Cap 1 Services Marketing Baron Et Al (Curs 3)

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Contents

List of Figures x

List of Tables and Exhibits xi

Postcards from Practice xiii

Its in the News! xiv

List of Case Study Figures xv

Preface to the Third Edition xvi

Acknowledgements xviii

1 Introduction 1

A Service Experience 3

The Story 3

Analysing the Experience 6

The Process 6

The People 7

The Physical Evidence 9

Visible and Invisible Elements of Services 10

The Structure of the Book 11

The Relationship between Theory and Practice 13

Characteristics of Case Studies in the Book 14

Small-scale Operators 14

Human Involvement in the Service Experience 14

Easily Replicated Format 15

Overall Learning Outcomes 17

Discussion Questions and Exercises 17

Notes and References 17

2 The Contemporary Context 19

Learning Objectives 19

Economic Importance of Services 19

The Evolution of the Sub-discipline of Services Marketing 24

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vi Contents

Service-dominant Logic 29

Scope and Characteristics of Service Provision 31

Management Implications Arising from the Characteristics

of Services 35

Summary 39

Learning Outcomes 40



3 Service Goals: The Use of Metaphors 43


The Uses and Limitations of Metaphors in Marketing and Management 44

Using the Factory Metaphor: The Service as a System 44

Using the Structural Models to Understand Services 48

Using the Theatre/Drama Metaphor: The Service as a Performance 59

Lessons from the Theatre 62

Summary 65

Summarising the Factory Metaphor 65

Summarising the Theatre/Drama Metaphor 66




4 Customer Interactions in Services 69


Introduction 69

Significance of Service Encounters 71

Customer Interacts with Service Employee(s)

Managerial Issues 73

Customer Interacts with Fellow Customers Managerial Issues 74

Customer Interacts with Technology/Equipment


Customer Interacts with the Physical Surroundings


Customer Interactions in Service Encounters 78

Interactions between Customers and Employees 78

Customer-to-customer Interactions 82

Interactions between Customers and Technology/Equipment 88

Summary 92




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Contents vii

5 Consumer Experiences 97


Introduction 97

Service Experiences 98

Reasons for the Interest in Consumer Experiences 101

Perspectives on the Consumer Experience 105

Implications for Service Management 109

Summary 112




6 Service Design 115


Introduction 115

Designing the Process 118

Designing the Physical Environment 135

The Physical Service Environment and Customer Satisfaction 136

The Online Servicescape: e-scapes 142

Summary 142




7 Service Employees as Operant Resources 145


Introduction 145

Defining Internal Marketing 148

Value and Practice of Internal Marketing 153

Increasing Job Satisfaction of Service Employees 155

Service Orientation of Organisations 161

Summary 163




8 Service Quality and Customer Satisfaction 167


Introduction 167

Perceived Service Quality 168

How Consumers Assess Service Quality 169

Dimensions of Service Quality 169

Potential Causes of Service Quality Shortfalls: The Gaps Model 171

Antecedents of Consumer Expectations 172

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viii Contents

SERVQUAL: The Research Instrument 174

Service Quality Its Evolution 177

E-service Quality 177

Customer Satisfaction 179

The Academic Perspective 179

The Practitioner Perspective 180

The Customer Perspective 182

Customer Satisfaction Research 183

Service Quality versus Satisfaction 184

Service Quality as an Overall Attitude 184

Expectations and Perceptions 184

Cumulative Customer Satisfaction 185

Which is the Antecedent? 186

Summary 186




9 Relationship Marketing 191


Introduction 191

Definitions and Features of Relationship Marketing 193

Market-based Relationship Marketing 196

Customer Loyalty 205

Strategies for Maintaining Customer Loyalty 206

Summary 214




10 Service Profitability 217


Introduction 217

Macro-level Links between Quality and Business Results 218

Micro-level Analysis of Customer Profitability 225

Summary 238




11 Future Research Issues 243


Introduction 243

Issues Arising from Technology-based Self-service Provision 245

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Contents ix

Additional Areas for Future Research 254

On Research Methodology 259



Case Studies

1 Joe & Co. Hairdressing 265

2 George Ball & Son, Funeral Directors 271

3 Kings School Band Programme 281

4 An Individual Experience of Arriving at Auckland

International Airport 288

5 Waymark Holidays 292

6 Landscape Safari 305

7 Waterstons, Business Analysis and Computer Consultancy 313

8 Coloring Ring Back Tone: Adding to the Chinese

Consumer Experience 319

9 Jackson Russell 325

10 RAD9 333

11 Living in the Cyber-society 342

Glossary 345

Index 351

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C H A P T E R

1Introduction

Why study services marketing? Why pick up a textbook on services marketing?There may be a variety of reasons you are working in a service business, you

are representing consumers, you have got to because you are a student, and it ispart of your course. Whichever direction you start from, however, we believethat, like us, you will find services marketing a fascinating field of academicstudy, firmly embedded in the real world.

It is real, because we all consume services as part of our everyday life. A dayin our life may involve, for example, listening to a favourite radio programme,travelling on a train or bus, visiting the shops and buying a snack at lunchtime,arranging a dental appointment, attending lectures and tutorials, buying a bookvia the Internet and calling into the pub for a drink in the evening. At work, wemay rely on administrative, technical and clerical support services, and come toexpect that offices, toilets and other rooms are regularly cleaned. Furthermore,we probably have an opinion on the level of service offered in all these areas,and are quite prepared to share our feelings of satisfaction/dissatisfaction (withthe services) with others. When we consume certain types of services on a lessfrequent basis for example, going on a package holiday, eating in an expen-sive restaurant, making a claim on an insurance policy we are usually highlyattuned to the service provided, and perhaps even more likely to express ouropinions of the quality of service.

Its in the News! 1.1Increased Affluence

According to the UKs Sunday Times of 24 February 2008,

. . . we are being dubbed as a nation of butlers. How true the super-rich require a fleetof staff to cater to their increasingly complex needs, and its gone beyond the traditionalnanny, housekeeper and driver. These are mere skeleton staff: now, a new brighter pha-lanx of personal helpers is assuming the white gloves as well. Pilots, publicists, art dealersand bodyguards have become de rigueur, as well as more niche service providers suchas fake-eyelash technicians, personal record producers, and jewellery curators.

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2 Services Marketing

Its in the News! 1.1 (Continued)The article goes on to identify other services being employed by affluent

consumers.

Private tutors (art, history, languages whatever. Does it matter?) A super-stylist (for party appearances and private dinners) A concierge (sits in your house and sorts your mail when you are away) A television crew (someone documenting your life) The log man (for 10,000, this Chelsea-based artist will style your fireplace).

Postcard from Practice 1.1

Service Leads to Customer Loyalty

Banking in New Zealand was highly regulated until the mid-1980s. Banks could

borrow only at strictly controlled rates and similarly lend only with carefully regu-

lated margins. There was little to differentiate the service of the main banks and

their customer bases were stable and therefore ostensibly loyal as there was little

incentive to change. However, it was widely accepted that customer service levels

were generally poor. With deregulation that all changed. New banking products

were available almost overnight and customer service levels were improved enor-

mously in response to the open market. Competition forced a huge change on the

banking industry. Customers suddenly had a choice of a wide range of innovative

products, many of which could be tailored to their specific needs. They started to

move to competitor banks at alarming rates, often for marginal financial benefit,

but motivated by the lure of improved service standards and personalised prod-

ucts. Banks started to realise that the customers come first slogan was more

than a slogan it was the reality on which the financial performance of their busi-

ness rested. They undertook big investments in people, product development and

infrastructure.

Source: Richard Handley.

But for many of us, we are not simply service consumers (or customers); we alsoprovide service. We are both consumers and providers of services. If you are read-ing this book, it is likely that you work full-time in a service industry or thatyou have had some part-time jobs in the service industry. This is a wonderfulposition from which to appreciate the issues involved with the marketing andmanagement of services. In addition, you may well find that you have playedseveral different service roles. In our own case, for example, although our servicejob may be described as teaching or lecturing, we have played other roles suchas researching, student counselling, consulting and editing, with varying degreesof success.

