Marketing of Services
Dr. Vinita Sahay
Services Marketing
Bachelor level
5 ECTS credits
Term 1
Dr. Vinita S. Sahay
Professor
sahayvinita@gmail.com
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Marketing of Services
Dr. Vinita Sahay
Services Marketing
Background
Service Industry dominates the economic landscape of most countries and contributes over 80%
of GDP in developed Economies. The distinctive nature of the services sector comes from their
very intangibility, which impacts their conception, design, communication, delivery, and
purchase and consumption. Other characteristics of services like heterogeneity, perishability and
simultaneity also increase the complexities of management and require greater integration of the
traditionally distinct organizational functions of marketing, human resources and operations.
These problems encountered in service businesses need to be articulated and tackled by
managers.
Course Objectives
To study and learn from best practices in designing, launching and marketing of services in
diverse industries such as airlines, hospitality, Retail, automotive, financial management
consulting, IT, travel & tourism, utilities and higher education etc. The course aims to provide
insights to:
i. To study “breakthrough” Services in order to understand the operations of successful
service firms that can be benchmarks for future management practice.
ii. To develop an understanding of Service management thinking
iii. Application of concepts of CRM, creating a service culture Customer loyalty and retention,
service encounters, service characteristics, value creation, customer involvement, demand
and suppy management and service recovery .
iv. Understanding service quality, its measurement and management
v. Service design through marketing research and blueprinting for efficient delivery
vi. To develop an awareness of the opportunities for leveraging Information Technology and
Human resources for enhancing Service firm competitiveness.
vii. Understand the role of operations in managing organizations and creating competitive
advantage
Pedagogy
The pedagogy for this course will be a mix of classroom lectures; experience sharing, case
discussion, assignments and carrying out a comprehensive industry/research based project work.
Students are advised to come prepared for the class by reading the prescribed materials as well as
by updating the cases and analyzing parallels of the cases by obtaining insights through library
research, field study and personal observation.
Case Discussions
All class members are expected to have read the case and reflected upon the assigned questions.
Furthermore, class members are encouraged to apply concepts from the assigned readings to their
analysis of the case. Coming unprepared to class could lead to expulsion from the class.
Active participation is expected throughout the entire class with thoughtful contributions to
advance the quality of the discussion. Please note that the frequency (i.e., the quantity) and
decibel of your interventions in class is not a key criterion for effective class participation. The
classroom should be considered a laboratory in which you can test your ability to convince your
peers of the correctness of your approach to complex problems and of your ability to achieve the
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Dr. Vinita Sahay
desired results through the use of that approach. Criteria that are useful in measuring effective
class participation include:
1. Are the points that are made relevant to the discussion? Are they linked to the comments
of others?
2. Do comments show evidence of applying the concepts from the readings to the analysis
of the case?
3. Is there a willingness to test new ideas, or are all comments "safe" (e.g., repetition of
case facts without analysis and conclusions?
4. Do comments clarify or build upon the important aspects of earlier comments and lead to
a clearer statement of the concepts being covered and the problems being addressed?
An important element of this class is teamwork. You are encouraged to form your own group (of
2-3 students) and discuss the case before reflecting on the case assignment. A mechanism to
encourage active class participation and to discourage disruptive tactics will be evolved based on
class experience. Written (Individual) case assignments have to be submitted for two cases for
internal evaluation.
Evaluation
Case Analysis (Written Individual)
Assignment
Project Presentation
Research Based/Industry Based work
End Term
10%
10%
10%
10%
60%
Individual Case Work:
WRITING UP A CASE:
One written case analysis need to be submitted for internal evaluation. The analysis will address
the case questions and be limited to five pages, computer typed double-spaced, plus exhibits.
Written submissions are due at the start of class (the day the case is discussed). Handwritten
will not be accepted under any circumstances and Late submission will lead to loss of
grades/’s. The papers will be graded with particular attention to application of course reading
material and concepts. The analysis should be quantitative and qualitative. The assigned
questions for a case are given in the detailed course outline following the case description. The
format is as follows:
(1) Papers should be Computer typed in Font size 12, Ariel style, with normal margins on A
4 sheet. The name of the case should be on the first page of the text with your Roll. No.,
Date and case name. An executive summary is not required nor expected.
