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HONG KONG BAPTIST UNIVERSITYDEPARTMENT OF MARKETING

FIRST SEMESTER 2001-2002

SUBJECT : MKT 3860 Services Marketing

PREREQUISITE : MKT 2310 Marketing Management

INSTRUCTOR : Noel Y.M. Siu (Tel.: 2339 7529 Rm: WLB 608)

INTRODUCTION

This course is designed to introduce you to the modern marketing philosophies and practices of services marketing. The purpose is to provide an overview of the services marketing process andits differences from the marketing of consumer products. The course will cover both theory andapplication. The growing significance of services marketing beyond its traditional connotations of advertising and personal selling will also become apparent.

Principle issues to be explored include:

* Understanding services* Strategic issues associated with services

* The Ps of services marketing* Determination of services quality* Globalizing services marketing

TEXTBOOK

Zeithaml, V.A. and Bitner, M.J. (2000), Services Marketing: Integrating Customer Focus Acrossthe Firm, 2nd Edition, N.Y.: McGraw-Hill.

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OTHER REFERENCES

Lovelock, C.H. and Wright, L. (1999), Principles of Service Marketing and Management, N.J.:Prentice-Hall.

Kurtz, D.L. and Clow, K.E. (1998), Services Marketing, N.Y.: John Wiley & Sons.

Lovelock, C.H.(1996), Services Marketing, 3rd ed., Englewood Cliffs, N.J.: Prentice-Hall.

Bateson, J.E.G. (1995), Managing Services Marketing, 3rd Ed., Florida: The Dryden Press.

Baron, S. and Harris, K. (1995), Services Marketing: Text and Cases, London: Macmillan.

Rust, R.T., Zahorik, A.J. and Keiningham, T.L. (1996), Service Marketing, N.Y.: Harper Collins.

You are required to read relevant articles from various journals such as:Journal of Services MarketingJournal of MarketingJournal of International Consumer MarketingJournal of Consumer ResearchInternational Journal of Service Industry Management

ASSESSMENT

Class participation and discussion 20%Written assignment 10%Group project

written 20%oral 10%

Final exam 40%

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MKT 3860SERVICES MARKETING1ST SEMESTER 2001-2002

TOPIC OUTLINE

WEEK DATE TOPIC CHAPTER 1

1 Sept 5

Sept 3-7

Understanding services marketing: an introduction

No tutorial Zeithaml(Z) 1

2 Sept12

Sept 10-14

Understanding the gaps model

Tutorial 1: Group Formation

Z. 2 (2nd ed.)Z. 2 (1st ed.)

3 Sept19

Sept 17-21

Understanding customer expectations and perceptions

Tutorial 2: Services Marketing Mix

Z. 3 and 4

4 Sept26 Sept 24-

28

Listening to customers through Marketing Research

Tutorial 3: The Gap Model

Z. 5

5 Oct 3 Oct 1-5

Understanding Customer Relationship and Service Recovery

Tutorial 4: Service Quality(Oct 1-2: public holiday)

Z.6 and 7

6 Oct 10

Oct 8-12

Service Design and Servicecape

Tutorial 5: Mystery Shoppers

Z. 8 and 10

7 Oct 17

Oct 15-19

Enhancing Customer-Defined Service Standards

Tutorial 6: Story of a Service Hero

Z. 9

8 Oct 24

Oct 22-26

Employees and Customers in Service Delivery

Tutorial 7: Debate I (Oct 25: public holiday)

Z. 11, 12

1 The information in this column is for your reference only. You need to read other reference books and journal

articles

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9 Oct 31

Oct 29-Nov 2

Intermediaries and Electronic Channels in Service Delivery

Tutorial 8: Debate II

Z. 13

10 Nov 7

Nov 5-9

Managing Demand and Capacity

Tutorial 9: Case Studies – AT & T (Text pp. 550 – 566) and GE Medical Systems (Text pp. 588 – 604)

Z. 14

11 Nov 14

Nov 12-16

Marketing Communications of Services

Tutorial 10: Case Studies – Custom Research Inc. (Text pp.530 – 549) and Euro Disney (Text pp. 511 – 529)

Z. 15

12 Nov 21

Nov 19-23

Pricing of Services

Tutorial 11: Group project presentation

Z. 16

13 Nov 28

Nov 26-30

Special Topic on eCRM

Tutorial 12: Group project presentation

Other References

14 Dec 5 Conclusion

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Tutorial 1: Group Formation

• Groups are formed for the tutorial exercises and group projects

• Please prepare for each tutorial. The extent of knowledge advancement will be highlydependent on your active participation and commitment in the whole learning process. Youare expected to complete each tutorial exercise before the class.

