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Overview

Principles of Service Marketing and Management, Second Edition, is designed to complement the materials found in traditional marketing principles texts. It avoids sweeping and often misleading generalizations about services, recognizing explicitly that the differences between specific categories of services (based on the nature of the underlying service process) may be as important to student understanding as the broader differences between goods marketing and services marketing.

Read More Show Less

Product Details

  • ISBN-13: 9780130404671
  • Publisher: Prentice Hall
  • Publication date: 1/28/2002
  • Edition description: 2ND
  • Edition number: 2
  • Pages: 436
  • Product dimensions: 7.97 (w) x 9.99 (h) x 0.90 (d)

Meet the Author

Christopher Lovelock is one of the pioneers of services marketing. Based in Massachusetts, he gives seminars and workshops for managers around the world and also teaches an MBA service marketing course at the Yale School of Management. His distinguished academic career has included 11 years on the faculty of the Harvard Business School and two years as a visiting professor at IMD in Switzerland. He has also held appointments at Berkeley, Stanford, and the Sloan School at MIT, as well as visiting professorships at The University of Queensland in Australia and at both INSEAD and Theseus Institute in France. Christopher obtained a BCom and an MA in economics from the University of Edinburgh, then worked in advertising with the London office of J. Walter Thompson Co. and in corporate planning with Canadian Industries Ltd. in Montreal. Later, he obtained an MBA from Harvard and a PhD from Stanford. Author or coauthor of over 60 articles, more than 100 teaching cases, and 26 books, he serves on the editorial review boards of the International Journal of Service Industry Management, Journal of Service Research, and Service Industries Journal. He is a recipient of the American Marketing Association's Award for Career Contributions to the Services Discipline and a best article award from the Journal of Marketing. He has also been recognized for excellence in case writing and in 2000 won the Business Week European Case Award.

Lauren Wright is a professor and former marketing department chair at California State University Chico. In 1998, she was a visiting faculty fellow at the University of Canterbury in Christchurch, New Zealand.Winner of several awards for outstanding undergraduateteaching, Lauren has been recognized as a Master Teacher at CSU Chico and consults with faculty campus-wide on effective teaching techniques. Her name is listed in the 1998 publication Who's Who Among America's Teachers and Strathmore's Who's Who for 1999-2000. She is past chair of the American Marketing Association's Special Interest Group for Services Marketing (SERVSIG), founded the annual SERVSIG Doctoral Consortium, and has served as research director for the International Service Quality Association. She has published numerous articles on service quality, new service success, business process redesign, and innovative teaching pedagogies and has presented her research findings at many national and international conferences. She holds a BS from the University of Oregon and MBA and PhD degrees from Pennsylvania State University, where she won the Marketing Science Doctoral Dissertation Award for her work on the factors affecting new service success.

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Read an Excerpt

The service sector of the economy can best be characterized by its diversity. No single conceptual model can serve to embrace organizations ranging in size from huge international corporations (in fields such as airlines, banking, insurance, telecommunications, hotel chains, and freight transportation) to locally owned and operated small businesses such as restaurants, laundries, taxis, optometrists, and many business-to-business services. So, the goal of this book is to provide a carefully designed toolbox for service managers, teaching students how different frameworks and analytical procedures can best be used to examine the varied challenges faced by managers in different service settings. WHAT'S NEW IN THE SECOND EDITION?

Responding to reviewer suggestions, new research findings, and continuing rapid changes in technology and the environment of the service sector, the content of the second edition of Principles of Service Marketing and Management incorporates many changes and refinements. The book comprises seventeen chapters, grouped into five parts, each of which is preceded by an overview of the issues to be addressed in the constituent chapters. There are also nine relatively short cases of varying levels of difficulty.

Key changes from the first edition—described in more detail later in this preface—include:

  • A restructuring of chapter sequence and content, plus two new chapters.
  • Significant updating, including the addition of many new examples and research findings.
  • Improved approaches to pedagogy, designed to enhance student learning, including a service decision framework that provides a "roadmap" for the book.
  • Revised and enhanced supplements, including an instructor's manual, enlarged and improved test bank, and more than 200 PowerPoint transparencies.
Target Courses

The text presents an integrated approach to studying services that places marketing issues within a broader general management context. Managers working in service organizations have to understand and acknowledge the close ties that link the marketing, operations, and human resource functions. They also need a realistic understanding of the potential (and limitations) of technology—especially information technology—to facilitate creation and delivery of services. As the experience of the "dot-com" meltdown of 2000-2001 suggests, not every new concept is commercially viable or creates useful value for consumers. With these perspectives in mind, this book has been designed so that instructors can make selective use of chapters and cases to teach courses of different lengths and formats in either Services Marketing or Service Management.

