Essentials of Services Marketing

Cover
Title page
Copyright
Dedication
About the Author
Brief Contents
Contents
Preface
Acknowledgments
Part I: Understanding Service Markets, Products, and Customers
Chapter 1. Introduction to Services Marketing
Why Study Services
Services Dominate the Global Economy
Most New Jobs Are Generated by Services
Understanding Services Offers Personal Competitive Advantage
What Are the Principal Industries of the Service Sector?
Contribution to Gross Domestic Product
Powerful Forces Are Transforming Service Markets
B2B Services as a Core Engine of Economic Development
What Are Services?
Benefits without Ownership
Defining Services
Service Products versus Customer Service and After-Sales Service
Four Broad Categories of Services—A Process Perspective
People Processing
Possession Processing
Mental Stimulus Processing
Information Processing
Services Pose Distinct Marketing Challenges
The 7 Ps of Services Marketing
The Traditional Marketing Mix Applied to Services
The Extended Services Marketing Mix for Managing the Customer Interface
Marketing Must Be Integrated with Other Management Functions
The Service–Profit Chain
A Framework for Developing Effective Service Marketing Strategies
Chapter 2. Understanding Service Consumers
The Three-Stage Model of Service Consumption
Pre-Purchase Stage
Need Awareness
Information Search
Evaluation of Alternative Services
Purchase Decision
Service Encounter Stage
Service Encounters Are “Moments of Truth”
The Servuction System
Theater as Metaphor for Service Delivery
Role and Script Theories
Perceived Control Theory
Post-Encounter Stage
Customer Satisfaction
Service Quality
Customer Loyalty
Chapter 3. Positioning Services in Competitive Markets
Customer-Driven Services Marketing Strategy
Customer, Competitor, and Company Analysis (3 Cs)
Segmentation, Targeting, and Positioning (STP)
Segmenting Service Markets
Important versus Determinant Service Attributes
Segmenting Based on Service Levels
Targeting Service Markets
Achieving Competitive Advantage through Focus
Principles of Positioning Services
Using Positioning Maps to Plot Competitive Strategy
An Example of Applying Positioning Maps to the Hotel Industry
Mapping Future Scenarios to Identify Potential Competitive Responses
Positioning Charts Help Executives Visualize Strategy
Positioning Digital Services and Platforms
Attributes of Digital Service Available for Positioning
Developing an Effective Positioning Strategy
Part II: Applying the 4 Ps of Marketing to Services
Chapter 4. Developing Service Products and Brands
Understanding Service Products
What Is a Service Product?
What Are the Benefits of Well-Developed Service Products?
Creating Service Products
The Flower of Service
Facilitating Supplementary Services
Billing
Payment
Enhancing Supplementary Services
Hospitality
Exceptions
Managing the Flower of Service
Branding Services
Service Brand Architecture at the Corporate Level
Branding Service Products and Experiences
Branding Service Levels (Service Tiering)
Building Brand Equity
Delivering Branded Service Experiences
New Service Development
A Hierarchy of New Service Categories
Design Thinking in New Service Development
Achieving Success in New Service Development
Chapter 5. Distributing Services through Physical and Electronic Channels
Distribution in a Services Context
What Is Being Distributed?
How Should a Service Be Distributed?
Customers Visit the Service Site
Service Providers Go to Their Customers
The Service Transaction Is Conducted Remotely
Channel Preferences Vary among Customers
Channel Integration Is Key
Where Should a Service Facility Be Located?
Strategic Location Considerations
Tactical Location Considerations
Innovative Location Strategies
When Should Service Be Delivered?
The Role of Intermediaries
Benefits and Costs of Alternative Distribution Channels
Franchising
Other Intermediaries
The Challenge of Distribution in Large Domestic Markets
Distributing Services Internationally
Factors Favoring Adoption of Transnational Strategies
Barriers to International Trade in Services
How to Enter International Markets
Chapter 6. Setting Prices and Implementing Revenue Management
Effective Pricing Is Central to Financial Success
Objectives for Establishing Prices
Pricing Strategy Stands on Three Foundations
Cost-Based Pricing
Value-Based Pricing
Reducing Related Monetary and Non-Monetary Costs
Competition-Based Pricing
Revenue Management: What It Is and How It Works
Reserving Capacity for High-Yield Customers
How Can We Measure the Effectiveness of a Firm’s Revenue Management?
How Does Competitors’ Pricing Affect Revenue Management?
Price Elasticity
Designing Rate Fences
Fairness and Ethical Concerns in Service Pricing
Service Pricing Is Complex
Piling on the Fees
Designing Fairness into Revenue Management
Putting Service Pricing into Practice
How Much Should Be Charged?
What Should Be the Specified Basis for Pricing?
Who Should Collect Payment and Where Should Payment Be Made?
When Should Payment Be Made?
How Should Payment Be Made?
How Should Prices Be Communicated to Target Markets?
