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Marketing Final Exam

Carrier you are familiar with as your example service

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Unformatted text preview: ices will be available PTS: 1 REF: 192-193 Communication KEY: CB&E Model Distribution OBJ: 12-4 TOP: AACSB MSC: BLOOMS Synthesis 6. There are four promotional strategies for dealing with the unique features of services. Name these strategies and give examples of each, using American Airlines (or another air carrier you are familiar with) as your example service. ANS: STRESSING TANGIBLE CUES. The most obvious tangible cue is the aircraft itself because this is an equipment-based service. Other tangible cues can be stressed during in-flight service, such as special meal and beverage services, provision of promotional items such as playing cards featuring the American Airlines (AA) logo, or other methods of making intangible services more tangible. USING PERSONAL INFORMATION SOURCES. Personal sources of information can help to reduce a customers’ perceived risk in choosing a service. An endorsement of a famous actor or political figure who prefers to use AA would be beneficial. AA should also seek to stimulate positive word-of-mouth communication among present and prospective customers. CREATING A STRONG ORGANIZATIONAL IMAGE. Service marketers should attempt to create strong organizational images. One way to create an image is to manage the evidence of the service. This would mean that AA should create a good appearance of the flight crews and other employees, keep the aircraft clean, and provide other tangible goods (items featuring the AA logo). ENGAGING IN POSTPURCHASE COMMUNICATION. Postpurchase communication can be accomplished with postcard surveys, in-flight brochures, or personal interviews. Customers should be shown that their feedback is sought and their patronage is appreciated. PTS: 1 REF: 193 Communication KEY: CB&E Model Promotion OBJ: 12-4 TOP: AACSB MSC: BLOOMS Synthesis 7. Describe the two unique challenges faced by service providers as they decide on a pricing strategy to use. ANS: (1) In order to price a service, it is important to define the unit of service consumption. For example, should pricing be based on completing a specific service task or should it be time based? (2) For services that are composed of multiple elements, the issue is whether pricing should be based on a bundle of elements or whether each element should be priced separately. PTS: 1 REF: 193-194 OBJ: 12-4 TOP: AACSB Communication KEY: CB&E Model Pricing MSC: BLOOMS Synthesis 8. Name and briefly define the three categories of pricing objectives for services. ANS: REVENUE-ORIENTED PRICING focuses on maximizing the surplus of income over costs. A limitation of this approach is that for many services, determining costs can be difficult. OPERATIONS-ORIENTED PRICING seeks to match supply and demand by varying prices. Prices can be increased during peak times and decreased during slow times. PATRONAGE-ORIENTED PRICING tries to maximize the number of customers using the service. Pricing according to different market segments’ ability to pay and offering m...
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