Services Marketing: People, Technology, Strategy (Ninth Edition)
684
Services Marketing: People, Technology, Strategy (Ninth Edition)
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Overview
Product Details
| ISBN-13: | 9781944659820 |
|---|---|
| Publisher: | World Scientific (Us) |
| Publication date: | 10/28/2021 |
| Pages: | 684 |
| Product dimensions: | 8.43(w) x 10.94(h) x 0.94(d) |
Table of Contents
About the Authors xiii
Preface xiv
Acknowledgements xvi
Part I Understanding Service Products, Markets, and Customers 2
1 Creating Value in the Service Economy 4
Opening Vignette 5
Introduction to the World of Services Marketing 5
Why Study Services? 7
Services Dominate the Global Economy 7
Most New Jobs are Generated by Services 8
Understanding Services Offers Personal Competitive Advantage 9
What are the Principal Industries of the Service Sector? 11
Contribution to Gross Domestic Product 11
Powerful Forces are Transforming Service Markets 12
Business-to-Business Services as a Core Engine of Economic Development 14
Outsourcing and Offshoring Often Work in Tandem 15
What are Services? 16
The Historical View 16
Benefits Without Ownership 16
Defining Services 18
Service Products versus Customer Service and After-Sales Service 18
Four Broad Categories of Services - A Process Perspective 19
People Processing 19
Possession Processing 20
Mental Stimulus Processing 21
Information Processing 22
Services Pose Distinct Marketing Challenges 22
The 7 Ps of Services Marketing 24
The Traditional Marketing Mix Applied to Services 24
Product Elements 24
Place and Time 25
Price and Other User Outlays 26
Promotion and Education 26
The Extended Services Marketing Mix for Managing the Customer Interface 27
Process 27
Physical Environment 28
People 28
Marketing Must be Integrated with Other Management Functions 28
The Service-Profit Chain 30
A Framework for Developing Effective Service Marketing Strategies 31
Conclusion 32
2 Understanding Service Consumers 40
Opening Vignette 41
Susan Munro, Service Consumer 41
The Three-Stage Model of Service Consumption 42
Prepurchase Stage 42
Need Awareness 42
Information Search 42
Evaluation of Alternative Services 42
Purchase Decision 52
Service Encounter Stage 53
Service Encounters are "Moments of Truth" 53
Service Encounters Range from High Contact to Low Contact 54
The Servuction System 55
Theater as Metaphor for Service Delivery 57
Role and Script Theories 58
Perceived Control Theory 60
Post-Encounter Stage 61
Customer Satisfaction 61
Service Quality 63
Customer Loyalty 65
Conclusion 68
3 Positioning Services in Competitive Markets 76
Opening Vignette 77
Positioning a Chain of Childcare Centers Away from the Competition 77
Customer-Driven Services Marketing Strategy 78
Customer, Competitor, and Company Analysis (3 Cs) 78
Segmentation, Targeting, and Positioning (STP) 80
Segmenting Service Markets 81
Important versus Determinant Service Attributes 82
Segmentation Based on Service Levels 83
Targeting Service Markets 84
Achieving Competitive Advantage Through Focus 84
Principles of Positioning Services 89
Using Positioning Maps to Plot Competitive Strategy 90
An Example of Applying Positioning Maps to the Hotel Industry 90
Mapping Future Scenarios to Identify Potential Competitive Responses 92
Positioning Charts Help Executives Visualize Strategy 94
Positioning Digital Services and Platforms 94
Attributes of Digital Service Available for Positioning 94
Ecosystem Orchestration and Governance 96
Direct and Indirect Network Effects 96
Developing an Effective Positioning Strategy 98
Conclusion 99
Part II Applying the 4 Ps of Marketing to Services 104
4 Developing Service Products and Brands 106
Opening Vignette 107
Understanding Service Products 107
What is a Service Product? 108
What are the Benefits of Well-Developed Service Products? 108
Creating Service Products 110
The Flower of Service 110
Facilitating Supplementary Services 111
Enhancing Supplementary Services 114
Managing the Flower of Service 118
Branding Services 119
Service Brand Architecture at the Corporate Level 119
Branding Service Products and Experiences 121
Branding Service Levels - Service Tiering 123
Building Brand Equity 124
Delivering Branded Service Experiences 125
New Service Development 125
A Hierarchy of New Service Categories 126
Design Thinking in New Service Development 130
Achieving Success in New Service Development 130
Conclusion 131
5 Distributing Services Through Physical and Electronic Channels 138
Opening Vignette 139
Being Global in an Instant? … Or Does It Take Forever? 139
Distribution in a Services Context 140
What is Being Distributed? 140
How Should a Service be Distributed? 140
