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Winning in Service Markets

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Abstract

Winning in Service Markets is the first practitioner book to offers a comprehensive overview of extant knowledge on the key aspects of services marketing and management based on sound academic evidence. Accessible and practical, Winning in Service Markets bridges the gap between cutting-edge academic research and management practice.
World Scientic
www.worldscientific.com
Y0002 hc
ISBN 978-1-944659-04-2
Wirtz
Jochen Wirtz
Winning
Service
Markets
Success through
People, Technology and Strategy
in
WINNING in SERVICE MARKETS
Winning in Service Markets: Success through People, Technology, and Strategy
is the rst practitioner book in the market to cover the key aspects of
services marketing and management based on sound academic evidence
and knowledge. Derived from the globally leading textbook for Services
Marketing by the same author, this book offers a comprehensive overview of
extant knowledge on the topic. Accessible and practical, Winning in Service
Markets bridges the gap between cutting-edge academic research and industry
practitioners, and features best practices and latest trends on services
marketing and management from around the world.
Winning in Service Markets is a highly practical book. I love the comprehensive
coverage of services marketing and the rigor.Also, it is easy to read and full
of interesting, best practice examples.I recommend this book to everyone
working in a service organization.
Jan Swartz
President, Princess Cruises
You won’t nd opinion here. Rather, this book is based on rock-solid academic
evidence. Jochen Wirtz does an excellent job of taking the body of academic
research and translating it into best practices for service organizations with
actionable insights that even the most experienced managers can learn from.
Shep Hyken
Customer service expert and New York Times Bestselling author of The Amazement Revolution
Winning in Service Markets is a comprehensive, well-written book that enables
managers to access the best of academic research and put it to use in their
work. Jochen Wirtz has done a masterful job presenting the most relevant
academic research in a comprehensive and accessible manner to managers
in service organizations. Few business scholars are able to translate rigorous
academic research to managers as well as him. This book is a shining
example.
Leonard Berry
University Distinguished Professor of Marketing, Texas A&M University
Winning in Service Markets provides a set of useful frameworks and
prescriptions rooted in both practice and research. As such, it represents a
refreshing alternative to the prevailing literature available to managers who
are looking for insights rooted in sound theory.A must read for any practicing
manager in the service economy.
Leonard A. Schlesinger
Baker Foundation Professor, Harvard Business School
World Scientic
www.worldscientific.com
Y0002 hc
ISBN 978-1-944659-04-2
Wirtz
Jochen Wirtz
Winning
Service
Markets
Success through
People, Technology and Strategy
in
WINNING in SERVICE MARKETS
Winning in Service Markets: Success through People, Technology, and Strategy
is the rst practitioner book in the market to cover the key aspects of
services marketing and management based on sound academic evidence
and knowledge. Derived from the globally leading textbook for Services
Marketing by the same author, this book offers a comprehensive overview of
extant knowledge on the topic. Accessible and practical, Winning in Service
Markets bridges the gap between cutting-edge academic research and industry
practitioners, and features best practices and latest trends on services
marketing and management from around the world.
Winning in Service Markets is a highly practical book. I love the comprehensive
coverage of services marketing and the rigor.Also, it is easy to read and full
of interesting, best practice examples.I recommend this book to everyone
working in a service organization.
Jan Swartz
President, Princess Cruises
You won’t nd opinion here. Rather, this book is based on rock-solid academic
evidence. Jochen Wirtz does an excellent job of taking the body of academic
research and translating it into best practices for service organizations with
actionable insights that even the most experienced managers can learn from.
Shep Hyken
Customer service expert and New York Times Bestselling author of The Amazement Revolution
Winning in Service Markets is a comprehensive, well-written book that enables
managers to access the best of academic research and put it to use in their
work. Jochen Wirtz has done a masterful job presenting the most relevant
academic research in a comprehensive and accessible manner to managers
in service organizations. Few business scholars are able to translate rigorous
academic research to managers as well as him. This book is a shining
example.
Leonard Berry
University Distinguished Professor of Marketing, Texas A&M University
Winning in Service Markets provides a set of useful frameworks and
prescriptions rooted in both practice and research. As such, it represents a
refreshing alternative to the prevailing literature available to managers who
are looking for insights rooted in sound theory.A must read for any practicing
manager in the service economy.
Leonard A. Schlesinger
Baker Foundation Professor, Harvard Business School
xi
Contents
Preface x
Introduction xiii
Part I: Understanding Service Products,
Consumers and Markets 1
1. Creating and Capturing Value in the Service Economy 2
2. Consumer Behavior in a Services Context 33
3. Positioning Services in Competitive Markets 67
Part II: Applying the 4 Ps of Marketing to Services 101
4. Developing Service Products and Brands 102
5. Distributing Services 135
6. Pricing Services and Revenue Management 163
7. Service Marketing Communications 210
Part III: Managing the Customer Interface 267
8. Designing Service Processes 268
9. Balancing Demand and Capacity 308
10. Crafting The Service Environment 344
11. Managing People for Service Advantage 378
Part IV: Developing Customer Relationships 439
12. Managing Relationships and Building Loyalty 440
13. Complaint Handling and Service Recovery 489
Part V: Striving for Service Excellence 535
14. Improving Service Quality and Productivity 536
15. Building a World-Class Service Organization 591
Endnotes 608
Index 662
About the author 681
Acknowledgements 683
x
Preface
e main objective of this book is to cover the key aspects of services
marketing and management, and that is based on sound academic
research. erefore, I used a globally leading text book I co-authored
with Professor Christopher Lovelock (Title: Services Marketing: People,
Technology, Strategy, 8th edition) as a base for this book and adapted
and rewrote it for managers. is is a unique approach. ere are a
lot of books that focus on certain aspects of service management and
marketing, such as on managing customer loyalty, complaint handling
and service recovery, revenue management, driving change and building
a customer-focused service culture, or on the experience of individual
organizations. What I wanted to achieve with this book is to provide a
more comprehensive coverage of the latest academic research and its
implications for best-practice service management and marketing.
e book aims to bridge the all-too-frequent gap between cutting edge
academic research and theory, and management practice. at is, it
provides a strongly managerial perspective, yet is rooted in solid academic
research, complemented by memorable frameworks.
In particular, creating and marketing value in today’s increasingly
service and knowledge-intensive economy requires an understanding of
the powerful design and packaging of ‘intangible’ benets and products,
high-quality service operations and customer information management
processes, a pool of motivated and competent front-line employees,
building and maintaining a loyal and protable customer base, and
the development and implementation of a coherent service strategy to
transform these assets into improved business performance. is book
aims to provide this knowledge.
xiii
Introduction to
The World of Services
Unfortunately, consumers are not always happy with the quality and
value of the services they receive. Both individual and corporate
consumers complain about broken promises, poor value for money,
rude or incompetent personnel, inconvenient service hours, bureaucratic
procedures, wasted time, malfunctioning self-service technologies,
complicated websites, a lack of understanding of their needs, and various
other problems.