Books are necessarily printed in a linear sequence. However, this text has been designed to give instructors the flexibility to depart from the printed order if they wish. For instance, both Chapter 15, "Employee Roles in Service Organizations," and Chapter 16, "The Impact of Technology on Services," can easily be moved up in the course sequence. Distinguishing Features of the Book

Key features of this book include its strong managerial orientation and strategic focus, use of memorable and relevant conceptual frameworks, references to both recent and classic research findings, use of interesting examples to link theory to practice, and inclusion of nine classroom-tested cases to accompany the text chapters.

Principles of Service Marketing and Management, Second Edition, is designed to complement the materials found in traditional marketing principles texts. It avoids sweeping and often misleading generalizations about services, recognizing explicitly that the differences between specific categories of services (based on the nature of the underlying service process) may be as important to student understanding as the broader differences between goods marketing and services marketing.

The book shows how different technologies—and information technology in particular—are changing the nature of service delivery and can offer innovative ways for service providers and customers to relate to each other (the people side of the business). The text makes use of recent research in such areas as service encounters, customer expectations and satisfaction, loyalty and relationship marketing, service quality, service recovery, managing demand and capacity, productivity improvement in services, pricing and yield management, new service development, technology, and service leadership. New Chapter Content in the Second Edition

Changes and enhancements to the chapters include the following:

  • Use of a new service decision framework, featured in each of the five part openers (and also in Chapters 1 and 2), to provide a roadmap for the book and to highlight the questions that service managers need to ask. This framework is sufficiently flexible to allow instructors to treat topics in different sequences and with different levels of emphasis.
  • Explicit linkage between the service decision framework and the 8Ps model of integrated service management, which modifies elements of the traditional 7Ps framework of service marketing (for instance, describing service delivery systems in terms of "Place, Cyberspace, and Time" instead of the outdated "Place" terminology) and adds Productivity and Quality as linked concepts.
  • Addition of two new chapters, one focusing on technology in services and the other on service leadership.
  • Restructuring of chapter sequence and content, together with better integration between chapters to tighten the linkages between them and facilitate their use in alternative sequences.
  • A revision and updating of all text materials, including addition of numerous examples and references from the period 1999-2001.
  • An enhanced treatment of service pricing, designed to capture student interest and including such topics as activity-based costing, yield management, and introduction of new types of service fees.
  • A more balanced treatment of marketing communication, describing its role in educating service customers in addition to promoting sales.
  • Coverage of technology issues throughout the book, with a thoughtful discussion of the role and potential of Internet and Web applications in the "post-dot-com-meltdown" era, supplemented by in-depth treatment in Chapter 16 of how technological change impacts services.
  • Discussion of ethical issues facing service managers, introduced as appropriate in specific and relevant contexts.
  • Use of international examples throughout the book.
  • Inclusion of references at the end of each chapter.
New and Improved Pedagogical Aids

The Instructor's Resource Manual for the book includes:

  1. Detailed course design and teaching hints, plus sample course outlines.
  2. Chapter-by-chapter teaching suggestions, plus discussion of learning objectives and sample responses to study questions and exercises.
  3. A description of sixteen suggested student exercises and five comprehensive projects (designed for either individual or team use).
  4. Detailed teaching notes for each of the nine cases, plus suggestions for possible chapters with which they might be paired.
  5. More than 200 new and revised PowerPoint transparencies, keyed to each chapter, and contained as electronic files in a CD-ROM.

A new Test Bank features an enlarged and enhanced set of questions for use in quizzes and exams.

The Companion Web site for this book includes:

  1. An online study guide and additional resources for students.
  2. Faculty resources including an online version of the Instructor's Manual and PowerPoints.
ACKNOWLEDGMENTS

Over the years, many colleagues in both the academic and business worlds have provided us with valuable insights into the management and marketing of services, through their writings and in conference or seminar discussions. We have also benefited greatly from in-class and after-class discussions with our students and from their feedback on assignments and exercises.

It's with sadness that we acknowledge the contributions of two friends who have died recently, the late Eric Langeard of the Universite d'Aix-Marseille III in France and the late Liam Glynn of University College, Dublin, Ireland. Both played an important role in stimulating international debate among service scholars and are much missed.

