PART 0NE 1
Introduction 1
1. INTRODUCTION TO SERVICES 3
What Are Services? 5
Tangibility Spectrum 5
Trends in the Service Sector 6
Why Services Marketing? 7
A Service-based Economy 8
Service as a Business Imperative in Manufacturing 10
Deregulated Industries and Professional Service Needs 11
New Technologies Spawn Need for Service Concepts 11
Services Marketing Is Different 12
Technology Spotlight: New Technology-Based Services Require Customer Education: The Case of Caller Identification 13
Myths about Services 13
Myth 1: A Service Economy Produces Services at the Expense Of Other Sectors 13
Myth 2: Service Jobs Are low Paying and Menial 14
Myth 3: Service Production Is Labor Intensive and Low in Productivity 15
Myth 4: The Growth of Government Is the Reason We Are a Service Economy 16
Myth 5: Service Is a Necessary Evil for Manufacturing Firms 16
Myth 6: Managing Services Is Just Like Managing Manufacturing Businesses 16
Differences in Goods versus Services Marketing 18
Intangibility 19
Heterogeneity 20
Simultaneous Production and Consumption 20
Perishability 21
Challenges and Questions for Service Marketers 21
The Services Marketing Triangle 22
The Services Marketing Mix 23
Traditional Marketing Mix 23
Expanded Mir for Services 26
Summary 27
Discussion Questions 28
Exercises 28
Notes 29
2. KEY COMPETITIVE TRENDS AND CONCEPTUAL FRAMEWORKOF THE BOOK 30
Competitive Trends for the 1990s and Beyond 31
Customer Satisfaction and Customer Focus 31
Value 32
Total Quality Management ahd Service Quality 33
Emphasis on Service as a Key Differentiator in Manufacturing Finns 34
New Measurement Systems that Link Customer Satisfaction with Financial Goals and Operational Measurements 34
Emerging Technology 35
Internationalization of Services 36
Technology Spotlight: Virtual Reality 36
The Gaps Model of Service Quality 37
The Customer Gap: The Difference between Customer Perceptions and Expectations 37
Provider GAP 1: Not Knowing What Customers Expect 38
Provider GAP 2. Not Selecting the Right Service Designs Standards 40
Provider GAP 3: Not Delivering to Service Standards 43
Provider GAP 4. Not Matching Performance to Promises 45
Putting It All Together: Closing the Gaps 47
Summary and Conclusion 50
Discussion Questions 50
Exercises 50
Notes 51
PART TWO 53
Focus on the Customer 53
3. CONSUMER BEHAVIOR IN SERVICES 55
Services: Search versus Experience versus Credence Properties? 57
Services: Categories in the Decision-making Process and Framework of the Chapter 60
Information Search 60
Technology Spotlight: Consumer Resistance to Changing Technology:Voice Mail 63
Evaluation of Service Alternatives 63
Service Purchase and Consumption 66
Post-purchase Evaluation 69
Summary and Conclusion 72
Discussion Questions 72
Exercises 73
Notes 73
4. CUSTOMER EXPECTAIONS OF SERVICE 75
Meaning and Types of Service Expectations 77
Expected Service: Two Levels of Expectations 77
The Zone of Tolerance 79
Factors That Influence Customer 82
Expectations of Service 82
Sources of Desired Service Expectations 82
Sources of Adequate Service Expectations 84
Techology Spotlight: Information Technology and Reengineering Combine to Change Customer Expectations of Service 87
Service Encounter Expectations versus Overall Service Expectations 88
Sources of Both Desired and Predicted Service Expectations 88
A Model of Customer Service Expectations 90
The Customer Gap Revised: Service Superiority versus Service Adequacy 91
Current Issues Involving Customer Service Expectations 93
What Does a Services Marketer Do if Customer Expectations Are "Unrealistic"? 94
How Does a Company Exceed Customer Service Expctations? 96
Do Customer Service Expectations Continually Escalate? 97
How Does a Service Company Stay Ahead of Competition in Meeting Customer Expectations? 97
Summary 99
Discussion Questions 99
Exercises 100
Notes 100
5. CUSTOMER PERCEPTIONS OF SERVICE 102
Factors That Influence Customer Perceptions of Service 104