On the other hand, suppliers of services, who oen face sti
competition, appear to have a very dierent set of concerns. Many owners
and managers complain about how dicult it is to nd skilled and motivated
employees, to keep costs down and make a prot, or to satisfy customers,
who, they sometimes grumble, have become unreasonably demanding.
Fortunately, there are service companies that know how to please
their customers while also running a productive and protable operation.
ese organizations are staed by pleasant and competent employees, and
are accessible through user-friendly, self-service technologies, websites
and apps.
xiv · Winning in Service Markets
is book will show how service businesses can be managed to
achieve customer satisfaction and protability. In addition to studying key
concepts, organizing frameworks, and tools of services marketing, there
are many examples from rms across the US and around the world. From
the experiences of other rms, important lessons can be drawn on how
to succeed in increasingly competitive service markets. is book aims to
provide the knowledge and skills necessary and relevant in tomorrow’s
business environment.
Below are the key contents of the ve parts of this book:
PART I
Understanding Service Products, Consumers, and Markets
Part I of the book lays the building blocks for studying services and
learning how to become an eective services marketer.
• Chapter 1 denes services and shows how to create value without
transfer of ownership.
Chapter 2 discusses consumer behavior in both high- and low-
contact services. e three-stage model of service consumption is
used to explore how customers search for and evaluate alternative
services, make purchase decisions, experience and respond to
service encounters, and evaluate service performance.
Chapter 3 discusses how a service value proposition should be
positioned in a way that creates competitive advantage for the rm.
e chapter shows how rms can segment a service market, position
their value proposition, and focus on attracting their target segment.
PART II
Applying the 4 ‘P’s of Marketing to Services
Part II revisits the 4 ‘P’s of the traditional marketing mix, expanded to
take into account the characteristics of services that dierent from goods.
• Chapter 4 discusses about product that includes both the core and
supplementary service elements. e supplementary elements
facilitate and enhance the core service oering.
Introduction to The World of Services · xv
Chapter 5 discusses place and time elements which refer to the
delivery of the product elements to the customers.
• Chapter 6 deals with the prices of services that need to be set with
reference to costs, competition and value, and revenue management
considerations.
Chapter 7 explains promotion and education, and how rms should
inform customers about their services. In services marketing, much
communication is educational in nature to teach customers how to
eectively move through service processes.
PART III
Managing the Customer Interface
Part III of the book focuses on managing the interface between the
customers and service rm. It covers the additional 3 ‘P’s that are unique
to services marketing.
Chapter 8 describes processes to create and deliver the product
elements. It begins with the design of eective delivery processes,
specifying how the operating and delivery systems link together to
deliver the value proposition. Very oen, customers are involved in
these processes as co-producers, and well-designed processes need
to account for that.
Chapter 9 also relates to process management and focuses on balancing
demand and capacity for each step of a customer service process.
Marketing strategies for managing demand involve smoothing
demand uctuations, inventorying demand through reservation
systems, and formalized queuing. Managing customer waiting is
also explored in this chapter.
• Chapter 10 describes the physical environment, also known as the
servicescape, needs to be engineered to create the right impression
and facilitate eective service process delivery. e servicescape
provides tangible evidence of a rm’s image and service quality.
Chapter 11 emphasizes that people play a key role in services
marketing when direct interaction between customers and service
personnel is part of the service. e nature of these interactions
strongly inuences how customers perceive service quality. Hence,
xvi · Winning in Service Markets
service rms devote a signicant amount of eort to recruit, train,
and motivate employees. How to get all this right is explained using
the Service Talent Cycle as an integrative framework.
PART IV
Developing Customer Relationships
Part IV focuses on how to develop customer relationships and build
loyalty.
Chapter 12 shows that achieving protability requires creating
relationships with customers from the right segments and then nding
ways to build and reinforce their loyalty. is chapter introduces the
Wheel of Loyalty, which shows three systematic steps in building
customer loyalty. e chapter closes with a discussion of customer
relationship management (CRM) systems.
Chapter 13 shows that loyal customer base is oen built from
eective complaint handling and service recovery, which are discussed
in this chapter. Service guarantees are explored as a powerful way of
institutionalizing service recovery and as an eective marketing tool
to signal high-quality service.
PART V
Striving for Service Excellence
Part V focuses on how to develop and transform a rm to achieve service
excellence.
• Chapter 14 discusses that productivity and quality are both necessary
and are strongly related to nancial success in services. is chapter
focuses on service quality, diagnosing quality shortfalls using the
Gaps Model, and strategies to close quality gaps. Customer feedback
systems are discussed as an eective tool for systematically listening
to and learning from customers. Productivity is introduced as closely
related to quality, and it is emphasized that in today’s competitive
markets, rms need to simultaneously improve both quality and
productivity — not one at the expense of the other.
Chapter 15 is the nal chapter that discusses how to move a service
organization to higher levels of performance in each functional area.