Customers Visit the Service Site 142
Service Providers Go to Their Customers 142
The Service Transaction is Conducted Remotely 143
Channel Preferences Vary Among Customers 146
Channel Integration is Key 147
Where Should a Service Facility be Located? 148
Strategic Location Considerations 148
Tactical Location Considerations 148
Locational Constraints 149
Innovative Location Strategies 150
When Should Service he Delivered? 151
The Role of Intermediaries 153
Benefits and Costs of Alternative Distribution Channels 153
Franchising 155
Other Intermediaries 157
The Challenge of Distribution in Large Domestic Markets 157
Distributing Services Internationally 158
Factors Favoring Adoption of Transnational Strategies 158
How Does the Nature of a Service Affect International Distribution? 161
Barriers to International Trade in Services 162
How to Enter International Markets? 164
Conclusion 165
6 Service Pricing and Revenue Management 172
Opening Vignette 173
Dynamic Pricing is Here to Stay 173
Effective Pricing is Central to Financial Success 174
Objectives for Establishing Prices 174
Pricing Strategy Stands on Three Foundations 174
Cost-Based Pricing 177
Value-Based Pricing 179
Reducing Related Monetary and Nonmonetary Costs 180
Competition-Based Pricing 182
Revenue Management: What It is and How It Works 184
Reserving Capacity for High-Yield Customers 185
How Can We Measure the Effectiveness of a Firm's Revenue Management? 187
How Does Competitors' Pricing Affect Revenue Management? 187
Price Elasticity 187
Designing Rate Fences 188
Fairness and Ethical Concerns in Service Pricing 190
Service Pricing is Complex 192
Piling on the Fees 193
Designing Fairness into Revenue Management 195
Putting Service Pricing into Practice 197
How Much to Charge? 197
What Should be the Specified Basis for Pricing? 197
Who Should Collect Payment and Where Should Payment be Made? 201
When Should Payment be Made? 201
How Should Payment be Made? 202
How Should Prices be Communicated to the Target Markets? 204
Conclusion 204
7 Service Marketing Communications 210
Opening Vignette 211
Oscar is Having the Time of His Life 211
Integrated Service Marketing Communications 212
Defining the Target Audience 214
Specifying Service Communication Objectives 214
Strategic Service Communication Objectives 214
Tactical Service Communication Objectives 215
Promote Tangible Cues to Communicate Quality 217
Crafting Effective Service Communication Messages 218
Problems of Intangibility 219
Overcoming the Problems of Intangibility 220
The Service Marketing Communications Mix 223
Service Communications Media and Their Effectiveness 223
Communications Originate from Different Sources 225
Messages Transmitted Through Traditional Marketing Channels 225
Messages Transmitted Online 229
Messages Transmitted Through Service Delivery Channels 235
Messages Originating from Outside the Organization 238
Timing Decisions of Service Marketing Communications 243
Budget Decisions and Program Evaluation 243
Ethical and Consumer Privacy Issues in Communications 244
The Role of Corporate Design 246
Integrated Marketing Communications 247
Conclusion 248
Part III Managing the Customer Interface 258
8 Designing Service Processes 260
Opening Vignette 261
Redesigning Customer Service in a Small Hospital Practice 261
The Redesigned Service Model 261
What is a Service Process? 262
Designing and Documenting Service Processes 262
Developing a Service Blueprint 265
Blueprinting the Restaurant Experience: A Three-Act Performance 266
Identifying Fail Points 272
Fail-Proofing to Design Fail Points Out of Service Processes 273
Setting Service Standards and Targets 274
Consumer Perceptions and Emotions in Service Process Design 275 Service Process Redesign 276
Service Process Redesign Should Improve Both Quality and Productivity 277
Customer Participation in Service Processes 278
Levels of Customer Participation 280
Customers as Service Co-Creators 280
Reducing Service Failures Caused by Customers 281
Self-Service Technologies, Service Robots, and Artificial Intelligence 282
Customer Benefits and Adoption of Self-Service Technology 283
Customer Disadvantages and Barriers of Adoption of Self-Service Technology 285
Assessing and Improving Self-Service Technologies 285
Managing Customers' Reluctance to Change 286
Service Robots in the Frontline 287
Beginning of the Service Revolution 287
What are Service Robots and How Do They Differ from Traditional Self-Service Technologies? 288
What Services Will Robots Deliver? 289
Conclusion 293
3 Balancing Demand and Capacity 302
Opening Vignette 303
Summer on the Ski Slopes 303
Fluctuations in Demand Threaten Profitability 303