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Introduction 3

In the course of your study of services marketing, you can, and should, makeuse of your experiences of consuming and providing services. Your experienceswill enable you to be constructively critical of the theory and to add creativelyto theory. We believe that in building an understanding of services, and henceof services marketing and management, you should wherever possible draw onexperiences and intuitions. In so doing, this ensures a more interactive and livelyvehicle for learning.

So our answer to the question why study services marketing? is that it is aninvigorating exercise in combining theory and practical knowledge to further anunderstanding of something which is an important part of life.

If we look at the historical development of services marketing, it has beenacknowledged that services marketing developed academically because it filleda need in marketing practice.1 Service executives persuaded academics that adifferent approach was required to understand the marketing of services fromthat used for the marketing of goods. It may not be obvious immediately, butit will soon become apparent that many services are incredibly complex, andprovide different challenges for marketing practitioners and academics alike. Thecomplexity is illustrated by a story of a particular service experience and theanalysis that follows.

Service ExperienceServices areexperienced andevaluated as a seriesof processes which,while frequentlyintangible, leaveconcrete impressionsand memories.

A Service Experience

To introduce many of the features of service provision, and identify the exchangerelationships between the service provider organisation and its customers, westart with a story of a service experience. The story is fictional. It is an amalgamof several personal and reported experiences. However, the incidents described inthe story should strike a chord with you, and hence provide an understandablescenario for a more general discussion.

To encourage a more purposeful reading of the story, we suggest that you con-sider the following questions about the nature of the service itself and the serviceexperiences of the main characters.

What is the service the passengers (the Townsends) are paying for? How mightthe service be defined? When does the service start and finish?

Is the service provision different for the two passengers (John and JackTownsend)? Is the service experience different for them? To what extent mightthe service experience be affected by employees of the service providers? Bythe physical settings in which the service takes place? By other customers(passengers)?

The Story

John Townsend and his son Jack (aged 14) were travelling to Singapore to joinJohns wife Jane, who was completing a spell as a visiting lecturer at the National

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University of Singapore. They had chosen to fly with Singapore Airlines. Johnhad booked the flights through the Internet. He was also very pleased with him-self that his websearch had unearthed lots of information about Singapore. Inparticular, he had been able to book a Sunday brunch at the Raffles Hotel inSingapore for the three of them an experience a friend had told him not to miss.John had never flown on long haul before. His only experience of a scheduledflight was a British Airways flight to Geneva. Jack had flown on package holi-days to Menorca and Crete with the family and definitely did not like flying. The13-hour flight from Manchester to Singapore was viewed with mixed feelings.John regarded it as part of a wonderful, never likely to be repeated, experience(with the bonus of seeing Jane after three months apart). Jack just wanted to getit over.

They arrived at Manchester Airports Terminal 1 three hours before the flighttime (as instructed on their tickets). The reception hall was very crowded andnoisy but it was clear from the information on the handily placed multiple mon-itors that they should check in at Desk 21. The next problem was actually findingDesk 21. They could see plenty of desks with destination indicators above them,but they could not spot that particular number. An armed security guard wasthe only airport official around, so they asked him for assistance. He directedthem politely to Desk 21. After passing several long queues of passengers withtrolleys full of baggage, they were pleasantly surprised to see a small queue ofonly two passenger groups. The surprise turned to frustration when they wereinformed that they had mistakenly joined the Raffles Class (i.e., first class) pas-senger queue the red carpet should have been the giveaway and had to join,instead, the much longer economy class queue at Desk 22.

In the queue, John spent the time talking to a couple of Manchester Universityfemale students who were flying home to Singapore. He learnt a lot about thetypes of food and the places to eat, and about which tourist attractions weregood value for money (and which were not). Whilst checking in the baggage,John and Jack were asked a number of security-related questions. Although theywere the standard practice, the questions added a hijacker dimension to Jacksfear of flying. Finally, they were able to secure plane seats in an aisle seat andadjacent seat in the middle four seats of the plane, which was very importantto both of them in view of the length of the flight. Despite his economy classstatus, John felt quite pleased that he was travelling with an airline that to himwas a symbol of exotic travel. Jack could not have cared less.

Baggage successfully despatched, and with over two hours still to wait, theymade their way to the main concourse. It was brightly lit with a variety of shops(including, John was surprised to see, a branch of Harrods), located around acentral seated area. The seats were arranged so that only about 20 per cent of thepassengers could see flight information monitors clearly. Yet passengers neededthis information to know when to proceed to passport control. This situationseemed to increase congestion, with passengers frequently vacating their seatsto look at the monitors, leaving their partners to spread out luggage to hold on

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Introduction 5

to seats. This clearly irritated many passengers, and John shared a mutual moanabout the lack of information with a family travelling to Dubai. John found thehours wait before proceeding to passport control interminable. Jack, with heavymetal music blasting through his iPod, and many friends to chat to on hismobile phone, was unperturbed.

After an uneventful passage through Customs, they entered the departurelounge. There were some tables covered with uncollected crockery and glasses,an expensive coffee bar, a self-service snack bar and several shops, includingduty-free outlets. It was very crowded. Passenger information was provided onmonitors at various locations in the lounge, hypnotically flashing messagesabout the departure times and instructions to proceed to gates. Occasional flur-ries of passenger activity meant that instructions to proceed to appropriate gateshad flashed up. Jack, with the common sense of youth, had spotted the twoSingaporean students sitting in front of one of the monitors. Relax dad, he said,just follow them when they move.

It turned out to be Gate 2 which was a good ten minutes away, even on themoveable walkway. Through the windows they could see several planes waitingto depart. John was pleased and reassured to see that their plane was one of thebiggest. However, when they got on board, although the interior was bigger thatany they had seen before eight seats to each row, and two corridors the indi-vidual space per seat was disappointingly small, particularly for Johns 6ft 3in.frame. They were both very impressed with the in-flight entertainment system.Each passenger had individual controls and his/her own monitor on the seatin front. Not only were up-to-date films available for viewing, but the systemwas interactive! Jack immediately sought out the flight magazine to find out therange of video games available. John soon stopped worrying about where to puthis feet as he started to look around at the fellow passengers. There was a mix offamilies, couples, ages and ethnic groupings, but quite a few empty seats as well.The children of the family in front appeared to be very worldly wise, and werealready talking about Changi airport and making plans to get one of the freetoothbrushes from the toilet before they are all taken. John mused to himselfthat he had already experienced so much and yet they had not even started onthe flight.

Jack stiffened during the cabin crews demonstration of emergency procedures,but relaxed visibly when the pilot calmly described the flight route. John beganto relax after the complimentary drink and Jack worked out his personalised pro-gramme of movie watching. The cabin crew, one man and three women, all veryelegantly dressed, were extremely polite and helpful. Nothing was apparently toomuch trouble. At one stage, they searched the complete economy section look-ing for a passenger who would be prepared to swap seats with another passengerwho wished to sit with a friend. They even found out the English football resultsat the request of a passenger. Jack decided that he needed to go to the toilet at thevery time when the cabin crew had started to serve dinner, but there was no waypast the meal trolley for the next 30 minutes. He had to sit and suffer. John and

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Jack tucked into the Shrimp Newburg, and listened to the co-pilot explain howthey could follow the route on their video system. As the pins and needles inhis legs increased, John thought enviously of the business-class passengers, notto mention Raffles class passengers, in their spacious seats. When the plane wasover Calcutta, he even wished he had paid twice as much for the extra comfort.

Analysing the Experience

Almost all the incidents described in the story could happen to air travellers irre-spective of their point of departure or of airline used. Therefore, this is not a storyspecifically about Manchester Airport or about Singapore Airlines, but describesthe feelings and apprehensions of the service customers as well as the facilitiesoffered by the service providers. It contains elements and issues that are com-mon to most types of services (not just air travel). These elements and issuesform the content of much of the services marketing academic and practical lit-erature. We start with an examination of three fundamental aspects of services process, people and physical evidence, the management of which contributesto the success, or otherwise, of the marketing of the services. We then take adifferent perspective by focusing on the visible and invisible (to the passenger)elements of air transport service provision to highlight issues of relevance to themarketing of all services.

