Faculty
Professor Gail A. Taylor
Objectives
COURSE DESCRIPTION
Services are becoming the dominant economic driver in the U.S. economy and are critical for competitive advantage in companies from all industrial sectors. Superior service drives the competitive advantage of leading companies like Charles Schwab, Ritz-Carlton Hotels, and FedEx. Even for companies not considered traditional service companies, services represent their primary growth and profitability strategies into the 21st century. For example, IBM and GE, two companies that gained prominence due to their product offerings, now generate approximately 40% of revenues and over 60% of current profits respectively from services.
The purpose of this course is to introduce you to services marketing as a separate and distinct area of marketing thought and practice and help you to understand its powerful influence in competitive markets. During this course we focus our attention on three main services marketing areas, the service customer, the service company and the integration of marketing, human resources and operations within the service system. All course activities are intended to help you become proficient in analyzing and judging the merits of services marketing strategies and assist you in making strategic decisions in both business and consumer services industries. Throughout the course an emphasis is placed on marketing's role within the total organization.
The course objectives aim to help you:
Gain knowledge of the unique aspects and challenges inherent in marketing and managing the delivery of services or other intangible offerings.
Develop the ability to think critically and strategically about opportunities and issues that emerge in service industries and to confidently apply services marketing concepts and frameworks to formulate valuable solutions.
Discover the critical success factors in both business and comsumer markets, based upon evidence from course readings, discussions and views of guest speakers.
Become more sensitive to the importance of integrating marketing, orperations and human resource management for an effective service system.
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 assigned materials, case discussions, team presentations, and active learning exercises. We will also have several service practitioners/experts sharing their insights with our class.
Requirements
Materials
REQUIRED COURSE MATERIALS
A course pack will be available containing required cases and most readings for the course.
Supplemental Readings
Book: Services Marketing: Integrating Customer Focus Across the Firm, 4th edition, Valarie Zeithaml, Mary Jo Bitner, and Dwayne Gremler, Boston, MA: McGraw-Hill Irwin, 2006.
Book: Service America in the New Economy, Karl Albrecht and Ron Zemke, McGraw-Hill, 2002.
Book: Discovering the Soul of Service, Leonard L. Berry, New York, NY: The Free Press, 1999.
These books and additional supplemental readings will be on reserve at Feldberg Library.
TUCK HONOR CODE AND ATTENDANCE POLICIES
In class discussions and in any written assignment conducted for this class, you can use whatever notes you have prepared for that assignment. It is a violation of the Honor Principle to use notes or assignments from earlier years' classes or to use any materials prepared by other students. Listing your name on a group assignment indicates that you have made a substantial contribution to the end product.
In all case analyses, you should not go beyond the case in your quest for information. The case provides all of the company facts that should be used in your analysis. Under no circumstances should the company be called, knowledgeable sources interviewed, or should additional research be conducted.
Students are expected to conform to the Tuck School policy on laptop use in the classroom. Consulting your e-mail and surfing the Internet or Tuck Intranet during class is strictly prohibited.
Attendance is required at all class sessions. A missed session will result in a zero grade for that day. Because of the limited number of meetings and the interactive nature of the course it is not possible to make up missed sessions. Please notify your professor in advance if you are unable to attend class due to illness or family emergency.
Grading
(30%)
Course grades will be determined based upon in-class participation and weekly assignments.
In-Class Participation (30%): Active student participation in class is essential to the learning process and to the success of the class. To participate effectively students will read assigned materials and complete all out-of-class assignments prior to class time. Please note that you will be evaluated on the quality of your interaction, not necessarily the quantity. Please participate, and share your experiences as long as they are relevant.
Case Analyses (30%):
Two written case analyses will be submitted for grading. The Custom Research case is due on January 23 and the Ritz–Carlton case is due on January 28. Both case assignments are team assignments and each can be submitted any time prior to the start of class on the due date. There is a 1,000-word limit (about four pages) on text for each analysis. In order to ensure equity in grading, it is extremely important that you adhere to this limit. Violations of the word limit will negatively impact your grade. Please put your student numbers on your assignments NOT your name.
While there is no rigid format for a written case analysis, all papers should contain, in order, three basic sections:
1. A problem definition statement, which identifies the key issues facing the company, discusses their relative importance, and introduces the recommended solution.
2. An analysis section that presents the arguments for the recommended solution through the synthesis and interpretation of case facts and data. Please feel free to use information from any course reading to assist you in your analysis.
