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• Contents
• About the Authors
• Preface
• Acknowledgements
• PART I: UNDERSTANDING SERVICE PRODUCTS, 2 MARKETS, AND CUSTOMERS
• 1. Creating Value in the Service Economy
• OPENING VIGNETTE
• Introduction to the World of 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
• BUSINESS-TO-BUSINESS SERVICES AS A CORE ENGINE OF ECONOMIC DEVELOPMENT
• OUTSOURCING AND OFFSHORING OFTEN WORK IN TANDEM
• WHAT ARE SERVICES?
• The Historical View
• 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
• Information Processing
• SERVICES POSE DISTINCT MARKETING CHALLENGES
• THE 7 PS OF SERVICES MARKETING
• THE TRADITIONAL MARKETING MIX APPLIED TO SERVICES
• Product Elements
• Place and Time
• Price and Other User Outlays
• Promotion and Education
• THE EXTENDED SERVICES MARKETING MIX FOR MANAGING THE CUSTOMER INTERFACE
• Process
• Physical Environment
• People
• MARKETING MUST BE INTEGRATED WITH OTHER MANAGEMENT FUNCTIONS
• THE SERVICE-PROFIT CHAIN
• A FRAMEWORK FOR DEVELOPING EFFECTIVE SERVICE MARKETING STRATEGIES
• CONCLUSION
• 2. Understanding Service Consumers
• OPENING VIGNETTE
• Susan Munro, Service Consumer
• THE THREE-STAGE MODEL OF SERVICE CONSUMPTION
• PREPURCHASE STAGE
• Need Awareness
• Information Search
• Evaluation of Alternative Services
• Purchase Decision
• SERVICE ENCOUNTER STAGE
• Service Encounters are “Moments of Truth”
• Service Encounters Range from High Contact to Low Contact
• 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
• CONCLUSION
• 3. Positioning Services in Competitive Markets
• OPENING VIGNETTE
• Positioning a Chain of Childcare Centers Away from the Competition
• 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
• Segmentation 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
• Ecosystem Orchestration and Governance
• Direct and Indirect Network Effects
• DEVELOPING AN EFFECTIVE POSITIONING STRATEGY
• CONCLUSION
• PART II: APPLYING THE 4 PS OF MARKETING TO SERVICES
• 4. Developing Service Products and Brands
• OPENING VIGNETTE
• UNDERSTANDING SERVICE PRODUCTS
• What is a Service Product?
• What are the Benefits of Well-Developed Service Products?
• Creating Service Products
• THE FLOWER OF SERVICE
• THE FLOWER OF SERVICE
• Facilitating Supplementary Services
• Enhancing Supplementary Services
• 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
• CONCLUSION
• 5. Distributing Services Through Physical and Electronic Channels
• OPENING VIGNETTE
• Being Global in an Instant? … Or Does It Take Forever?
• 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
• Locational Constraints
• 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
• How Does the Nature of a Service Affect International Distribution?
• Barriers to International Trade in Services
• How to Enter International Markets?
• CONCLUSION
• 6. Service Pricing and Revenue Management
• OPENING VIGNETTE
• Dynamic Pricing is Here to Stay
• 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 Nonmonetary Costs
• Competition-Based Pricing
• REVENUE MANAGEMENT: WHAT IT IS AND HOW IT WORKS9
• 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 to Charge?
• 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 the Target Markets?