The Process

Shostack, in the early 1980s, affirmed that service is not a thing but a process the process is the product.2 Services are processes that occur over time. The veryway that the story of John and Jacks flight to Singapore is told emphasises theprocess elements. They entered the concourse, then they looked at the informa-tion screen, then they asked the way to Desk 21, then . . . . The complexity of theservice experience can be appreciated very clearly when it is broken down intothe many process components. Even what may appear, at first glance, to be a rel-atively simple service, for example, a gents barber, can be seen to be quite com-plex when viewed as a complete process (see Chapter 6). It is always surprising todiscover how many distinct process elements there are for a service try countingthe number of clicks on the mouse for a straightforward service by the Internet,such as checking your current account balance using your banks website.

The fact that a process has many elements can have several implications forservice managers.

Core ServiceThe service thatcustomers pay for andfrequently comprisesthe intangible elementof the serviceexperience.

Peripheral ServiceService elements thatsupport the delivery ofthe service paid for.Many peripheralservices provide thetangible elements ofthe service experience.

First, while there may be a core service that the customers are paying for,there are also many peripheral elements to the service. The core service offer-ing is the necessary outputs of the organisation which are intended to providethe intangible benefits customers are looking for. Peripheral services are thosewhich are either indispensable for the execution of the core service or availableonly to improve quality of the service bundle.3 In the airport scenario, the

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Introduction 7

flight itself is obviously a major component; that is, the means of travellingquickly and safely from Manchester to Singapore. This could be described asthe core element in this context. There are, however, a range of extra com-ponents of the service which are still highly valued, such as meals and drinkson the plane, in-flight entertainment, and pillows, blankets and toothbrushesfor passenger comfort (the peripheral elements). Of course, passengers may notthink this way, and may give more weight to some of the peripheral elementsthan to the core service. How often have you heard people voicing complaintsabout the food served on a plane or the (lack of) drinks, even though the flightwas on time with smooth takeoff and landing? Furthermore, each separate ele-ment in the process, whether it is core or peripheral, can be a cause of customer(dis)satisfaction.

Second, when does the service begin and end for the customer? For theTownsends, the first contact with the service provider (Singapore Airlines) wasvia their website. The last contact (for this journey at least) would probably beat Changi airport in Singapore, where a whole new set of services would havebeen provided. As will be discussed in Chapter 4, certain encounters with theservice organisation may be more important than others from the customersperspective, especially the first encounter! The website has to be easy to use.

Service FailureDissatisfaction arisingfrom an unanticipatedservice outcome orperformance.

Service RecoverySteps that a serviceprovider and theircontact personnel taketo move a customerevaluation of theservice fromdissatisfaction tosatisfaction.

Third, the Townsends had a relatively stress-free service experience. It is notunknown, however, for various elements in the flight process to result in servicefailures for example, the flight is delayed, the baggage goes missing, the avail-able food on the flight does not correspond with the menu. Passengers, in themain, will understand the reasons for service failures, but will also expect theservice providers to recover the situation to their satisfaction. Service organi-sations study the service process in great detail to ensure that they have soundservice recovery strategies in place. Service recovery is a very important aspectof services marketing and is dealt with in both Chapter 6 and Chapter 9.

Fourth, unlike physical goods, time cannot be stored and used later. Theempty seats on the Manchester to Singapore flight cannot be resold. Withprocesses, appropriate management of supply and demand is crucial to busi-ness success. Service organisations, therefore, are often concerned with capacitymanagement, a feature that is discussed and illustrated in Chapter 2.

Finally, the process is not exactly the same for all passengers. The Raffles first-class passengers, for instance, were given different treatment both before andduring the flight. They would have faster check-in, a wider choice of food anddrinks, more leg room, greater speed of service and so on. The design of a higherlevel of customisation of service for Raffles passengers relates to the design of theprocess.

The People

The story highlights the importance of people involved in the service, in termsof their individual behaviour and attitudes, and their interactions with each

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other. The people in this context are the customers (passengers) and the con-tact personnel (the people providing the service for John and Jack). There wereseveral different contact personnel involved in the story. John and Jack cameinto contact with the pilot and co-pilot, the cabin crew, the baggage checkoutpersonnel and the security guard. The latter, although not employed by the air-line, is still a contributor to passengers service experiences. The appearance andmanner of contact personnel, as well as the words they actually speak, theirscripts (to use a drama analogy), can significantly affect the passengers overallperception of the service. Their status will also influence the extent to which theycan vary the nature of the interaction with the passengers or are constrained bya predetermined script. For example, the baggage checkout employees must gothrough their set security script even if it is distressing to Jack, whereas the seniorcabin crew steward may be allowed to use initiative and improvisation to calm anervous passenger.

Service ScriptsThese are frequentlyused to standardisethe customerexperience by ensuringthat contact personnelknow what behavioursare expected of them.Some service scriptsspecify words as wellas behaviours to beused when interactingwith customers.

It is a major challenge for many service organisations to train all employeesto promote their ideals of customer service, especially if some contact person-nel are employed by other companies (e.g., security guards, restaurant staff orcleaners). The issues are covered in more detail in Chapters 7 and 9. The impor-tant role played by the contact personnel is emphasised by Bateson,4 who notesthat the contact personnel can be a source of differentiation. This is particularlyappropriate with a service such as an airline where, because many airlines offersimilar bundles of benefits and fly the same planes from the same airports, theironly hope of a competitive advantage is from the service level.

Just as the different personal characteristics of the contact personnel will influ-ence the nature of the service, so too will the different personalities of thecustomers. The customers typically experiencing a particular service may differaccording to characteristics such as age, gender and socio-economic group. TheTownsends fellow passengers tended to be well-off families from many ethnicgroups quite a different mix from those on the package holiday to Crete. Fellowcustomers in the service setting can clearly influence a service experience. Theymay be acquainted (e.g. John and Jack) or strangers, so-called unacquaintedinfluencers.5

CustomerPerceptionsCustomer views andopinions.

The story of John and Jack Townsend illustrates that customer perceptions ofa service differ, even if the customers receive the same core and peripheral ser-vices. Personal and situational factors govern the service perceptions. John waslooking forward to the flight and had planned to make the most of the wholeexperience. Jack, on the other hand, was nervous about flying and just wantedthe flight to be over as soon as possible. Various cognitive, emotional and physi-ological responses affect their service experience. John believed that a long-haulscheduled flight would be better than a charter flight, had categorised SingaporeAirlines as exotic, and both he and Jack had been reassured by the size of theplane. John felt frustrated by the lack of available information (and thus thelack of control) in the departure lounge. Jack, although becoming increasinglyanxious by virtue of security checks and guards, was happy to sit and listen to

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Introduction 9

personal music in the lounges. Both were affected by the lack of space on theplane. In Johns case, it was proving very uncomfortable. On a related issue,customer expectations of service can vary. The Townsends expectations stemmedfrom previous flight experiences, Singapore Airlines advertisements and website,and Janes account of her flight. In contrast, the Singapore student seasonedtravellers had far more experience with the airline on which to form their expec-tations. Customer expectations and perceptions of services are key componentsof the measures of customer satisfaction and service quality; they are covered indetail in Chapter 8.

CustomerExpectationsThe ways in whichcustomers anticipatethe serviceperformance andoutcomes.

From the above, it can be seen that, unlike physical goods that can often bemass-produced and standardised, services will always vary because of the peo-ple element. No two coffees will be served exactly the same, even by the samecabin crew member. No two customers will interpret the crew members man-ner or demeanour in exactly the same way. No two cabin crew members willhave responded to their training in exactly the same way. Of course, part ofthe variation in services is due to the customers participation in the service,either physically (lifting baggage on to the scales, walking to the correct gate)or verbally (stating the requirement to sit in a non-smoking area, ordering theflight meal). Customers help produce, and can even create the service, as well asconsume it.

ServicescapeThe physical builtenvironment in whichservice encounterstake place.

