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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.
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
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
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.
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.
(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.
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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This document was uploaded on 09/29/2013.
- Fall '13