challenging our own and others ’assumptions · teaching services marketing ::: challenging our...

TEACHING SERVICES MARKETINGTEACHING SERVICES MARKETING::::::::

Challenging Our Own and OthersChallenging Our Own and Others’’ AssumptionsAssumptions

Christopher LovelockChristopher LovelockYale School of ManagementYale School of Management

AMA AMA ServSIGServSIG Doctoral ConsortiumDoctoral Consortium

W.P. Carey School of BusinessW.P. Carey School of Business

Arizona State University, October 8, 2005Arizona State University, October 8, 2005

Slide Slide ©© 2005 Christopher Lovelock2005 Christopher Lovelock

Overview: Questions for Discussion and Overview: Questions for Discussion and

Debate Debate –– No Easy Answers for PedagogyNo Easy Answers for Pedagogy

1. Is business education in trouble? If so, what does it mean for teaching services marketing (SM)?

2. Intellectual ferment in academic marketing—where is it taking us?

3. How is teaching SM courses constrained by what comes earlier ?

4. How should SM pedagogy be shaped by degree structure and course format?

5. Are we doing enough in SM courses to teach skills in market analysis and competitive strategy?

6. What do you see as SM’s foundation disciplines?

(1)(1)

Is Business Education in Trouble? Is Business Education in Trouble?

if so, what does it mean for teaching if so, what does it mean for teaching

services marketing ?services marketing ?


Is Business Education in Trouble ?Is Business Education in Trouble ?

Some External Perspectives from U.S.A.Some External Perspectives from U.S.A.

• Business school education attacked for lacking relevance

• Enrollment falling in many MBA programs in U.S.A. Would-be students can’t justify $ cost (+ time) vs. pay-off

• Professors are criticized for:– lacking real-world experience to bring to classroom

– Inhabiting overly-specialized departmental silos,

– being too focused on publishing narrow, theoretical, quantitatively-based research studies in little-read journals

• Part-time/ extension programs are proliferating. Are these: – genuine responses to learning needs of working adults? or

– exploitative, low-cost, cash cows where sponsoring institution lends its brand name but exercises minimal quality control?


What Does This Mean for Services Marketing ?What Does This Mean for Services Marketing ?

Are We Part of the ProblemAre We Part of the Problem……or the Solution ?or the Solution ?

• What institutional constraints do we need to challenge?

• What goals should we set to improve our teaching? – Up-to-date theoretical structure, concepts, frameworks– Real-world applications– Breadth of examples from different service industries, countries– Student exercises, projects that will boost excitement and learning– Skill development in pedagogies—avoid over-reliance on PPT lectures

� Case discussions,� Student presentations (group or individual)� Interactive dialogue� Computer–related exercises� Guest speakers

• What external relationships should we forge outside school?

(2)(2)

Intellectual ferment in academic Intellectual ferment in academic

marketingmarketing——where is it taking us?where is it taking us?


Intellectual Ferment is Shaking Up Academic Intellectual Ferment is Shaking Up Academic

Marketing TodayMarketing Today——ThatThat’’s Healthy !s Healthy !

• Marketing has been redefined to emphasize processes involved in creating, communicating, and delivering value to customers (AMA, 2004)

• Will that lead to a change in how introductory marketing courses are taught (e.g., value exchange approach?)

• In Services Marketing, old perspectives are being dusted off and new ones advanced to shake up traditional assumptions about goods and services (and whether they are different)

• What are implications for teaching?


Challenging LongChallenging Long--held Assumptions Can Be held Assumptions Can Be

Uncomfortable, Inconvenient, Liberating..Uncomfortable, Inconvenient, Liberating..Are you evolving teaching to move away from “goods are different from services” to include discussion of following perspectives (or even rebuild course around one of them)?

– all products create “service”-- goods are simply “service-creating appliances” (Vargo & Lusch, 2004)

– “everyone is in service” (Levitt, 1973); we should emphasize “service” not “services” (Rust, 1998)

– Distinction between manufacturing and service industries often emotional, no longer relevant (The Economist , 2005-10-01)

– Services, unlike goods, do not involve transfer of ownership (Judd 1964, Rathmell 1974) -– a long-ignored perspective

– More useful to distinguish marketing exchanges according to whether involve transfers of ownership than whether product is manufactured or not (Lovelock & Gummesson, 2004)


Implications of Implications of

NonNon--Ownership of ServicesOwnership of Services

• Renting durable goods can form the basis for a service business

• Service may take form of selling temporary use of portions of a larger physical entity

• Customers using a supplier’s own goods, facilities, or networks are more closely engaged with the firm than those using things they own themselves

• Time plays a central role in most services

• Customers may have different choice criteria for rentals than for outright purchases

• Services offer potential for resource sharing

(3)(3)

How is teaching SM courses How is teaching SM courses

constrained by what comes earlier ?constrained by what comes earlier ?


