Services Marketing and Management

Instructor: Prof. Mukti Mishra

Office Hours: Room No 213, after class and by appointment
Contact: 9437007777 [email protected]

Course Description

Services dominate the OECD economy and are becoming critical for competitive
advantage in companies across the globe and in all industry sectors. For manufacturers
like GE and IBM, services represent their primary growth and profitability strategies into
the 21st century. Almost 40 percent of IBM’s current revenues and over 60 percent of
GE’s current profits come from services. Superior service quality drives the competitive
advantage of excellent companies like Charles Schwab, Marriott Hotels, FedEx and
many Indian Companies like Tata and Birla Groups —traditional service businesses.
And the Internet is one big service—the success of companies using this channel will
depend heavily on the quality of their services from the customer’s point of view.

The course focuses on the unique challenges of managing services and delivering
quality service to customers. The attraction, retention, and building of strong customer
relationships through quality service (and services) are at the heart of the course
content. The course is equally applicable to organizations whose core product is
service (e.g., banks, transportation companies, hotels, hospitals, educational institutions,
professional services, telecommunication, etc.) and to organizations that depend on
service excellence for competitive advantage (e.g., high technology manufacturers,
automotive, industrial products, etc.).

In this course Students will learn critical skills and gain knowledge needed to implement
quality service and service strategies for competitive advantage across industries.
Students will learn frameworks for customer-focused management, and how to increase
customer satisfaction and retention through service strategies. Students will learn about
service quality and how to calculate customer lifetime value and profitability. Students
will learn to map services, understand customer expectations and develop relationship
marketing strategies. Throughout the course an emphasis is placed on the total
organization and how effective marketing and customer focus must be coordinated
across multiple functions.

An underlying assumption of this course is that students learn best and retain the most
through active participation in the learning process. Therefore, classroom sessions will
consist of a mixture of short lectures, student discussions of material and assignments,
case discussions, media presentations, active learning exercises, and guest speakers.

Objectives

 to gain an appreciation for the unique challenges inherent in marketing and

managing services, and developing/delivering quality service;
 to learn strategies, tools and approaches for addressing the unique challenges of
service management and marketing;
 to develop essential service quality knowledge and skills and be prepared to apply
them in an actual business context;
 to become a more perceptive and effective manager and consumer through
understanding the complexities of service design, delivery, and communication;
 to learn an appreciation of the inter-functional coordination necessary to deliver
quality service.
 to further develop communication skills through written projects, team-based work
and oral presentations.
 The importance of service quality to organisations
 The marketing management problems involved with implementing and maintaining
service quality
 The service product as an interactive experience
 The general skills required for the marketing of services

Required Text and Cases

1. Services Marketing: Integrating Customer Focus Across the Firm by Valarie A.

Zeithaml and Mary Jo Bitner, 2nd Edition, McGraw-Hill, 2000.
2. Services Marketing: People, Technology, Strategy by Christopher Lovelock, 4th
Edition, Pearson Education Asia, 2001.

Supplemental Readings for future learning

Our time together in this course is very short. We can only begin to cover many of the
topics. Many of you will find your interest sparked, and you will want to read and learn
more. To facilitate your future learning, you will be provided with a list of optional
readings from Fortune, Business Week, and Harvard Business Review and other
sources. You will also be provided with a list of services marketing and management
books to further develop your knowledge of the course topics in the future. Highly
recommended is the book Discovering the Soul of Service by best-selling author
Leonard L. Berry, The Free Press, 1999.

Learning Journal

Each student will turn in his/her personal learning journal following completion of the first
four class sessions. The learning journal will include typewritten answers to “learning
journal questions” for each day, included on the syllabus. These should be no longer
than 2-3 double-spaced typewritten pages per session.
This assignment encourages students to seek out (i.e., “watch” for) service-related
articles in the popular press. The objective of this exercise is to help students realize
that many services marketing practitioners routinely deal with the topics presented in the
class. Students are asked to locate a current article that addresses a services marketing
issue related to class discussions from the Wall Street Journal, Fortune, Newsweek,
Business Week, or other publications that are applicable to the course. Students then
write a short paper pertaining to the following issues:

1. A brief summary of the key point(s) of the article.

2. A discussion of the how this article relates to a key concept examined in this course
and the implications for services marketing practitioners.
3. The student’s personal reaction to the article based upon the marketing perspective
gained during the course.
In doing this assignment, students are forced to look beyond the textbook to find “real-
life” examples of the concepts discussed in class. This assignment can be used as a
way to begin each class, particularly if due dates for various students are scattered
throughout the semester. In particular, a student can be asked to provide a two-minute
summary of the article and discuss the marketing concept illustrated in the article. Once
an article has been discussed in class, it is often easy for the instructor to refer back to
the article in subsequent discussions.