From Excess Demand to Excess Capacity 303
Building Blocks of Managing Capacity and Demand 304
Defining Productive Service Capacity 306
Managing Capacity 307
Stretching Capacity Levels 307
Adjusting Capacity to Match Demand 308
Understand Patterns of Demand 309
Managing Demand 311
Marketing Mix Elements Can be Used to Shape Demand Patterns 312
Inventory Demand Through Waiting Lines and Queuing Systems 314
Waiting is a Universal Phenomenon 314
Managing Waiting Lines 315
Different Queue Configurations 315
Virtual Waits 318
Queuing Systems Can be Tailored to Market Segments 319
Customer Perceptions of Waiting Time 319
The Psychology of Waiting Time 319
Inventory Demand Through Reservation Systems 321
Reservation Strategies Should Focus on Yield 322
Create Alternative Use for Otherwise Wasted Capacity 323
Conclusion 323
10 Crafting the Service Environment 328
Opening Vignette 329
The Guggenheim Museum in Bilbao 329
Service Environments - An Important Element of the Services Marketing Mix 330
What is the Purpose of Service Environments? 330
Shape Customers' Service Experiences and Behaviors 330
Signal Quality and Position, Differentiate, and Strengthen the Brand 330
Core Component of the Value Proposition 333
Facilitate the Service Encounter and Enhance Productivity 334
The Theory Behind Consumer Responses to Service Environments 335
Feelings are a Key Driver of Customer Responses to Service Environments 335
The Servicescape Model - An Integrative Framework 337
Dimensions of the Service Environment 338
The Effect of Ambient Conditions 339
Music 339
Scent 341
Color 342
Spatial Layout and Functionality 345
Signs, Symbols, and Artifacts 345
People are Part of the Service Environment Too 347
Putting It All Together 348
Design with a Holistic View 348
Design from a Customer's Perspective 350
Tools to Guide Servicescape Design 352
Conclusion 352
11 Managing People for Service Advantage 358
Opening Vignette 359
Cora Griffith - The Outstanding Waitress 359
Service Employees are Extremely Important 360
Service Personnel as a Source of Customer Loyalty and Competitive Advantage 360
The Frontline in Low-Contact Services 362
Frontline Work is Difficult and Stressful 363
Service Jobs are Boundary Spanning Positions 363
Sources of Role Conflict and Role Stress 364
Emotional Labor 365
Service Sweatshops? 366
Cycles of Failure, Mediocrity, and Success 368
The Cycle of Failure 368
The Cycle of Mediocrity 371
The Cycle of Success 372
Human Resources Management - How to Get It Right? 373
Hire the Right People 374
Tools to Identify the Best Candidates 375
Train Service Employees Actively 379
Internal Communications to Shape the Service Culture and Behaviors 382
Empower the Frontline 382
Build High-Performance Service-Delivery Teams 384
Integrate Teams Across Departments and Functional Areas 387
Motivate and Energize People 388
The Role of Labor Unions 390
Service Culture, Climate, and Leadership 391
Building a Service-Oriented Culture 391
A Climate for Service 391
Qualities of Effective Leaders in Service Organizations 392
Leadership Styles, Focus on the Basics, and Role Modeling 392
Focusing the Entire Organization on the Frontline 393
Conclusion 395
Part IV Developing Customer Relationships 404
12 Managing Relationships and Building Loyalty 406
Opening Vignette 407
Caesars Entertainment's Customer Relationship Management 407
The Search for Customer Loyalty 407
Why is Customer Loyalty so Important to a Firm's Profitability? 409
Assessing the Value of a Loyal Customer 411
Worksheet for Calculating Customer Lifetime Value 412
The Gap Between Actual and Potential Customer Value 413
Why are Customers Loyal? 413
The Wheel of Loyalty 414
Building a Foundation for Loyalty 414
Target the Right Customers 414
Search for Value, Not Just Volume 416
Manage the Customer Base Through Effective Tiering of Service 418
Customer Satisfaction and Service Quality are Prerequisites for Loyalty 420
Strategies for Developing Loyalty Bonds with Customers 421
Deepen the Relationship 422
Encourage Loyalty Through Financial and Nonfinancial Rewards 422
Build Higher-Level Bonds 425
Strategies for Reducing Customer Switching 427
Analyze Customer Switching and Monitor Declining Accounts 427
Address Key Churn Drivers 427
Implement Effective Complaint Handling and Service Recovery Procedures 428
Increase Switching Costs 428
Enablers of Customer Loyalty Strategies 429
Customer Loyalty in a Transactional Marketing Context 429
Relationship Marketing 429
Creating "Membership-Type" Relationships as Enablers for Loyalty Strategies 429
Customer Relationship Management 431
Common Objectives of CRM Systems 431
What Does a Comprehensive CRM Strategy Include? 432