Introduction to The World of Services · xvii
Figure I: Organizing Framework for Winning in Service Markets
Applying the 4 Ps of
Marketing to Services
4. Developing Service
Products and Brands
5. Distributing Services
Through Physical and
Electronic Channels
6. Service Pricing and
Revenue Management
7. Service Marketing
Communications
Part I
Part II Part III
Part V
Part IV
Managing the
Customer Interface
8. Designing Service
Processes
9. Balancing Demand
and Capacity
10. Crafting the Service
Environment
11. Managing People for
Service Advantage
Developing Customer
Relationships
12. Managing
Relationships and
Building Loyalty
13. Complaint
Handling and
Service Recovery
Striving for Service Excellence
14. Improving Service Quality and Productivity
15. Building a World Class Service Organization
Understanding Service Products, Consumers,
and Markets
1. Creating Value in the Service Economy
2. Understanding Service Consumers
3. Positioning Services in Competitive Markets
CHAPTER SUMMARY
Service Sector Industries
In order of contribution to US GDP:
Government services
Real estate
Business and professional
services
Wholesale & retail trade
Transport, utilities &
communications
Finance & insurance
Healthcare services
Accommodation & food services
Arts, entertainment & recreation
service
Other private sector services
Categories of Services by Type of Processing
People-processing (e.g., passenger transport, hairstyling)
Possession-processing (e.g., freight transport, repair services)
Mental stimulus-processing (e.g., education)
Information-processing (e.g., accounting)
Services Pose Distinct Marketing Challenges
Services tend to have four frequently cited characteristics:
intangibility, heterogeneity (variability of quality),
inseparability of production and consumption, and
perishability of output, or IHIP for short. Key implications of
these features include:
Most services cannot be inventoried (i.e., output is
perishable)
Intangible elements typically dominate value creation (i.e.,
services are physically intangible)
Services are often difficult to understand (i.e., services are
mentally intangible)
Customers are often involved in co-production (i.e., if
people processing is involved, the service in inseparable)
People (service employees) may be part of the service
product and experience
Operational inputs and outputs tend to vary more widely
(i.e., services are heterogeneous)
The time factor often assumes great importance (e.g.,
capacity management)
Distribution may take place through non-physical channels
(e.g., information processing services)
Functions
need to be tightly
integrated as together
they shape the customer
experience, especially:
Marketing
Operations
Human resources
Information
technology
Service-Profit Chain
Shows the tight links
between
Leadership
Internal quality & IT
Employee
engagement
Customer value,
satisfaction & loyalty
Profitability & growth
Putting Service Strategy Into Action
This book is structured around an integrated model of
services marketing and management that covers:
Understanding Service Products, Consumers &
Markets
Applying the 4 ‘P’s of Marketing to Services
Designing & Managing the Customer Interface
using the additional 3 ‘P’s of Services Marketing
(Process, People & Physical Environment)
Developing Customer Relationships
Striving for Service Excellence
Key Trends
General Trends
Government policies
Social changes
Business trends
Advances in IT
Globalization
B2B Services Growth
Outsourcing
Offshoring
Firms increasing focus on core
competencies
Increasing specialization of
economies
Increasing productivity through
R&D
Why Study Services
Services dominate the global
economy
Most new jobs are generated by
services
Understanding services offers
personal competitive advantage
Definition of Services
Services provide benefits without ownership
Services are economic activities performed by one party
to another. Often time-based, these performances bring
about desired results to recipients, objects, or other
assets. In exchange for money, time, and effort, service
customers expect value from access to labor, skills, exper-
tise, goods, facilities, networks, and systems.
CHAPTER SUMMARY
Stages of Service Consumption
Awareness of need
Information search
Clarify needs
Explore solutions
Identify alternative service products
and suppliers
Evaluation of alternatives (solutions and
suppliers)
Review supplier information (e.g.,
advertising, brochures, websites)
Review information from third
parties (e.g., published reviews,
ratings, comments on the Web,
blogs, complaints to public agencies,
satisfaction ratings, awards)
Discuss options with service personnel
Get advice and feedback from third-
party advisors and other customers
Make decisions on service purchase and
often make reservations
Pre-purchase Stage
Key Concepts
Need arousal
Evoked set
Consideration set
Multi-attribute model
Search, experience, and credence
attributes
Perceived risk
Formation of expectations: desired
service level, predicted service level,
adequate service level, zone of tolerance
Stages of Service Consumption
Request service from a chosen supplier
or initiate self-service (payment may be
upfront or billed later)
Service delivery by personnel or self-
service
Service Encounter Stage
Stages of Service Consumption
Evaluation of service performance
Future intentions
Post-encounter Stage
Key Concepts
Moments of truth
Service encounters
Servuction system
Theater as a metaphor
Role and script theories
Perceived control theory
Key Concepts
Confirmation/ Disconfirmation of
expectations
Dissatisfaction, satisfaction, and delight
Service Quality
Word-of-mouth
Repurchase
Loyalty
Positioning Services in Competitive Markets
Customer Analysis
Market attractiveness
Market size and growth
Profitability
Market trends
Customer needs
Under- or unserved
needs
More valued benefits
Competitor Analysis
Current positioning
Strengths
Weaknesses
Company Analysis
Current positioning and
brand image
Strengths
Weaknesses
Values
Define and Analyze
Market Segments
Needs-based segmentation
followed by demographic,
psychographic, and
behavioral segmentation
Identify attributes and
service levels valued by
each segment
Select Target
Segments to Serve
Determine customers the
firm can serve best
Identify and analyze
possibilities for
differentiation
Decide on focus strategy
(i.e., service, market, or fully
focused)
Select benefits to emphasize
to customers
Benefits must be
meaningful to customers
Benefits must not be well
met by competitors
Articulate Desired
Position in the Market
Positioning must address an
attractive market
Positioning must give a
sustainable competitive
advantage over competition
Determine Services
Marketing Strategy
and Action Plan
Positioning strategy
7 ‘P’s of services marketing
Customer relationship
management strategy
Service quality and
productivity strategy
CHAPTER SUMMARY
CHAPTER SUMMARY
Components of a Service
Product
Core Product
Supplementary Services
Facilitating
Supplementary Services
Information
Order-taking
Billing
Payment
Enhancing
Supplementary Services
Consultation
Hospitality
Safekeeping
Exceptions
Delivery Process
Branding Service Firms,
Products and Experiences
Branding Strategies
Branded house
Subbrands
Endorsed brands
House of brands
Building Brand Equity
Company’s presented
brand
External brand
communications
Customer experience
with company
Brand awareness
Brand meaning
Tiering Services
Through Branding
Use branding
to define and
differentiate bundles
of services and
service levels
Branded Service
Experiences
Alignment of
product and
brand with the
delivery process,
servicescape and
service employees
Create an emotional
connection
New Service Development (NSD)
Hierarchy of NSD
Style changes
Service improvements
Supplementary
service innovations
Process line
extensions
Product line
extensions
Major process
innovations
Major service
innovation
Achieving Success
in NSD
Key success factors
are:
Market synergy
Organizational
factors (alignment
and support)
Market research
factors
Involvement of
customers early in
the process, ideally
at idea generation
CHAPTER SUMMARY
*Note that information and negotiations are types of supplementary services, but were listed separately here to
emphasize their importance in any service distribution strategy.
Intermediaries
“What tasks should be delegated to intermediaries?”
• Roles • Benefits • Costs (e.g., of franchisees, agents and distributors)
Distributing Service Internationally
“How should the service be distributed?”
• Export the service concept • Import customers /possessions • Deliver remotely
Entering International Markets
“How can the value-add be protected?”
Export the service • Licensing, franchising, joint venture • Foreign direct investment
Information &
promotion flow
(e.g., promotional
materials)
Negotiation flow
(e.g., make a
reservation or
sell a ticket)
Product flow
(including core
& remaining
supplementary
services)*
Customers visit
the service site
Service providers
go to their
customers
• Transaction
is conducted
remotely (e.g.,
via internet,
telephone, mail
and email)
• Channel
integration is key
Strategic location
considerations
(including
customer needs
and type of
service)
• Tactical
considerations
(i.e., specific
location
characteristics)
• Location
constraints (e.g.,
due to required
economies of
scale)
Customer needs
Economics of
incremental
opening hours
(fixed vs. variable
costs)
Availability of
labor
Use of self-
service facilities
What
“What flows
through the
channel?”
How
“How should
service reach the
customer?”
Where
“Where should
service be
delivered?”
When
“When should
service be
delivered?”