Although it's impossible to mention everyone who has influenced our thinking, we particularly want to express our appreciation to the following individuals: John Bateson of Gemini Consulting; Leonard Berry of Texas A&M University; Mary Jo Bitner and Steven Brown of Arizona State University; David Bowen of the Thunderbird Graduate School of International Management; Richard Chase of the University of Southern California; John Deighton, James Heskett, Theodore Levitt, Earl Sasser, and Leonard Schlesinger, all currently or formerly of Harvard Business School; Pierre Eiglier of Universite d' Aix-Marseille III; Ray Fisk of the University of New Orleans; Christian Gronroos of the Swedish School of Economics in Finland; Stephen Grove of Clemson University; Evert Gummesson of Stockholm University; Christopher Hart of Spire; Denis Lapert of Reims Management School; Jean-Claude Larreche of INSEAD; Barbara Lewis of the Manchester School of Management; David Maister of Maister Associates; "Parsu" Parasuraman of the University of Miami; Paul Patterson of the University of New South Wales; Fred Reichheld of Bain & Co; Javier Reynoso of ITESM, Monterrey, Mexico; Roland Rust and Benjamin Schneider of the University of Maryland; Sandra Vandermerwe of Imperial College, London; Rhett Walker of the Royal Melbourne Institute of Technology; Charles Weinberg of the University of British Columbia; Jochen Wirtz of the National University of Singapore; and Valarie Zeithaml of the University of North Carolina.

Warm thanks are due, too, to Tim Lovelock, who helped design and prepare many of the PowerPoint graphics developed as teaching aids. And, of course, we're very appreciative of all the hard work put in by the editing and production staff in helping to transform our manuscript into a handsome published text. They include Renata Butera and Terri O'Prey. Finally, we're most grateful to our editor, Bruce Kaplan, for his friendly support and encouragement.

Christopher Lovelock
Lauren Wright

Read More Show Less

Table of Contents

Preface xvi
Acknowledgments xviii
Part 1 Understanding Services 2
Chapter 1 Why Study Services? 4
Services in the Modern Economy 6
Marketing Services Versus Physical Goods 9
An Integrated Approach to Service Management 13
The Evolving Environment of Services 15
A Structure for Making Service Management Decisions 22
Chapter 2 Understanding Service Processes 26
How do Services Differ from One Another? 28
Service as a Process 32
Different Processes Pose Distinctive Management Challenges 38
Part 2 The Service Customer 48
Chapter 3 Managing Service Encounters 50
Where Does the Customer Fit in the Service Operation? 52
Managing Service Encounters 55
Service as a System 60
The Customer as Corproducer 69
Chapter 4 Customer Behavior in Service Environments 74
Focusing on the Right Customers 76
Understanding Customer Needs and Expectations 78
How Customers Evaluate Service Performances 83
The Purchase Process for Services 88
Mapping the Customer's Service Experience 91
Chapter 5 Relationship Marketing and Customer Loyalty 96
Targeting the Right Customers 98
From Transactions to Relationships 99
Creating and Maintaining Valued Relationships 103
The Problem of Customer Misbehavior 110
Chapter 6 Complaint Handling and Service Recovery 118
Consumer Complaining Behavior 120
Impact of Service Recovery Efforts on Customer Loyalty 127
Service Guarantees 130
Part 3 Service Marketing Strategy 138
Chapter 7 The Service Product 140
The Service Offering 142
Identifying and Classifying Supplementary Services 143
Service Design 153
Reengineering Service Processes 162
Chapter 8 Pricing Strategies for Services 166
Paying for Service: the Customer's Perspective 168
Foundations of Pricing Strategy 175
Pricing and Demand 179
Putting Pricing Strategies into Practice 182
Chapter 9 Promotion and Education 190
The Role of Marketing Communication 192
Communication Strategies for Services 193
The Marketing Communications Mix 199
Marketing Communications and the Internet 207
Chapter 10 Service Positioning and Design 214
The Need for Focus 216
Creating A Distinctive Service Strategy 217
Service Positioning 219
Perceptual Maps as Positioning Tools 221
Creating and Promoting Competitive Advantage 227
New Service Development 230
Part 4 Service Delivery Issues 238
Chapter 11 Creating Delivery Systems in Place, Cyberspace, and Time 240
Evaluating Alternative Delivery Channels 242
Options for Service Delivery 244
Physical Evidence and the Servicescape 247
Place, Cyberspace, and Time Decisions 251
The Role of Intermediaries 258
Chapter 12 Creating Value Through Productivity and Quality 262
Minding the Service Ps and Qs 264
Understanding Service Quality 265
Customer Satisfaction 272
Productivity Issues for Service Firms 279
Chapter 13 Balancing Demand and Capacity 286
The Ups and Downs of Demand 288
Measuring and Managing Capacity 289
Understanding the Patterns and Determinants of Demand 292
Strategies for Managing Demand 296
Chapter 14 Managing Customer Waiting Lines and Reservations 302
Waiting to Get Processed 304
Minimizing the Perceived Length of the Wait 308
Calculating Wait Times 311
Reservations 314
Appendix Poisson Distribution Table 319
Part 5 Integrating Marketing, Operations, and Human Resources 320
Chapter 15 Employee Roles in Service Organizations 322
Human Resources: An Asset Worth Managing 324
Human Resource Issues in High-Contact Environments 324
Job Design and Recruitment 327
Empowerment of Employees 331
Service Jobs as Relationships 333
Human Resources Management in a Multicultural Context 340
Chapter 16 The Impact of Technology on Services 344
Technology in Service Environments 346
It and the Augmented Service Product 350
The Digital Revolution 354
Service Strategy and the Internet 358
Guidelines for Effective use of Technology 363
Chapter 17 Organizing for Service Leadership 368
The Search for Synergy in Service Management 370
Creating a Leading Service Organization 376
In Search of Leadership 380
Cases 392
Glossary 423
Credits 429
Index 431
Read More Show Less

