Winning in Service Markets
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.
Supplementary resource (1)
... 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). ...
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.
Referral programs have become a popular way to acquire customers. Yet there is no evidence to date that customers acquired through such programs are more valuable than other customers. The authors address this gap and investigate the extent to which referred customers are more profitable and more loyal. Tracking approximately 10,000 customers of a leading German bank for almost three years, the authors find that referred customers (1) have a higher contribution margin, though this difference erodes over time; (2) have a higher retention rate, and this difference persists over time; and (3) are more valuable in both the short and the long run. The average value of a referred customer is at least 16% higher than that of a nonreferred customer with similar demographics and time of acquisition. However, the size of the value differential varies across customer segments; therefore, firms should use a selective approach for their referral programs.
Relying on a Bayesian-like framework, the authors develop a behavioral process model of perceived service quality. Perceptions of the dimensions of service quality are viewed to be a function of a customer's prior expectations of what will and what should transpire during a service encounter, as well as the customer's most recent contact with the service delivery system. These perceptions of quality dimensions form the basis for a person's overall quality perception, which in turn predicts the person's intended behaviors. The authors first test this model with data from a longitudinal laboratory experiment. Then they develop a method for estimating the model with one-time survey data, and reestimate the model using such data collected in a field study. Empirical findings from the two tests of the model indicate, among other things, that the two different types of expectations have opposing effects on perceptions of service quality and that service quality perceptions positively affect intended behaviors.
This article compares problems and strategies cited in the services marketing literature with those reported by actual service suppliers in a study conducted by the authors. Discussion centers on several broad themes that emerge from this comparison and on guidelines for future work in services marketing.
Do investments in customer satisfaction lead to excess returns? If so, are these returns associated with higher stock market risk? The empirical evidence presented in this article suggests that the answer to the first question is yes, but equally remarkable, the answer to the second question is no, suggesting that satisfied customers are economic assets with high returns/low risk. Although these results demonstrate stock market imperfections with respect to the time it takes for share prices to adjust, they are consistent with previous studies in marketing in that a firm's satisfied customers are likely to improve both the level and the stability of net cash flows. The implication, implausible as it may seem in other contexts, is high return/low risk. Specifically, the authors find that customer satisfaction, as measured by the American Customer Satisfaction Index (ACSI), is significantly related to market value of equity. Yet news about ACSI results does not move share prices. This apparent inconsistency is the catalyst for examining whether excess stock returns might be generated as a result. The authors present two stock portfolios: The first is a paper portfolio that is back tested, and the second is an actual case. At low systematic risk, both outperform the market by considerable margins. In other words, it is possible to beat the market consistently by investing in firms that do well on the ACSI.
Word-of-mouth (WOM) marketing—firms’ intentional influencing of consumer-to-consumer communications—is an increasingly important technique. Reviewing and synthesizing extant WOM theory, this article shows how marketers employing social media marketing methods face a situation of networked coproduction of narratives. It then presents a study of a marketing campaign in which mobile phones were seeded with prominent bloggers. Eighty-three blogs were followed for six months. The findings indicate that this network of communications offers four social media communication strategies—evaluation, embracing, endorsement, and explanation. Each is influenced by character narrative, communications forum, communal norms, and the nature of the marketing promotion. This new narrative model shows that communal WOM does not simply increase or amplify marketing messages; rather, marketing messages and meanings are systematically altered in the process of embedding them. The theory has definite, pragmatic implications for how marketers should plan, target, and leverage WOM and how scholars should understand WOM in a networked world.
A typology of service organizations is presented and a conceptual framework is advanced for exploring the impact of physical surroundings on the behaviors of both customers and employees. The ability of the physical surroundings to facilitate achievement of organizational as well as marketing goals is explored. Literature from diverse disciplines provides theoretical grounding for the framework, which serves as a base for focused propositions. By examining the multiple strategic roles that physical surroundings can exert in service organizations, the author highlights key managerial and research implications.
The popular press has recently reported that managers of retail and service outlets are diffusing scents into their stores to create more positive environments and develop a competitive advantage. These efforts are occurring despite there being no scholarly research supporting the use of scent in store environments. The authors present a review of theoretically relevant work from environmental psychology and olfaction research and a study examining the effects of ambient scent in a simulated retail environment. In the reported study, the authors find a difference between evaluations of and behaviors in a scented store environment and those in an unscented store environment. Their findings provide guidelines for managers of retail and service outlets concerning the benefits of scenting store environments.
Service marketing, to be effective and successful, requires a mirror-opposite view of conventional “product” practices.
The development and selection of research designs too often reflects thinking which is technique-oriented. This article looks at advertising research from another viewpoint.
It starts with the questions: What is advertising supposed to do? What are its functions? The authors then show the implications of these questions in relation to measurements of the effectiveness of proposed advertisements.
The relationship between attribute-level performance, overall satisfaction, and repurchase intentions is of critical importance to managers and generally has been conceptualized as linear and symmetric. The authors investigate the asymmetric and nonlinear nature of the relationship among these constructs. Predictions are developed and tested empirically using survey data from two different contexts: a service (health care, n = 4517) and a product (automobile, n = 9359 and n = 13,759). Results show that (1) negative performance on an attribute has a greater impact on overall satisfaction and repurchase intentions than positive performance has on that same attribute, and (2) overall satisfaction displays diminishing sensitivity to attribute-level performance. Surprisingly, results show that attribute performance has a direct impact on repurchase intentions in addition to its effect through satisfaction.