How is Teaching SM Courses How is Teaching SM Courses

Constrained by What Comes Earlier ?Constrained by What Comes Earlier ?

Content/pedagogy of MBA Services Marketing

elective cannot ignore:

• Content of prior courses students have taken (especially required intro marketing course)

• Student exposure to different pedagogies (e.g., case teaching, group work, presentations)

• Content of related courses outside marketing (especially operations management)

• Distribution requirements


Introductory Textbooks Are the Introductory Textbooks Are the ““Received Received

WisdomWisdom”” of Marketingof Marketing——is that OK ?is that OK ?

• Very slow to evolve: Competition stimulates packaging and supplements, not conceptual development

• All influenced by Kotler structure, heavy 4Ps orientation

• Services marketing gets a special chapter (in 4 texts), typically very out dated in terms of concepts, frameworks

• But… this is all most MBAs will ever learn about services marketing. Inference: “it’s a narrow niche field where most basic marketing concepts work fine”

• The real niche field in today’s economy is actually distribution and sale of consumer packaged goods – About 6 per cent of GDP in U.S.

– But that’s where many jobs for marketing MBAs traditionally lie


WhatWhat’’s Wrong With Intro Marketing Courses ?s Wrong With Intro Marketing Courses ?

(at least at some schools)(at least at some schools)

• Oriented around marketing in a manufacturing economy

• Primarily focused on consumer goods rather than industrial products

• Typically more emphasis on packaged goods than durables

• Services marketing treated as special case

• Retailing not well portrayed as the service industry it actually is

(4)(4)

How should SM pedagogy be shaped by How should SM pedagogy be shaped by

degree structure and course format ?degree structure and course format ?


Teaching MBA Courses is Constrained by Teaching MBA Courses is Constrained by

Degree Length and RequirementsDegree Length and Requirements

How much demand will there be for an SM course? How much content can you include?

• Semester, quarter, half-semester, other academic format

• No. of courses required for degree may vary widely, even within institution, e.g.,– EMBA: 12 courses– MBA: 16 courses– Advanced MBA: 20 courses

Note: the MBA degree is no longer an equivalent intellectual

commitment within the same institution, let alone across institutions!


SM Pedagogy Must Adjust to Class Size, SM Pedagogy Must Adjust to Class Size,

Schedules and FormatsSchedules and Formats

• Class size affects ability to interact with students. Cases best taught to 16-40 students, but less or more is feasible

• Class format often varies widely; 30 contact hours might be split:– 2 x 90-minute daytime classes per week for10 weeks– 1 x 3-hour evening class per week, 10 weeks– 2 weekends of 7-1/2 hour Sat + Sun classes

Questions:1. How many cases can you teach under each format?2. What can you do in a 3-hour evening class that would be more difficult

in a 90-min daytime class?3. What can you in a full day that you couldn’t in 4 x 90-min classes?4. Learning and forgetting: How important is class frequency

Insight: Adjust pedagogy and content to maximize learning!


Which is the Right Priority for Which is the Right Priority for

SM Course Content and Delivery ?SM Course Content and Delivery ?

• What the students want

• What the students need

• What you want, like to teach

• What the dean or senior colleagues think you ought (or ought not) to teach

• What knowledge, problem solving skills, and real-world exposure employers are seeking

(5)(5)

Are we doing enough in SM courses to Are we doing enough in SM courses to

teach skills in market analysis and teach skills in market analysis and

competitive strategy?competitive strategy?