Preface

The service sector of the economy can best be characterized by its diversity. No single conceptual model can serve to embrace organizations ranging in size from huge international corporations (in fields such as airlines, banking, insurance, telecommunications, hotel chains, and freight transportation) to locally owned and operated small businesses such as restaurants, laundries, taxis, optometrists, and many business-to-business services. So, the goal of this book is to provide a carefully designed toolbox for service managers, teaching students how different frameworks and analytical procedures can best be used to examine the varied challenges faced by managers in different service settings.

WHAT'S NEW IN THE SECOND EDITION?

Responding to reviewer suggestions, new research findings, and continuing rapid changes in technology and the environment of the service sector, the content of the second edition of Principles of Service Marketing and Management incorporates many changes and refinements. The book comprises seventeen chapters, grouped into five parts, each of which is preceded by an overview of the issues to be addressed in the constituent chapters. There are also nine relatively short cases of varying levels of difficulty.

Key changes from the first edition—described in more detail later in this preface—include:

  • A restructuring of chapter sequence and content, plus two new chapters.
  • Significant updating, including the addition of many new examples and research findings.
  • Improved approaches to pedagogy, designed to enhance student learning, including a service decision framework that provides a "roadmap" for thebook.
  • Revised and enhanced supplements, including an instructor's manual, enlarged and improved test bank, and more than 200 PowerPoint transparencies.

Target Courses

The text presents an integrated approach to studying services that places marketing issues within a broader general management context. Managers working in service organizations have to understand and acknowledge the close ties that link the marketing, operations, and human resource functions. They also need a realistic understanding of the potential (and limitations) of technology—especially information technology—to facilitate creation and delivery of services. As the experience of the "dot-com" meltdown of 2000-2001 suggests, not every new concept is commercially viable or creates useful value for consumers. With these perspectives in mind, this book has been designed so that instructors can make selective use of chapters and cases to teach courses of different lengths and formats in either Services Marketing or Service Management.

Books are necessarily printed in a linear sequence. However, this text has been designed to give instructors the flexibility to depart from the printed order if they wish. For instance, both Chapter 15, "Employee Roles in Service Organizations," and Chapter 16, "The Impact of Technology on Services," can easily be moved up in the course sequence.

Distinguishing Features of the Book

Key features of this book include its strong managerial orientation and strategic focus, use of memorable and relevant conceptual frameworks, references to both recent and classic research findings, use of interesting examples to link theory to practice, and inclusion of nine classroom-tested cases to accompany the text chapters.

Principles of Service Marketing and Management, Second Edition, is designed to complement the materials found in traditional marketing principles texts. It avoids sweeping and often misleading generalizations about services, recognizing explicitly that the differences between specific categories of services (based on the nature of the underlying service process) may be as important to student understanding as the broader differences between goods marketing and services marketing.

The book shows how different technologies—and information technology in particular—are changing the nature of service delivery and can offer innovative ways for service providers and customers to relate to each other (the people side of the business). The text makes use of recent research in such areas as service encounters, customer expectations and satisfaction, loyalty and relationship marketing, service quality, service recovery, managing demand and capacity, productivity improvement in services, pricing and yield management, new service development, technology, and service leadership.

