Because Business Marketers Cannot Always Provide Flawless Service, the Response

question 35

Essay

Because business marketers cannot always provide flawless service, the response to service problems is critical to future success. Explain how an excellent service recovery process can lead to a differential advantage for firms. How does a business marketer figure out how much to spend on service recovery and service quality?

---

Definitions:

Traceable Fixed Costs

Costs that can be directly associated with a specific product, service, or department without any ambiguity.

Rubber Division

A business segment or department within a company that is responsible for the production and/or sales of rubber products.

Common Corporate Fixed Costs

Expenses incurred by a corporation that do not vary with the level of production or sales, and are shared across different segments or products of the company.

Contribution Margin

The difference between sales revenue and variable costs, which contributes to covering fixed costs and generating profit.