3. A set of detailed recommendations and suggestions for implementation.
Feel free to use your own headings and subheadings and to structure each section in any way you feel is effective. For example, an analysis section might discuss "customers," "competition," "company capabilities," etc. Let the nature of the case dictate the format for your recommendations section.
Include exhibits to show quantitative work. Please remember that exhibits are not prose and are not to be included in the 1,000-word limit.
The problem definition should be very concise and to the point. Do not repeat case facts. It is safe to assume that the reader has read the case and is familiar with the information it contains. Do not waste your valuable (and limited) words by providing a case summary. Papers should be fairly evenly divided between analysis and recommendations. Grading criteria include the following points:
1. Quality of analysis - concise and comprehensive problem statements, appropriate use of course concepts, synthesizing and drawing inferences from case facts, inherent logic, informative exhibits.
2. Quality of recommendations - specific, comprehensive, and practical plans, recognition of implementation considerations.
3. Writing style and organization - logical structure, clarity, and conciseness.
Prepare a one-page slide highlighting your team's analysis and recommendations. Please place a copy of your slide in the "CR Slides" or the "RC Slides" folder. Teams will be randomly selected to share their analysis and recommendations with the class.
Learning Exercises and Assignments
Service Quality – Gaps Analysis (20%):A three page write-up of your analysis and a one page summary slide is due no later than 4pm on January 13. Appendices are acceptable and not included in the 3 page limit. Examples from your submissions will be used as the basis for class case discussions on January 14. As a result, please submit your assignments in the GAPS folder as soon as they are completed (again, no later than 4pm on the January 13).
GAP Analysis - This individual assignment calls for an analysis of the service quality performance of a firm that you feel is failing in their customer service efforts. Examine the current practices of the firm using the GAPS model. A service blueprint may be helpful in identifying the root cause of the service problems. How are these problems impacting your evaluation of the value of this service? Develop recommendations for specific services marketing strategies, policies or procedures to close one or more of the gaps in the service quality model. Consider possible causes underlying the service failure and suggest ways to minimize these problems. Feel free to consider suggesting a service redesign (if necessary) in your recommendations.
20%
Topic Presentations (20%):
Students will work in the same self-selected teams used for case assignments (team size will be announced in class). This assignment allows students to further explore service marketing topics that are of interest or that we may not have covered in depth this term due to the length of our class. There are a variety of options available for selection. Hopefully there is something listed that captures your interest. If not, you also have the option of developing your own presentation topic (wild card). Each topic listed below can only be selected by one team, unless otherwise indicated. Make sure that your team has “signed-up” for your topic by listing your team members under your selected topic in the topic presentation sign-up folder. This should be done no later than 5pm on January 12. Wild card topics must be approved in advance of sign-up.
Please note that class will be extended on Feburary 4 in order to allow each team adequate time to present their topics. A written paper is not required, but students will be responsible for placing an electronic copy of their presentations in the class folder by the start of class on the 4th. A key “take-a-way” slide must be incorporated in your presentation. A bibliography containing your sources and suggestions for further recommended readings related to your project topic should be included in an appendix.
Topic Options:
1. Service Promotions - This topic deals with how firms design and develop the optimal communication mix for their service offerings. Develop a presentation highlighting the most important issues related to the promotion of services. Some possible considerations are: Given the challenge of intangibility, what are the most effective ways that service firms can communicate their offerings to current and potential customers? How should firms go about establishing their services communication mix? How should managers determine which promotional tools will be most effective? During your presentation, provide a critical analysis of a sample of effective versus ineffective service promotion items. Be sure to highlight the concepts that will be most relevant to your classmates as they pursue their management careers.
2. Service Recovery - How well a firm handles complaints and resolves problems may determine whether it builds customer loyalty or faces increasing customer churn. This topic is paramount to both services marketing and service operations. Focusing exclusively on the marketing aspects of this issue, provide an analysis of why some customers complain and others do not. What can firms do to encourage effective customer feedback? How should an effective service recovery strategy be designed? Provide examples illustrating effective and ineffective attempts at service recovery.
3. Negative Customer Behavior – Customers who act in uncooperative or abusive ways are a problem for any organization. However, such customers have more potential for mischief in service businesses. This topic is receiving increased attention from service researchers and firms. Some researchers have even developed a new term, “jay customers,” to identify customers who act in thoughtless or abusive ways, causing problems for the firm, its employees, and other customers. How should firms and their frontline staff respond to abusive and/or opportunistic customers? How can firms safeguard themselves from these types of behaviors? Talk to several managers in various types of service firms and develop an understanding of the challenges resulting from these types of behaviors. Develop and present a strategic approach to this problem.