Learning Journals will be evaluated based on: (1) evidence of understanding and ability
to apply relevant course concepts; and (2) quality—depth, creativity, clarity—of analysis
and expression.

Overall Class Participation

Active student participation is essential to the learning process and to the success of the
class. Therefore, you will be evaluated on your individual overall participation including
attendance, participation in class discussions (including case discussions), and
completion of exercises in class. To participate effectively students will read assigned
text chapters and complete any out-of-class assignments prior to class time.
Since 20% of your grade rides on this, you will be graded on your participation
throughout the semester. Please note that I am grading the quality of your interaction,
not necessarily the quantity. In fact, too much mindless participation hurts the class flow
and can therefore hurt your grade. Please participate, and feel free to share your
experiences as long as they are relevant

Written Team Project, Presentation and Peer Evaluation

Students will work on a final term project in self-selected teams of 3. The purpose of the
project is to apply the concepts and tools learned in class to a real business situation of
your choosing. Through the project students will practice oral, written and presentation
skills as well as demonstrate knowledge of core services marketing and management
concepts. Each team will turn in the final project and present the project in class during
final class sessions. Students may select their own teams and topics within the
guidelines provided. . Peer evaluations will be included as part of each team member’s
final project grade.

Cases

We will discuss five cases during the course. Case questions are included on the
syllabus. You will be given credit for your oral participation in each case session. To
get full credit for the four cases, you must participate meaningfully in the
discussion and turn in your written preparation notes at the beginning of the case
discussion (make a copy for yourself so you will have something to refer to during
class). Your notes can be handwritten in any form that is useful to you; the notes will not
be graded, but rather reviewed to ensure that everyone comes prepared.

If you do not turn in case notes for a given case, your course grade will be reduced by
10 points. If you are absent during a case discussion, your course grade will be reduced
by 10 points. Thus, if you are absent AND do not turn in notes, you could lose as many
as 20 points for each case missed.
Service Audit: You and two other students will complete a group project involving an
audit of best service practices. The objective is to identify a local service firm that excels
in delivering excellent customer service. Then, using what you have learned in this
subject, you are to analyze the specific service strategies that give your firm its “best in
service” distinction. You need to be as specific as possible when discussing these
strategies and you must support your work with specific examples or objective
secondary research. In other words, using phrases like “everybody in XIMB knows UTI
Bank knows offers great service” is not sufficient. You need to uncover exactly UTI
Bank offers great service and precisely HOW it accomplishes this feat.

The final grade will be determined as follows:

Components Relative weight

Participation/ 20%
Presentation
Presentation/ 40%
Research
report/Case
Written exam 40%

To summarise some background theory of services, a brief lecture will be conducted in

class. Not all aspects of these chapters will be incorporated. However, the essential
points will be selected from each. You are expected to read the full chapter, unless
otherwise stated in class.
 Tentative Schedule of Topics
Week Topic(s) Chapters Probable Activities
Class – 1 Introduction 1  Class Introduction
Introduction to Services  Syllabus Review
Class - 2 Focus on the Customer 2  Assign Folder Groups
Consumer Behavior for Services  Select Assignments
Class - 3 Focus on the Customer 3  Case Analysis
Customer Expectations of Service
Class - 4 4
Focus on the Customer  Case Analysis
Customer Perceptions of Service
Class - 5 Listening to Customer Requirements 5  Case Analysis
Understanding Customer Expectations
Through Research
Class - 6 Listening to Customer 6  Case Analysis
Building Customer Relationships
Class - 7 Aligning Strategy, Service Design, and 8-9  Service Blueprint
Standards
Understanding and Closing Gap
Service Standards Development, and
Design
Service Design and Positioning
Class - 8 Managing Service Promises 10  Local Field Trips
Physical Evidence and the Servicescape
Class - 9 Delivering and Performing Service 11  Field Trips
Employees’ Roles in Service Delivery
Class - 10 Delivering and Performing Service 12 & 13  Case Analysis
Customers’ Roles in Service Delivery.
Delivering Through Intermediaries and
Electronic Channels
Class - 11 Pricing of Services 14  Case Analysis
Customer knowledge of service pricing
Class - 12 Integrated Gaps Model 18  Current Affairs
Closing the customer gap
Class - 13 Listening to Customer Requirements 7  Current Affairs
Service Recovery  Presentation