New Chapter Content in the Second Edition

Changes and enhancements to the chapters include the following:

  • Use of a new service decision framework, featured in each of the five part openers (and also in Chapters 1 and 2), to provide a roadmap for the book and to highlight the questions that service managers need to ask. This framework is sufficiently flexible to allow instructors to treat topics in different sequences and with different levels of emphasis.
  • Explicit linkage between the service decision framework and the 8Ps model of integrated service management, which modifies elements of the traditional 7Ps framework of service marketing (for instance, describing service delivery systems in terms of "Place, Cyberspace, and Time" instead of the outdated "Place" terminology) and adds Productivity and Quality as linked concepts.
  • Addition of two new chapters, one focusing on technology in services and the other on service leadership.
  • Restructuring of chapter sequence and content, together with better integration between chapters to tighten the linkages between them and facilitate their use in alternative sequences.
  • A revision and updating of all text materials, including addition of numerous examples and references from the period 1999-2001.
  • An enhanced treatment of service pricing, designed to capture student interest and including such topics as activity-based costing, yield management, and introduction of new types of service fees.
  • A more balanced treatment of marketing communication, describing its role in educating service customers in addition to promoting sales.
  • Coverage of technology issues throughout the book, with a thoughtful discussion of the role and potential of Internet and Web applications in the "post-dot-com-meltdown" era, supplemented by in-depth treatment in Chapter 16 of how technological change impacts services.
  • Discussion of ethical issues facing service managers, introduced as appropriate in specific and relevant contexts.
  • Use of international examples throughout the book.
  • Inclusion of references at the end of each chapter.

New and Improved Pedagogical Aids

The Instructor's Resource Manual for the book includes:

  1. Detailed course design and teaching hints, plus sample course outlines.
  2. Chapter-by-chapter teaching suggestions, plus discussion of learning objectives and sample responses to study questions and exercises.
  3. A description of sixteen suggested student exercises and five comprehensive projects (designed for either individual or team use).
  4. Detailed teaching notes for each of the nine cases, plus suggestions for possible chapters with which they might be paired.
  5. More than 200 new and revised PowerPoint transparencies, keyed to each chapter, and contained as electronic files in a CD-ROM.

A new Test Bank features an enlarged and enhanced set of questions for use in quizzes and exams.

The Companion Web site for this book includes:

  1. An online study guide and additional resources for students.
  2. Faculty resources including an online version of the Instructor's Manual and PowerPoints.

ACKNOWLEDGMENTS

Over the years, many colleagues in both the academic and business worlds have provided us with valuable insights into the management and marketing of services, through their writings and in conference or seminar discussions. We have also benefited greatly from in-class and after-class discussions with our students and from their feedback on assignments and exercises.

It's with sadness that we acknowledge the contributions of two friends who have died recently, the late Eric Langeard of the Universite d'Aix-Marseille III in France and the late Liam Glynn of University College, Dublin, Ireland. Both played an important role in stimulating international debate among service scholars and are much missed.

Although it's impossible to mention everyone who has influenced our thinking, we particularly want to express our appreciation to the following individuals: John Bateson of Gemini Consulting; Leonard Berry of Texas A&M University; Mary Jo Bitner and Steven Brown of Arizona State University; David Bowen of the Thunderbird Graduate School of International Management; Richard Chase of the University of Southern California; John Deighton, James Heskett, Theodore Levitt, Earl Sasser, and Leonard Schlesinger, all currently or formerly of Harvard Business School; Pierre Eiglier of Universite d' Aix-Marseille III; Ray Fisk of the University of New Orleans; Christian Gronroos of the Swedish School of Economics in Finland; Stephen Grove of Clemson University; Evert Gummesson of Stockholm University; Christopher Hart of Spire; Denis Lapert of Reims Management School; Jean-Claude Larreche of INSEAD; Barbara Lewis of the Manchester School of Management; David Maister of Maister Associates; "Parsu" Parasuraman of the University of Miami; Paul Patterson of the University of New South Wales; Fred Reichheld of Bain & Co; Javier Reynoso of ITESM, Monterrey, Mexico; Roland Rust and Benjamin Schneider of the University of Maryland; Sandra Vandermerwe of Imperial College, London; Rhett Walker of the Royal Melbourne Institute of Technology; Charles Weinberg of the University of British Columbia; Jochen Wirtz of the National University of Singapore; and Valarie Zeithaml of the University of North Carolina. Warm thanks are due, too, to Tim Lovelock, who helped design and prepare many of the PowerPoint graphics developed as teaching aids. And, of course, we're very appreciative of all the hard work put in by the editing and production staff in helping to transform our manuscript into a handsome published text. They include Renata Butera and Terri O'Prey. Finally, we're most grateful to our editor, Bruce Kaplan, for his friendly support and encouragement.

Christopher Lovelock
Lauren Wright

Read More Show Less

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