Chapter 7. Promoting Services and Educating Customers
Integrated Service Marketing Communications
Defining the Target Audience
Specifying Service Communication Objectives
Strategic Service Communications Objectives
Tactical Service Communications Objectives
Crafting Effective Service Communication Messages
Problems of Intangibility
Overcoming the Problems of Intangibility
The Services Marketing Communications Mix
Service Communications Media and Their Effectiveness
Communications Originate from Different Sources
Messages Transmitted through Traditional Marketing Channels
Messages Transmitted Online
Messages Transmitted through Service Delivery Channels
Messages Originating from Outside the Organization
Timing Decisions of Services Marketing Communications
Budget Decisions and Program Evaluation
Ethical and Consumer Privacy Issues in Communications
The Role of Corporate Design
Integrated Marketing Communications
Part III: Managing the Customer Interface
Chapter 8. Designing Service Processes
What Is a Service Process?
Designing and Documenting Service Processes
Developing a Service Blueprint
Blueprinting the Restaurant Experience: A Three-Act Performance
Identifying Fail Points
Fail-Proofing to Design Fail Points Out of Service Processes
Setting Service Standards and Targets
Consumer Perceptions and Emotions in Service Process Design
Service Process Redesign
Service Process Redesign Should Improve Both Quality and Productivity
Customer Participation in Service Processes
Customers as Service Co-Creators
Reducing Service Failures Caused by Customers
Self-Service Technologies, Service Robots, and AI
Customer Benefits and Adoption of Self-Service Technology
Customer Disadvantages and Barriers of Adoption of Self-Service Technology
Assessing and Improving SSTs
Managing Customers’ Reluctance to Change
Service Robots in the Frontline
Beginning of the Service Revolution
Service Robots versus Traditional SSTs
What Services Will Robots Deliver?
Chapter 9. Balancing Demand and Capacity
Fluctuations in Demand Threaten Profitability
From Excess Demand to Excess Capacity
Building Blocks of Managing Capacity and Demand
Defining Productive Service Capacity
Managing Capacity
Stretching Capacity Levels
Adjusting Capacity to Match Demand
Understand Patterns of Demand
Managing Demand
Marketing Mix Elements Can Be Used to Shape Demand Patterns
Inventory Demand through Waiting Lines and Queuing Systems
Waiting Is a Universal Phenomenon
Managing Waiting Lines
Different Queue Configurations
Virtual Waits
Queuing Systems Can Be Tailored to Market Segments
Customer Perceptions of Waiting Time
The Psychology of Waiting Time
Inventory Demand through Reservation Systems
Reservation Strategies Should Focus on Yield
Create Alternative Uses for Otherwise Wasted Capacity
Chapter 10. Crafting the Service Environment
Service Environments: An Important Element of the Services Marketing Mix
What Is The Purpose of Service Environments?
Shape Customers’ Service Experiences and˜Behaviors
Signal Quality and Position, Differentiate, and˜Strengthen the Brand
Core Component of the Value Proposition
Facilitate the Service Encounter and Enhance Productivity
The Theory behind Consumer Responses to Service Environments
Feelings Are a Key Driver of Customer Responses to Service Environments
The Servicescape Model: An Integrative Framework
Dimensions of the Service Environment
The Effect of Ambient Conditions
Spatial Layout and Functionality
Signs, Symbols, and Artifacts
People Are Part of the Service Environment˜Too
Putting It All Together
Design with a Holistic View
Design from a Customer’s Perspective
Tools to Guide Servicescape Design
Chapter 11. Managing People for Service Advantage
Service Employees Are Extremely Important
Service Personnel as a Source of Customer Loyalty and Competitive Advantage
Front-Line Work Is Difficult and Stressful
Service Jobs Are Boundary-Spanning Positions
Sources of Role Conflict and Role Stress
Emotional Labor
Service Sweatshops
Cycles of Failure, Mediocrity, and Success
The Cycle of Failure
The Cycle of Mediocrity
The Cycle of Success
Human Resource Management—How to Get It Right
Hire the Right People
Tools to Identify the Best Candidates
Train Service Employees Actively
Internal Communications to Shape the Service Culture and Behaviors
Empower the Front Line
Build High-Performance Service-Delivery Teams
Integrate Teams across Departments and Functional˜Areas
Motivate and Energize People
Service Culture, Climate, and Leadership
Building a Service-Oriented Culture
A Climate for Service
Qualities of Effective Leaders in Service Organizations
Focusing the Entire Organization on the Front Line
Part IV: Developing Customer Relationships
Chapter 12. Managing Relationships and Building Loyalty
The Search for Customer Loyalty
Why Is Customer Loyalty So Important to a Firm’s Profitability?
Assessing the Value of a Loyal Customer
Worksheet for Calculating Customer Lifetime Value
The Gap between Actual and Potential Customer Value
Why Are Customers Loyal?