Class - 14 Delivering and Performing Service 14 & 15  Presentation

Managing Demand and Capacity
Class - 15  Class Participation Paper due
 Course Conclusion
 Final Exam Review Session

This course is designed for 30 hrs class room teaching which can be extended up
to 40 hrs. For PGP Students 15 session will spill over to 20 sessions.
Classroom Behavior. Some miscellaneous expectations that I (as the service provider)
have of you (the customer) in the delivery (co-production) of this educational service:

Do not hesitate to ask questions. If something is unclear to you, it probably

means that several others have the same question. However, please ask me the
questions in class or to slow down and repeat something, not your neighbor. In
other words, no talking when I am talking. Likewise, no talking when a fellow
student “has the floor.” This is not only common courtesy, but such talking
annoys and distracts the other students around you (as well as myself).

Do not come to class late or leave early. Neither your fellow students nor I
appreciate such disruptions. You expect me to be on time, and I expect the
same behavior from you.

Please do not wear hats or caps in the classroom. They are as inappropriate in
this setting as they are in a church. (There are relatively few business situations
where wearing a hat during a meeting in an office building is considered
acceptable behavior.)

Please avoid my “Pet Peeves.” They include:

• Attempting to turn in assignments late (they are not accepted)
• Not following directions in doing assignments (you will end up with a lower
grade)
• Asking “did I miss anything?” after not attending a class
• Asking “will I miss anything important?” prior to not attending a class
• Using contractions (e.g., can’t) in written assignments
• Asking “are we going to get out early today?” (I want you to get your money’s
worth)
For those who have not previously studied services marketing, these are
some classic articles that you should read:
General

 Magrath, A. J. (1986). "When Marketing Services, 4 P's are Not Enough”. Business
Horizon, 29 (May-June), 44-50

 Levitt, T. (1981). “Marketing Intangible Products and Product Intangibles”. Harvard

Business Review 59 (May-June), 94-102.

 Shostack L. G. (1977) Breaking Free from Product Marketing (1977). Journal of

Marketing, 41 (April):73-80.

 Lovelock (1992) “Are Services Really Different?” in Managing Services p 1-8.

 Lovelock (1983) Classifying Services to Gain Strategic Marketing Insights. Journal of

Marketing, 47 (Summer):9-20

 Heskett, James L. et al. (1994) Putting the Service-Profit Chain to Work. Harvard
Business Review (March-April): 165-174.

 Berry, L. L. and A. Parasuraman (1993), “Building a New Academic Field - The Case
of Services Marketing,” Journal of Retailing, 69 (Spring) 13-60.

 Brown S. W., Fisk, R. P. and Bitner. (1994), “The Development and Emergence of
Services Marketing Thought,” Journal of Service Industry Management, 5(1): 21-48.

Customer Perceptions

 Solomon M. R.., Surprenant C., Czepiel J. A. and Gutman E. G. (1985) “A Role

Theory Perspective on Dyadic Interactions: The Service Encounter”. Journal of
Marketing, 49 (Winter): 99-111.

 Zeithaml, Valarie, Leonard Berry and A. Parasuraman (1993). “The Nature and
Determinants of Customer Expectations of Service,” Journal of the Academy of
Marketing Science, 21 (1). 1-12.

 Bitner, M. J. Booms, B., & Tetreault, M. S. (1990). The Service Encounter:

Diagnosing Favourable and Unfavourable Incidents. Journal of Marketing, 54, 71-84.

 Carlzon J (1991) “Putting the Customer First: the Key to Service Strategy”. Reprinted
in Lovelock C. (1991) Services Marketing, Englewood Cliffs, NJ.: 424-432.
 Parasuraman, A., Zeithaml V. A. and Berry L. (1985) A Conceptual Model of Service
Quality and Its Implications for Future Research. Journal of Marketing, 49 (Fall): 41-
50.

 Parasuraman, A., Valarie A. Zeithaml and Leonard L. Berry (1988). “SERVQUAL: A

Multiple-Item Scale for Measuring Consumer Perceptions of Service Quality,”
Journal of Retailing, 64 (Spring). 12-40.

 Cronin J. Joseph and Taylor, Steven A. (1992) Measuring Service Quality: A

Reexamination and Extension. Journal of Marketing, 56 (July): 55-68.

Relationships and Switching

 Gwinner, Kevin P., Dwayne D. Gremler and Mary Jo Bitner (1998). “Relational
Benefits in Service Industries: The Customer's Perspective,” Journal of the Academy of
Marketing Science, 26 (2). 101-114.