Service Encounters, or "Moments of Truth" 105
The Evidence of Service 113
Image 114
Technology Spotlight: Capturing Customer Perceptions in Real Time 116
Price 116
How Are Customer Perceptions Organized? 116
Service Quality 117
Customer Satisfaction 123
Perceived Value 124
Perceptions of Service for Different Units of Analysis(UOA) 124
Strategies for Influencing Customer Perceptions 125
Aim for Customer Satisfaction in Every Service Encounter 126
Manage the Evidence of Service to Reinforce Perceptions 127
Communicate Realistically and Use Customer Experiences to Reinforce Images 127
Use Price to Enhance Customer Perceptions of Quality and Value 128
Summary 128
Discussion Questions 129
Exercises 130
Notes 130
PART THREE 133
Listening to Customer Reguirements 133
6. UNDERSTANDING CUSTOMER EXPECTAIONS THROUGH MARKETING RESEARCH 135
Using Marketing Research to Understand Customer Expectations 137
Stage 1: Define the Problem and Research Objectives 138
Stage 2: Develop a Services Measurement Strategy 142
Stage 3: Implement the Research Program 143
Technology Spotlight: How Technology Improves the Practice of Marketing Research 148
Stage 4: Collect and Tabulate the Data 154
Stage 5: Analyze and Interpret the Findings 154
Stage 6: Report the Findings 155
Use of Marketing Research Information 159
Upward Communication 161
Objectives for Upward Communication 162
Research for Upward Communication 162
Summary 165
Discussion Questions 165
Exercises 166
Notes 166
7. BUILDING CUSTOMER RELATIONSHIPS THROUGH SEGMENTATION AND RETENTION STRATEGIES 169
Relationship Marketing 171
Goals of Relationship Marketing 172
Benefits of Customer Retention 173
The Customer Isn't Always Right 178
The Foundation for Relationships:Market Segmentation 180
Process for Market Segmentation and Targeting in Services 181
Individualized Service: Segments of One 187
Technology Spotlight:Customer Information Systems Allow Mass Customization of Services 188
Retention Strategies 189
Monitor Relationships 189
Three Levels of Retention Strategies 190
Recovery--Retaining Customers When Things Go Wrong 193
Customer Appreciation 195
Summary 196
Discussion Questions 196
Exercises 197
Notes 197
PART FOUR 201
Aligning Strategy, Service Design, and Standards 201
8. CUSTOMER-DEFINED SERVICE STANDARDS 203
Main Factors Leading to Provider GAP2 205
Inadequate Standardization of Service Behaviors and Actions 205
Absence of Formal Goal Setting 207
Lack of Customer-defined Standards 208
Customer-Defined Service Standards 209
"Hard" Customer-defined Standards 209
"Soft" Customer-defined Standards 210
One-Time Fixes 213
Building Blocks: The Service Encounter Sequence 215
Expressing Customer Requirements as Specific Behaviors and Actions 218
Measurements of Behaviors and Actions 220
Process for Developing Customer-Defined Standards 222
Technology Spotlight: The Role of Information Technology in Customer-Defined Standards 222
Step 1: Identify Existing or Desired Service Encounter Sequence 223
Step 2: Translate Customer Expectations into Behaviors and Actions for Each Service 223
Step 3: Select Behaviors and Actions for Standards 224
Step 4: Decide Whether Hard or Soft Standards Are Appropriate 226
Step 5. Develop Feedback Mechanisms for Measurement to Standards 227
Step 6: Establish Measures and Target Levels 230
Step 7: Track Measures against Standards 232
SteP 8: Provide Feedback about Performance to Employees 232
Step 9: Periodically Update Target Levels and Measures 232
Service Performance Indices 233
Summary 235
Discussion Questions 236
Exercises 236
Notes 237
9. LEADERSHIP AND MEASUREMENT SYSTEMS FOR MARKET-DRIVEN SERVICE PERFORMANCE 238
Key Reasons for GAP2 240
Inadequate Sevice Leadership 240
Not Recognizing that Quality Service Is a Profit Strategy 240
Imbalanced Performance Scorecard 242
Service Leadership 242
A Leader Creates a Service Vision 243
A Leader Implements the Service Vision 245
The Challenge of Middle Management 251