• Discussion question: One of the underlying frameworks for the subject is the servicesmarketing mix. Discuss why each of the three new mix elements (process, people, and physical evidence) is included. How might each of these communicate with or help to satisfyan organization’s customers?

Tutorial 2: Services Marketing Mix

• Visit two local retail service providers that you believe are positioned very differently (e.g.McDonald’s and a fine-dining restaurant). From you own observations, compare their strategies on the elements of the services marketing mix.

• Present your findings to the class. You can use role-play to show their contrastingcharacteristics.

Tutorial 3: The Gap Model

• Each group will be assigned to discuss a particular gap in the class. As a group, you need toidentify a case (from newspapers, magazines, websites, etc.) which is about the particular gap.

• In the class, present the case, the seriousness of the problem and how you think the problemcan be avoided, in the first place, and solved.

Tutorial 4: Service Quality

• As a group, identify a service type (e.g. banking, airline, education). Interview at least 10 people about their perceptions towards service quality of the service, whether the five

dimensions of quality are relevant, and which are most important in determining quality of that particular type of service.

• Present your findings and observations to the class.

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Tutorial 5: Mystery Shoppers

• You are now a group of mystery shoppers.

• Identify a store that you are familiar. Work out a list of items that you think are importantservice standards. You can refer to pp. 120-121 in your textbook for reference. You don’tneed to adopt all items from the text. But please develop your own items. The items must bespecific and measurable. Convert the list into a questionnaire.

• You need to go to the store and consume their product/service. After experiencing the whole process, you need to fill in the questionnaire individually.

• Present your list and findings as well as sharing your experience as mystery shoppers.

Tutorial 6: Story of a Service Hero

“A good recovery can turn angry, frustrated customers into loyal ones. It can, in fact, createmore goodwill than if things had gone smoothly in the first place. Consider how Club Med – Cancun, part of the Paris-based Club Mediterranee, recovered from a service nightmare and wonthe loyalty of one group of vacationers.

The vacationers had nothing but trouble getting from New York to their Mexican destination.The flight took off six hours late, made two unexpected stops, and circled thirty minutes beforeit could land. Because of all the delays and mishaps, the plane was en route for ten hours morethan planned and ran out of food and drinks. It finally arrived at two o’clock in the morning,with a landing so rough that oxygen masks and luggage dropped from overhead. By the time the plane pulled up to the gate, the soured passengers were faint with hunger and convinced thattheir vacation was ruined before it had even started. One lawyer on board was already collectingnames and addresses for a class-action lawsuit.

Silvio de Bortoli, the general manager of the Cancun resort and a legend throughout theorganization for his ability to satisfy customers, got word of horrendous flight and immediatelycreated an antidote. He took half the staff to the airport, where they laid out a table of snacks anddrinks and set up a stereo system to play lively music. As the guests filed through the gate, theyreceived personal greetings, help with their bags, a sympathetic ear, and a chauffeured ride to theresort. Waiting for them at Club Med was a lavish banquet, the staff had rallied other guests towake up and greet the newcomers, and the partying continued until sunrise. Many guests said it

was the most fun they’d had since college.

In the end, the vacationers had a better experience than if their flight from New York had gonelike clockwork. Although the company probably couldn’t measure it, Club Mediterranee wonmarket share that night. After all, the battle for market share is won not by analyzingdemographic trends, ratings points, and other global measures, but rather by pleasing customersone at a time.”

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• If you were one of the customers, how would you feel in the whole process? Would you still buy the service from the Club Med? Would you tell others about your experience?

• Can you think of an alternative means to solve the same problem?

• Discuss the benefits to a company of having an effective service recovery strategy.

Tutorial 7 - 8: Debate

The purpose of the exercise is to train you to be more critical on some key issues. Two weekswill be scheduled for two debates. In each week, two debate teams will choose a topic and draw alot to decide they are “for” or “against” the statement. You are expected to collect sufficientinformation (e.g. some current statistics or argument from scholars or practitioners withevidence) for the debate from various sources.

Two groups in each tutorial need to choose a topic for debate from the following list:

• The Disneyland project can boost the tourism business in the future.• Electronic channels can replace face-to-face contact with service providers.• Service cannot be standardized.• Empowerment is always the best approach for effective service delivery.• Customers are always right

Each team will select three members for the debate. There should have a chief in each team. The procedure is:

Each one is given no more than 3 minutes for the speech (we will follow the usual sequence thatany debates would observe). 10 minutes will be open to the floor to challenge the teams. Teammembers need to respond to challenges. Then each chief is given no more than 3 minutes toconclude the debate.