Key questions for designing an effective service distribution strategy:
Pricing Services and Revenue Management
Table 6.2: Key Categories of Rate Fences
Rate Fences Examples
Physical (product-related) Fences
Basic product Class of travel (business/economy class)
Size of rental car
Size and furnishing of a hotel room
Seat location in a theater or stadium
Amenities Free breakfast at a hotel, airport pick up, etc.
Free golf cart at a golf course
Valet parking
Service level Priority wait-listing, separate check-in counters with no or
only short queues
Improved food and beverage selection
Dedicated service hotlines
Personal butler
Dedicated account management team
Other physical characteristics Table location pricing (e.g., restaurant table with view in a
high rise building), seat location pricing (e.g., a window or
aisle seat in an aircraft cabin)
Extra legroom on an airline
Non-Physical Fences
Transaction Characteristics
Time of booking or reservation Discounts for advance purchase
Location of booking or
reservation
Passengers booking air tickets for an identical route in
different countries are charged different prices (e.g., prices
tend to be higher at an airline’s hub because of higher
frequency flights and more direct flights)
Customers making reservations online are charged a lower
price than those making reservations by phone
Flexibility of ticket usage Fees/penalties for canceling or changing a reservation (up
to loss of entire ticket price)
Non-refundable reservation fees
Consumption Characteristics
Time or duration of use Happy hour offer in a bar, early-bird special in a restaurant
before 6 pm, and minimum required spending during peak
periods
Must stay over a Saturday night for a hotel booking
Must stay at least for five nights
Location of consumption Price depends on departure location, especially in
international travel
Prices vary by location (between cities, city center versus
edges of the city)
Pricing Services and Revenue Management
Objectives of Service Pricing
• Gain profit & cover costs
• Build demand & develop a user base
• Support positioning strategy
Putting Service Pricing into Practice
How much should be charged?
What should be the basis of pricing?
Who should collect payment & where?
When should payment be made?
How should payment be made?
How should prices be communicated?
Value to Customer (Price Ceiling)
Net value & price
Value perception
Related monetary & non-monetary costs
Competitor Pricing
(Competitive Benchmark)
Price competition
intensifiers
Price competition inhibitors
Unit Cost to Firm (Price Floor)
Fixed & variable costs
• Contribution
Break-even analysis
Activity-based costing
Viable Price
Range
Components of the Pricing Tripod
Revenue Management (RM)
When Should RM be Used?
Fixed capacity & high fixed costs
Variable & uncertain demand
Varying customer price sensitivity
How to Apply RM?
Predict demand by segment
Reserve capacity for high-yield
customers
Maximise revenue per available
space and time unit (RevPAST)
“Pick up” competitor pricing through
booking pace in the RM system
Implement price segmentation
through “rate fences”
Rate Fences
Physical fences
- Basic product
- Amenities
- Service level
Non-physical fences
- Transaction characteristics
- Consumption characteristics
- Buyer characteristics
Ethical Concerns
Service pricing is complex
• Confusopoly
Fees: Crime & punishment
Design Fairness into RM
Clear, logical & fair prices and rate fences
Frame rate fences as discounts
Communicate benefits of RM
‘Hide’ discounts
Take care of loyal customers
Use service recovery to deal with
overbooking
Fairness & Ethical Concerns in Service Pricing
CHAPTER SUMMARY
Figure 7.2: Common communications objectives along the Service Marketing
Communications Funnel
Three–Stage Model of
Service Consumption
Common Communication Objectives Along the
Services Marketing Communications Funnel
Key Consumer Behavior
Concepts and Theories
Pre-purchase Stage
Awareness of need
Information search
Clarify needs
Explore solutions
Identify alternative
service products
Evaluation of alternatives
Review supplier
information (e.g.,
advertising, website)
Review information
from third parties (e.g.,
published reviews,
ratings, blogs)
Discuss options with
service personnel
Get advice from third-
parties
Make purchase decision
Customer Acquisition
Move customers along the key stages of the
sales funnel
Build awareness, knowledge, and interest in
the service or brand
Encourage to explore the firm’s website or
social media sites
Register for your online newsletter, service
updates, or YouTube channel
Develop liking, preference, and conviction for
the service or brand
Compare a service favorably with
competitors’ offerings
Convince potential customers about
the firm’s superior performance on
determinant attributes
Encourage potential customers to purchase
Reduce perceived risk by providing
information and service guarantees
Encourage trial by offering promotional
incentives
Create memorable images of brands and
services
Stimulate and shift demand to match capacity
Pre-purchase Stage
Need arousal
Evoked set
Consideration set
Multi-attribute choice model
Search, experience, and
credence attributes
Perceived risk
Formation of expectations
Purchase decision
Service Encounter Stage
Request service from
the chosen supplier or
initiate self-service
Experience the service
encounter
Service Encounter Management
Familiarize customers with service processes
in advance of use (e.g., what to prepare &
expect)
Guide customers through the service process
Manage customer behavior and perceptions
during the service encounter (e.g., teach
roles, script for queuing, inject perceived
control)
Manage quality perceptions
Cross-sell & upsell services
Service Encounter Stage
Moments of truth
Service encounters
Servuction system
Theatre as metaphor
Role and script theories
Perceived control theory
Post-encounter Stage
Evaluation of service
performance
Future intentions
Future behaviors
Customer Engagement
Manage customer satisfaction
Manage service quality
perceptions
Build loyalty
Encourage WOM (offline and
online)
Encourage referrals
Build a brand community
Post-encounter Stage
• Confirmation/
disconfirmation of
expectations
• Dissatisfaction,
satisfaction, and delight
Service quality
WOM and referrals
Online reviews
• Repurchase
Customer loyalty
Airlines’ mobile app that
includes messaging and
other functions, including
loyalty programs and mobile
boarding passes
Budget airline’s
website where
customers buy
tickets
Potential customers
searches keywords
such as “budget
airlines” using search
engines (e.g., Google)
Advertising
on portal sites
such as Yahoo!
and CNN
Strategic
collaborations that
allow referrals across
firms (e.g., between
airlines and car
rental firms, or music
streaming services
and café chains)
Timely messages
(e.g., via email, text
and WhatsApp)
and subscribers to
newsletters
Advertising
in traditional
media, including
TV and print
Contests and
promotions
Significant
presence
on social
networking sites
(e.g., Facebook,
Twitter, LinkedIn)
and blogs
Click-
through
traffic
Social
media
and viral
marketing
Mobile apps
Online direct marketing
Search engine
optimization
Offline traditional marketing to
drive traffic
Cross-selling Online promotions
Figure 7.15: Budget carriers are excellent at integrating a vast array of mostly online
channels to drive ticket sales on their websites.
Who
is our target
audience?
