marketing of services - au

Marketing of Services Dr. Vinita Sahay

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Marketing of Services 5 ECTS credits

Term 1

Dr. Vinita S. Sahay Professor

[email protected]

[email protected]

mailto:[email protected]

mailto:[email protected]


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Services Marketing

Background

Service Industry dominates the economic landscape of most countries and contributes over 80%

of GDP in developed Economies. The distinctive nature of the services sector comes from their

very intangibility, which impacts their conception, design, communication, delivery, and

purchase and consumption. Other characteristics of services like heterogeneity, perishability and

simultaneity also increase the complexities of management and require greater integration of the

traditionally distinct organizational functions of marketing, human resources and operations.

These problems encountered in service businesses need to be articulated and tackled by

managers.

Course Objectives To study and learn from best practices in designing, launching and marketing of services in

diverse industries such as airlines, hospitality, Retail, automotive, financial management

consulting, IT, travel & tourism, utilities and higher education etc. The course aims to provide

insights to:

i. To study “breakthrough” Services in order to understand the operations of successful

service firms that can be benchmarks for future management practice.

ii. To develop an understanding of Service management thinking

iii. Application of concepts of CRM, creating a service culture Customer loyalty and retention,

service encounters, service characteristics, value creation, customer involvement, demand

and suppy management and service recovery .

iv. Understanding service quality, its measurement and management

v. Service design through marketing research and blueprinting for efficient delivery

vi. To develop an awareness of the opportunities for leveraging Information Technology and

Human resources for enhancing Service firm competitiveness.

vii. Understand the role of operations in managing organizations and creating competitive

advantage

Pedagogy

The pedagogy for this course will be a mix of classroom lectures; experience sharing, case

discussion, assignments and carrying out a comprehensive industry/research based project work.

Students are advised to come prepared for the class by reading the prescribed materials as well as

by updating the cases and analyzing parallels of the cases by obtaining insights through library

research, field study and personal observation.

Case Discussions

All class members are expected to have read the case and reflected upon the assigned questions.

Furthermore, class members are encouraged to apply concepts from the assigned readings to their

analysis of the case. Coming unprepared to class could lead to expulsion from the class.

Active participation is expected throughout the entire class with thoughtful contributions to

advance the quality of the discussion. Please note that the frequency (i.e., the quantity) and

decibel of your interventions in class is not a key criterion for effective class participation. The

classroom should be considered a laboratory in which you can test your ability to convince your

peers of the correctness of your approach to complex problems and of your ability to achieve the


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desired results through the use of that approach. Criteria that are useful in measuring effective

class participation include:

1. Are the points that are made relevant to the discussion? Are they linked to the comments

of others?

2. Do comments show evidence of applying the concepts from the readings to the analysis

of the case?

3. Is there a willingness to test new ideas, or are all comments "safe" (e.g., repetition of

case facts without analysis and conclusions?

4. Do comments clarify or build upon the important aspects of earlier comments and lead to

a clearer statement of the concepts being covered and the problems being addressed?

An important element of this class is teamwork. You are encouraged to form your own group (of

2-3 students) and discuss the case before reflecting on the case assignment. A mechanism to

encourage active class participation and to discourage disruptive tactics will be evolved based on

class experience. Written (Individual) case assignments have to be submitted for two cases for

internal evaluation.

Evaluation Case Analysis (Written Individual) 10%

Assignment 10%

Project Presentation 10%

Research Based/Industry Based work 10%

End Term 60%

Individual Case Work:

WRITING UP A CASE:

One written case analysis need to be submitted for internal evaluation. The analysis will address

the case questions and be limited to five pages, computer typed double-spaced, plus exhibits.

Written submissions are due at the start of class (the day the case is discussed). Handwritten

will not be accepted under any circumstances and Late submission will lead to loss of

grades/’s. The papers will be graded with particular attention to application of course reading

material and concepts. The analysis should be quantitative and qualitative. The assigned

questions for a case are given in the detailed course outline following the case description. The

format is as follows:

(1) Papers should be Computer typed in Font size 12, Ariel style, with normal margins on A

4 sheet. The name of the case should be on the first page of the text with your Roll. No.,

Date and case name. An executive summary is not required nor expected.