The Physical Evidence

By physical evidence, we mean the exterior and the interior environment to theservice setting and the equipment and technology that customers may encounterin their dealings with the service provider. Although the core service for theTownsends quick, safe transport from Manchester to Singapore is essentiallyintangible, the story clearly shows that there are many tangible aspects thatmay affect their perceptions of the total service experience. The exterior andthe interior environmental dimensions of the service would include the ambi-ent conditions of the airport and aeroplane (temperature, air quality, music,noise etc.), the utilisation of space (equipment, layout, furnishings) as well assigns, symbols and artefacts. These elements make up what has been labelledthe servicescape.6 In our story, the Townsends noticed noise and heat at theairport and the lack of signage and seating arrangements at the terminal. Thelack of space inside the plane itself affected both the passengers and the cabincrew. The service provider has a great deal of control over this part of the servicepackage. For example, designing individual, interactive entertainment systemsfor passengers with monitors on the seat in front gives the passengers more con-trol and improves their flight experience. Airlines also recognise the importanceof tangible mementoes for the passengers to take away with them to remindthem of the occasion, for example in-flight magazines, toothbrushes and printedmeal menus. These are often determinants of repeat purchase. In Chapter 6, we

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look at the design of the physical evidence of services as well as the design of theservice process.

The equipment and technology which the Townsends encountered includethe Internet, an in-flight entertainment system and moving walkways, each ofwhich have been designed to operate independently of any contact persons.They are examples of technology-based services7 that were unavailable until the1990s. These forms of self-service are of great interest to all service providers, asthey increase hours of business (e.g., ATMs, pay at the pump petrol/gas stations,flight ticket machines), and may reduce the inherent (human) variability of theservice provider. John and Jack are more likely to take notice of other equip-ment in the servicescape if it does not work as it should. Broken baggage returnconveyor belt systems cause delays and a lot of ill feeling.

Technology-basedServicesServices that rely moreheavily on customersinteracting withmachines than withcontact personnel.

Visible and Invisible Elements of Services

The extended service experience of the Townsends is determined by the elementsthat are visible to them (e.g., the behaviour of a contact person, or the layout ofthe aeroplane) and those which are invisible to them (e.g., the staff trainingprogrammes, the computerisation of the baggage handling system, the cateringpreparation). Using the analogy of a service being like a drama performance,8 thevisible elements are front-stage whereas the invisible elements are back-stage.Front-stage

Service elements thatare visible tocustomers.

Back-stageService elements thatare invisible tocustomers and arefrequently undertakenby non-contactpersonnel.

The elements that are visible to John and Jack are essentially people and phys-ical evidence as demonstrated above. However, it is their interactions with peopleand the physical evidence that determine the service experience. They engagein interpersonal interactions with each other and with other customers (e.g.,students in the queue, family from Dubai in the main concourse). These areknown collectively as customer-to-customer interactions. They engage in interper-sonal interactions with the many contact personnel customeremployee inter-actions. They engage in interactions with the physical environment, equipmentand technology.

The visible elements (people and physical evidence) are common to most ser-vices (hospitals, education, restaurants, hotels, sporting occasions, retail outlets,banks, package holidays, hairdressers etc.), and, likewise, the resulting interac-tions are determinants of the customer experience in these services, albeit withvarying degrees of relative importance. Chapter 4 is devoted to an understand-ing of customer interactions in services. It also highlights the importance ofefforts made by service providers to control the interactions. With customer-to-customer interactions, for example, most managerial emphasis has beenon reducing the possibility of negative exchanges between one customer andanother. This can be achieved by, for example, allocating quiet carriages ontrains for passengers who do not wish to be disturbed by other passengers car-rying out conversations on their mobile (cell) phones. Some strategies havebeen put forward, however, to encourage positive interactions by rewarding

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Introduction 11

customers who give useful advice to other customers.9 A resulting, pleasantconversation with a fellow traveller is both satisfying and makes the time passmore quickly.

The invisible elements largely support the service process as described above.Although the invisible components are not valued directly by customers, theyare recognised by writers and managers alike as being important components ofthe service package.10 Airport and airline services spend huge sums of money onimproving and enhancing computerised systems and other technology in orderto move passengers more efficiently through the process. (For example, Termi-nal 5, in Londons Heathrow airport, opened in 2008, is reputed to have cost4.2 billion.) Jack, who wanted to get the ordeal over with as quickly as possible,would no doubt appreciate the management concentration on the back-stage.

The language used in understanding and writing about services, and ser-vices marketing, employs two metaphors the factory metaphor and thedrama/theatre metaphor, each of which relates to different goals of a serviceorganisation. If the goal is efficiency (probably with a concentration on the invis-ible elements of a service operation) then service is likened to a factory, with anemphasis on inputs and outputs to the process. If, however, the goal is the cus-tomer experience (probably with a concentration on the visible elements thepeople and the setting), then service is likened to a theatrical production, withan emphasis on the performance. What may be particularly exasperating to thepeople charged with the marketing and management of services is that a goal ofefficiency may suit one customer (e.g., Jack), but not another. John, for exam-ple, may prefer more of an experience to remember, savouring every moment.Service goals and the use of metaphors are considered in Chapter 3.

The Structure of the Book

The story has provided specific examples of many of the issues and key areasof services marketing. Clearly, a single scenario will not address all the issues.However, the story and our brief discussion of the elements that make up theservice experience provide a useful starting point for explaining the structure ofthe remainder of the book.

In Chapter 2, we set the context by examining the ways in which servicescan be defined and the potential range of application of services marketingtheory. As will be seen, it is not just businesses that refer to themselves as ser-vices businesses that can make use of the theory. The importance of servicesin many economies is increasing rapidly and some national and global statisticsare provided to emphasise the scope of development of the service economy.Some fundamental building blocks of the theory characteristics of services,perceived risk of services and the services marketing mix are introduced. Allcan be related back to the story above, but clearly have widespread applications,which will be illustrated with examples from a range of services. The chapter

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also charts the evolution of services marketing as an academic sub-discipline andoutlines the key elements of the service-dominant logic of marketing, a twenty-first century approach to marketing that underpins our concentration on peopleand, in particular, customer and consumer experiences.

The use of metaphors in services marketing is well recognised by academicsand practitioners alike. The two most common metaphors for services arefactory and drama/theatre. With the former, we happily use expressions suchas service delivery, service productivity, efficiency and process. With thelatter, we talk of service performance, roles and scripts (for employees andcustomers), front- and back-stage and service setting. Both metaphors arehelpful in understanding services and providing a language of communication.In Chapter 3, we explore the use of the metaphors in some detail, especially relat-ing to the service goals (to mix metaphors!). We firmly believe that the metaphorusage is important in constructing how service is perceived by customers and ser-vice organisations (is the service goal efficiency or performance?), but equally, weare aware of its limitations.

Our airline passengers interacted with contact personnel, the built environ-ment (represented by the airport and the aeroplane) and with other passengers.They benefited from efficient, but invisible, service elements such as flight mealpreparation and computerised reservation systems. Their encounter with the ser-vice was for a finite period. These features are common to many services. InChapter 4, we concentrate on customer interactions in services and their centralrole in the marketing of services. The personal, situational, cognitive, emotionaland physiological factors peculiar to particular customers are relevant here, andaffect the content of the service encounter. Interpersonal service encounters areextremely important, but the Internet in particular has rapidly increased theneed to learn more about technology-based service encounters.

Service EncounterOccurs whencustomers directlyinteract with anyaspect of the servicedelivery system.

In the late 1990s and early 2000s, there has been a great interest, by practi-tioners and academics, in providing holistic service experiences for consumers.In the story, we see, for example, that John was expecting more than a routineflight between two destinations, and also that the flight was perhaps only a com-ponent of a never-to-be-repeated overall travel experience. In other contexts,such as shopping mall11 and store12 design, the intended consumer experience isparamount in planning the setting and activities. There are even claims that theservice economy is being replaced by an experience economy.13 Chapter 5 buildson the drama/theatre metaphor to explore the consumer experience.

The factory metaphor emphasises service as a process. The design of serviceprocesses is covered in Chapter 6, with a special focus on service blueprinting.This approach ensures that the invisible elements supporting service delivery areunderstood and fully integrated. We have found that the service blueprint is notonly integral to service design and positioning, but it also provides a useful visualtool for creative service ideas.

In Chapter 7, we explicitly acknowledge the people aspects of services, partic-ularly the roles of the contact personnel. As the story demonstrates, customers

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Introduction 13

(passengers) may make contact with several people who are providing the ser-vice, some of whom are more empowered than others to improvise, but allof whom should, as far as the company is concerned, be offering passen-gers the service which is promised. This represents a great challenge to mostservice organisations, large or small. Finally, theory and practice are broughttogether through the discussion of the elements of a research instrument,SERVOR, which companies can use to measure service orientation: Are theyreally structured to provide good, or even excellent service?