(Target Audience
Decision)
Key Target Audiences
for Service
Communications:
• Prospective
customers, target
segments
Current customers,
users of the service
• Employees
as secondary
audience
What
are our objectives?
(Communications Objectives)
Strategic Objectives:
Position & differentiate the
brand & service products
Tactical Objectives by
Consumption Stage Along the
Service Communication Funnel
Pre-purchase stage:
Manage the customer search
and choice process.
Service encounter stage:
Guide customers through the
service encounter
Post-encounter stage:
Manage customer satisfaction
& build loyalty
How
should this be communicated?
(Message Decisions)
Challenges of Service
Communications:
Problems of intangibility
– Abstractness
– Generality
– Non-searchability
– Mental impalpability
Strategies to address
intangibility
– Advertising tactics to
address intangibility (incl.,
showing consumption
episodes, documentation,
and testimonials)
– Tangible cues
– Metaphors
Where
should this be communicated?
(Media Decisions)
Communications Mix for Services
from Three Key Sources:
Marketing communications
channels
Traditional media (e.g., TV)
Online media (e.g., search
engine advertising)
Service delivery channels
Service outlets
Frontline employees
Self-service delivery points
Messages originated from
outside the organization:
Word-of-mouth, social media
Blogs & Twitter
Traditional media coverage
When
should communication
take place?
(Timing Decisions)
Timing Decisions:
Map timing
against Service
Communications
Funnel
Use media plan
flowchart
Integrated Marketing Communications
Integrate communication across all channels to deliver a consistent message, look and feel
Budget Decisions & Communications Program Evaluation
Objective-and-Task Method
Other budgeting methods (e.g., percentage of revenue, matching
against competitor spent)
Map performance against overall and specific objectives along
the Service Communications Funnel.
Ethics & Consumer Privacy
Don’t make exaggerated promises or
use deceptive communications
Respect and protect consumer privacy
Corporate Design
Ensure a unified and
distinctive visual appearance
for all tangible elements of the
firm and its services
Communications Strategy ImplementationCommunications Strategy Development
CHAPTER SUMMARY
Designing Service Processes
CHAPTER SUMMARY
Service Processes
Are the service experience from the customer’s perspective
Are the architecture of service from the firm’s perspective
Flowcharting of Service Processes
Maps a service process
Shows the nature and sequence of steps involved
Is an easy way to visualize the customer experience
Mapping & Designing Service Processes
Blueprinting of Service Processes
A more complex form of flowcharting
Shows how a service process is constructed
Maps the customer, employee, and service system
interactions
Design elements:
Front-stage activities
Physical evidence
Line of visibility
Backstage activities
Support processes & supplies
Potential fail points
Common customer waits
Service standards & targets
Details preprocess, in-process, and post-process
stages of service delivery
Process Design Considerations
Use poka-yokes to design fail points out of processes
•Set service standards and targets to manage
processes
•Design customer emotions into the process:
Start strong
Build an improving trend
Create a peak
Get bad experiences over with early
Segment pleasure, combine pain
Finish strong
Manage Customer Participation in Service Processes
Customers as
Co-creators
Educate, train and
motivate customers to
do their part well
•Use customer poka-
yokes to reduce
failures caused by
customers
•Consider peer-to-peer
problem solving as
part of online brand
communities
Self-Service Technologies (SSTs)
Customer benefits
Convenience & speed
Control, information & customization
Cost savings
Disadvantages & barriers
Poorly designed SSTs
Unreliable SSTs
Poor service recovery procedures
Inadequate customer education
Assessing & improving SSTs
Does the SST work reliably?
Is the SST better than the
interpersonal alternative?
If it fails, are systems in place to
recover the service?
Managing Customers’
Reluctance to Change
Develop customers’ trust
Understand customers’ habits &
expectations
Pretest new procedures &
equipment
Publicize the benefits
Teach customers to use
innovations & promote trial
Monitor performance & improve
the SST
Redesigning Service Processes
Indicators for Redesign Need
Excessive information exchange
•High degree of control activities
•Increased processing of exceptions
•Growing number of customer complaints
about inconvenient and unnecessary
procedures
Objectives of Redesign
Reduced number of service failures
Reduced cycle time
Enhanced productivity
Increased customer satisfaction
How to Redesign Service Processes?
Examine the blueprint with key
stakeholders (i.e., customers, frontline
and back office employees and IT) and
see how to reconstruct, rearrange and
substitute tasks
Eliminate non-value adding steps
Address bottlenecks, balance process
Shift to self-service
Capacity Situation
Approaches in
Managing Demand
Insufficient Capacity
(Excess Demand)
Insufficient Demand
(Excess Capacity)
Take no action Results in unorganized queuing
(may irritate customers and
discourage future use).
Capacity is wasted (customers
may have a disappointing
experience for services such
as theater).
Manage demand
through marketing
mix elements
Reduce demand in peak periods:
Higher prices will increase
profits.
Change product elements (e.g.,
do not offer time-consuming
services during peak times).
Modify time and place of
delivery (e.g., extend opening
hours).
Communication can encourage
use in other time slots. (Can
this effort be focused on less
profitable and less desirable
segments?)
Note that demand from highly
profitable segments should
still be stimulated, and priority
to capacity should be given
to those segments. Demand
reduction and shifting should
primarily be focused on lower
yield segments.
Increase demand in low periods:
Lower prices selectively (try
to avoid cannibalizing existing
business; ensure that all
relevant costs are covered).
Change product elements (find
alternative value propositions
for service during low
seasons).
Use communications and
variation in products and
distribution (but recognize
extra costs, if any, and make
sure that appropriate trade-
offs are made between
profitability and use levels).
Inventory demand
using a queuing
system
Match appropriate queue
configuration to service
process.
Consider priority system for
most desirable segments and
make other customer shift to
off-peak period.
Consider separate queues
based on urgency, duration and
premium pricing of service.
Shorten customer’s perceptions
of waiting time and make their
waits more comfortable.
Not applicable, but the
queuing system can still
collect data on number
and type of transactions
and customers served. The
same applied to reservations
systems below.
Inventory demand
using a reservations
system
Focus on yield and reserve
capacity for less price sensitive
customers.
Consider a priority system for
important segments.
Make other customers shift to
off-peak periods.
Clarify that capacity is
available and let customers
make reservations at their
preferred time slots.
Table 9.2: Alternate demand management strategies for different capacity situations.
Balancing Demand and Capacity
CHAPTER SUMMARY
Understand Patterns of Demand
Understand patterns of demand by answering the following questions:
Do demand levels follow predictable cycles?
What are the underlying causes of these cyclical variations?
Can demand be disaggregated by market segment?
Determine drivers of demand by segment (e.g., demand for routine
maintenance versus emergency repairs)
Building Blocks of Effective Capacity & Demand Management
Define Productive Capacity
Determine which aspects of capacity need to be managed carefully.