(2) The page limit for each paper is five pages of text, plus exhibits. Note that these are

maximum limits. Papers should be concise and coherent.

(3) Exhibits should contain specific types of analyses (application of a framework, table of

comparisons, cost analysis, competitive features, etc.) and information (web page of

firm) that supports and is relevant, but would be too detailed for the body of the paper.

(4) Please proof read/spell check your paper before turning it in. Papers for this course

should be of the same quality that would be provided to the management of the business.

(5) Copying of any kind will invite disciplinary action for all concerned. You are to ensure

that your answer is not copied in any form. All concerned will be awarded F grade

for the same.


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(6) An extract from previously published work should be acknowledged or else it may be

liable for copyright violation.

TEAM WORK:

FACILITATING CASE DISCUSSION

By the end of the second session you will have to form groups and select one case to lead the

class in analysis. Facilitating a case discussion is presenting a complete analysis of the case and

leading the class in the case analysis. This requires the team to draw out insights and ideas from

the class and defend the case analysis with class members who are expected to have read the case

and thought about the assigned questions. Often the case discussion consists of a brief overview

of the firm, complete analysis of the situation, identification of the problems/issues arising in the

case and analysis of the same by applying conceptual frameworks. A solution in the form of

suggested option or an action plan needs to be recommended and defended.

Criteria for measuring the effectiveness of leading a case discussion include:

a) Ability to identify the important issues in the case.

b) Ability to analyze the issues and use of concepts in the specific situation.

c) Ability to generate insight.

d) Ability to answer the queries of class members satisfactorily

The case may be presented in the form of a Power point presentation (PPT). The maximum time

allowed for case presentation is 20 minutes followed by 10 minutes for questions. The time

allocated has to be adhered to.

Recommended Text Book

i. Valarie A Zeithaml, Mary Jo Bitner & Dwayne D.Gremler, “Services Marketing: Integrating

Customer focus across the firm”, Latest Edition McGraw -Hill. ( Abbreviation VAZ used

everywhere in the document)

Suggested Journals:

Harvard Business Review

Sloan Management Review

Journal of Services Research

Journal of Services Marketing

IJSIM: International Journal of Service Industry Management

AMSJ: Academy of Marketing Science Journal

HBROP Harvard Business Review Update

JSM: Journal of Services Marketing.

Suggested Websites:

AMA Academic SIG: Services Marketing

Services and related topics Conferences:

2008 Frontiers in Services Conference

Serv SIG Website: Conference page

Services Marketing Doctoral Consortium: Serv SIG Web site information

Academic Centres

Centre for Services leadership: Arizona State University

Services Management Archive: Brigham Young University

Centre for Excellence in Service: University of Maryland


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Course Outline (course start: 3rd

July, detailed schedule and teaching hrs. TBA)

Services: An Overview

Distinct Aspects of Services.

Frameworks for Analysis of Services

Growth and importance of Services in the Economy

From the manufacturing paradigm to service & solutions Paradigm and consequent

implications for management theory & practice

Recommended Readings:

Levitt; Marketing Product intangibles and Intangible Products, HBR May-June 1981

Shostack, L., “Breaking Free from Product Marketing”, Journal of Marketing, April 1997,

pp.72-80.

Henkoff, R. “Service is Everybody’s Business,” Fortune, June 27, 1994, pp.48-60.

Quinn,J.B. and Gagon C.E., “Will Services Follow Manufacturing into Decline?” Harvard

Business Review, November-December1986, pp.95-103.

Levitt, T. ‘The Industrialization of Services?’ The Marketing Imagination, 2e, The Free

Press, 1986, pp.50-71.

Understanding Consumer Behaviour The consumer Experience

Pre-Readings

Case: Shouldice Hospital Ltd ( From Text Book)

VAZ Chapter 3

Recommended Readings:

*Berry and Bendapudi; Clueing in to customers, HBR 2003.

