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A zone of tolerance is the area between customers’ expectations regarding their desired service and the minimum level of acceptable service. Glossary 12-* Chapter 12 – Services: The Intangible Product * These are the learning objectives for this chapter. * * In a service economy, firms compete on how well they provide service to their customers. This web link is to the “live” customer service rep at Ask students: Describe your last outstanding and horrible customer service experiences. How did it affect your attitude toward the firm? How did it affect your purchase behavior? * According to Theodore Levitt, all products are services. Ask students: What does this statement mean? When you purchase products, do you also purchase the services associated with the product? Like what? * This graph sets up the following discussion; if you wish to shorten this presentation, simply review these differences. The next slides go into greater detail. * Consumers use cues to judge the service quality of dentists, including the quality of the furnishings, whether magazines are current, and diplomas on the wall. Group activity: Think about the cues you use to assess the quality of a service. Choose a particular service (e.g., auto repair, medical care, insurance) and list several cues the provider could use to indicate quality. * When staying at a hotel, you can’t test it out before you stay. Some hotels offer satisfaction guarantees to lower risk. Ask students what other kinds of products can they not test before? Some of them might say delivery in which case it is funny to show this YouTube ad. The ad (always check before class) is for FedEx and was one of their best superbowl ads ever. * Many students work in service professions. Ask students: How have your employers attempted to reduce service variability? Do these programs work? What else could your employer do to reduce variability? * Each of the pictured services are perishable, because as soon as the plane/ship
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