• CONCLUSION
• 7. Service Marketing Communications
• OPENING VIGNETTE
• Oscar is Having the Time of His Life
• INTEGRATED SERVICE MARKETING COMMUNICATIONS
• DEFINING THE TARGET AUDIENCE
• SPECIFYING SERVICE COMMUNICATION OBJECTIVES
• Strategic Service Communication Objectives
• Tactical Service Communication Objectives
• Promote Tangible Cues to Communicate Quality
• CRAFTING EFFECTIVE SERVICE COMMUNICATION MESSAGES
• Problems of Intangibility
• Overcoming the Problems of Intangibility
• THE SERVICE 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 SERVICE MARKETING COMMUNICATIONS
• BUDGET DECISIONS AND PROGRAM EVALUATION
• ETHICAL AND CONSUMER PRIVACY ISSUES IN COMMUNICATIONS
• THE ROLE OF CORPORATE DESIGN
• INTEGRATED MARKETING COMMUNICATIONS
• CONCLUSION
• PART III: MANAGING THE CUSTOMER INTERFACE
• 8. Designing Service Processes
• OPENING VIGNETTE
• Redesigning Customer Service in a Small Hospital Practice
• The Redesigned Service Model
• 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
• Levels of Customer Participation
• Customers as Service Co-Creators
• Reducing Service Failures Caused by Customers
• SELF-SERVICE TECHNOLOGIES, SERVICE ROBOTS, AND ARTIFICIAL INTELLIGENCE
• Customer Benefits and Adoption of Self-Service Technology
• Customer Disadvantages and Barriers of Adoption of Self-Service Technology
• Assessing and Improving Self-Service Technologies
• Managing Customers’ Reluctance to Change
• SERVICE ROBOTS IN THE FRONTLINE
• Beginning of the Service Revolution
• What are Service Robots and How Do They Differ from Traditional Self-Service Technologies?
• What Services Will Robots Deliver?
• CONCLUSION
• 9. Balancing Demand and Capacity
• OPENING VIGNETTE
• Summer on the Ski Slopes
• 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 USE FOR OTHERWISE WASTED CAPACITY
• CONCLUSION
• 10. Crafting the Service Environment
• OPENING VIGNETTE
• The Guggenheim Museum in Bilbao
• 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
• Scent
• Color
• 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
• CONCLUSION
• 11. Managing People for Service Advantage
• OPENING VIGNETTE
• Cora Griffith — The Outstanding Waitress
• SERVICE EMPLOYEES ARE EXTREMELY IMPORTANT
• Service Personnel as a Source of Customer Loyalty and Competitive Advantage
• The Frontline in Low-Contact Services
• FRONTLINE 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 Success
• HUMAN RESOURCES 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 Frontline
• Build High-Performance Service-Delivery Teams
• Integrate Teams Across Departments and Functional Areas
• Motivate and Energize People
• The Role of Labor Unions
• SERVICE CULTURE, CLIMATE, AND LEADERSHIP
• Building a Service-Oriented Culture
• A Climate for Service
• Qualities of Effective Leaders in Service Organizations
• Leadership Styles, Focus on the Basics, and Role Modeling
• Focusing the Entire Organization on the Frontline
• CONCLUSION
• PART IV: DEVELOPING CUSTOMER RELATIONSHIPS
• 12. Managing Relationships and Building Loyalty
• OPENING VIGNETTE
• Caesars Entertainment’s Customer Relationship Management
• 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 Service
• Customer Satisfaction and Service Quality are Prerequisites for Loyalty
• STRATEGIES FOR DEVELOPING LOYALTY BONDS WITH CUSTOMERS
• Deepen the Relationship
• Encourage Loyalty Through Financial and Nonfinancial 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 a CRM Implementation Right
• CONCLUSION
• 13. Complaint Handling and Service Recovery
• OPENING VIGNETTE
• Too Little, Too Late — Jet Blue’s 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
• Consequences of Dysfunctional Customer Behavior
• Dealing with Customer Fraud
• CONCLUSION
• PART V: STRIVING FOR SERVICE EXCELLENCE
• 14. Improving Service Quality and Productivity
• OPENING VIGNETTE
• Improving Service Quality in a Ferry Company
• 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 System
• 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
• Total Quality Management
• ISO 9000 Certification
• Six Sigma
• Malcolm-Baldrige and European Foundation for Quality Management Approaches
• Which Approach Should a Firm Adopt?
• CONCLUSION
• 15. Building a World-Class Service Organization
• INTRODUCTION
• 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 Cost-Effective Service Excellence Pathways
• CONCLUSION
• APPENDIX: FURTHER RESOURCES ON SERVICES MARKETING AND MANAGEMENT
• PART VI: CASE STUDIES
• Case 1 Sullivan Ford Auto World
• Case 2 Dr. Beckett’s Dental Office
• Case 3 Digital Luxury Services: Tradition versus Innovation in Luxury Fashion
• LUXURY BRANDS AND DIGITAL SERVICES
• THE PARADOX OF DIGITAL LUXURY
• WHAT IS THE RIGHT DIGITAL SERVICE STRATEGY FOR LUXURY BRANDS?
