five-star,
and resort hotels located in the Gazimagusa and Kyrenia regions of Northern Cyprus in June and July 2004. The
questionnaire was based on service expectations and perceptions. As a result of the pilot study with 50 customers,
the instrument was reworded for measuring service quality and the zone of tolerance for hotels. This modified
instrument became the “HOTELZOT” instrument, which was used to measure customers’ service expectations and
service perceptions. Psychometric properties of the scale (such as reliability) were tested, and the dimensionality of
the scale was confirmed through an exploratory factor analysis.

Findings – The conceptual model (HOTELZOT) presented here, and the results of this study, demonstrate that
evaluation of services can be scaled according to different types of expectations – “desired” and “adequate” – and
that customers use these two types of expectations as a comparison standard in evaluating hotel services. The
findings reveal that the customers visiting Northern Cyprus hotels have a narrow zone of tolerance in services
provided by the hotels. The results also indicate that the HOTELZOT instrument presented here is two-dimensional.
The results with respect to gap analysis reveal that there was a shortfall in the service quality provided by the hotels
in the sample, with the largest gap being found in intangibles.
Research limitations/implications – First, the sample in this study is small and is limited to a relatively specific
group of tourists. Second, measurement of customer satisfaction was carried out using a single-item scale, and it was
therefore not possible to estimate its reliability. Finally, this study examined the influence of two factors on
customers’ zones of tolerance for hotels. As proposed by Zeithaml et al., there might be other factors that determine
the width of the zone of tolerance.

What is services marketing

A service is the action of doing something for someone or something. It is largely intangible (i.e. not material). A
product is tangible (i.e. material) since you can touch it and own it. A service tends to be an experience that is
consumed at the point where it is purchased, and cannot be owned since is quickly perishes. A person could go to a
café one day and have excellent service, and then return the next day and have a poor experience. So often marketers
talk about the nature of a service as:
Intangible - and cannot have a real, physical presence as does a product. For example, motor insurance may have a
certificate, but the financial service itself cannot be touched i.e. it is intangible.
Perishable - in that once it has occurred it cannot be repeated in exactly the same way. For example, once a 100
metres Olympic final has been run, there will be not other for 4 more years, and even then it will be staged in a
different place with many different finalists.

5- Write short notes on any three of the following:

B- The Service Delivery System

When talking about our service delivery system and doing the business plan, we have to determine how the service
is going to be delivered.  What processes are we going to use to deliver the service?  What is the work force going to
be like? What kind of equipment facilities are we going to use, recognizing that we are going to produce the service
and deliver it simultaneously?
Using the McDonald’s example, it seems that McDonald’s restaurants have the philosophy that "discretion is the
enemy of order".  In simple words:  do not let too many people have discretion or decision making authority.  If
there were too many people with decision making authority, there would be no speed and consistency. 
There are only effectively one or two people in a McDonald’s that make decisions.  Everybody else reacts - the
buzzer goes to take the burgers out, put french fries in a package with a scoop that is designed to give you just so
many French fries in a package, mix something up according to a recipe.  Everyone there is controlled by
equipment, standards and timers.  The decision making authority is centralized within one or two experienced
people.

C- Perceived Service Quality

Deals with three issues in the area of perceived service quality. First, it compares the gap model with the
performance model. Second, it investigates the direction of causality between service quality and satisfaction.
Finally, it examines whether the influences of some dimensions of service quality vary across service industry
types. Three service firms were selected and respondents were interviewed in each firm. As hypothesized, the
performance model appeared to be superior to the gap model. In addition, the result shows that perceived
service quality is an antecedent of satisfaction, rather than vice versa. Finally, tangibles appeared to be a more
important factor in the facility/equipment-based industries, whereas responsiveness is a more important factor
in the people-based industries. Managerial implications and future research directions are discussed.

D- Relationship Marketing was first defined as a form of marketing developed from direct response marketing
campaigns which emphasizes customer retention and satisfaction, rather than a dominant focus on sales transactions.
As a practice, Relationship Marketing differs from other forms of marketing in that it recognizes the long term value
of customer relationships and extends communication beyond intrusive advertising and sales promotional messages.
With the growth of the internet and mobile platforms, Relationship Marketing has continued to evolve and move
forward as technology opens more collaborative and social communication channels.

Assignment B

1-Define service culture. Why is service culture so important? Can a manufacturing firm have a
service culture? Why or why not?

ANS- Service culture

 What is a service culture in an organization?

The answer to this question is that it culture is different for each organization. No two organizations operate in the
same manner, have the same focus, or provide management that accomplishes the same results. Among other things,
a culture includes values, beliefs, norms, rituals, and practices of a group or organization. Any policy, procedure,
action, or inaction on the part of an organization, and its employees contribute to the service culture. Most
importantly, each employee plays a key role in communicating the culture to its customers. This may include such
things as personal appearance, the way employees interact with customers, and service provider’s knowledge, skill
and attitude level. Culture also encompasses an organization’s products and services, and the physical appearance of
the organization's facility, equipment, or any other aspect of the organization with which the customer comes into
contact.
Importance of servic culture

In order to achieve results, however, much more is necessary. Detailed steps are spelled out in my book The Service
Journey and in my advanced customer service webinar class offered through Business Expert Webinars. More than
anything though, it is important to recognize service is a change in culture, a change that impacts
everything and everyone within the organization, every time. Service is not only about identifying
individuals whose job it is to make sure the organization is service-oriented, and it's not only about discussing the
importance of service. It's about taking that talk, and converting into action, committing to delivering an excellent
service experience for the long haul.