(2) The page limit for each paper is five pages of text, plus exhibits. Note that these are
maximum limits. Papers should be concise and coherent.
(3) Exhibits should contain specific types of analyses (application of a framework, table of
comparisons, cost analysis, competitive features, etc.) and information (web page of
firm) that supports and is relevant, but would be too detailed for the body of the paper.
(4) Please proof read/spell check your paper before turning it in. Papers for this course
should be of the same quality that would be provided to the management of the business.
(5) Copying of any kind will invite disciplinary action for all concerned. You are to ensure
that your answer is not copied in any form. All concerned will be awarded F grade
for the same.
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Marketing of Services
Dr. Vinita Sahay
(6) An extract from previously published work should be acknowledged or else it may be
liable for copyright violation.
TEAM WORK:
FACILITATING CASE DISCUSSION (5-6 members)
By the end of the second session you will have to form groups and select one case to lead the
class in analysis. Facilitating a case discussion is presenting a complete analysis of the case and
leading the class in the case analysis. This requires the team to draw out insights and ideas from
the class and defend the case analysis with class members who are expected to have read the case
and thought about the assigned questions. Often the case discussion consists of a brief overview
of the firm, complete analysis of the situation, identification of the problems/issues arising in the
case and analysis of the same by applying conceptual frameworks. A solution in the form of
suggested option or an action plan needs to be recommended and defended.
Criteria for measuring the effectiveness of leading a case discussion include:
a)
b)
c)
d)
Ability to identify the important issues in the case.
Ability to analyze the issues and use of concepts in the specific situation.
Ability to generate insight.
Ability to answer the queries of class members satisfactorily
The case may be presented in the form of a Power point presentation (PPT). The maximum time
allowed for case presentation is 20 minutes followed by 10 minutes for questions. The time
allocated has to be adhered to.
Recommended Text Book
i. Valarie A Zeithaml, Mary Jo Bitner & Dwayne D.Gremler, “Services Marketing: Integrating
Customer focus across the firm”, 5th Edition McGraw -Hill. ( Abbreviation VAZ used
everywhere in the document)
Suggested Journals:
Harvard Business Review
Sloan Management Review
Journal of Services Research
Journal of Services Marketing
IJSIM: International Journal of Service Industry Management
AMSJ: Academy of Marketing Science Journal
HBROP Harvard Business Review Update
JSM: Journal of Services Marketing.
Suggested Websites:
AMA Academic SIG: Services Marketing
Services and related topics Conferences:
2008 Frontiers in Services Conference
Serv SIG Website: Conference page
Services Marketing Doctoral Consortium: Serv SIG Web site information
Academic Centres
Centre for Services leadership: Arizona State University
Services Management Archive: Brigham Young University
Centre for Excellence in Service: University of Maryland
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Marketing of Services
Dr. Vinita Sahay
Course Outline
Day One
Services: An Overview
Distinct Aspects of Services.
Frameworks for Analysis of Services
Growth and importance of Services in the Economy
From the manufacturing paradigm to service & solutions Paradigm and consequent
implications for management theory & practice
Recommended Readings:
Levitt; Marketing Product intangibles and Intangible Products, HBR May-June 1981
Shostack, L., “Breaking Free from Product Marketing”, Journal of Marketing, April 1997,
pp.72-80.
Henkoff, R. “Service is Everybody’s Business,” Fortune, June 27, 1994, pp.48-60.
Quinn,J.B. and Gagon C.E., “Will Services Follow Manufacturing into Decline?” Harvard
Business Review, November-December1986, pp.95-103.
Levitt, T. ‘The Industrialization of Services?’ The Marketing Imagination, 2e, The Free
Press, 1986, pp.50-71.
