Read the summary and the most important questions on Service Industry II

• Week 1

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• What are monetary costs?

  Are the things associated with the job on which you must spend money.

• What are the pricing objectives about?

  The pricing objectives should be in line with the overall business and
  marketing strategy; e.g. acquiring market share, maximising short-term profit, prevent competition from entering the market, communicate brand positioning, stimulate sales of other company services

• What is the pricing strategy?

  The pricing strategy establishes a framework for pricing decisions and determines the way in which prices will be set. Cost, competition and value as experienced by the consumer should be taken into account.
  
  

• What are the three pricing strategies? And give a brief explanation.

  • Cost-based pricing; setting prices based on the cost of the goods or services being sold.
    
  • Customer based pricing; determine how much each customer is willing to pay for its product or service and then charges the price each customer is willing to bear.
  • Competition-based pricing; setting your prices in relation to the prices of your competitors

• What is the pricing structure?

  The pricing structure takes into account a set of characteristics that will have an effect on price levels and answers questions like: Which aspect of the service will be priced? What will be included for that price? Will there be differentiation among different customers, payment conditions? (ex.: Un café – 2 €, un café s’il vous plait – 1,80 €)

• What are pricing levels / tactics?

  Promotions or other short-term actions 
  

  • E.g. Quantity discounts, lower prices in off-peak hours
    

• What is the definition of Yield Management?

  The process of allocating the right type of capacity to the right customer at the right price.
  Maximising the revenue or the yield
  
  Applications:
  

  • Airline seats
    
  • Hotel rooms
    
  • Rental cars
    
  • Restaurant seats
    

  Variable pricing: taking advatage of customer’s variable willingness to pay

• Week 2

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• What are the three elements of service blueprint (3 lines)?

  • Line of interaction – actions of onstage contact customers/employees (NB: could also be online)
    
  • Line of visibility – contact employees are working for a customer without the customer involved
    
  • Line of internal interaction - separates contact employees from those who do not directly support interactions with customers/users
    

• What are soft standards?

  “Standardisation” of employee’s behaviour. Crucial to reach customer satisfaction! Exceed the adequate service level.
  

  • Being treated as an individual (empathy, people)
    
  • Being able to help (responsiveness, people, process)
    

• Week 3

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• Name three things why managing capacity and productivity is important for services.

  • To meet customer expectations
    
  • To be efficient
    
  • To make the highest profit, you need to: Have the capacity needed to avoid waiting times or delays for cutomers and staff; Design and organize the service process to serve the highest number of customers for the lowest costs.