The Wheel of Loyalty
Building a Foundation for Loyalty
Target the Right Customers
Search for Value, Not Just Volume
Manage the Customer Base through Effective Tiering˜of Services
Customer Satisfaction and Service Quality Are Prerequisites for Loyalty
Strategies for Developing Loyalty Bonds with Customers
Deepen the Relationship
Encourage Loyalty through Financial and Non-Financial Rewards
Build Higher-Level Bonds
Strategies for Reducing Customer Switching
Analyze Customer Switching and Monitor Declining Accounts
Address Key Churn Drivers
Implement Effective Complaint Handling and Service Recovery Procedures
Increase Switching Costs
Enablers of Customer Loyalty Strategies
Customer Loyalty in a Transactional Marketing Context
Relationship Marketing
Creating “Membership-Type” Relationships as Enablers for Loyalty Strategies
Customer Relationship Management
Common Objectives of CRM Systems
What Does a Comprehensive CRM Strategy Include?
Common Failures in CRM Implementation
How to Get CRM Implementation Right
Chapter 13. Complaint Handling and Service Recovery
Customer Complaining Behavior
Customer Response Options to Service Failure
Understanding Customer Complaining Behavior
What Do Customers Expect Once They Have Made a Complaint?
Customer Responses to Effective Service Recovery
Impact of Effective Service Recovery on Customer Loyalty
The Service Recovery Paradox
Principles of Effective Service Recovery Systems
Make It Easy for Customers to Give Feedback
Enable Effective Service Recovery
How Generous Should Compensation Be?
Dealing with Complaining Customers
Service Guarantees
The Power of Service Guarantees
How to Design Service Guarantees
Is Full Satisfaction the Best You Can Guarantee?
Is It Always Beneficial to Introduce a Service Guarantee?
Discouraging Abuse and Opportunistic Customer Behavior
Seven Types of Jaycustomers
Dealing with Customer Fraud
Part V: Striving for Service Excellence
Chapter 14. Improving Service Quality and Productivity
Integrating Service Quality and Productivity Strategies
Service Quality, Productivity, and Profitability
What Is Service Quality?
Identifying and Correcting Service Quality Problems
The Gaps Model in Service Design and Delivery
How to Close Service Quality Gaps
Measuring Service Quality
Soft and Hard Service Quality Measures
Learning From Customer Feedback
Key Objectives of Effective Customer Feedback Systems
Use a Mix of Customer Feedback Collection Tools
Analysis, Reporting, and Dissemination of Customer Feedback
Hard Measures of Service Quality
Tools to Analyze and Address Service Quality Problems
Root Cause Analysis: The Fishbone Diagram
Pareto Analysis
Blueprinting—A Powerful Tool for Identifying Fail Points
Return on Quality
Assess Costs and Benefits of Quality Initiatives
Determine the Optimal Level of Reliability
Defining and Measuring Productivity
Defining Productivity in a Service Context
Measuring Productivity
Service Productivity, Efficiency, and Effectiveness
Improving Service Productivity
Generic Productivity Improvement Strategies
Customer-Driven Approaches to Improve Productivity
How Productivity Improvements Impact Quality and Value
Integration and Systematic Approaches to Improving Service Quality and Productivity
Systematic Approaches to Improving Service Quality and Productivity
Which Approach Should a Firm Adopt?
Chapter 15. Building a World-Class Service Organization
Customer Satisfaction and Corporate Performance
Customer Satisfaction and the Wallet Allocation Rule
Creating a World-Class Service Organization
From Losers to Leaders: Four Levels of Service Performance
Moving to a Higher Level of Performance
Cost-Effective Service Excellence
Dual-Culture Strategy
Operations Management Approach
Focused Service Factory Strategy
Business Models Based on CESE Pathways
Conclusion and Wrap-Up
Part VI: Cases
Case 1. Sullivan Ford Auto World
Case 2. Susan Munro, Service Customer
Case 3. Dr. Beckett’s Dental Office
Case 4. Uber’s Unintended Burdens
Case 5. Kiwi Experience
Case 6. The Accra Beach Hotel: Block Booking of Capacity during a Peak Period
Case 7. Revenue Management at The View
Case 8. Aussie Pooch Mobile
Case 9. Service Robots in the Frontline: How Will Aarion Bank’s Customers Respond?
Case 10. Digital Luxury Services: Tradition versus Innovation in Luxury Fashion
Case 11. National Library Board, Singapore: Delivering Cost-Effective Service Excellence through Innovation and People
Case 12. Red Lobster
Case 13. Banyan Tree: Branding the Intangible
Case 14. Singapore Airlines: Managing Human Resources for Cost-Effective Service Excellence
Case 15. Menton Bank
Case 16. Dr. Mahalee Goes to London: Global Client Management
Case 17. Platform versus Pipeline Business Models: Are Airbnb and Marriott Right to Move into Each Other’s Turf?
Case 18. The Royal Dining Membership Program Dilemma
Case 19. The Broadstripe Service Guarantee
Case 20. What Drives Share of Streaming for Streaming Video Services? The Launch of HBO Max
Case 21. LUX*: Staging a Service Revolution in a Resort Chain
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