Reality Check for Your Students AND Reality Check for Your Students AND

Colleagues: Size of Modern Service SectorColleagues: Size of Modern Service Sector

Contribution of Services to GDP of United States, 2004

SERVICES 68.0%GOVERNMENT

12.4%(mostly services)

Manufacturing &Construction

17.3%

Agriculture, forestry,

mining, fishing 2.3%

Source: Survey of Current Business,

US Bureau of Economic Analaysi, May 2005


Reality Check for Your Course Content:Reality Check for Your Course Content:Mix of Service Economy vs. Mix of Your ExamplesMix of Service Economy vs. Mix of Your Examples

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1 2 3 4

Value added by Service Industry Categoriesto U.S. Gross Domestic Product, 2004

)

Other (except government) 276

Accommodation and food services 308Arts, entertainment, and recreation 119

Healthcare and social assistance 804Educational services 100

Professional and business services 1,341

Real estate and rental and leasing 1,451

Finance and insurance 972

Information 547Transportation and warehousing 339

Retail trade 798

Wholesale trade 688 Source: Survey of Current Business,

May 2005 (NAICS data)

All data in $ billions


““What business are we in ?What business are we in ?””

Industry Analysis and Generic CompetitionIndustry Analysis and Generic Competition

• Customers can gain value from:– purchasing goods

– renting those same goods without transfer of ownership

– renting a service provider who operates the item on your behalf

• Generic competition exists between industries, – e.g, telecom vs. mail

– downloadable videos from cable vs rental video, vs. purchase of videos)


Using Economic Data for Analysis of Using Economic Data for Analysis of

Service Markets, Competition, and Trends Service Markets, Competition, and Trends

Pedagogical Issue: Are we doing enough in Services Marketing courses to teach skills in market analysis and competitive strategy? (Requires data)

• NAICS (North American Industry Classification System now being used to compile, record national economic data in U.S., Canada, Mexico

• Replaces old SIC codes in USA

• Captures huge array of new service industries, each with its own NAICS code. U.S. data easily accessible on Web

• Information includes # establishments, employment

• New North American Product Classification System assigns productline code to thousands of service products

• Potential value for research, teaching, student projects


Insights on the Nature of the Service Economy Insights on the Nature of the Service Economy

from NA1CS from NA1CS

• NAICS (North American Industry Classification System) has replaced U.S. Standard Industrial Classification System (SIC)

• Jointly developed by U.S., Canada, and Mexico

• Will reshape how we view changing national economies

• Each sector is assigned a 2-digit code, can drill down by:

– Sub-sector 541: Professional, Scientific, and Technical Services

– Industry group 5416: Management, Scientific, & Technical Consulting Services

– Establishments 54161: Management consulting services

– Establishments 541613: Marketing consulting services

• A new North American Product Classification System (NAPCS) is being developed, with initial focus on products of service industries—each product is assigned a product-line code


Examples of Goods Rental Data Examples of Goods Rental Data

from 2002 Economic Censusfrom 2002 Economic CensusNAICS Code 5324: Commercial and Industrial Machine and NAICS Code 5324: Commercial and Industrial Machine and

Equipment Rental and LeasingEquipment Rental and Leasing

Product Line Code # Estabs Prod. line % of estabs’.(NAPCS) revenues total revs

52587 Office furniture 438 $ 206m 24.7%52589 Medical machinery and equip. 2420 3071 83.452626 Party supplies 218 27 16.952584 Heavy equip. for construction,

mining, forestry (with operators) 292 106 17.2 52585 Heavy equip. for construction,

mining, forestry (w/out operators) 5074 9646 82.8

Source: 2002 Economic Census: Real Estate and Rental and Leasing Industry Series. Commercial and Industrial Machinery and Equipment Rental and Leasing: Table 3 – Product Lines by Kind of Business for the U.S. 2002. Washington DC: U.S. Department of Commerce, Economics and Statistics Administration, U.S. Census Bureau, 2004, p. 3.


Role of Cases and Student ProjectsRole of Cases and Student Projects

• Cases (supplemented by introductory lectures or post-discussion wrap ups) are best way to get students thinking about issues of market analysis and competitive positioning

• Decision-forcing cases require them to develop, defend competitive strategy

• Student projects on a particular company often emphasize market analysis and strategy formulation

• Group presentations add depth, interest to class learning

(6)(6)

What Do You See as What Do You See as SMSM’’ss

Underlying Disciplines ?Underlying Disciplines ?


What Do You See as the Foundation Disciplines What Do You See as the Foundation Disciplines

for Teaching Services Marketing?for Teaching Services Marketing?