Productive capacity can include:
Facilities (e.g., hotel rooms)
Equipment (e.g., MRI machines)
Labor (e.g., consultants);
Infrastructure (e.g., electricity networks)
Manage Capacity
Adjust capacity to more closely match demand.
Available options include:
Stretch capacity
Schedule downtime during low periods
Cross-train employees
Use part-time employees
Invite customers to perform self-service
Ask customers to share capacity
Design capacity to be flexible
Rent or share extra facilities and equipment
Insufficient Capacity
Reduce & shift demand through marketing mix
elements: Do demand levels follow predictable
cycles?
Increase price
Product design (e.g., don’t offer time-
consuming services during peak periods)
Time and place of delivery (e.g., extend
opening hours)
Promotion & education (e.g., communicate
peak periods)
Inventory demand using queuing systems
Tailor queuing system to market segments
(e.g., by urgency, price, and importance of
customers)
Use psychology of waiting time to make
waits less unpleasant
Inventory demand using reservations systems
Control demand and smoothen it
Focus on yield
Insufficient Demand
Increase demand through marketing
mix elements :
Lower price
Product design (e.g., find
additional value propositions for
the same capacity)
Add locations (e.g., create
additional demand through home
delivery)
Promotion & education (e.g., offer
promotion bundles)
Create use for otherwise wasted
capacity:
Use for differentiation
Reward your loyal customers
Development of new customers
Reward employees
Barter capacity
Manage Demand
Crafting The Service Environment
CHAPTER SUMMARY
Design of Effective Services
Environments
Design with a holistic view
Design from the customers’ perspective
Use design tools (ranging from keen
observation and customer feedback to
photo audits and field experiments)
Internal
Responses
Cognitive
(e.g., beliefs,
perceptions)
Emotional (e.g.,
moods, attitudes)
Physiological
(e.g., comfort,
pain)
Bitner’s Servicescape Model
Key Dimensions of Service
Environments
Ambient conditions (e.g., music,
scents, and colors)
• Spatial layout and functionality
(e.g., floor plan, size and shape of
furnishing, counters, equipment)
Signs, symbols, and artifacts
• Appearance of service employees
and other customers
Response Moderators
Employees (e.g., liking of
servicescape, personal tolerance for
stimulation through music, noise, and
crowding)
Customers
Behavioral
Responses
Approach (e.g.,
explore, spend
time, spend
money in the
environment)
Avoidance
(e.g., leave the
environment)
Interaction
between service
employees and
customers
Main Purposes of Service
Environments
Shape customers’ service
experience and behaviors
Signal quality and position,
differentiate and strengthen the
brand
Core component of the value
proposition
Facilitate the service encounter
and enhance productivity
Theories from Environmental
Psychology that Explain Consumer
Responses to Service Environments
The Mehrabian–Russell
Stimulus–Response Model
Perceptions and interpretation
of servicescapes influences
how consumers feel
These feelings then drive
consumer responses to those
environments
Russell’s Model of Affect
Customers’ feelings (or
emotions) can be modeled with
two dimensions: pleasure and
arousal
Pleasure is subjective
Arousal largely depends on
the information rate of an
environment
Pleasure and arousal interact
on response behaviors,
whereby arousal generally
amplifies the effects of
pleasure (or displeasure)
Figure 11.8: The Service Talent Cycle — getting HR right in service firms
Leadership that
Fosters a strong
climate for
service with a
passion for
service and
productivity
Drives values
that inspire,
energize and
guide service
providers and
leads by example
Focuses the entire
organization on
supporting the
frontline
Utilize the full range of rewards
• Pay
• Performance bonuses
• Satisfying job content
• Feedback & recognition
• Goal accomplishment
Build high performance service
delivery teams:
Ideally cross-functional,
customer-centric structure
Develop team structures & skills
that work
Extensive Training &
Development on
• Organization
culture, purpose &
strategy
Interpersonal &
technical skills
• Product/service
knowledge
Be the preferred employer and
compete for talent market share
Intensify selection process to hire
the right people for the organization
and the given job
Empower
the
Frontline
3. Motivate & Energize
Your People
1. Hire the
Right People
2. Enable Your People
Service
Excellence
&
Productivity
Integrate teams
across departments &
functional areas
Managing People for Service Advantage
CHAPTER SUMMARY
Frontline Employees Are
Important
Are a core part of the service
product
Are the service firm in the
eyes of the customer
Are a core part of the brand,
deliver the brand promise
Sell, cross-sell and up-sell
Are a key driver of customer
loyalty
Determine productivity
Basic Models of HR in
Service Firms
Cycle of Failure
Low pay, low investment
in people, high staff
turnover
Result in customer
dissatisfaction, defection,
and low margins
Cycle of Mediocrity
Large bureaucracies;
offer job security but little
scope in the job itself
No incentives to serve
customers well
Cycle of Success
Heavy investment
in recruitment,
development, and
motivation of frontline
employees
Employees are engaged
and productive
Customers are satisfied
and loyal, margins are
improved
Pleasure (or displeasure)
Motivate the Frontline
Energize and motivate employees with a full set of rewards
Rewards should include pay, performance bonuses, satisfying
job content, feedback and recognition, and goal accomplishment
Service Culture, Climate, & Leadership
Service Culture
•Shared perceptions of what is important in an organization
•Shared values and beliefs of why those things are important
Climate for Service
•Climate is culture translated into policies, practices, and
procedures
•Shared perception of practices and behaviors that get rewarded
Leadership
•Qualities of effective leaders
•Leadership styles that focus on basics versus transformation
•Strong focus on frontline
Frontline Work Is Difficult
& Stressful
• Boundary-spanning
positions
Link the inside of the
organization to the outside
world
Have conflicting roles that
cause role stress:
Organization/client
conflict
Person/role conflict
Inter-client conflict
Require emotional labor
HR in Service Firms
Is Challenging
How to Get HR Right — The Service Talent Cycle
Hire the Right People
Be the preferred employer and compete for talent market share
•Intensify the selection process to identify the right people for the
organization and given job
Conduct multiple structured interviews
Use personality tests
Observe candidate behavior
Give applicants a realistic preview of the job
Enable the Frontline
Training & Development
Conduct extensive training on:
Organizational culture, purpose, & strategy
Interpersonal and technical skills
Product/service knowledge
Reinforce training to shape behaviors
Use internal communications/marketing to shape the service
culture and behaviors
Professionalize the frontline
Empower the Frontline
Provide discretion to find solutions to service problems and
customization of service delivery
Set appropriate levels of empowerment depending on the
business model and customer needs
Empowerment requires: (1) information about performance,
(2) knowledge that enables contribution to performance, (3)
power to make decisions, and (4) performance-based rewards.