 Keaveney, Susan M. (1995). “Customer Switching Behavior in Service Industries:

An Exploratory Study,” Journal of Marketing, 59 (April). 71-82.

Strategies

 Zeithaml V. A., Parasuraman, A. and Berry L. L. (1985) Problems and Strategies

in Services Marketing, Journal of Marketing, 49 (Spring): 33-46.

 Shostack G. L. (1987) Service Positioning through Structural Change. Journal of

Marketing, 51 (January): 34-43.

OTHER REFERENCES

AECC Urges Priority for Teaching in College Education: Issues Statement #1 (1990).
Torrance, CA: Accounting Education Change Commission.
Astin, A. (1985). Achieving Educational Excellence. San Francisco, CA: Jossey-Bass.

Berry, Leonard L. and A. Parasuraman (1993). “Building a New Academic Field – The
Case of Services Marketing.” Journal of Retailing, 69 (1): 13-60.
Bird, Laura (1993). “The Clients That Exasperate Madison Avenue.” Wall Street Journal,
November 22: B1.
Bitner, Mary Jo, Bernard H. Booms, and Mary Stanfield Tetreault (1990). “The Service
Encounter: Diagnosing Favorable and Unfavorable Incidents.” Journal of
Marketing, January: 71 -84.
Bok, E. (1986). Higher Learning. Cambridge, MA: Harvard University Press.

Boyer, E. (1990). Scholarship Revisited. Lawrenceville, NJ: Princeton University Press.

Byrne, John A. (1993), “The Horizontal Corporation,” Business Week, December 20:
76-81.
Carlzon, Jan (1991). “Putting the Customer First: The Key to Services Strategy.” In
Services Marketing by Christopher H. Lovelock. Engelwood Cliffs, NJ: Prentice-
Hall, 406-423.
Cottell, Philip G. and Barbara J. Millis (1994). Financial Accounting: Information for
Decisions. Cincinnati, OH: South-Western Publishing Company.
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Feuer, Dale (1987). “The Flip Side of Customer Service.” Training, January: 8.

Fisk, Raymond P., Stephen W. Brown, and Mary Jo Bitner (1993). “Tracking the
Evolution of the Services Marketing Literature.” Journal of Retailing, 69 (1): 61--
103.
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Sourcebook for Higher Education. University Park, PA: National Center on
Postsecondary Teaching, Learning and Assessment.
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Graham, Ellen (1992b). “Digging for Knowledge.” Wall Street Journal, September 11:
B4.

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November 27: 140.

Huey, John (1994). “The New Post-Heroic Leadership.” Fortune, February 21: 42-50.

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C.: Association of American Colleges.
Involvement in Learning: Realizing the Potential of American Higher Education (1984).
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in the Classroom. Edina, MN: Interaction Book Company.
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Designing a Winning Service Strategy, edited by Mary Jo Bitner and Lawrence A.
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 Sample Questionnaires For FIELD TRIP

Service Encounter
Journal Entry: ____
Your Name: __________________________________
Name of Firm: ___________________________________ Type of Service
(industry):_____________________
Date of Encounter: ________________________________ Time Encounter
Occurred:_____________________

What specific circumstances led to this encounter?

______________________________________________________________________
______________________
______________________________________________________________________
______________________
______________________________________________________________________
______________________
______________________________________________________________________
______________________
______________________________________________________________________
______________________
______________________________________________________________________
______________________
______________________________________________________________________
______________________

Exactly what did the firm/employee say or do?

______________________________________________________________________
______________________
______________________________________________________________________
______________________
______________________________________________________________________
______________________
______________________________________________________________________
______________________
______________________________________________________________________
______________________
______________________________________________________________________
______________________
______________________________________________________________________
______________________

How would you rate your level of satisfaction with this encounter? (Circle the most
appropriate number.)
1 2 3 4 5 6 7
extremely
extremely
 dissatisfied satisfied

What exactly made you feel that way?

______________________________________________________________________
______________________
______________________________________________________________________
______________________
______________________________________________________________________
______________________
______________________________________________________________________
______________________
______________________________________________________________________
______________________
______________________________________________________________________
______________________
______________________________________________________________________
______________________

What could the employee/firm have done to make you happier with the encounter?
______________________________________________________________________
______________________
______________________________________________________________________
______________________
______________________________________________________________________
______________________
______________________________________________________________________
______________________
______________________________________________________________________
______________________
______________________________________________________________________
______________________
______________________________________________________________________
______________________

How likely is it that you will go back to this service firm?

1 2 3 4 5 6 7
extremely
extremely
unlikely
likely