Chapter 11

Review and Applications
1.1 – To keep track of how service employment is affecting the US economy, go to http://www.bls.gov/bdm/home.html. Look at the right side bar which gives the latest numbers for Business Employment Dynamics. What trends do you see? Do the numbers support the information from the chapter?
The trends show a high number of jobs being in the service sector. This matches what the book says about the service industry.

2.1 – Assume that you are a manger of a bank branch. Write a list of the implications of intangibility for your firm.
The services of the bank can’t be touched, seen, tasted, heard, or felt. It is harder for the customers to evaluate the quality of services because of the fewer search qualities. It would also be harder for marketers to communicate the benefits of the service customers will receive from the bank.

3.1 – Analyze a recent experience that you have had with a service business in terms of your expectations and perceptions about each of the five components of service quality.
The experience I had was at Ruth’s Chris Steakhouse. I went there for the first time and had a great experience.
Reliability – The service at the restaurant was great. Not only from the waiter, but from all the other service workers at the restaurant.
Responsiveness – The service was quick and the waiter was at the table every time we needed something. We conveniently made reservations online so our table was ready right when we got there.
Assurance – The waiter went through the options of meals we were considering. He did this because we had never been there. He also suggested wines to pair with different dinner courses.
Empathy – The waiter talked to us throughout the meal to make sure everything was good and meeting our expectations. We even received a post card from the waiter in the mail a couple days after our dinner thanking us for coming into the restaurant.
Tangibles – The interior of the restaurant was very nice. The wait staff was dressed in white shirts and ties, which looked very nice.

Application Exercise
New car – physical good and difficult to assess.
Designer jeans – physical good and difficult to assess.
Oil change – service and easy to assess.
Dry cleaning – service and easy to assess.
Haircut – service and easy to assess.
Tax preparation software – both a good and a service and easy to assess.
College education – service, easy to assess.

The services were quicker to assess in terms of satisfaction, but services are more difficult to assess prior to purchase. People spend more time trying to search for a good product, but don’t know the benefits until they have already bought the product.