John and Jack Townsend each had their own prior expectations of air travelservice. On meeting Jane in Singapore, each could recount his actual perceptionsof that same service. What did they think about the quality of service? Werethey satisfied with the service? Or even delighted? Did their views differ? If theirexpectations were exceeded, it is likely that they would be satisfied and wouldgive a high-quality verdict. Service quality and customer satisfaction are recog-nised as important service output measures. To increase service quality and/orcustomer satisfaction, within an appropriate budget, is normally part of the mis-sion of a service organisation. Chapter 8 examines the current work and debateson service quality and customer satisfaction, and looks at the models that arebased on gaps between customers expectations and subsequent perceptions ofa service.

Given Janes working relationship in Singapore, there is a possibility that theTownsends may visit Singapore again in the future. Both Manchester Airport andSingapore Airlines would wish them to travel with them again. In other words,they wish to retain them as customers. A concentration on customer retention,through a marketing policy which merges marketing, customer service and qual-ity elements, is termed relationship marketing. This is covered in Chapter 9 andbuilds on the material in earlier chapters, particularly Chapters 7 and 8.

Implicit in the management and marketing of services is the desire for theorganisation to make a profit (or break even, in the case of not-for-profit ser-vices) and to achieve certain levels of productivity. Perhaps surprisingly though,there remains limited explicit reference in the services marketing literature to theissues of service profitability and productivity. Chapter 10 looks at work in thisarea.

Finally, in Chapter 11, we look forward and outline some potential futures andassociated research issues. We are made aware regularly of the interest in servicesmarketing by the number of students at undergraduate and postgraduate levelwho undertake dissertations in the field. This chapter contains ideas for suchwork.

The Relationship between Theory and Practice

New to this edition is the inclusion of two features that highlight the every-day relevance of services marketing theory for practitioners and customers

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alike: postcards from practice and Its in the news!. Our purpose is to demon-strate the pervasive nature of services within our daily lives and assist readersto draw upon their own experiences to make sense of theories discussed withinthis text. We hope to encourage readers to become more critically aware of thegood and bad service practices they encounter and therefore be more confidentwhen determining managerial responses to improve service practice. In essencethat is the philosophy behind this text: drawing upon personal understandingsof how customers evaluate their experiences to learn how organisations mightbest respond managerially.

Characteristics of Case Studies in the Book

The book has 11 case studies. The case studies enable practice, theory and per-sonal experience to be integrated. They are different from, but complement thecase studies that are in many of the other textbooks on services marketing. Mostcases in this book share the characteristics outlined below.

Small-scale Operators

First, the majority of the case studies describe the issues and concerns that affectsmall-scale service operators that are generally neglected in the wider servicesmarketing literature. Although these businesses may not make such a significantfinancial contribution to the service economy as the large-scale operators fre-quently cited in the literature (e.g., banks, building societies, insurance agencies,telecommunications organisations, hotel chains), they often make a significantsocial contribution to the welfare of the communities in which they operate.14

The social role performed by the services covered in this book is an importanttheme running through the cases. As Czepiel et al. point out: Service encountersare a form of human interaction important not only to their direct participants(clients and providers) and the service organizations that sponsor them, but alsoto society as a whole.15

Human Involvement in the Service Experience

The services selected involve a high level of human interaction. Most commonlythis consists of interaction between contact personnel and customers, but it mayalso be between fellow customers during the service experience. This perspectiveenables us to focus on the whole range of problems faced by service managersstruggling to control human involvement in the service delivery process. Thehuman involvement may be facilitated by increased consumer accessibility toinformation and communication technologies. Solomon in Czepiel et al. uses

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Introduction 15

quotations from service managers to illustrate the unpredictability and impor-tance of human exchanges in the service experience in their article on serviceencounters.16

In a service business, youre dealing with something that is primarily delivered by peo-ple to people. Your people are as much of your product in the consumers mind asany other attribute of the service. Peoples performance day in and day out fluctuatesup and down. Therefore, the level of consistency that you can count on and try tocommunicate to the consumer is not a certain thing.

The cases illustrate the importance of the development of long-term personalrelationships to the continued success of many service operations.

Easily Replicated Format

Although reading, studying and analysing written case studies provides an effec-tive means for matching theory and practice, it is not the same as activelystudying a real service organisation. We have found that undergraduate and post-graduate students can gain enormous benefits from writing their own case studyof a small service business. Indeed, three of the case studies in this book werewritten by student groups we have supervised in the past three years.

An in-depth study of a real (small) service organisation can often be achievedover a period of two months or so, and any interviews with the serviceowners/managers can be guided by the checklist of questions below (Table 1.1).We highly recommend it.

Table 1.1 Checklist for gathering suitable information from owners/managers of small servicebusinesses

History of the businessWhen was the business founded?By whom?How has it developed/changed?Location(s)?

StaffingHow many?Who?Personal details; age, qualifications, experience, attitudes/beliefs?

Nature of the businessWhat sort of business are you in?How do you define the service you offer?Who are your competitors?

LocationIf important, collect maps, diagrams.

Physical environmentAsk to look around outlet of interest (front- and back-stage).

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Table 1.1 (Continued)

Method of paymentHow do customers pay for the services?What variety of methods are offered?

Making contact with customersHow do you make contact with new customers; advertising, promotion, PR?How do you retain contact with existing customers?

Relationships (other than with customers)What other parties do you deal with; suppliers, accountants, agencies, societies?What was in your diary over the last month? Refer to key telephone/fax numbers, addresses,

email, etc.

Invisible elementsTypical transactions with business associates?What equipment has to be purchased? Why?How are records kept?Try to obtain flow diagram from first customer contact to final purchase.

Peripheral servicesWhat else is offered on-site to improve overall service?Any examples of special services offered to particular customers?

Customers (1)Who are the typical customer variations?If I wished to become a customer, how would I go about it? (repeats, but important). How do

you build up good relationships with customers?Which customers are most likely to repeat buy?Can you give examples of where your service exceeded/did not meet customer

expectations?

Customers (2)Describe some examples of staff interactions with customers(a) incidents that went well(b) incidents that went badly for whatever reason.

Customers (3)Describe some positive/negative incidents of customers interacting with other customers

(a) conversations(b) altercations(c) cooperations

How do they affect the business?

Contact personnelHow are they trained/prepared for the job?How much initiative can/should they use? Give examples.What are the attributes of a very good member of your staff?What are the minimum requirements of a member of staff?

RecoveryGive examples of an incident which was going wrong, but which was recovered to the

customers satisfaction (more than one if possible).

GeneralHow do you define service quality in the context of your business?Do you have a mission statement and/or company objectives?

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Introduction 17

Overall Learning Outcomes

Having read the chapters and undertaken the case studies, you will be able to

1. Identify the theoretical aspects of services marketing. In particular, you will be able to

critically evaluate the theoretical contributions to services marketing interrelate consumer, customer and provider perceptions of services.

2. Understand how theory translates into service practice. In particular, you will be able to

choose appropriate services marketing frameworks to analyse a service business apply flexibility in your study of new and developing service practices.

Discussion Questions and Exercises

1. Think of three services you have used in the last seven days. What are the processes involvedwith these services from your (customer) perspective?

2. Name two services where companies have attempted to replace contact personnel withmachines. To what extent has the changeover been successful?

3. Why is physical evidence important in services?

4. In what type of services might it be an option to make the invisible elements of the servicemore visible?

5. What small service businesses are run by members of your family or by friends?

Notes and References

1. Berry, L. L. and Parasuraman, A., Building a New Academic Field: The Case of ServicesMarketing, Journal of Retailing, 69(1), Spring 1993, pp. 1360.

2. Shostack, G. L., Breaking Free from Product Marketing, Journal of Marketing, 41, April1977, pp. 7380.

3. Carman, J. M. and Langeard, E., Growth Strategies for Service Firms, Strategic Manage-ment Journal, 1, 1980, pp. 722.

4. Bateson, J. E. G., Managing Services Marketing: Text and Readings, 2nd edn., DrydenPress, London, 1992.

5. McGrath, M. A. and Otnes, C., Unacquainted Influencers: When Strangers Interact in theRetail Setting, Journal of Business Research, 32, 1995, pp. 26172.