Apportion 100 points: among the following:

– Anthropology

– Economics

– Ethnography

– Political Science

– Psychology

– Social Psychology

– Sociology

– Other (1) specify: __________________________

– Other (2) specify: __________________________

Exclude hybrids and hyphenated fields (e.g., social anthropology)


In Which of These Disciplines Do You Have In Which of These Disciplines Do You Have

Formal Training?Formal Training?

DISCIPLINE PhD degree Masters degree Individual Courses

(major) (minor) Grad Ugrad

Anthropology

Economics

Ethnography

Political Science

Psychology

Social Psychology

Sociology

Other (1) specify: __________________________

Other (2) specify: __________________________


A Potentially Awkward QuestionA Potentially Awkward Question

If you lack formal training in a discipline which you see as a foundation for teaching services marketing, how are you dealing with this so far?

– Find a way to learn what I need to know (personal reading, sit in on relevant course(s), dialogue with colleagues, etc.)

– Invite guest presenters

– Assign relevant background readings but don’t elaborate on them in class

– Don’t try to handle what I didn’t learn in grad school (and maybe feel a twinge of guilt…or maybe not)

AppendixAppendix

Texts by Christopher Lovelock Texts by Christopher Lovelock

Relevant to Teaching Relevant to Teaching

Services MarketingServices Marketing


Current and Forthcoming BooksCurrent and Forthcoming Books

with Jochen Wirtzwith Jochen Wirtz

• Services Marketing: People-Technology-Strategy, 5/e (Prentice Hall, 2004)

• New 6th edition due mid-2006!

TARGETED AT UNDERGRADUATE AND MBA MARKETS

INCLUDES TEXT, CASES, AND READINGS

+ INSTRUCTORS’ RESOURCE MANUAL, PPTs, AND TEST BANK

Also

• Christopher Lovelock, Jochen Wirtz, Tat Hean Keh, and XiongwenLu, Services Marketing in Asia, 2/e (Singapore: Pearson, 2005)

• Jochen Wirtz and Christopher Lovelock, Services Marketing in Asia: A Casebook (Singapore: Pearson Education, 2005)


Additional Books in PrintAdditional Books in Print

• Christopher Lovelock and Lauren Wright, Principles of Service Marketing and Management, 2/e (Prentice Hall, 2002)

• Christopher Lovelock, Paul Patterson & Rhett Walker, Services Marketing: An Asia Pacific and Australian Perspective, 3/e (Pearson Australia, 2004)

• Christopher Lovelock, Javier Reynoso, Luis Huete, y Guillermo D’Andrea, Administracion de Servicios (Pearson Mexico, 2004)

• Christopher Lovelock, Jochen Wirtz et Denis Lapert, Marketing des Services 5/e (Pearson France, 2005)

Plus translations in Chinese: Mandarin (China) and Traditional (Taiwan), Japanese, Portuguese, Russian, and Thai


Christopher Lovelock and Jochen Wirtz at Christopher Lovelock and Jochen Wirtz at

Book Launch for Book Launch for Services MarketingServices Marketing 5/e 5/e

Singapore, February 2004Singapore, February 2004


Jochen Wirtz and Family at Awards Banquet Jochen Wirtz and Family at Awards Banquet

for NUS Outstanding Educator Awardfor NUS Outstanding Educator Award

T

TEACHING AWARDS

NUS OutstandingEducator Award, 2003(university-wide:only two awardseach year among 2,700 NUS faculty)

Previous teachingAwards at NUS Business School,1996, 1998, 1999, 2001, 2002, 2005

Email: [email protected]

Associate Professor, National University of Singapore


Recharging the little gray cellsRecharging the little gray cells……

(above), fishing trip, Cape Cod, with son Tim

(below), India, 2004 with Tim and his fiancée Eva

(right) backpacking In Sierra Nevada Mountains, Calif. at 10,500 feet,August 2005

(left) hiking at9000 feet inCajon de Maipo, Chile, with daughterLiz, Dec. 2003


For Further InformationFor Further Information……

• Email:– [email protected]

– [email protected]

• Website: www.lovelock.com– Bio– Details of books, journal articles, other publications– Downloadable conference PPT presentations

• For details of how to access videos of plenary presentations at ServSIG Service Research Conference, Singapore, June 2005, see ServSIG October 2005 newsletter on www.servsig.org

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