Understanding Consumer Behaviour
The consumer Experience
Pre-Readings
Case: Shouldice Hospital Ltd (Case 8, Pages 700-712 of Text Book)
VAZ Chapter 3
Recommended Readings:
Schmenner; How can service businesses survive and prosper, SMR Spring 1986
Gronroos; A Services oriented approach to Marketing Of Services, EJM,1978
Fryar, C.R., “What’s Different about Services Marketing”, The Journal of Services Marketing,
Vol 5, No.4, Fall1 1991, pp53-58
Hopper, M.D., “Rattling SABRE_New Ways to compete on Information”, Harvard Business
Review, May –June 1990, pp.118-125.
Day 2
Customer Exceptions, Needs and Perceptions
Service Quality
Moments of Truth
Pre Readings:
VAZ Chapter 4 & 5
Recommended Readings
Berry and Bendapudi; Clueing in to customers, HBR 2003
Chase, Dasu; Want to perfect your Company’s Service? Use of Behavioral Science, HBROP
2001.
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Dr. Vinita Sahay
Carlzon, J., “Putting the Customer First: The Key to Service Strategy”, The McKinsey Quarterly,
Summer 1997.
Stafford, M.B.” How Customers Perceive Service Quality”, Journal of Retail Banking, pp. 2937.
Understanding Service Quality & Establishing Service Standards
Developing RATER, SERVQUAL
Listening to Customer Requirements
Understanding Customer Expectations and Perceptions through Marketing Research
Pre Readings:
VAZ Chapter 6
Day 3
Customers Relationship Management (CRM)
Six Market Domain Approach
Customer Relationships in the Market Place
Customer Retention Strategies
Pre Readings:
VAZ Chapter 7
Case Study: British Airways : Using Information Systems to better serve the Customers :
Harvard business School 9-395-065
Service Recovery
Service Recovery
Handling Customer Complaints
Pre Readings:
VAZ Chapter 8
Christopher W. R. Hart, Jemes L. Heskett and W. Earl Sasser Jr., “The Profitable Art of Service
Recovery”, Harvard Business Review, July-August, 1990, pp. 148-156.
Christopher W. R. Hart, “The Power of Unconditional Service Guarantee”, Harvard Business
Review, July-August, 1990, pp. 54-62.
Day 4
Service Development & Design
1. Stages in New Service Design Strategies
2. Service Blueprinting
Pre Readings:
VAZ Chapter 9 & 10
Recommended Readings
Marshall: Note on process Analyses; Process Fundamentals, HBSP Note
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Dr. Vinita Sahay
Shostack, G.L., “Designing Services that Deliver”, Harvard Business Review, January –February
1984, pp. 133-139
Kingman Brundae, J., “The ABC‘s of Service System Blueprinting”, in Designing a Winning
Service Strategy, M.J. Bitner and L.A. Crosby (eds.), American Marketing Association, 1989.
Customer Defined Service Standards
Process for Developing Customer –Defined Standards
Physical Evidence and ServiceScape
Pre Readings:
VAZ Chapter 11
Day 5
Experiential Marketing & Sensory Branding
Leveraging the Brand
Reading: Book on Sensory Branding by Martin Lindstrom
www.martinlindstrom.com
Schmitt; Experiential Marketing, JMM, 1999
Pine, Gilmor; Welcome to the Experience Economy, HBR,1998.
Berry; Cultivating Service Brand Equity, CL- Pages 207-216.
Employees & Customer’s Role in Service Delivery
Managing Service Employees
Motivating Employees
Customer’s Role in Service Delivery
Pre Readings
VAZ Chapter 12
Pre Readings
Rucii, A.J., Kirn , S.P. and Quinn, R.T., “The Employee–Customer–Profit Chain at Sears”,
Harvard Business Review, January-February, 1998, pp. 83-97
Additional Readings
Mahesh, V.S., “Effective Human Resource Management: Key to Excellence in Service
Organizations”, Vikalpa, Vol. 13, No. 4, October-November 1988, pp. 9-15
Regis Mckenna, “Real Time Marketing”, Harvard Business Review, 73, July-August 1995, pp.
87-98.