6. Bitner, M. J., Servicescapes: The Impact of Physical Surroundings on Customers andEmployees, Journal of Marketing, 56, April 1992, pp. 5771.

7. Meuter, M. L., Ostrom, A. L., Roundtree, R. I. and Bitner, M. J., Self-Service Technologies:Understanding Customer Satisfaction with Technology-Based Service Encounters, Journalof Marketing, 64, July 2000, pp. 5064.

8. Grove, S. J. and Fisk, R. P., The Dramaturgy of Services Exchange: An Analytical Frame-work for Services Marketing, in L. L. Berry, G. L. Shostack and G. D. Upah (eds), EmergingPerspectives on Services Marketing, American Marketing Association, Chicago, 1983.

9. Pranter, C. A. and Martin, C. L., Compatibility Management: Roles in Service Perfor-mances, Journal of Services Marketing, 5, Spring 1991, pp. 4353.

10. The servuction model of service delivery systems explicitly recognises invisible compo-nents: see Langeard, E., Bateson, J., Lovelock, C. and Eiglier, P., Marketing of Services: NewInsights from Consumers and Managers, report no. 81104, Marketing Science Institute,Cambridge, Mass., 1981.

11. The Mills Corporation, for example, wishes to draw consumers into its malls who are notonly ready to shop, but are also ready to have an experience. http://www.millscorp.com/

12. See, for example, ImagiCorps, and its offer of Retail Theater. http://www.imagicorps.com/retail.html.

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13. Pine, B. J. II and Gilmore, J. H., The Experience Economy: Work is Theater and EveryBusiness a Stage, HBS Press, Boston, Mass., 1999.

14. Baron, S., Leaver, D., Oldfield, B. M. and Cassidy, K., Independent Food and GroceryRetailers: Attitudes and Opinions in the Year 2000, Manchester Metropolitan University,Manchester, June 2000.

15. Czepiel, J. A., Solomon, M. R. and Surprenant, C. F. (eds), The Service Encounter:Managing Employee/Customer Interaction in Service Businesses, Lexington Books,Lexington, Mass., 1985.

16. Ibid.

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October 16, 2008 11:30 MAC/SRMK Page-351 9780230_520936_15_ind01

Index

Abbey National, 198Absurd theatre, 624Accommodation, 55Acquaintances, interactions

with, 823Advertising, 151, 173, 228Affluence, 1, 22Age Concern, 277Airline services, 119, 146,

172, 225Airports, 76, 77, 138Airtours, 99, 2924Air travel experience, 36

analysis, 611Allafrica.com, 170Amazon.com, 247Ambient conditions, 9, 127,

136, 1401American Customer

Satisfaction Index(ACSI), 236

American Express, 213Arena Housing Group, 176Asda, 202Assurance, 169, 176

see also PZB; RATER;SERVQUAL

Attitudeattitudinal loyalty, 2056service quality as, 184

Auckland District LawSociety, 160

Auckland Grammar School,286

Auckland Herald, 312Auckland International

Airport, 28891Aurora, 2089

B&Q, 92, 211Back-stage, 1012, 55, 92,

134, 247Ball, G. & Son, Funeral

Directors, 58, 27180

Banks, 2, 10, 119, 1289,146, 1989, 204

Behavioural loyalty, 2056Bereavement counselling,

2732Bio-security, 291Blueprinting, 12, 11923

applications, 12435,2467

Bobby Byrnes restaurantsand pubs, 104

Boots, 201Boots Advantage card, 212Borders bookstores, 92Brecht, B., 62, 109British Airways, 146, 256,

298Building communities

stage, 24, 289Business analysis and

computer consultancycase study, 31318

Business-to-business sector,32, 245

Butchers, 12930

Call centres, 1523, 155,196, 245

Capacity management, 25,27, 367, 558

Case studieschecklist for information

collection, 1516purpose and role, 1415

CBRT, 320CDMA, 321Changi airport, Singapore,

1378Chapels of Rest, 272Characteristics of services,

25, 325management

implications, 358Cheers, 104

Child Cancer Foundation,22930

China MobileCommunications Ltd,320

China Unicom, 320China United

TelecommunicationsLtd, 320

Christmas service, 102Classification of services,

130, 136Clicks and bricks strategy,

92, 93Clicks or bricks strategy,

92Co-consume, 71Co-create, 28, 71, 244Coffins, 271, 275Coloring Ring Back Tone,

31924Comet, 103Commitment

employees, 154, 1603,233

relationship marketing,1945, 204, 228, 255,257

Communicationwith customers, 79, 174,

179, 253with employees, 133,

154, 162, 173,182

Compatibility management,74, 858

Complaints, 7, 81, 105,1289, 149, 156, 162,203, 2078, 250

customer evaluation of,21011

illegitimate complaints,211

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352 Index

Complexity, 6, 534, 122,255

blueprinting to identify,1302

Connoisseur, customer as,634

Consumption, timing of,25, 30, 34, 557

Contact personnel, 8, 12,14, 25, 456, 49, 78,12330

see also employees;internal marketing

Co-operative Society(Co-op), 277

Co-produce, 30, 244, 248Core element, 7Costs, 55, 5960, 158, 195

switching/exit, 182, 192,197, 199, 210

reducing, 224, 228,2501, 254

Crawling out stage, 245Creating language stage,

24, 28Credence factors, 33Crises, 81, 2089Critical incidents, 267, 50,

52, 79, 84, 110Critical incident technique,

78, 97, 150Critical Path Analysis, 120Culture, 134, 148, 1545,

161Cumulative customer

satisfaction, 185Customer compatibility, 74,

85Customer confidence, 253Customer-to-customer

interactions withacquaintances, 823strangers, 83

Customer databases,195200

Customer defections,22731

Customer-employeeinteractions, 10, 7882

Customer errors, 1267Customer expectations, 9,

60, 71, 77, 16972, 179antecedents of, 1724measuring, 174, 2356and perceptions, 85

see also service quality;perceptions

Customer experience, seeservice experience

Customer orientation,1545

Customer productivity, 88,93, 245

future research, 24853operant resources, 2831,

347Customer pyramid, 2257Customer Relationship

Management (CRM),195

Customer roles, 624, 109Customers, 23

advantages of relationshipmarketing, 1989

assessment of servicequality, 16877

co-creators of value, as,301

defection of, 22731disadvantages of

relationshipmarketing, 2001

employees as partialcustomers, 153

evaluations of complainthandling, 21011

expectations, 9interactions, see

interactionsinternal, 14850, 153,

1545involvement, 49, 88,

901, 2524Jay, 256loyalty, see loyaltyneeds, 9, 1012, 1978operant resource, as, 31,

