CONTENTS Preface ix About the Authors xv PART ONE UNDERSTANDING SERVICE PRODUCTS, CONSUMERS, AND MARKETS1 CHAPTER 1Introduction to Services Marketing 3 Services Dominate the Modern Economy 4 Services Pose Distinctive Marketing Challenges 7 Important Differences Exist Among Services11 Marketing must be Integrated with other Functions18 Service Success Requires a Focus on Both Customers and Competitive Markets 22 Conclusion24 CHAPTER 2Consumer Behavior in Service Encounters 27 Customers Interact with Service Operations 28 The Purchase Process for Services Involves Multiple Steps32 Customers Have Needs and Expectations36 Customers May Find it Difficult to Evaluate Services 38 A Service Business is a System 43 Conclusion50 CHAPTERSPositioning Services in Competitive Markets 53 Focus Underlies the Search for Competitive Advantage 54 Market Segmentation Forms the Basis for Focused Strategies 55 Positioning Distinguishes a Brand from its Competitors 59 Conduct Internal, Market, and Competitor Analyses 62 Use Positioning Maps to Plot Competitive Strategy 63 Competitive Positioning can be Changed 68 Conclusion69 Readings Stephen J. Grove and Raymond P. Fisk, Service Theater: An Analytical Framework for Services Marketing 72 PART TWO KEY ELEMENTS OF SERVICES MARKETING83 CHAPTER 4Creating the Service Product 85 Planning and Creating Services85 Identifying and Classifying Supplementary Services 95 Planning and Branding Service Products106 New Service Development109 Conclusion116 CHAPTER 5Designing the Communications Mix for Services 119 Communication Plays a Key Role in Marketing119 Communicating Services Presents Both Challenges and Opportunities121 Set Clear Objectives for Marketing Communications125 The Marketing Communications Mix127 Branding and Communications134 Marketing Communications and the Internet136 Conclusion139 CHAPTER 6Pricing and Revenue Management142 Effective Pricing is Central to Financial Success142 Objectives and Foundations for Setting Prices143 Cost-Based Pricing144 Value-Based Pricing148 Competition-Based Pricing153 Revenue Management154 Ethical Concerns and Perceived Fairness of Pricing Policies157 Putting Service Pricing into Practice162 Conclusion167 CHAPTER 7 Distributing Services172 Distribution in a Services Context172 The Type of Contact: Options for Service Delivery173 Decisions about Place and Time176 Service Delivery in Cyberspace180 The Role of Intermediaries183 Internationally Distributed Services185 Conclusion193 Readings Leonard L. Berry, Cultivating Service Brand Equity196 Sheryl E. Kimes and Richard B. Chase, The Strategic Levers of Yield Management207 PART THREEMANAGING THE SERVICE DELIVERY PROCESS219 CHAPTER 8Designing and Managing Service Processes 221 Blueprinting Services to Create Valued Experiences and Productive Operations 221 Service Process Redesign231 The Customer as Coproducer 234 The Problem of Customer Misbehavior 239 Conclusion243 CHAPTER 9Balancing Demand and Capacity 246 Fluctuations in Demand Threaten Service Productivity 246 Many Service Organizations are Capacity-Constrained 248 Patterns and Determinants of Demand251 Demand Levels Can Be Managed253 Inventory Demand Through Waiting Lines and Reservations 256 Minimizing Perceptions of Waiting Time260 Creating an Effective Reservations System 262 Conclusion265 CHAPTER 10 Planning the Service Environment 268 The Purpose of Service Environments268 Consumer Responses to Service Environments271 Dimensions of the Service Environment 274 Putting it All Together 282 Conclusion286 CHAPTER 11 Managing People for Service Advantage290 Service Staff are Crucially Important 290 Frontline Work is Difficult and Stressful292 Cycles of Failure, Mediocrity, and Success 295 Human Resources Management: How to Get it Right 300 Service Leadership and Culture311 Conclusion315 Readings Tony Simons, The High Cost of Lost Trust320 Stephan H. Haeckel, Lewis P. Carbone, and Leonard L. Berry, How to Lead Customer Experience322 PART FOURIMPLEMENTING SERVICES MARKETING329 CHAPTER 12 Managing Relationships and Building Loyalty 331 The Search for Customer Loyalty 331 Understanding the Customer/Firm Relationship 336 Targeting the Right Customers338 Analyzing and Managing the Customer Base343 Building Customer Loyalty 345 Customer Relationship Management Systems 354 Conclusion356 CHAPTER 13 Customer Feedback and Service Recovery 359 Customer Complaining Behavior 359 Customer Responses to Effective Service Recovery363 Principles of Effective Service Recovery Systems 365 Service Guarantees368 Discouraging Abuse and Opportunistic Behavior373 Learning from Customer Feedback 375 Conclusion379 CHAPTER 14 Improving Service Quality and Productivity 384 Integrating Service Quality and Productivity Strategies 385 What is Service Quality?386 The Gap Model: A Conceptual Tool to Identify and Correct Service Quality Problems390 Measuring and Improving Service Quality 393 Defining and Measuring Productivity 400 Improving Service Productivity 403 Conclusion407 Appendix: Systematic Approaches to Productivity, Quality Improvement, and Process Standardization409 CHAPTER 15 Organizing for Service Leadership 414 The Search for Synergy in Service Management 415 Creating a Leading Service Organization 422 In Search of Leadership 426 Conclusion 433 Readings Roland T. Rust, Katherine N. Lemon, and Valarie A. Zeithaml, Where Should the Next Marketing Dollar Go?435 CASES 1 Four Customers in Search of Solutions 439 2 Bouleau & Huntley 443 3 Honeywell Automation in India 448 4 MakeMyTrip.com 460 5 Air Charters: The Path Ahead 469 6 Bharat Sanchar Nigam Limited 480 7 Banyan Tree494 8 Revenue Management at Prego Italian Restaurant 506 9 Customer Asset Management at DHL in Asia 517 10 Bossard Asia Pacific523 11 Giordano: International Expansion 530 12 TLContact.com 546 13 Outsourcing: The Case of Indian BPO Segment560 14 Hotel Industry in India: Challenges for Growth and Marketing 571 Credits583 Name Index 585 Subject Index 590