• Case 4 Uber’s Unintended Burdens
• THE BEGINNING
• THE INITIAL PUBLIC OFFERING
• ROCKY ROAD
• BACK TO THE UNITED STATES
• Endnotes
• Case 5 Kiwi Experience
• Case 6 Revenue Management at The View
• BASELINE PERFORMANCE
• Party Size Mix
• Occupancy
• Average Check per Person
• Server Performance
• Meal Duration
• Revenue per Available Seat-Hour
• Discounts
• Case 7 The Accra Beach Hotel: Block Booking of Capacity During a Peak Period
• Case 8 Aussie Pooch Mobile
• Case 9 Service Robots in the Frontline: How Will Aarion Bank’s Customers Respond?
• Case 10 Shouldice Hospital Limited (Abridged)
• HISTORY
• THE SHOULDICE METHOD
• The Patients’ Experience
• The Nurses’ Experience
• The Doctors’ Experience
• THE FACILITY
• ADMINISTRATION
• Operating Costs
• THE MARKET
• PROBLEMS AND PLANS
• Case 11 Singapore Airlines: Managing Human Resources for Cost-Effective Service Excellence
• HUMAN RESOURCES AND COST-EFFECTIVE SERVICE EXCELLENCE AT SINGAPORE AIRLINES
• STRINGENT SELECTION AND RECRUITMENT PROCESS
• EXTENSIVE INVESTMENT IN TRAINING AND RETRAINING
• BUILDING HIGH-PERFORMANCE SERVICE DELIVERY TEAMS
• EMPOWERMENT OF FRONTLINE TO DELIVER SERVICE QUALITY
• MOTIVATING STAFF THROUGH REWARDS AND RECOGNITION
• BEYOND HUMAN RESOURCES
• APPENDIX: CABIN CREW PERFORMANCE MANAGEMENT QUESTIONS
• Case 12 National Library Board Singapore: Delivering Cost-Effective Service Excellence Through Innov
• Case 13 Menton Bank
• Case 14 Starbucks: Delivering Customer Service
• COMPANY BACKGROUND
• THE STARBUCKS VALUE PROPOSITION
• Channels of Distribution
• DELIVERING ON SERVICE
• Measuring Service Performance
• COMPETITION
• CAFFEINATING THE WORLD
• Retail Expansion
• Product Innovation
• Service Innovation
• STARBUCKS’ MARKET RESEARCH: TROUBLE BREWING?
• Starbucks’ Brand Meaning
• The Changing Customer
• Customer Behavior
• Measuring and Driving Customer Satisfaction
• REDISCOVERING THE STARBUCKS CUSTOMER
• Case 15 Platform versus Pipeline Business Models: Are Airbnb and Marriot Right to Move into Each Oth
• AIRBNB’S MOVE INTO PIPELINE BUSINESSES
• MARRIOTT’S MOVE INTO THE PEER TO-PEER PLATFORM BUSINESS MODEL
• ARE AIRBNB’S AND MARRIOTT’S STRATEGIES SOUND?
• Case 16 Dr. Mahalee Goes to London: Global Client Management
• Case 17 The Royal Dining Membership Program Dilemma
• Case 18 What Drives Share of Streaming Video? The Launch of HBO Max
• UNDERSTANDING CUSTOMER PERCEPTIONS
• CONNECTING THE KEY PERFORMANCE INDICATORS
• KEY DRIVERS
• KEY COMPETITOR PROFILES
• CONCLUSION
• Online Supplementary Materials
• Endnotes
• Case 19 LUX*: Staging a Service Revolution in a Resort Chain
• THE DARK AGES
• LUX* TRANSFORMATION
• Vision, Purpose, and Values
• Changing the Service Culture Through Training
• Innovation and Differentiation
• Measurement, Feedback, and Incentives
• FUTURE PLANS
• Name Index
• Subject Index