24854partial employees, as, 49perceptions, see

perceptionsproductivity of, 24553retention, 88, 93, 182,

192, 206satisfaction, 17984Satisfaction-Profit Chain,

2289unruly, 75

Customer satisfaction,17984

cumulative, 185

customer-employeeinteractions, 7881,146, 147, 1589

customer-technologyinteractions, 8991

physical environmentand, 1367

service quality vs, 1845Customer satisfaction

indices, 2346Customer satisfaction

surveys, 79, 1802Customer service, 2, 8,

1767, 180, 182, 194Customer switching

behaviour, 255Customer-

technology/equipmentinteractions, 767

research issues, 24553satisfaction with, 8892see also e-service

provision; self-serviceCustomisation, 91, 223

drawback of, 55Cyber-society, 3425Cycle of failure, 230

Databases, 195, 196, 198,200, 201, 202

David Lloyd Leisure, 22Decision support systems,

237Defections, customer,

22731Delay, 378, 56, 80

see also capacitymanagement; waitingtimes

Delivery-externalcommunications gap,172, 174

Delivery system, 408Demand, see capacity

management;perishability

De-regulation, 2, 22Design, 12, 36, 11543,

2078physical environment,

778, 13541process, 12, 11819self-service technologies,

901, 142, 2468Disney theme parks, 37Distributive justice, 210Divergence, 1302

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Index 353

Door 2 Door Airbus, 49Drama, see theatre

metaphorDreamworld, 57Dysfunctional customers,

2567Jay customers, 256unruly customers, 75

EasyJet, 1545, 249EBay, 22, 246Economic value,

progression of, 101Effectiveness, marketing,

55, 77, 11617, 1378Effective service recovery,

37, 81, 90, 20711automated environment,

in, 247Efficiency, 1112, 201

factory metaphor, 11, 12,4466, 11617

operational, 55, 11617,1378

EGG Bank, 2267Empathy, 37, 90, 1567,

16970, 176Employees

commitment, 233customer-employee

interactions, 10,734, 7882

customer productivity,impact on, 2524

customers as partialemployees, 36, 49, 66

employment experience,see employmentexperience

empowerment, seeempowerment,employee

internal marketing, seeinternal marketing

loyalty, see loyaltyoperant resource, as,

301, 14563partial customers, as,

153retention, 200, 204satisfaction, see employee

satisfactionservice-profit chain,

1467, 2314Employee satisfaction,

1468, 221, 2313see also job satisfaction

Employee surveys, 150Employment experience,

15961, 2545Empowerment, employee,

81, 90, 1579, 162,2089

Encounter errors, 127Environmental engineer

role, 86Environment, physical, see

physical environmentEquipment and technology,

see customer-technology/equipmentinteractions

E-service provision, 119,134

e-form, 47, 52, 246e-scape, 142, 143, 248e-service failure and

recovery, 21112e-service quality, 1779e-tail, 212e-xperience, 103

European CustomerSatisfaction Index(ECSI), 236

European Quality Award(EQA), 221

Exit costs, see costsExpectation-

disconfirmationparadigm, 179

Expectations, see customerexpectations

Experience factors, 33Experiences, consumer, see

service experienceExperiential marketing,

1067

Facebook, 22, 246, 343Factory metaphor, 11, 12,

4466, 11617Fail-safing, 1245Fight the Monster

campaign, 22930Flowcharting, 120

see also blueprinting;service mapping

Front-stage, 1011, 50,61, 81

see also visible elementsFunctional quality, 169Funeral directors case study,

27180

Gallup, 147Gaps model, 25, 1702General Consumer Council

for NorthernIreland, 105

Generation Y (Gen Y), 254George Ball & Son case

study, 58, 271280Gestalt, 108, 111Gold Coast, Australia, 49, 57Google, 47, 52, 340, 341Google AdWords, 3389Google Scholar, 174Great good places, 1045Growth limitation, 578GSM, 170, 320

Hairdressing, 478blueprinting, 1202case study, 23668complexity and

divergence, 1302services marketing

system, 456Haji-Ioannou, S., 154Halo effect, 180Health services, 201, 589,

193, 2589Helpseekers, 83Heterogeneity, 25, 334, 36,

38, 71, 76Hewlett Packard, 98Hotel Ibis Darling Harbour,

173Hotels, 138, 220

IBM, 111, 244, 245IKEA, 85ILG Travel, 292Implementation, line of,

1236Impression management,

378see also delay; waiting

timesIMRG, 177Influence markets, 2045Information technology

(IT), 28, 29, 467, 195see also customer-

technology/equipmentinteractions;self-service;technology-basedservices

Inseparability, 25, 34, 36,45, 145

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354 Index

Institute of EmploymentStudies, 233

Intangibility, 25, 323, 36,71

Interactional justice, 210Interaction, line of, 1236Interactions, 710, 6995

acquaintances, with,823

customer-customer, 745,828

customer-employee, 734,7882

customer-technology/equipment with,767, 8891

physical surroundings,with, 778

strangers, with, 834Internal interaction, line of,

1236Internal marketing,

14865defining, 14850evaluation, 162increasing job

satisfaction, 15561relationship marketing,

204value and practice,

1535Internet, 12, 223, 534,

734, 767, 8891,11819, 1289

challenges for employers,156

responsiveness, 134roles, 2467strategies for services via,

723see also e-service provision

Intrusion, 200Invisible elements, 1011,

12, 16, 119identifying, 1223,

12930

Jackson Russell, 15961,32532

Job satisfaction, 15561see also employee

satisfaction;employee surveys

Joe & Co, Hairdressing,26570

Justice, perceived, 210,255

Key account managers, 316Kings School Band

Programme, 612case study, 28187

Kitchen and Garden Show,312

Landscape Safari, 1345,30512

Legislator role, 86Leisure

servicescapes, 136time, growth of, 22

Lewiss department store,108

Linkedin, 342Los Alamos National Bank,

221Loyalty, 1467, 1589,

1802customer loyalty, 2057employee loyalty, 227,

2303and profitability, 22733relationship marketing,

1912strategies for maintaining,

20614switching behaviour, 255

Loyalty-based system chain,2301

Loyalty cards, 2001, 202Loyalty schemes, 202,

21214

Making tools stage, 24, 28Malcolm Baldrige National

Quality Award(MBNQA), 2202

Manchester Crematorium,276

Manufacturing-orientedthinking, 35

Market-based relationshipmarketing, 192,196202

advantages, 198200disadvantages, 2002

Marketing effectiveness, 55,116

physical environment,138

Marketing mix, 25services (extended), 19,

256, 11516Marketing tools, 1502

Market-perceived qualityratio, 219

Market research, 81, 150,1834

Marks & Spencer, 83, 291Marriott Corporation, 230Matchmaker role, 86Merck & Co, 230Metaphors, 11, 12, 4368,

116factory, 11, 12, 4459,

656, 116theatre, 11, 12, 5966,

116uses and limitations, 44

Methodology, for servicesresearch, 25960

Microsoft, 63, 313, 314, 316Mills Corporation, 24MMS, 321Motivation, of employees,

135, 150see also employee

satisfaction; jobsatisfaction

MTN, 170Music, 9, 111

ambient conditions, 141Kings school band case

study, 28187Kings school band

programme, 612MySpace, 22, 342

National Association ofFuneral Directors(NAFD), see GeorgeBall & Son case study

National Salvage Group(NSG), 314, 318

Needs, customer, 9, 1012,1978

Network-based relationshipmarketing, 1923,2025

Networks, 224New Zealand Symphony

Orchestra, 286Not-for-profit sector, 13,

312, 222

Observational research, 73,12930, 259

Oceans Connect, 153Operant resources, 28, 301

customers as, 24854employees as, 1456

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Index 355

Operational efficiency, seeefficiency; factorymetaphor

Operations system, 456Outlay, 55Outsourcing, 2545

see also call centresOwners Abroad, 292, 293,

294

P&O cruises, 209Past experiences, 173Pay-as-you-go services, 32People, 79, 1011, 301

importance of, 15, 20services marketing mix,

256see also employees;

internal marketing;operant resources

Perceptions, customer, 89,13, 35, 378

expectations and, 9justice, 210service quality, 16872see also critical incidents

Performance, service as, 12,5962

see also drama metaphorPeripheral elements, 67Perishability, 25, 346PERT (Program Evaluation

and Review Technique),120

Physical environment,911, 115

customer encounterswith, 778

and customer satisfaction,1367

design, 13542e-scapes, 142, 248

Physical evidence, 911PIMS database, 21821Plant-by-numbers, 135

Landscape Safari casestudy, 30512

Points of contact, multiple,504, 701

Police officer role, 87Political realism, 62, 64Portable Play Station (PSP),

290Precision marketing, 195Preparation errors, 127

Price/pricing, 256, 37, 55,102

capacity management,and, 556

rail services, of, 389switching behaviour, 255see also costs; outlay

PriceWaterhouseCoopers,20

Private embedded devices,28

Private sector, 31Proactive helpers, 83Procedural justice, 210,

255Process, 67, 1112Process design, 67, 11535

applications, 12435blueprinting, 11923service mapping, 1234technology-based

self-service, 2467Productivity

customer, of, 24853healthcare, in, 589profit, and, 1467see also efficiency; factory

metaphorProfessional services, 197

see also Jackson RussellProfitability, 21642

customer loyalty/defection and,22733

customer pyramid, 225employee loyalty and,

2301links between quality

and, 1758quality, productivity and

profitabilityprogramme, 2224

service-profit chain,1467, 2314

statistical estimations ofrelationships withquality and customersatisfaction, 2347