A timekeeper is needed in each week. The non-debate teams in each tutorial will act as judge.

Tutorial 9 –10: Case Assignment

Students need to present their answer of a particular case in the class. Since the time limit is 15minutes, you are strongly advised to select the main points for the presentation. Some studentswill serve in a critique group. The assignment will be submitted right after the presentation.

Tutorial 11 – 12: Project presentation

Each group is given no more than 15 minutes to do the presentation. Poor time management

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may cause score reduction. 5 minutes will be allocated for Q & A.

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Written Assignment (10%)

• Students will need to do one of the following cases:

• The case of AT & T (Text pp. 550-566)• The case of GE Medical Systems (Text pp. 588-604)• The case of Custom Research Inc. (Text pp. 530-549)• The case of Euro Disney (Text pp. 511-529)

• The length of the assignment is not more than 2,000 words. In your assignment,you need to give a brief background/ introduction and answer the questions in a cohesiveway.

• Hand in your assignment right after your presentation.

AT & T:

1. Discuss Falcone’s formation and management of his services salesforce.

2. How do the skills needed for small versus large markets differ, and what did Falcone do to bridge the gap?

3. Analyze Falcone’s actions in the context of the HR strategy wheel in chapter 11.

4. Are there things you would do differently? What would you do next if you were Falcone?

GE Medical Systems

1. What are the services offered by GE Medical Systems? Who are their customers? Whattrends in the industry will affect their future growth?

2. Why has TiP TV been so successful? What are the benefits to customers? Does GEMS havea sustainable competitive advantage in TiP TV?

3. Although TiP-TV can be purchased on a stand-alone basis, the majority (80%) of

subscriptions sold include a GEMS service contract that ‘masks” the fee for TiP-TV. Whatmust GEMS do to transition its customers from a ‘free’ to ‘fee’ mentality? How can itovercome customer (and sales person) resistance to accept the need to pay for educationalservices? What are the arguments for and against ‘free’ vs. ‘fee’?

4. Should GEMS consider moving the TiP customer education organization from a cost centre(with the primary goal of customer satisfaction) to a profit & loss centre? What are theimplications and challenges?

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Custom Research Inc.

1. Has Custom Research Inc. correctly analyzed what is causing their problems in improving profitability?

2. Evaluate the process and procedures used by Jeff Pope in dividing customers into categoriesof profitability. What are the problems in the way the analysis has been done?

3. What should Judy Corson, Jeff Pope, and Custom Research Inc. do?

Euro Disney: The First 100 Days

1. Was Euro Disney successful in its first 100 days? Why or why not? Please discuss withreference to its target markets, service concept and service delivery.

2. What do we learn from comparing Tokyo Disneyland to Euro Disney?

3. What lessons has Euro Disney learned which could be applied to the development of thesecond theme park? Should the park be adapted for the local market from the US model, andif so, in what ways? Should Euro Disney proceed with the next step of development? Whatrecommendations would you make regarding staffing, training, and general management?

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Group Project (20%)

• Work in a group, choose an organization that you are familiar and study the services that it provides. The organization can either be profit-making or not-for-profit one.

• Use the Critical Incident Technique described in Chapters 5 to gather data from customers.

• Each member interviews at least 10 “customers” who should not be your classmates or your close friends. There should have a wide spectrum of the demographic profiles.

• In your report, you need to justify the choice of the organization and the methodology.

• Present introduction, summary of the literature, methodology, findings and recommendations.You are required to attach a sample of the data in the appendix. The marks you gain aredependent on the quality of your work and the level of difficulty involved.

• The following articles are reserved in the library for your reference. You need to read other

relevant references as well.

Gremler, DD and Bitner, MJ (1994). “The Internal Service Encounter”, International Journal of Service Industry Management , 5, 2, 34-56.

Bitner, MJ, Booms, BH and Tetreault, MS (1990).“The Service Encounter Diagnosing

Favorable and Unfavorable Incidents”, Journal of Marketing , 54, Jan, 71-84.

Bitner, MJ, Booms, BH and Mohr, LA (1994). “Critical Service Encounters: The Employee’sViewpoint”, Journal of Marketing , 58, October, 95-106.

• The length of the assignment is not more than 3,500 words. The submission deadline is:November 30, 5p.m.

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