Day 6
Case Analysis: Starbucks: Delivering Customer Service (Case 7, pages 682-699 of VAZ)
Distributing Services
Delivering Service through Intermediaries and Electronic Channels
Pre Readings:
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Marketing of Services
Dr. Vinita Sahay
Desiraju and Shugan; Strategic Service Pricing and Yield Management, JOM , 1999
VAZ Chapter 14
Managing Demand and Capacity
Pre Readings:
VAZ Chapter 15
Measuring and Managing Capacity
Strategies for Managing Demand
Recommended Readings
Shemwell, Cronin: Service Marketing Strategies for coping with demand supply imbalances,
JSM 1994
W. Earl. Sasser Jr., “Match Supply and Demand in Service Industries”, Harvard Business
Review 54, Nov-Dec1976:133-140
Kimes and Chase, The Strategic levers Of Yield Management, CL-pp-205-212.
Day 7
Integrated Services Marketing Communications
Customer Education
Developing Communication Mix
Pre Readings:
VAZ Chapter 16
Recommended Readings
Legg, D., and Baker, J. “Advertising Strategies for Service Firms” from Add Value to Your
Services, Carol Surprenant, ed.1987, pp. 163-168.
Douglas, T., ’The Power of Branding” in Lovelock, C., Services Marketing, 3e, Prentice Hall,
1996, pp. 398-401.
Case Analysis: Rapid Rewards at Southwest
Day 8
Pricing and Revenue Management
Pricing Strategies: Planning and Implementation
Pre Readings:
VAZ Chapter 17
Day 9
Project Presentations
Project Presentations & Review of Course Learning
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Dr. Vinita Sahay
Service Industry Project Report
Each Student should choose one service industry to investigate. As we go along, various pieces
of the report will be turned in, at the end of the term all the pieces of the report will be put
together in one final report. This report serves two purposes:
It allows you to apply various concepts, introduced during the term
It allows you to acquire a deeper understanding of one particular service industry (Hopefully,
one you are interested in!)
Each report will include the components listed below; these components will be graded as they
are submitted. Each of these components, however, is not expected to be in the ‘Finished
Product’, rather these assignments demonstrate that you have understood the concepts from the
class and the readings and has made a reasonable effort to apply them in looking at a particular
industry. Students are expected to revise each section as necessary for inclusion in the final
report.
1. Industry Analysis
What are the current trends in the industry?
What role does technology play in the industry?
Who are the major players in the industry?
Who is the competition? Think broadly.
Where would you locate this industry on the ‘Tangibility Spectrum?’
2. Typical Service Offering
What are customer expectations of service in the industry service in the industry?
What bundles of benefits do the customers typically receive?
What is the typical service performance of the firms in the industry?
Do all the Five-Service Quality dimensions apply to the firms in this Industry? Which
might be the most/least important?
What is the customer involvement in the service industry?
3. Physical Evidence
What role does servicescape play in this industry?
What aspects of this servicescape significantly influence the service delivery process?
How can servicescape be used as a source of competitive advantage?
4.
Industry Section
In general what are the strength and the weaknesses of this industry?(provide evidence to
support and defend your views)
What opportunity do you see in this industry?
What do you think the future holds for this industry?
What advice would you give to a person/company planning to enter this industry?
5. ‘Wild Card’ Section
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Dr. Vinita Sahay
you may create your own special section here ( a new idea from the same industry)
some ideas might include (but are not limited to) one of the following :
Pricing (eg. what is the standard pricing procedure in this industry)
Promotion (eg. what promotion strategies are normally employed)
Managing supply and demand
Employee roles in service delivery
Internal marketing
In-depth interview of a manager in this industry
6. Final Report
The final report should include all of the following:
Cover Page: It should include the report title, your name with roll number.
Executive Summary: An Executive Summary of no more than two double spaced pages will
follow the cover page, this should highlight what is included in the report.
Table of Contents: Immediately following the executive summary should be a table of
contents of your report .you may put the report together in any order you like, provided there
is some logical reasoning apparent to the reader for the sequence you have chosen.
Main Body of the Report: Students are expected to include each of these components
discussed earlier in the final report. As noted earlier, students should revise each section, as
necessary for inclusion in the final report.
Conclusion: the report should end with a brief conclusion that ties the entire project together
and reveals the major insights gained during the study of your chosen industry.