*Chase,Dasu: want to perfect your Company’s Service? Use Behavioural Science, HBROP 2001

Schmenner; How can service businesses survive and prosper, SMR Spring 1986

Gronroos; A Services oriented approach to Marketing Of Services, EJM,1978

Fryar, C.R., “What’s Different about Services Marketing”, The Journal of Services Marketing,

Vol 5, No.4, Fall1 1991, pp53-58

Hopper, M.D., “Rattling SABRE_New Ways to compete on Information”, Harvard Business

Review, May –June 1990, pp.118-125.

Customer Exceptions, Needs and Perceptions

Service Quality

Moments of Truth

Pre Readings:

VAZ Chapter 4 & 5

Recommended Readings

Berry and Bendapudi; Clueing in to customers, HBR 2003


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Chase, Dasu; Want to perfect your Company’s Service? Use of Behavioral Science, HBROP

2001.

Carlzon, J., “Putting the Customer First: The Key to Service Strategy”, The McKinsey Quarterly,

Summer 1997.

Stafford, M.B.” How Customers Perceive Service Quality”, Journal of Retail Banking, pp. 29-

37.

Understanding Service Quality & Establishing Service Standards

Developing RATER, SERVQUAL

Listening to Customer Requirements

Understanding Customer Expectations and Perceptions through Marketing Research

Pre Readings:

VAZ Chapter 6

Customers Relationship Management (CRM) Six Market Domain Approach

Customer Relationships in the Market Place

Customer Retention Strategies

Pre Readings:

VAZ Chapter 7

Case Study: British Airways: Using Information Systems to better serve the Customers :

Harvard business School 9-395-065

Service Recovery

Service Recovery

Handling Customer Complaints

Pre Readings:

VAZ Chapter 8

Christopher W. R. Hart, Jemes L. Heskett and W. Earl Sasser Jr., “The Profitable Art of Service

Recovery”, Harvard Business Review, July-August, 1990, pp. 148-156.

Christopher W. R. Hart, “The Power of Unconditional Service Guarantee”, Harvard Business

Review, July-August, 1990, pp. 54-62.

Service Development & Design

1. Stages in New Service Design Strategies

2. Service Blueprinting

Case University Health Services: Walk in Clinic (UHS)

Pre Readings:

VAZ Chapter 9 & 10


Marshall: Note on process Analyses; Process Fundamentals, HBSP Note


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Shostack, G.L., “Designing Services that Deliver”, Harvard Business Review, January –February

1984, pp. 133-139

Kingman Brundae, J., “The ABC‘s of Service System Blueprinting”, in Designing a Winning

Service Strategy, M.J. Bitner and L.A. Crosby (eds.), American Marketing Association, 1989.

Customer Defined Service Standards

Process for Developing Customer –Defined Standards

Physical Evidence and ServiceScape

Pre Readings:

VAZ Chapter 11

Experiential Marketing & Sensory Branding

Leveraging the Brand

Reading: Book on Sensory Branding by Martin Lindstrom

www.martinlindstrom.com

Schmitt; Experiential Marketing, JMM, 1999

Pine, Gilmor; Welcome to the Experience Economy, HBR,1998.

Berry; Cultivating Service Brand Equity, CL- Pages 207-216.

Employees & Customer’s Role in Service Delivery

Managing Service Employees

Motivating Employees

Customer’s Role in Service Delivery

Pre Readings

VAZ Chapter 12

Pre Readings

Rucii, A.J., Kirn , S.P. and Quinn, R.T., “The Employee–Customer–Profit Chain at Sears”,

Harvard Business Review, January-February, 1998, pp. 83-97

Additional Readings

Mahesh, V.S., “Effective Human Resource Management: Key to Excellence in Service

Organizations”, Vikalpa, Vol. 13, No. 4, October-November 1988, pp. 9-15

Regis Mckenna, “Real Time Marketing”, Harvard Business Review, 73, July-August 1995, pp.

87-98.

