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Services Marketing: People, Technology, Strategy, Sixth Edition

by Christopher Lovelock - Yale University; Jochen Wirtz - National University of Singapore

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Copyright, ii
About the Authors, iv
About the Contributors of the Readings and Cases, vii
Preface, xv
I. Understanding Service Markets, Products, and Customers, 1
1. New Perspectives on Marketing in the Service Economy, 4
Why Study Services?, 6
What Are Services?, 12
Services Pose Distinctive Marketing Challenges, 16
Services Require an Expanded Marketing Mix, 22
Conclusion, 29
Review Questions, 29
Application Exercises, 30
Endnotes, 30
2. Customer Behavior in Service Encounters, 32
Differences Among Services Affect Customer Behavior, 33
Customer Decision Making: The Three-Stage Model of Service Consumption, 38
The Prepurchase Stage, 40
The Service Encounter Stage, 49
The Post-Encounter Stage, 58
Conclusion, 60
Review Questions, 61
Application Exercises, 61
Endnotes, 62
Reading, 64
In a Dizzying World, One Way to Keep Up: Renting Possessions, 64
II. Building the Service Model, 66
3. Developing Service Concepts: Core and Supplementary Elements, 68
Planning and Creating Services, 69
The Flower of Service, 77
Planning and Branding Service Products, 86
Development of New Services, 89
Conclusion, 95
Review Questions, 96
Application Exercises, 96
Endnotes, 96
4. Distributing Services Through Physical and Electronic Channels, 98
Distribution in a Services Context, 99
Determining the Type of Contact: Options for Service Delivery, 100
Place and Time Decisions, 103
Delivering Services in Cyberspace, 107
The Role of Intermediaries, 110
The Challenge of Distribution in Large Domestic Markets, 112
Distributing Services Internationally, 114
Conclusion, 122
Review Questions, 122
Application Exercises, 122
Endnotes, 123
5. Exploring Business Models: Pricing and Revenue Management, 124
Effective Pricing Is Central to Financial Success, 125
Pricing Strategy Stands on Three Legs, 127
Revenue Management: What It Is and How It Works, 136
Ethical Concerns in Service Pricing, 142
Putting Service Pricing into Practice, 146
Conclusion, 151
Review Questions, 151
Application Exercises, 152
Endnotes, 152
6. Educating Customers and Promoting the Value Proposition, 154
The Role of Marketing Communication, 155
Communicating Services Presents both Challenges and Opportunities, 156
Setting Communication Objectives, 163
The Marketing Communications Mix, 164
The Role of Corporate Design, 175
Marketing Communications and the Internet, 176
Conclusion, 180
Review Questions, 180
Application Exercises, 181
Endnotes, 181
7. Positioning Services in Competitive Markets, 184
Focus Underlies the Search for Competitive Advantage, 185
Market Segmentation Forms the Basis for Focused Strategies, 187
Service Attributes and Levels, 188
Positioning Distinguishes a Brand from Its Competitors, 191
Internal, Market, and Competitor Analyses, 196
Using Positioning Maps to Plot Competitive Strategy, 199
Changing Competitive Positioning, 204
Conclusion, 204
Review Questions, 205
Application Exercises, 205
Endnotes, 205
Readings, 207
The Health Travellers, 207
The Strategic Levers of Yield Management, 211
Fees! Fees! Fees!, 220
Best Practice: Defensive Marketing: How a Strong Incumbent Can Protect Its Position, 225
Deciding Whom to Fight For, 227
III. Managing the Customer Interface, 230
8. Designing and Managing Service Processes, 232
Blueprinting Services to Create Valued Experiences and Productive Operations, 233
Service Process Redesign, 242
The Customer as Co-producer, 245
Dysfunctional Customer Behavior Disrupts Service Processes, 250
Conclusion, 257
Review Questions, 257
Application Exercises, 258
Endnotes, 258
9. Balancing Demand and Productive Capacity, 260
Fluctuations in Demand Threaten Service Productivity, 261
Many Service Organizations Are Capacity-Constrained, 262
Patterns and Determinants of Demand, 266
Demand Levels Can Be Managed, 268
Inventory Demand Through Waiting Lines and Reservations, 273
Minimize Perceptions of Waiting Time, 279
Create an Effective Reservations System, 281
Conclusion, 285
Study Questions, 286
Application Exercises, 286
Endnotes, 286
10. Crafting the Service Environment, 288
What Is the Purpose of Service Environments?, 289
Understanding Consumer Responses to Service Environments, 291
Dimensions of the Service Environment, 295
Putting It All Together, 304
Conclusion, 308
Review Questions, 308
Application Exercises, 308
Endnotes, 308
11. Managing People for Service Advantage, 310
Service Employees Are Crucially Important, 311
Front-Line Work Is Difficult and Stressful, 313
Cycles of Failure, Mediocrity, and Success, 316
Human Resoures Management — How to Get It Right, 321
Service Leadership and Culture, 335
Conclusion, 338
Review Questions, 339
Application Exercises, 339
Endnotes, 339
Readings, 342
Kung-Fu Service Development at Singapore Airlines, 342
Getting More from Call Centers: Used Properly, They Can Be Strategic Assets, 346
How to Lead the Customer Experience, 352
IV. Implementing Profitable Service Strategies, 356
12. Managing Relationships and Building Loyalty, 358
The Search for Customer Loyalty, 359
Understanding the Customer–Firm Relationship, 363
The Wheel of Loyalty, 365
