* Section A
1- What are the perceived risks in buying and using a service?
Any time customers consider purchasing a new product or signing up for a new service, they also face a set of uncertainties about the product or service collectively referred to as perceived risk. As part of the conversion process from potential customer to paying customer, businesses must develop strategies to assuage one or more of the six types of perceived risk:
One of the most common types of perceived risk, functional or quality risk refers to the fear that a product or service will fail to deliver promised functions or benefits. A new computer, for example, might fail to run the ...view middle of the document...
For example, a customer may want to buy from a particular company because it offers inexpensive alternatives, but feel ambivalent due to the company’s labor practices.
2- How customers can handle the risks above?
Customers can handle this risks by:
-Rely on reputable companies
-Look for warranty and guaranties
-Visit the service facility
-Asking for Knowledge and experience
-Using Internet to compare attributes of the service/product
* SECTION B
3- Service quality model ( 7 Gaps)
Gap between consumer expectation and management perception: This gap arises when the management or service provider does not correctly perceive what the customer wants or needs. For instance – hotel administrators may think guests want better food or in-house restaurant facilities, but guests may be more concerned with the responsiveness of the staff or the cleanliness of their rooms.
Hotel administrators may think guests want better food or in-house restaurant facilities, but guests may be more concerned with the responsiveness of the staff.
Factors that affect the size of the knowledge gap include:
* Before introducing a new product or service into the market, a company must conduct market research to understand whether there would be any demand for the product, and what features should be incorporated. The better this process is conducted, the smaller the knowledge gap will be.
* There are methods of ensuring that customer desires are taken on board. These include: comprehensive studies, gauging satisfaction after individual transactions (surveys immediately after a purchase is made), customer panels and interviews, and through customer complaints.
* The fewer the layers between management and customer contact...