Organize Frontline Employees into Effective Service Delivery
Teams
Use cross-functional teams that can service customers from
end-to-end
Structure teams for success (e.g., set goals, carefully select
members with the right skills)
Integrate teams across departments and functional area (e.g.,
cross-postings, and internal campaigns such as “walk a mile in
my shoes” and “a day in the field”)
Figure 12.3: The Wheel of Loyalty
1. Build a
Foundation
for Loyalty
3. Reduce
Churn Drivers
Conduct churn diagnostic and
monitor declining/churning
customers.
Deepen the relationship
via:
– Cross-selling
– Bundling
Segment the market to match
customer needs and firm capabilities.
Be selective: acquire customers
who fit the core value proposition.
Manage the customer base
via effective tiering of service.
Deliver quality service.
2. Create Loyalty
Bonds
Give loyalty rewards:
– Financial
– Non-financial
– Higher-tier service
levels
– Recognition and
appreciation
Put effective complaint
handling and service recovery
processes in place.
Increase switching
costs.
Build higher-level
bonds:
– Social
– Customization
– Structural
Address key churn drivers:
– Proactive retention
measures
– Reactive retention measures
(e.g., save teams)
Enabled
through:
Customer
Loyalty
Frontline
staff
Account
managers
Membership
programs
CRM
systems
CHAPTER SUMMARY
Importance of Customer Loyalty
to Firm Profitability
Higher purchases, share-of-wallet, &
cross-buying
Reduced customer service costs
Positive word-of-mouth and referrals
Lower price sensitivity
Amortization of acquisition costs over
a longer period
Value Analysis
Lifetime value
computation
Gap analysis between
actual and potential
customer value
Reduce Customer Churn
Churn analysis
•Address key churn drivers
•Effective complaint
handling & service
recovery
•Increase switching costs
Positive switching costs
(soft lock-in strategies)
through adding value
(see loyalty bonds)
Contractual & other
hard lock-in strategies
(e.g., early cancellation
fees)
Customer Loyalty
Loyalty Drivers
Confidence benefits
Social benefits
Special treatment
benefits
Customer Loyalty Strategies — The Wheel of Loyalty
Foundation for Loyalty
Target the right
customers, match firm
capabilities with customer
requirements
Search for value, not just
volume
Use tiering of the customer
base to focus resources
and attention on the firm’s
most valuable customers
Deliver service quality to
win behavioral (share-
of-wallet) and attitudinal
loyalty (share-of-heart)
Loyalty Bonds
Deepen the relationship through
bundling & cross-selling
•Offer loyalty rewards
Financial rewards (hard
benefits), e.g., points, frequent
flyer miles; free upgrades
Non-financial rewards
(soft benefits), e.g., priority
waitlisting, upgrading,
early check-in, etc; special
recognition and appreciation;
implicit service guarantee
Higher-level loyalty bonds
Social bonds
Customization bonds
Structural bonds
Enablers of Customer Loyalty Strategies
Frontline Employees & Account Managers
Membership-type Relationships
•Achieved through loyalty programs even for
transaction-type services
•Loyalty programs provide a unique identifier of
the customer that facilitates an integrated view
of the customer across all channels, branches,
and product lines
CRM Systems
•Strategy development (e.g., customer strategy,
target segments, tiering of customers, design of
loyalty bonds)
•Value creation for customers and the firm (e.g.,
customer benefits through tiering, customization
and priority service, and higher share-of-wallet
for firm)
•Multichannel integration (e.g., provide a unified
customer interface)
•Information management (e.g., deliver customer
data to all touchpoints)
•Performance assessment of strategy
Complaint Handling and Service Recovery
CHAPTER SUMMARY
Customer Complaining
Why do customers complain?
Obtain restitution or compensation
Vent anger
Help to improve the service
For altruistic reasons
What proportion of unhappy
customers complains?
5%–10% complain
Why do unhappy customers not
complain?
It takes time and effort
The payoff is uncertain
Complaining can be unpleasant
Who is most likely to complain?
• Higher socioeconomic class
customers
Customers with more product
knowledge
Where do customers complain?
Vast majority of complaints are
made at the point of service
provision (face-to-face or over the
phone)
Only a small proportion of
complaints is sent via email, social
media, websites, or letters
Customer Expectations Once a Complaint Is Made
Customers expect fair treatment along three dimensions:
Procedural justice: Customers expect a convenient,
responsive, and flexible service recovery process
•Interactional justice: The recovery effort must be seen as
genuine, honest, and polite
•Outcome justice: The restitution has to reflect the customer
loss and inconveniences suffered
Customer Responses to Service
Failure
Take public action (complain to
the firm, to a third party, take legal
action)
Take private action (switch provider,
spread negative word-of-mouth)
Take no action
Customer Responses to an Effective Service Recovery
•Avoids switching, restores confidence in the firm
•The Service Recovery Paradox: an excellent recovery can
even result in higher satisfaction and loyalty than if a service
was delivered as promised
Principles of Effective Service Recovery Systems
•Make it easy for customers to provide feedback and reduce
customer complaint barriers
•Enable effective service recovery: Make it (1) proactive,
(2) planned, (3) trained, and (4) empowered
•Establish appropriate compensation levels: Set based on the
(1 ) positioning of the firm, (2) severity of the service failure,
and the (3) importance of the customer. Target for “well-
dosed generosity”
Dealing with Complaining Customers:
•Act fast
•Acknowledge customer’s feelings
•Do not argue
•Show understanding
•Clarify the facts
•Give customer the benefit of the doubt
•Propose steps to solve the problem
•Keep the customer informed
•Consider compensation
•Persevere to regain customer goodwill
•Improve the service system
Service Guarantees
Institutionalize professional complaint
handling & service recovery
Drive improvement of processes
Design: (1) unconditional, (2) easy to
understand, (3) meaningful, (4) easy to
invoke, (5) easy to collect on, and (6)
credible
Unsuitable for firms with (1) a reputation
for excellence, (2) poor quality service, and
(3) uncontrollable quality due to external
factors (e.g., weather)
Jaycustomers
There are 7 types of
jaycustomers:
The Cheat
The Thief
The Rule Breaker
The Belligerent
The Family Feuders
The Vandal
The Deadbeat
Jaycustomers cause
problems for firms and
can spoil the service
experience of other
customers.
Firms need to keep
track and manage their
behavior, including, as a
last resort, blacklisting
them from using the
firm’s facilities.
CHAPTER SUMMARY
Systematic Approaches to
Improving Service Quality &
Productivity
Nine-step approach to service
process improvement:
Determine priority processes for
improvement
Set targets for (a) customer
satisfaction, (b) defects, (c)
cycle-time, and (d) productivity
improvements
Identify key elements of quality
Assess process performance
Identify quality gaps
Identify root causes of gaps
Improve process performance
Control and fine-tune
Start again, the journey is the
destination…
Widely-used organization-wide
systematic approaches:
Total quality management (TQM)
ISO 9000 Certification
Six Sigma (i.e., DMAIC)
Malcolm-Baldrige and EFQM
Approaches
Integrating Service Quality & Productivity
Quality and productivity are twin paths to
creating value for customers and firms
Service quality and productivity improvements
can reinforce, be independent or even counter
each others’ impact on profitability
What Is Service Quality?