In Organizations, which want to grow, the leadership ( CEO or the top management team) need to think broadly and
deeply about many issues and either create new ideas or take decisions on some critical issues to take the
organisation forward. A good consulting set up is useful to discuss along with you, create a solution for one of the
issues, offer an idea and also ensure your HR people implement it using counseling, coaching methods. We are
offering to work with you to co-create ideas and solutions which will bring substantial value to your organisation
and your customers.
Customer-driven is the mantra of leaders everywhere. We all know excellent service strengthens customer loyalty
and differentiates us from our competitors. Unfortunately, we often confuse programs, tools, and even quality
systems with what we really need to provide a superior service experience. This course gives you a new way of
thinking about how you relate to the market, customers, employees and other key stakeholders.

2-. In what specific ways does the distribution of services differ from the distribution of
goods? What are the main differences between agents and brokers? Explain with suitable
examples.

ANS- Distribution of goods

It is not unreasonable to wonder why all products are not sold directly from producer to final consumer. The simple
answer is that distributors lower the costs of market transactions in a specialized economy. First, distributors lower
the costs of market transactions by taking advantage of economies of scale and scope. For example, retail stores
typically offer many varieties of goods. It would be very costly for consumers to purchase every item directly from
producers. Second, distributors reduce the information costs of market transactions. Wholesale merchants
traditionally, and retail merchants more recently, lower the costs of trade by lowering the costs of discovering supply
and demand conditions. Third, distributors also lower the cost of trade by solving the asymmetric information
problem. This problem typically arises when consumers cannot easily discern the quality of a product sold in the
market place. Historically, the wholesale merchants solved this problem by organizing exchanges that inspected
quality and standardized grades. The traditional local retail merchants often solved this problem by developing a
reputation for honesty. Over time, as market transactions became increasingly anonymous, multiunit chain retail
stores and multiunit manufacturing firms used advertising and branding as a solution to the asymmetric information
problem.

Main differences between agents and brokers

Real estate brokers and agents are two different things. An agent provides their services, independently, to a broker
for a fee. A broker sells property owned by others, and may offer management services. Most brokers deal in
residential property, but some deal with industrial, commercial and agricultural. The brokers who deal in the latter
are often times employed by specialized firms or larger corporations. A broker encompasses many area of property
purchasing and has to be extremely knowledgeable. It is the responsibility of a broker to be proficient in the laws
governing real estate purchasing in the market they are working in, as well as, financing options. Additionally, a
broker handles title searches for properties, and general marketing.
Both brokers and agents have similar job duties. They both obtain listings of properties and do research about the
current market to determine the market price for a property and decide what the property needs to be listed at, if they
are working for a seller, or if a property has a favorable listing price, if they are working for a buyer. In the case of
rental property, both brokers and agents have to be familiar with the region's functionality. A property's accessibility
to transportation, they utilities available, and the job market all tie into whether a rental property will be more
favorable to a buyer, or seller. The major differences between a broker and an agent is license requirements and
client interaction.

3. Describe the non-monetary costs involved in the following services -

a) Getting an automobile loan

It’s always a delight to get the keys to a new car. For most, the only challenge is paying for the car. Unless you have
cash in hand, you’ll need some type of auto loan. Follow these six keys to a great auto loan and you can ride around
knowing you got the best deal.
Key to a Great Auto Loan #1: Manage Your Credit
One of the first things you should do before applying for an auto loan is review your credit. All US consumers are
entitled to a free credit report, so use this resource. Find out if there’s anything you need to fix. Any errors or
bad habits could affect your auto loan rate.

B- Belonging to a health club

Many people are convinced that they don't need a health club membership in order to whip themselves into good
physical shape. They think that they possess the ability to exercise on their own. Many people have tight budgets of
both time and money and they don't want to part with

1) Equipment: Health clubs have set up their businesses by investing in an array of the latest equipment. This
equipment is designed to get bodies toned up and physically fit. There are stationary weights, free weights,
resistance machines and even personal trainers to ensure that each member uses them correctly. Who can afford to
have such an extensive selection of fitness machines in their own home?
2) Personal Trainers: Exercising under the trained guidance of a professional will ensure that a person follows a plan
that is just right for them. The right combination of aerobics, strength building maneuvers along with an ample dose
of flexibility regimes will give a person the all-over fitness that they need. Following the wrong routine can cause
injury and burn out. Personal trainers have been especially educated to avoid these maladies in their clients.

D- Attending an executive education class

The value of education is obvious, particularly with the growth of a global economy. People realize that education
and learning cannot stop when they move from school to career. They must continuously develop their skills and
keep current with new trends and business concepts if they and their organizations are to be successful.
American colleges and universities typically have departments or schools of business that offer degrees at the
undergraduate (bachelor) and graduate (master and doctorate) levels. In addition, many leading business schools
offer programs for experienced business people, allowing them to return to campus to explore new ideas, to be
updated in their field or in areas with which they are unfamiliar, and leave with fresh approaches to business issues.
This type of educational program falls into the broad category of "Executive Education." What these programs offer
and how one can learn more about them is the purpose of this article.

Assignment C

1- A
2- B
3- A
4- C
5- D
6- A
7- A
8- C
9- D
10- B
11- B
12- A
13- C
14- B
15- C
16- C
17- D
18- D
19- B
20- C
21- A
22- B
23- C
24- A
25- B
26- D
27- A
28- C
29- B
30- D
31- C
32- A
33- C
34- A
35- B
36- D
37- A
38- C
39- C
40- B