Case Analysis: Starbucks: Delivering Customer Service (From the text book VAZ)

Distributing Services

Delivering Service through Intermediaries and Electronic Channels

Pre Readings:

Desiraju and Shugan; Strategic Service Pricing and Yield Management, JOM , 1999

VAZ Chapter 14

http://www.martinlindstrom.com/


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Case The Pizza Public Company Limited, Thailand (A)-PPCL

Managing Demand and Capacity

Pre Readings:

VAZ Chapter 15

Measuring and Managing Capacity

Strategies for Managing Demand

Case: Delays at Logan airport-.Answer the questions given in the problem set “Delays at

Logan Airport: Problem set”


Shemwell, Cronin: Service Marketing Strategies for coping with demand supply imbalances,

JSM 1994

W. Earl. Sasser Jr., “Match Supply and Demand in Service Industries”, Harvard Business

Review 54, Nov-Dec1976:133-140

Kimes and Chase, The Strategic levers Of Yield Management, CL-pp-205-212.

Integrated Services Marketing Communications

Customer Education

Developing Communication Mix

Pre Readings:

VAZ Chapter 16


Legg, D., and Baker, J. “Advertising Strategies for Service Firms” from Add Value to Your

Services, Carol Surprenant, ed.1987, pp. 163-168.

Douglas, T., ’The Power of Branding” in Lovelock, C., Services Marketing, 3e, Prentice Hall,

1996, pp. 398-401.

Case Analysis: Rapid Rewards at Southwest

Pricing and Revenue Management

Pricing Strategies: Planning and Implementation

Pre Readings:

VAZ Chapter 17

Case: Revenue Management at Prego Italian restaurant

*Desiraju and Shugan; Strategic service pricing and yield management ,JOM, 1999

*Kimes and Chase, The Strategic levers of Yield Management,

Project Presentations

Project Presentations & Review of Course Learning


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Service Industry Project Report

By the end of the second session you are required to select a company/ Unit from the service

sector with a domestic focus and submit group member’s names and Project title to the course

instructor. Data for the project may be collected from primary or secondary sources. A strong

conceptual and analytical focus is required. Group Project presentations will be held in sessions

19 and 20 (given in Course outline). Each member of the group has to be present during

presentation to qualify for evaluation. Each presentation will be of 10 minutes (Powerpoint) and

will be open for questions and discussion for 5-7 minutes by the class following the presentation.

The following questions need to be answered in the report to be submitted at the end of the

course.

1. A general overview of the industry, service concept, major trends and structure.

2. Identify and describe the major competitors in terms of their service positioning and

marketing mix.

3. How is the market segmented and who are the target customers for the selected

firm/unit?

4. Describe the service product using the service design framework.

5. What are the brand elements?

6. Describe major services offered by the firm, the firm’s service line, pricing strategy,

communication mix and distribution channels used?

7. What are the opportunities for revenue management? Make recommendations

8. Map the service process. Examine the process flow; What is the throughput time, cycle

time, theoretical and actual capacity and capacity utilization? What are the marketing

implications of the same?

9. Identify the bottleneck in the process. Suggest how to overcome the same.

10. Are demand and supply matched? Describe the demand management strategy used by

the firm? Evaluate and make recommendations

11. What’s the customer lifetime value (CLV). How can it be used for marketing decisions?

Make specific recommendations for marketing based on CLV.

12. Describe employee roles in the service delivery process and how these roles impact the

service customer’s experience. Identify and discuss employee and customer scripts.

13. What is the marketing strategy of the firm? Suggest what the future marketing strategy

should be to meet the firm’s objectives.

Group project presentations will be held towards the end of the course (sessions 19 and 20) The

issues to be presented are

Module

No

Topics to be presented

II -How is the market segmented?

-Who are the target customers?

-What is the value proposition

-How is the service positioned? How is the positioning implemented?

-What are the tangible/intangible elements of the service? What are the supplementary


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services offered?

-What is the new service development process?

-What are the brand elements? How is the brand developed?

-What is the pricing/communication and distribution strategy?