4. Franchising - Develop a presentation that illustrates the marketing and management challenges raised by the use of service intermediaries. Select two business format franchises, other than food service, choosing one targeted primarily at consumer markets and the other primarily at business-to-business markets. Develop a profile of each, examining their strategy across each of the 7P’s and also evaluating their competitive positioning. Clearly illustrate the benefits and challenges associated with using service intermediaries (from both the Franchisers and the Franchisees perspectives). Be sure to highlight the concepts that will be most relevant to your classmates.
5. Servicescapes - Service environments, also called servicescapes, relate to the style and appearance of the physical surroundings and other experiential elements encountered by customers at service delivery sites. Identify firms from three different industries where the service environment is a crucial part of the overall value proposition. Select at least one firm that has done an excellent job managing their servicescape for effective service delivery and select at least one firm that has done a poor job. Provide some guidelines or frameworks for your classmates to aid them in analyzing and developing an effective servicescape.
6. Exporting Services I - This project requires you to take a closer look at service marketing issues in a country outside of the U.S. Provide examples of firms (in the same industry) that have exported services to this country and who have excelled in their business as a result of having a clear understanding of what service means in this country. Also, provide examples of firms that struggled because of a lack of understanding of how customers define service in this country. How did they turn themselves around? Finally, provide an example of a firm that is currently struggling and you suspect it is because they have not realized that they do not have an understanding of what service means in this country. Offer suggestions as to how they can turn things around.
7. Exporting Services II -Select a U.S. based company (not Starbucks) that has exported their service to at least three different countries. How has the company chosen to enter these three markets (ownership, franchising, strategic alliance)? Compare and contrast the company's experience in each of the three countries. What challenges have they faced as a result of differences in culture, customer expectation, employee motivation, etc.? How have they addressed these challenges? What key factors should your classmates consider when developing a global service export strategy?
8. Wild Card - Submit a proposal for a service marketing project that your team designs.
Schedule
Thursday, 01/08/2009
Session 1: Introduction to Services Marketing
Required Readings:
1. "Welcome to the Experience Economy," by J. Pine and J. Gilmore
2. "Putting the Service-Profit Chain to Work," by J. Heskett, T. Jones, G. Loveman W. Sasser and L. Schlesinger
3. "The Four Things a Service Business Must Get Right, by F. Frei
Optional Readings:
"The Move to Solutions Providers," by S. Brown
"Go Downstream: The New Profit Imperative in Manufacturing," by R. Wise and P. Baumgartner
Prep Questions:
1. Why is the marketing of service different from the marketing of goods? How do these differences translate into the need for modified marketing strategies?
2. What are the key factors motivating manufacturers to add service to their product mix?
3. What are the challenges associated with offering services within a business that primarily sells products?
4. What useful parallels do you see between running an automobile sales and service dealership and running healthcare services?
5. What advice would you give to Carol Sullivan-Diaz?
Case:
Sullivan Ford Auto World
Assignment:
Review the Services Marketing Chapter from the Kotler and Keller textbook used in the Marketing core course.
Friday, 01/09/2009
I. The Customer
Session 2: Understanding the Service Customer: Expectations and Satisfaction
Required Readings:
1.“Customer Expectations of Service,” by V. Zeithaml, M. Bitner and D. Gremler
2."Customer Satisfaction Fables," by D. Iacobucci, K. Grayson, and A. Ostrom
3."Understanding Customers Experience," by C. Meyer and A. Schwager
Optional Readings:
"The Top 10 Reasons You Don’t Understand Your Customers," by F. Reichheld.
"Stop Customer Churn Before It Starts," by M. Kon
Case:
Priceline (In-class interactive video case)
Prep Questions:
1. How are customer expectations formed?
2. What are the challenges resulting from exceeding customer expectations?
3. Why are customer expectations of particular importance when purchasing services as opposed to goods?
4. Is it possible to be “too good” at service delivery? When would a firm consider “underperforming?”
5. True or False – The customer is always right! Why or why not? How does the answer to this question impact a firm’s relationship management strategies?
Monday, 01/12/2009
GROUP TOPIC SELECTION DUE BY 5PM
Tuesday, 01/13/2009
Assignment:
INDIVIDUAL WRITE-UP DUE - Place an electronic copy of your completed GAPS Assignment and your one page summary slide in the "GAPS Assignment" drop-in folder by 4pm.