Building a Foundation for Loyalty, 366
Creating Loyalty Bonds, 373
Strategies for Reducing Customer Defections, 379
CRM: Customer Relationship Management, 381
Conclusion, 386
Review Questions, 386
Application Exercises, 386
Endnotes, 387
13. Achieving Service Recovery and Obtaining Customer Feedback, 390
Customer Complaining Behavior, 391
Customer Responses to Effective Service Recovery, 394
Principles of Effective Service Recovery Systems, 397
Service Guarantees, 400
Discouraging Abuse and Opportunistic Behavior, 405
Learning from Customer Feedback, 406
Conclusion, 412
Review Questions, 412
Application Exercises, 412
Endnotes, 413
14. Improving Service Quality and Productivity, 416
Integrating Service Quality and Productivity Strategies, 417
What Is Service Quality?, 418
The Gaps Model — A Conceptual Tool to Identify and Correct Service Quality Problems, 424
Measuring and Improving Service Quality, 425
Defining and Measuring Productivity, 433
Improving Service Productivity, 435
Conclusion, 441
Review Questions, 441
Application Exercises, 442
Appendix: Systematic Approaches to Productivity and Quality Improvement and to Process Standardization, 442
Endnotes, 444
15. Organizing for Change Management and Service Leadership, 446
Effective Marketing Lies at the Heart of Value Creation, 447
Integrating Marketing, Operations, and Human Resources, 450
Creating a Leading Service Organization, 452
In Search of Human Leadership, 456
Change Management, 462
Conclusion, 469
Review Questions, 469
Application Exercises, 469
Endnotes, 470
Readings, 471
Why Service Stinks, 471
Creating New Markets Through Service Innovation, 478
The One Number You Need to Grow, 485
Cases, 492
Case 1. Susan Munro, Service Consumer, 492
Study Questions, 493
Case 2. Four Customers in Search of Solutions, 494
Winston Chen, 494
Marie Portillo, 494
Eleanor Vanderbilt, 494
Richard Robbins, 494
Study Questions, 494
Case 3. Dr. Beckett’s Dental Office, 495
Management Comes to Dentistry, 495
Redesigning the Service Delivery System, 495
The Biggest Challenge, 497
Study Questions, 497
Case 4. Starbucks: Delivering Customer Service, 498
Company Background, 498
The Starbucks Value Proposition, 499
Delivering on Service, 502
Competition, 503
Caffeinating the World, 503
Service Innovation, 506
Starbucks’ Market Research: Trouble Brewing?, 506
Rediscovering the Starbucks Customer, 508
Endnotes, 510
Study Questions, 510
Case 5. Giordano: Positioning for International Expansion, 511
Company Background, 512
Product Positioning, 515
Giordano’s Growth Strategy, 518
Study Questions, 519
Case 6. Aussie Pooch Mobile, 520
Company Background, 520
The Australian Market, 523
Franchising Strategy at Aussie Pooch Mobile, 526
Marketing and Competition, 528
Developing a Strategy for the Future, 530
Study Questions, 531
Case 7. Jollibee Foods Corporation, 532
Jollibee: The Early Years, 532
Marketing, Operations, and Human Resources, 534
International Operations, 537
References, 538
Study Questions, 539
Case 8. The Accra Beach Hotel: Block Booking of Capacity During a Peak Period, 540
The Hotel, 540
Hotel Performance, 541
The West Indies Cricket Board, 543
Study Questions, 544
Case 9. Sullivan Ford Auto World, 545
The Sullivan Family, 545
The Dealership, 546
Outlook, 547
Customer Survey Results, 547
Options, 548
An Unwelcome Disturbance, 548
Study Questions, 549
Case 10. CompuMentor and the DiscounTech.org Service: Creating an Earned-Income Venture for a Nonprofit Organization, 550
CompuMentor, 550
The Nonprofit Market, 552
DiscounTech, 552
Future Plans Through FY 2005, 559
Appendix A, 561
Appendix B: Findings from Online Survey of DiscounTech Users: September 2002, 562
Case 11. Dr. Mahalee Goes to London, 567
Study Questions, 568
Case 12. Menton Bank, 569
The New Focus on Customer Service at Menton Bank, 569
Customer Service Issues, 570
Human Resources, 570
Appendix: Menton Bank: Job Descriptions for Customer Service Staff in Branches, 574
Study Questions, 576
Case 13. Red Lobster, 577
Peer Review at Darden Industries, 577
The Evidence, 577
The Panel Deliberates, 578
Study Questions, 578
Case 14. Hilton HHonors Worldwide: Loyalty Wars , 579
Loyalty Marketing Programs, 579
The Hotel Industry, 579
Marketing the Hilton Brand, 582
The Starwood Announcement, 587
Endnotes, 589
Study Questions, 589
Case 15. The Accellion Service Guarantee, 590
Study Questions, 591
Case 16. Shouldice Hospital Limited (Abridged), 592
History, 592
The Shouldice Method, 592
The Patients’ Experience, 593
The Nurses’ Experience, 596
The Doctors’ Experience, 596
The Facility, 597
Administration, 597
The Market, 599
Problems and Plans, 599
Endnotes, 601
Study Questions, 601
Case 17. Massachusetts Audubon Society, 602
History of the Audubon Movement, 602
Evolution of Mass Audubon, 603
Organization, 605
The Resources Division, 607
Communication Strategy Task Force, 610
Creating a New Communications Program, 612
Appendix: Profiles of Selected Environmental Organizations, 613
Study Questions, 615
Case 18. TLContact: CarePages Service (A), 616
The Company, 616
History: Genesis of an Idea, 618
An Evolving Marketing Strategy, 620
Planning the Agenda for the Board Meeting, 624
Study Questions, 625
Glossary of Service Marketing and Management Terms, 625
Name Index, I-1-1
Subject Index, I-2-1

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