References: A complete citation of all work /research of others references in your report
should be included in a list at the end of the report as references and also indicated in the text
of the report.
ASSIGNMENT - 2
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Marketing of Services
Dr. Vinita Sahay
MARKETING OF SERVICES
Submission Date – Monday of the second week
Length of the Assignment (not more than three A4 pages)
Select a Web site for service businesses. Prepare an evaluation of each using the
following criteria:
User-friendliness
Easy to access and use
Fast
Needed information
Instructions
Applicability of contents and features to each of the five technology-dominated
areas:
Information
Consultation
Order-Taking
Billing
Payment
Overall effectiveness and suggestions for improvement on specific dimensions
missing or unnecessary content
Layout and sequencing
Eye-appeal—appropriate use of graphics and color
Animation
Audio options
Presence or absence of all necessary service features
Use of hypertext links
RSS feeds
Any other aspect...
How does the Web compare as an information medium relative to other media used
by service marketers? What do you see as its potential for the future?
Explore the use of Social Media Marketing by the same company/ Institution
Quote the instances of Blogging, creation of Communities, fan clubs,
friends/followers, events, auctions etc. Usage of Sites/platforms like Twitter,
Facebook, Linked-in etc.
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Dr. Vinita Sahay
Day –Wise Schedule Of Marketing of Services
Kindly find Day wise Schedule keeping in mind that Teaching will start from 3 rd July 2012.
27 lessons of 45 minutes each, amounts to 20.5 hours in 9 days so about 3 hours for 8 days and lesser on
2nd Friday.
Time suggested: 9.00 AM to 12.20 PM with two breaks of about 10 minutes in between.
Students are strongly suggested to buy the Text Book.
Pre- Read On the first day: Case: Shouldice Hospital Ltd (Case 8, of Text Book)
Day and Date
Day 1: 3rd July Tuesday
Coverage
Resources Required on days
Services: An Overview
Understanding
Consumer
Behaviour
Day 2: 4th July Wednesday
Customer Exceptions, Needs To be distributed for Day
and Perceptions
3:Case Study:
British
Airways
:
Using
Understanding
Service Information Systems to
Quality
&
Establishing better serve the Customers :
Service Standards
Harvard business School 9395-065
Developing
RATER,
SERVQUAL VS SERVPERF
Listening
to
Requirements
Customer
Understanding Customer
Expectations and Perceptions
through Marketing Research
Day 3: 5th July Thursday
Customers
Relationship
Management (CRM)
Case Study:
British
Airways : Using Information
Systems to better serve the
Customers
:
Harvard
business School 9-395-065
Service Recovery
Service Recovery
Handling
Customer
Complaints
Day 4:6th July Friday
Service
Design
Development
&
3. Stages
in
New
Service
Design
Strategies
4. Service Blueprinting
Customer Defined Service
Standards
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Marketing of Services
Dr. Vinita Sahay
Process
for
Developing
Customer –Defined Standards
Physical
Evidence
ServiceScape
Day 5: 9th July Monday
and
Experiential Marketing &
Sensory Branding
Leveraging the Brand
Employees & Customer’s
Role in Service Delivery
Managing
Service
Employees
Motivating Employees
Customer’s Role in Service
Delivery
Case Analysis: Starbucks:
Delivering Customer Service
(Case 7, pages 682-699 of
VAZ)
Day 6: 10th July Tuesday
Distributing Services
Day 7: 11th July Wednesday
Integrated
Services
Marketing Communications
Customer Education
Developing
Communication Mix
To be distributed for Day
7:Case Analysis: Rapid
Delivering Service through Rewards at Southwest
Intermediaries
and
Electronic Channels
Managing
Demand
and
Capacity
Measuring and Managing
Capacity
Strategies for Managing
Demand
Case
Analysis:
Rapid
Rewards at Southwest
Day 8: 12th July Thursday
Pricing
and
Management
Revenue
Pricing Strategies: Planning and
Implementation
Day 9: 13th July Friday
Project Presentations
Project Presentations &
Review of Course Learning
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