Progression of economicvalue, 1012

Promises gap, 172Promotion, 256, 1512Publicity, 151Public sector, 31Purchase pals, 823

Purposeof consumption, 1367,

142PZB, 16977, 184

Qualitative research, 25960Quality, 13, 257, 16779,

184as an overall attitude, 184assessment by consumers,

169awards, 2202and business results,

21820customer satisfaction vs,

17985dimensions of, 16970e-service quality, 1779healthcare, and, 589internal marketing,

14855perceived service quality,

1689potential causes of

shortfalls (gapsmodel), 1712

return on quality, 234,2367

SERVQUAL, 1747See also customer

expectations;perceptions

Quality, productivity andprofitability (Q P and P)programme, 2224

Queuing, 56see also capacity

management

RAD9, 47Case study, 33346

Rail servicescustomer interactions, 75,

845pricing, 389

RATER, 16971Reactive helpers, 83Recruitment markets, 203Red Rock Canyon trail ride,

99100, 102Referral markets, 204Relationship marketing, 25,

191214definitions and features,

1936market-based, 196202network-based, 2025

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356 Index

Relationshipmarketing continued

see also loyalty;loyalty-based systemchain; loyalty cards;loyalty schemes

Reliability, 169, 1701,1789

Research, 150critical incident

technique, 78future research issues,

24361methodology, 25960SERVQUAL, 1747

Resolution errors, 127Responsiveness, 134,

16970, 176internet service, 247

Retail theatre, 625, 1023Return on investment

(ROI), 5, 219Return on quality (ROQ),

234, 2367Rifleman role, 86Ringo, 342Role clarity

consumers, 90employees, 156

Rolescustomer roles, 624,

825, 1089internet, 246service providers, 858

Rutherford Rede, 878,13940

Safety, ensuring, 12930Safeway, 103, 202Sainsburys, 193Santa Claus role, 87Satisfaction, 13, 1678,

17986customer satisfaction

indices, 2346economic/profit, impact

on, 218, 227employee/job, 1468,

15561, 2324employees, with, 7881,

146loyalty; profitability, and,

22736physical environment,

with, 1367technology, with, 767,

8991see also critical incidents

Satisfaction-Profit Chain,2289

Scent/smell, 140Scope of service provision,

312Scripts, 8, 50, 65

application atWagamama, 601

Scurrying about stage, 24,256

Search factors, 133Sears, 230Security, within e-service,

1779Segmentation, 151, 200Self-service, 10, 11819,

134customer confidence and

ability, 253future of, 24453impact on employees,

2523self-scanning &

self-check-out,24950, 252

self-service technology(SST) andtechnology-basedself-service (TBSS),767, 8892

see also e-service provisionSense-ceptor, 634Senses, 1067SERVOR, 1613Servant leadership, see

SERVORServer errors, 1267Service characteristics, 325

management implicationsof, 359

Service delivery system,447

Service design, see designService-dominant logic

(S-DL), 2931co-creation of value, 30future research, 2445operant resources, 28,

301, 1456,24854

value-in use, 30Service encounters, 6972

customer-customerinteractions, 745,827

customer-employeeinteractions, 734,7882

customer-physicalenvironmentinteractions, 77

customer-technologyinteractions, 767,8892

Service experience, 36analysis, 611

Service failures, 7, 2023e-service, 21112prevention, 122, 1245,

162recovery, see service

recoverysee also customer errors;

server errors;switching behaviour

Service goals, 12, 4267service as a performance,

5965service as a system, 4459see also effectiveness;

efficiency; factorymetaphor; theatremetaphor

Service journey audits, 123Service mapping, 119,

1234applications, 1234

Service maps, see servicemapping

Service marketing system,456, 48, 55

Service operations system,456

Service orientation, 1613see also SERVOR

Service-oriented thinking,35

Service profitability, seeprofitability

Service-profit chain, 1467,2313

Service quality, see qualityService recovery, 7, 1289,

162, 192, 211,2556

automated environment,in, 247

cultural impact on,2578

effective service recovery,8190, 2079

PROOF


Index 357

e-service, 21112see also complaints;

justiceService rewards, see

SERVOR; QualityServicescape, 9, 78, 1356

customer satisfaction,and, 1367

designing, 13741e-scapes, 142, 248see also ambient

conditions; physicalenvironment

Service science, 28, 29, 246Service science,

management andengineering (SSME), 28,29, 244, 246

Service scripts, see scriptsServices marketing mix, 19,

256, 11516Services marketing system,

456, 48, 55Services, study of, 13

characteristics of, 325economic importance,

1924evolution of services

marketing, 249management

implications, 359scope of service provision,

312Service standards

communication, seeSERVOR

Service technology, seeself-service;technology-basedservices

Service training, 73, 1523health services, in, 201see also employee

empowerment;internal marketing;SERVOR

Service transaction analysis,123

Service vision, see SERVORSERVQUAL, 1707

conceptual andmethodologicalproblems, 1756

SERVSIG, 177Servuction system model,

445

SIM card, 171Singapore Airlines, 36, 255

analysis of serviceexperience, 613

Six Sigma, 224Skype, 343Small-scale operators, 14Smell/scent, 140

see also ambientconditions

SMS, 321Specifications, quality,

1714see also SERVQUAL

Spect-actor, 624, 1089Staff development, see

empowerment;employee

Stanislavski (KonstantinSergeivich), 62

Star Alliance, 289Starship Hospital, Auckland,

229Statistical Process Control

(SPC), 224Strangers, interactions with,

834Sunset Trail Ride and

Barbecue Dinner,99100

Supermarket shopperscustomer service survey,1801

Suppliers, relationshipswith, 2023

Supply and demand, seecapacity mangement

Surrealism, 62, 63Swedish Customer

Satisfaction Barometer(SCSB), 228, 2346

Swissair, 294, 297Switching behaviour, 255Switching costs, see costsSydney Harbour

BridgeClimb, 117

Tags Hardware, 103Tangibility, 6, 911, 36, 71,

11819, 1689see also intangibility;

peripheral serviceelements; physicalevidence;servicescapes

Tangible errors, 127Targeting, 151

Task errors, see server errorsTeacher role, 86Technical quality, 169Technology-based services,

767customer interaction

with, 767research issues, 24553satisfaction with, 8892see also self-service

Tesco, 22, 77, 202Tesco Club-card, 212Theatre metaphor, 11, 12,

5966, 116future research, 259see also effectiveness;

service goalsTheatrical movements, 623Theatrical realism, 623Theatrical retail/service

offers, 1023Third places, 82, 104Thomson Holidays, 2923Timing of consumption, see

capacity management;delay and waiting

Total Quality Management(TQM), 224

Tourism industry, 20, 112TradeMe, 22, 156, 246Training, see empowerment;

employeeTransaction marketing

relationship marketingcompared with, 192

Treatment errors, see servererrors

Truste-service, 92, 178relationship marketing,

1945, 197service quality, 169service recovery, 2556

Unacquainted influencers,see strangers

Unitec, 326, 331, 344University of Durham

Business School(UDBS), 315

University of Liverpool,322, 324

Unplanned variation, 122Utilitarian consumption,

1368, 2578

PROOF


358 Index

Variability, 10, 1201see also blueprinting;

heterogeneityVenetian Hotel, Las

Vegas, 103, 109,110, 111

Veterinary services, 83, 133,146

Visibility, line of, 121, 122,123, 124, 133

see also blueprintingVisible elements, 1011, 45,

47Voyeur role, 62, 63

Wagamama, 601Waitakere City Hospital,

139Waiting rooms, design of,

135Waiting times, 37, 478

healthcare, 201management of, 378,

567see also capacity

managementWalking erect stage, 24, 37Waterstons Business

Analysis and ComputerConsultancy, 31318

Waymark Holidays, 151,159, 191, 202

case study, 292303Word of mouth (WOM), 36,

152, 1723employee, 152negative, 81, 155relationship marketing,

199, 228

Yahoo!, 105Yellow Pages, 46, 49, 276,

306

PROOF

ContentsChapter 1: IntroductionIndex

Cap 1 Services Marketing Baron Et Al (Curs 3)

Documents

learning objectives

service management

service experiences

service design

service goals

customer interactions

physical service environment

overall learning outcomes