Service Quality as a Profit Strategy 252
The Role of Service Quality in Offensive Marketing：Attracting More and Better Customers 252
The Role of Service Quality in Defensive Marketing: Retaining Customers 254
The Balanced Performance Scorecard 256
Technology Spotlight: Implementing a Balanced Scorecard in Health Care 257
Financial Measurement 257
Customer Perception Measurement 258
Operational Measurement 258
Innovation and Learning Measurement 258
Summary 259
Discussion Questions 259
Exercises 260
Notes 260
10. SERVICE DESIGN AND POSITIONING 263
Challenges of Service Design and Positioning 265
New Service DeveloPment 267
Types of New Services 268
Stages in New Services Development 269
Technology Spotlight: Technology Revolutionizes Service Offerings 270
Use of a Formal New Service Development Model by service Firms 275
Service Blueprinting 277
What Is a Service Blueprint? 277
Service Blueprint Examples 280
Reading and Using Servive Blueprints 282
Building a Blueprint 285
Service Positioning 286
Positioning Dimensions 288
Positioning on the Five Dimensions of service Quality 288
Positioning on Service Evidence 291
Summary 293
Discussion Questions 295
Exercises 296
Notes 296
PART FIVE 299
Delivering and Performing Service 299
11. EMPLOYEES' ROLES IN SERVICE DELIVERY 301
The Critical Importance of Service Employees 303
Employee Satisfaction-Customer Satisfaction 304
Service Quality Dimensions Are Driven by Employee Behaviors 306
Boundary-Spanning Roles 307
Emotional Labor 307
Sources of Conflict 308
Quality/Productivity Trade-offs 310
Strategies for Closing GAP3 311
Technology Spotlight: Imaging System Increases Productivity and Customer Service 311
Hire the Right People 313
Develop People to Deliver Service Quality 316
Provide Needed Support Systems 322
Retain the Best People 325
Service Culture 328
Summary 329
Discussion Questions 330
Exercises 331
Notes 331
12. DELIVERING SERVICE THROUGH INTERMEDIARIES 334
Intermediaries and the GAPs Model 337
Reasons for GAP3 Involving Intermediaries 338
Key Intermediaries for Service Delivery 340
Franchising 340
Agents and Brokers 348
Electronic Channels 351
Technology Spotlight: Ticketless Air Travel 355
Strategies for Effective Service Delivery through Intermediaries 356
Control Strategies 357
Empowerment Strategies 357
Partnering Strategies 359
Summary 359
Discussion Questions 360
Exercises 360
Notes 361
13. CUSTOMERS' ROLES IN SERVICE DELIVERY 363
The Importance of Customers in Service Delivery 366
Customer Receiving the Service 367
Other Customers 367
Customers' Roles 368
Customers as Productive Resources 368
Customers as Contributors to Service Quality Value, and Satisfaction 370
Customers as Competitors 372
Strategies for Enhancing Customer Participation 373
Define Customers'Jobs 373
Technology Spotlight: At Charles Schwab Investors Watch the Market Themselves 376
Recruit, Educate. and Reward Customers 378
Manage tbe Customer Mix 382
Summary 384
Discussion Questions 384
Exercises 385
Notes 385
14. MANAGING DEMAND AND CAPACITY 387
The Underlying Issue: Lack of Inventory Capability 389
Understanding Capacity Constraints 392
Time, Labor,Equipment, Facilities 392
Optimal versus Maximal Use of Capacity 393
Understanding Demand Patterns 394
Charting Demand Patterns 394
Predictable Cycles 394
Random Demand Fluctuations 395
Demand Patterns by Market Segment 395
Strategies for Matching Capacity and Demand 396
Shifting Demand to Match Capacity 396
Flexing Capacity to Meet Demand 399
Yield Management: Balancing Capacity Utilization, Pricing, Market Segmentation,and Financial Return 401
Challenges and Risks in Using Yield Management 403
Technology Spotlight: Shippers Turn to Computer Technology to Assist with Yield Management 403
Waiting Line Strategies: When Demand and Capacity Cannot Be Aligned 404
Employ Operational Logic 405
Establish a Reservation Process 406
Differentiate Waiting Customers 407
Make Waiting Fun, or at Least Tolerable 408