Customer defined
Consistently meeting or exceeding customer
expectations
The Gaps Model
The Gaps Model helps to identify the causes of
quality problems at the macro level through a
gap analysis:
Gap 1: The Knowledge Gap
Gap 2: The Policy Gap
Gap 3: The Delivery Gap
Gap 4: The Communications Gap
Gap 5: The Perceptions Gap
Gap 6: The Service Quality Gap
Each of the gaps has distinct causes.
Prescriptions are provided on how to address
the causes of each gap.
Customer Feedback
Referred to as “soft measures”
Objectives:
Assess and benchmark performance
Improve performance by cementing
strengths and improving weaknesses
Create a customer-oriented service
culture and a culture for change
Use a mix of tools to obtain reliable,
and actionable feedback, such as:
Surveys, feedback cards, & online/
mobile messages, complaints &
compliments
Mystery shopping
Focus groups and service reviews
Online reviews and discussions
Operational Measures
Process & outcome
measures
Referred to as “hard
measures”
Relate to process
activities and
outcomes that can
be counted, timed
or measured (e.g.,
system uptime,
on-time departure,
service response
time, and failure
rates)
Analysis, Reporting, &
Dissemination of Customer
Feedback & Operational
Measures
Daily morning briefings to the
frontline
Monthly service performance
updates to process owners &
service teams
Quarterly service performance
reviews to middle management
& process owners
Annual service performance
reports to top management &
entire firm
Analytical tools:
Fishbone diagram to
conduct root cause
analysis
Pareto charts to identify key
fail points & root causes
• Blueprinting
Return on quality:
Assess costs and benefits
of quality initiatives
• Importance-performance
matrix
Optimal level of reliability
depends on cost of service
recovery
Measuring & Improving Service Productivity
Defining and measuring productivity:
Productivity: output/input
Efficiency: compared to a standard (i.e., “do things right”)
Effectiveness: compared to a goal (i.e., “do the right things”)
All three have to be balanced
Productivity improvement strategies:
Generic productivity strategies (i.e., “doing the same things
better, faster, cheaper”)
Customer-driven approaches (e.g., shifting time of demand,
using lower cost service delivery channels, and self-
service)
Outsourcing to third parties
Monitor potential customer implications of productivity
enhancement
Measuring Service Quality
Analyzing Service Quality Problems
Suitable for:
Polytechnic Students
Undergraduate Students
Services Marketing is available for various audiences:
Services Marketing Series
The content in terms of core theory, models and frameworks is largely the same
across these publications. However, they are presented and designed to fit their
particular target audiences.
Services Marketing is available in some 26 languages and adaptations for key
markets around the world.
Essentials of
Services Marketing Winning in Service Markets:
Success Through People,
Technology Strategy
Services Marketing:
People, Technology, Strategy
Suitable for:
Advanced Undergraduate Students
Master’s-Level/MBA Students
Suitable for:
Executive Program/EMBA Participants
Practitioners/Senior Management
Available in the following formats:
• Paperback
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Available in the following formats:
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Bundle of Paperback & E-book
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Available in the following formats:
• Hardcover
• Paperback
• E-book
Bundle of Paperback & E-book
Winning in Service Markets Series
Key chapters of Winning in Service
Markets are available as stand-alone
publications in e-book and paperback:
Vol. 1: Understanding Service
Consumers
Vol. 2: Positioning Services in
Competitive Markets
Vol. 3: Developing Service Products
& Brands
Vol. 4: Pricing Services & Revenue
Management
Vol. 5: Service Marketing
Communications
Vol. 6: Designing Customer Service
Processes
Vol. 7: Balancing Demand & Capacity
in Service Operations
Vol. 8: Crafting the Service
Environment
Vol. 9: Managing People for Service
Advantage
Vol. 10: Managing Customer
Relationships & Building
Loyalty
Vol. 11: Designing Complaint Handling
& Service Recovery
Strategies
Vol. 12: Service Quality & Productivity
Management
Vol. 13: Building a World Class
Service Organization
(Assessment Tool)
Contact
For orders of individual copies, course adoptions, bulk purchases: sales@wspc.com
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For questions regarding contents: Jochen Wirtz, jochen@nus.edu.sg.
Published by Pearson Education
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... Processes constitute the basic architecture of services; they describe the method and sequence of actions of operating systems and specify how these systems within an organisation should work together to generate the promised value for customers (Wirtz, 2016). Poorly designed processes will result in dissatisfied and frustrated customers as they receive services of poor quality. ...
... Poorly designed processes will result in dissatisfied and frustrated customers as they receive services of poor quality. Any service process can be considered in terms of the following three stages: preliminary processing, in-process activities and final activities (Wirtz, 2016). The preliminary processing stage concerns initial activities associated with a service. ...
... When identifying a service process, it is necessary to pay attention to the following elements: defining standards for each front-stage activity, major customer activities, physical and other evidence for front-stage activities, a line of interaction, front-stage activities in the form of contact between the personnel and the customer, a line of visibility, back-stage activities in the staff-customer relationship, support processes involving other employees and information technology (Wirtz, 2016). The front-stage is the part of the service delivery system that is visible to the customer, while the back-stage is invisible and consists of all the personnel as well as facilities, equipment and processes that support the personnel and processes in the front-stage part (Haksever and Render, 2018). ...
Book
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The process of globalisation in world markets, and the growing number of enterprises competing with one another in terms of the products and services they offer, naturally leads to the improved efficiency of management systems. Efficiency is required in order for these entities to maintain competitiveness. To assess the efficiency of their management systems, enterprises use quality cost calculation. This book fills the research gap concerned with the scientific study of the quality cost calculation, with regard to service companies. It offers the authors’ concept of using the cost of quality calculation as a tool for assessing the efficiency of the management systems of service companies. The book consists of six chapters that present both a theoretical and an empirical part. In the theoretical part, the following issues are discussed: quality costs; the evolution of quality cost calculation; quality cost calculation models and their applications to date; and the specific way in which service companies operate. The practical part presents the authors’ model of quality cost calculation along with the adopted assumptions and cost structure, as well as the research methodology and verification of the use of the developed model in a selected service company. The research gives credence to the role and importance of this tool in economic practice. The book will be desired reading by both theoreticians and practitioners of quality management and accounting. It is also a valuable resource for master’s and doctoral students wishing to broaden their knowledge of quality costs and their calculation in the fields of economics and management.
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