-Evaluate and make recommendations on the above-mentioned.

III * Following issues need to be presented for discussion

*Map the service process. Examine the process flow; What are the throughput time, cycle

time, theoretical and actual capacity and capacity utilization.

*Identify the bottleneck in the process. Suggest how to overcome the same.

*. Are demand and supply matched? How does the company match supply and demand?

Evaluate and make recommendations

*What are the servicescape elements? What is the role of the service environment in the

service experience?

*What is the HR strategy? Are the recruitment, Job design and reward and performance

evaluation systems aligned with the Service concept?

* Discuss the role of Technology and its fit with the strategy.

IV *What is the lifetime value of a Customer/Customer segments.

*How satisfied/dissatisfied are the customers. What is the value of shifting a customer from 4

to 5 on a five-point scale (5 is highly satisfied.)

*How can the company improve customer and company profitability?

*Discuss the relationship marketing strategy of the company and how effective is it.

*What is the service recovery strategy? Evaluate the same..

*Define service quality for the organization. Use the GAPS framework to make

recommendations for service quality improvement

*Identify at least one service quality problem and do a root cause analysis of the same.

*How would you apply six sigma to improve the process?

*Use the Strategic Service Vision (SSV) framework to evaluate growth options.


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Day–Wise Schedule Of Marketing of Services

Kindly find Day wise Schedule keeping in mind that Teaching will start from 3rd July 2013.

27 lessons of 45 minutes each, amounts to 2 hours 35 minutes for 8 days

Time suggested: 9.00 AM to 9.50 AM Ist Session.

10.00 to 10.50 AM IInd Session.

11.00 to 11.35 – III rd Session

11.35 to 11.45 -doubt clearing / discussion time (Not Mandatory)

Students are strongly suggested to buy the Text Book.

Pre- Read On the first day: Case: Shouldice Hospital Ltd (Case 8, of Text Book)

Day and Date Coverage Resources Required on days

Day 1: 3rd

July Wednesday Services: An Overview

Understanding Consumer

Behaviour

Day 2: 4th

July Thursday Customer Exceptions, Needs

and Perceptions

Understanding Service Quality

& Establishing Service

Standards

Developing RATER,

SERVQUAL VS SERVPERF

Listening to Customer

Requirements Understanding Customer

Expectations and Perceptions

through Marketing Research

To be distributed for Day

3:Case Study: British

Airways : Using Information

Systems to better serve the

Customers : Harvard business

School 9-395-065

Day 3: 5th

July Friday Customers Relationship

Management (CRM)

Case Study: British Airways :

Using Information Systems to

better serve the Customers :

Harvard business School 9-395-

065

Service Recovery

Service Recovery

Handling Customer

Complaints

Day 4:8th

July Monday Service Development & Design To be distributed for Day


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3. Stages in New Service

Design Strategies

4. Service Blueprinting

Customer Defined Service

Standards

Process for Developing Customer

–Defined Standards

Physical Evidence and

ServiceScape

4: Hubspot inbound

marketing and web 2.0:

Harvard business School

9-509-049

Day 5: 9th July Tuesday Experiential Marketing &

Sensory Branding

Leveraging the Brand

Employees & Customer’s Role

in Service Delivery

Managing Service Employees

Motivating Employees

Customer’s Role in Service

Delivery

Case Analysis: Starbucks:

Delivering Customer Service

(Case 7, pages 682-699 of VAZ)

Day 6: 10th

July Wednesday Distributing Services

Delivering Service through

Intermediaries and Electronic

Channels

Managing Demand and

Capacity

Measuring and Managing

Capacity

Strategies for Managing

Demand

To be distributed for Day 7:Case

Analysis: Rapid Rewards at

Southwest

Day 7: 11th

July Thursday Integrated Services Marketing

Communications

Customer Education

Developing Communication

Mix

Case Analysis: Rapid Rewards

at Southwest

Day 8: 12th

July Friday Pricing and Revenue

Management

Pricing Strategies: Planning and

Implementation

Project Presentations

Project Presentations & Review

of Course Learning


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