Summary 410
Discussion Questions 411
Exercises 412
Notes 412
15. INTERNATIONAL SERVICES MARKETING 414
Challenges in the Global Market 417
Legal Barriers to Services Marketing 417
Cultural Barriers to Services Marketing 419
Technology Spotlight:Internationalizing the Airwaves 424
Opportunities in International Services 425
U.S. Exports of Services 426
Free Trade Agreements 426
Opportunities in International Markets 430
Selling Services Internationally the Easy Way, at Home 430
Trade Creates Service Demand 431
Data on International Services 434
Pursuing and Managing Opportunities for International Services 434
Adapting the Service Itself 434
Adapting Promotion and Distribution 435
Adapting Entry Modes 437
Adapting Communication 438
Adapting Work Force Management 440
Adapting Marketing Research Internationally 441
Summary 442
Discussion Questions 442
Exercises 443
Notes 443
PART SIX 447
Managing Service Promises 447
16. THE ROLE OF ADVERTISING,PERSONAL SELLING, AND OTHER COMMUNICATION 449
Key Reasons for GAP 4 Involving Communication 452
Inadequate Management of Service Promises 452
Overpromising in Advertising and Personal Selling 453
Inadequate Customer Education 454
Inadequate Horizontal Communications 455
Differences in Policies and Procedures across Distribution Outlets 456
Four Categories of Strategies to Match Service Promises with Delivery 456
Managing Service Promises 457
Resetting Customer Expectations 462
Improving Customer Education 465
Managing Horizontal Communications 468
Exceeding Customer Expectations:Caveats and Strategies 472
DemonStrate Understanding of Customer Expectations 474
Leverage the Delivery Dimensions 475
Exceed Expectations of Selected Customers 476
Underpromise and Overdeliver 478
Position Unusual Service as Unique, Not the standard 478
Summary 478
Discussion Questions 479
Exercises 479
Notes 479
17. PRICING OF SERVICES 482
The Role of Price and Value in Provider GAP4 484
Three Key Ways Service Prices Are Different for Consumers 485
Customer Knowledge of Service Prices 485
The Role of Nonmonetary Costs 489
Price as an Indicator of Service Quality 490
Approaches to Pricing Services 491
Cost-based Pricing 491
Competition-based Pricing 494
Technology Spotlight: On-Line Legal Fees 4955
Demand-based Pricing 496
Summary 513
Discussion Questions 513
Exercises 514
Notes 514
18. THE PHYSICAL EVIDENCE OF SERVICE 516
Physical Evidence-What Is It? 519
Types of Servicescapes 521
Servicescape Use 521
Complexity of the Servicescape 523
Typology Implications 523
Roles of the Servicescape 524
Package 524
Facilitator 524
Socializer 525
Differentiator 526
Framework for Understanding Servicescape EffeCts on Behavior 526
The Underlying Framework 526
Behaviors in the Servicescape 527
Internal Responses to the Servicesape 530
Internal Response Moderators 533
Environmental Dimensions of the Servicescape 534
Approaches for Understanding Servicescape Effects 537
Environment Surveys 538
Direct Observation 538
Experiments 540
Technology Spotlight: Virtual Reality: 541
Simulating Service Environments 541
Photographic Blueprints 542
Guidelines for Physical Evidence Strategy 542
Recognize the Strategic Impact of Physical Evidence 543
Map the Physical Evidence of Service 543
Clarify Roles of the Servicescape 543
Assess and Identify Physical Evidence Opportunities 544
Be Prepared to Update and Modernize the Evidence 544
Work Cross-functionally 544
Summary 545
Discussion Questions 546
Exercises 547
Notes 547
CASES 550
Case 1 The Chartered Bank of Canada 550
Case 2 Roscoe Nondestructive Testing (A) 561
Case 3 The Launch of Classic FM 569
Case 4 Cedarbrae Volkswagen-Quality of Service 584
Case 5 Baxter Healthcare Corporation,Shared Services(A) 611
Case 6 Shouldice Hospital Limited 620
Case 7 AT(T(A):Focusing the Services Salesforce on Customers) 647
AT＆T(C): Employees as Customers 659
Case 8 Wolf Fenner(A): Pan-Europeanizing Service Quality 666
Case 9 Getting the Bugs Out 682
INDEX 691