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Northwest Airlines Case

Northwest Airlines Case. Northwest Airlines: Case Objectives. To analyze a company’s attitudes and practices that contributed to a service disaster. To appreciate ways to avoid exacerbating service disasters.

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Northwest Airlines Case

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  1. Northwest Airlines Case

  2. Northwest Airlines:Case Objectives • To analyze a company’s attitudes and practices that contributed to a service disaster. • To appreciate ways to avoid exacerbating service disasters. • To identify actions the company could have taken to fail safe--prevent or mitigate--the crisis. • To discuss strategies for effective service recovery.

  3. Exhibit 1Sitting on the Tarmac

  4. Exhibit 2

  5. What Do Customers Expect When a Service Fails? • Outcome fairness • Procedural fairness • Interaction fairness

  6. Dimensions of Service Quality • RELIABILITY • ability to perform promised service dependably and accurately • RESPONSIVENESS • willingness to help customers and provide prompt service • ASSURANCE • employees’ knowledge and courtesy and their ability to inspire trust and confidence

  7. Dimensions of Service Quality (continued) • EMPATHY • caring, individualized attention given to customers • TANGIBLES • appearance of physical facilities, equipment, personnel and written materials

  8. Service EncountersCommon Themes • RECOVERY • employee response to delivery system failures • ADAPTABILITY • employee response to customer needs and requests • SPONTANEITY • unprompted and unsolicited employee actions and attitudes • COPING • employee response to problem customers

  9. Long- and Short-termImplications of Problem • Reputation • Customer loyalty • Employee morale • Demands on executive time and attention • Standing with the U.S. Department of Transportation • Vulnerability to negative press • Need to lobby Congress to prevent restrictive legislation • Legal liability

  10. Figure 7.3 Customer Response Following Service Failure Service Failure Take Action Do Nothing Stay with Provider Switch Providers Complain to Provider Complain to Family & Friends Complain to Third Party Switch Providers Stay with Provider

  11. Figure 7.6Causes Behind Service Switching Pricing • High Price • Price Increases • Unfair Pricing • Deceptive Pricing Response to Service Failure • Negative Response • No Response • Reluctant Response Inconvenience Competition • Location/Hours • Wait for Appointment • Wait for Service Service Switching Behavior • Found Better Service Ethical Problems Core Service Failure • Cheat • Hard Sell • Unsafe • Conflict of Interest • Service Mistakes • Billing Errors • Service Catastrophe Service Encounter Failures Involuntary Switching • Uncaring • Impolite • Unresponsive • Unknowledgeable • Customer Moved • Provider Closed Source: Sue Keaveney, “Customer Switching Behavior in Service Industries: An Exploratory Study,” Journal of Marketing, April, 1995, pp. 71-82.

  12. Welcome and Encourage Complaints Fail Safe the Service Service Recovery Strategies Act Quickly Learn from Lost Customers Treat Customers Fairly Learn from Recovery Experiences Figure 7.5Service Recovery Strategies

  13. PREVENT: Cancel flights Plan for snow Communications Winterize Plan for contingencies Best way to deal with it is to prevent it! MITIGATE: Remote disembark Remote catering/lavatories Borrow gates Hotels for employees If you can’t prevent it, have recovery plans in place! Failsafing the NWA Service

  14. Major Lessons of the Case • It is worthwhile for a service company to invest in treating customers well. • Companies should take pains to avoid causing customers emotional distress. • If they cause the distress inadvertently, companies should make handsome amends.

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