Common Failures in CRM Implementation 434
How to Get a CRM Implementation Right 435
Conclusion 435
13 Complaint Handling and Service Recovery 442
Opening Vignette 443
Too Little, Too Late-Jet Blue's Service Recovery 443
Customer Complaining Behavior 444
Customer Response Options to Service Failure 444
Understanding Customer Complaining Behavior 446
What Do Customers Expect Once They Have Made a Complaint? 448
Customer Responses to Effective Service Recovery 448
Impact of Effective Service Recovery on Customer Loyalty 449
The Service Recovery Paradox 449
Principles of Effective Service Recovery Systems 450
Make It Easy for Customers to Give Feedback 450
Enable Effective Service Recovery 451
How Generous Should Compensation be? 452
Dealing with Complaining Customers 453
Service Guarantees 456
The Power of Service Guarantees 456
How to Design Service Guarantees 457
Is Full Satisfaction the Best You Can Guarantee? 458
Is It Always Beneficial to Introduce a Service Guarantee? 458
Discouraging Abuse and Opportunistic Customer Behavior 459
Seven Types of Jaycustomers 459
Consequences of Dysfunctional Customer Behavior 465
Dealing with Customer Fraud 465
Conclusion 468
Part V Striving for Service Excellence 476
14 Improving Service Quality and Productivity 478
Opening Vignette 479
Improving Service Quality in a Ferry Company 479
Integrating Service Quality and Productivity Strategies 480
Service Quality, Productivity, and Profitability 480
What is Service Quality? 482
Identifying and Correcting Service Quality Problems 483
The Gaps Model in Service Design and Delivery 483
How to Close Service Quality Gaps? 484
Measuring Service Quality 486
Soft and Hard Service Quality Measures 486
Learning From Customer Feedback 487
Key Objectives of Effective Customer Feedback System 487
Use a Mix of Customer Feedback Collection Tools 489
Analysis, Reporting, and Dissemination of Customer Feedback 493
Hard Measures of Service Quality 494
Tools to Analyze and Address Service Quality Problems 496
Root Cause Analysis: The Fishbone Diagram 496
Pareto Analysis 498
Blueprinting - A Powerful Tool for Identifying Fail Points 499
Return On Quality 499
Assess Costs and Benefits of Quality Initiatives 500
Determine the Optimal Level of Reliability 501
Defining and Measuring Productivity 501
Defining Productivity in a Service Context 502
Measuring Productivity 502
Service Productivity, Efficiency, and Effectiveness 503
Improving Service Productivity 503
Generic Productivity Improvement Strategies 503
Customer-Driven Approaches to Improve Productivity 505
How Productivity Improvements Impact Quality and Value 506
Integration and Systematic Approaches to Improving Service Quality and Productivity 508
Total Quality Management 508
ISO 9000 Certification 508
Six Sigma 508
Malcolm-Baldrige and European Foundation for Quality Management Approaches 510
Which Approach Should a Firm Adopt? 512
Conclusion 513
15 Building a World-Class Service Organization 520
Introduction 521
Customer Satisfaction and Corporate Performance 522
Customer Satisfaction and the Wallet Allocation Rule 523
Creating a World-Class Service Organization 525
From Losers to Leaders: Four Levels of Service Performance 525
Moving to a Higher Level of Performance 530
Cost-Effective Service Excellence 531
Dual Culture Strategy 531
Operations Management Approach 537
Focused Service Factory Strategy 538
Business Models Based on Cost-Effective Service Excellence Pathways 539
Conclusion 540
Part VI Case Studies 546
Case 1 Sullivan Ford Auto World 548
Case 2 Dr. Beckett's Dental Office 549
Case 3 Digital Luxury Services: Tradition versus Innovation in Luxury Fashion 550
Case 4 Uber's Unintended Burdens 553
Case 5 Kiwi Experience 559
Case 6 Revenue Management at The View 560
Case 7 The Accra Beach Hotel: Block Booking of Capacity During a Peak Period 564
Case 8 Aussie Pooch Mobile 565
Case 9 Service Robots in the Frontline: How Will Aarion Bank's Customers Respond? 566
Case 10 Shouldice Hospital Limited (Abridged) 571
Case 11 Singapore Airlines: Managing Human Resources for Cost-Effective Service Excellence 580
Case 12 National Library Board Singapore: Delivering Cost-Effective Service Excellence Through Innovation and People 589
Case 13 Menton Bank 590
Case 14 Starbucks: Delivering Customer Service 591
Case 15 Platform versus Pipeline Business Models: Are Airbnb and Marriot Right to Move into Each Other's Turf? 606
Case 16 Dr. Mahalee Goes to London: Global Client Management 609
Case 17 The Royal Dining Membership Program Dilemma 610
Case 18 What Drives Share of Streaming Video? The Launch of HBO Max 611
Case 19 LUX*: Staging a Service Revolution in a Resort Chain 624
Name Index 640
Subject Index 654