Wednesday, 01/14/2009
Session 3: Perceived Service Quality: Customer Expectations Meets Firm Performance
Required Reading:
1. “The Integrated GAPS Model of Service Quality,” Chapter 18, Services Marketing: Integrating Customer Focus across the Firm, 3rd edition, by V. Zeithaml and M. Bitner
2. “Seeking Synergy in Service Operations: Seven Things Marketers Need to Know about Service Operations,” by C. Lovelock
3. "Designing and Managing Service Processes," Chapter 8, in Services Marketing, 5th Edition, by C. Lovelock and J. Wirtz
Assignment:
GAPS Assignment will be discussed in class today.
Thursday, 01/15/2009
Session 4: The Customer Technology Interface and Service Innovation
Required Readings:
1. "Implementing Successful Self-Service Technologies" by M.J. Bitner, A. Ostrom, and M. Meuter
2. "Turn Customer Input into Innovation," by A. Ulwick
Optional Reading:
"Creating New Markets Through Service Innovation," by L. Berry, V. Shankar, J. Parish, S. Cadwallader and T. Dotzel
Case:
Quality Improvement
Class Prep Questions:
1. What decision is Allan Moulter facing?
2. What are the issues, challenges and tradeoffs?
3. What would you do if you were Allan Moulter at Quality Care?
Thursday, 01/22/2009
II. The Company
Session 5: Culture, Growth and Profitability
Required Reading:
1. “Customer Service Champs,” by J. McGregor
2. “The Road Map to Success: Defining Values in the Desired Culture” by L. Senn, and J. Hart
Review
The BCG Matrix (Stars, Dogs, Cash Cows, Question Marks) from the Kotler and Keller Text and the Markstrat manual.
Class Prep Questions:
1. What commonalities are found in superior service companies?
2. How can these themes be replicated?
3. What is the role of “culture” in successful service firms?
Friday, 01/23/2009
Session 6: Loyalty, Relationship Marketing and the Customer Mix
Required Readings:
1. “Building Loyalty in Business Markets,” by D. Narayandas
2. "How to Lose Your Star Performer Without Losing Your Customers Too,” by N. Bendapudi and R. Leone
3. “Sprint Nextel defends dropping customers,” by D. Twiddy
Case:
Custom Research Inc. (A)
Optional Reading:
“Analyzing Customers, Best Buy Decides Not All Are Welcome,” by G. McWilliams
“When irate guests pounce: Should hotels have a blacklist?” by K. Yancey
Assignment:
See case analysis description.
GROUP CASE WRITE-UP DUE – Place an electronic copy of your completed case write-up in the "Custom Research Assignment" drop-in folder prior to the start of class – Don't forget to copy your one-page slide to the “CR Slides” folder.
Wednesday, 01/28/2009
Session 7: Marketing to the Internal Customer
See case analysis description.
GROUP CASE WRITE-UP DUE – Put an electronic copy of your completed case write-up in the "Ritz-Carlton Assignment" drop-in folder prior to the start of class.
Required Reading:
1. “Manage Your Human Sigma,” by J. Fleming, C. Coffman, and J. Harter
2. “Creating the Living Brand,” by N. Bendapudi and V. Bendapudi
Case:
The Ritz-Carlton Hotel Company
Class Prep Questions:
1. What is the essence of the Ritz-Carlton experience? How has this contributed to brand perceptions and customer expectations?
2. How is Ritz-Carlton attempting to manage their “Human Sigma?” Is the Ritz-Carlton a “Living Brand?”
3. How does the Ritz-Carlton create “Ladies and Gentlemen” serving “Ladies and Gentleman”?
4. What are the pros and cons of lengthening the 7 day countdown?
Thursday, 01/29/2009
III. Challenges
Session 8: Overcoming Hurdles to Service Success
Required Readings:
1. "How We Built a Strong Company in a Weak Industry," by R. Brown
2. "Blue Ocean Strategy," by W. Chan Kim and R. Mauborgne
Case:
Northern Trust
Class Prep Questions:
1. How do you market a service that people don't want?
2. How do you replicate a successful service offering?
3.What are the unique challenges associated with marketing a professional service?
Wednesday, 02/04/2009
Session 9: Topic Presentations
Please Note: CLASS TIME WILL BE EXTENDED TODAY DUE TO PRESENTATIONS.
Topic Presentations - Electronic copies of your presentations and supplemental slides must be copied to the "Topic Presentations" drop-in folder by the start of class today.
