978-0078112102 Chapter 1 Lecture Note

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CHAPTER 1:

INTRODUCTION TO SERVICES

CHAPTER TOPICS

What are Services?

Why Service Marketing?

Service and Technology

Characteristics of Services

Service Marketing Mix

Staying Focused on the Customer



Technology Spotlight: The Changing Face of Customer Service

Global Feature: The Migration of Service Jobs

Strategy Insight: Competing Strategically through Service

CHAPTER OBJECTIVES

1. Explain what services are and identify important trends in services.

2. Explain the need for special service marketing concepts and practices and why the need has

developed and is accelerating.

3. Explore the profound impact of technology on service.

4. Outline the basic differences between goods and services and the resulting challenges and

opportunities for service businesses.

5. Introduce the expanded marketing mix for services and the philosophy of customer focus as powerful

frameworks and themes that are fundamental to the rest of the text.

LECTURE TIPS & AIDS

1. The activity suggested here must be made at least one class period prior to the related in-class

discussion (it works best if it is done at the end of the first class meeting or very early in the course).

Ask the students to be “detectives” in their courses for the first few class meetings. They should

attempt to identify some of the “clues” they are using to assess the quality of each class they have

signed up for and be ready to discuss these in class. On the day of the in-class discussion, students

can break into small groups to discuss their observations for about 10-15 minutes. They should

attempt to separate their “clues” into “tangible” and “intangible” categories. (These may need to be

defined briefly if this assignment is made on the first day of class.)

After the groups meet, the instructor can start a discussion with the whole class by putting

“Intangible” and “Tangible” headings on the board and asking people to share what their groups put

in each list. Students will come up with lots of items for both lists. Their suggestions should lead to

an interesting discussion of how the intangible/tangible dimensions interact (e.g., while an instructor’s

voice may be tangible because it can be heard, what is inferred from the voice—enthusiasm,

sternness, etc.—is more intangible). A fun twist on this exercise is for the instructor to purposely

wear very different clothing for the class periods leading up to this discussion (e.g., professional dress

vs. casual attire). Students can then be asked what impressions they have of the instructor and what

impact the clothing had on their reactions.

2. To introduce the topic of “goods vs. services,” the instructor divides the class into small groups (3 -5

people) and gives each group a list of products, including those that are “mostly” goods, “mostly”

services, and “a combination of both.” The sample lists below are from Dawn Iacobucci (1992). “An

Empirical Examination of Some Basic Tenets in Services: Goods-Services Continua” In Advances in

Services Marketing and Management. JAI Press. 1: 23-52.

List 1 List 2 List 3

Blue Jeans Business Suit Appendix Operation

Car Casual Clothing Car Brake Relining

Dental Examination Condo Dress Shoes

Meal at Nice Restaurant Couch Eyeglasses

Golf Lessons Day Care Furniture

Haircut Dishwasher Greeting Card

Hotel Room Dry Cleaning Health Club Membership

Houseplant Fast Food Legal Representation

Ice Cream Cone Flu Shot Novel

Jewelry House Cleaner Psychotherapy

Laundry Detergent Life Insurance Rental Car

“Lean Cuisine” Dinner Plumbing Repairs Soft Drink

Running Shoes Poster Framing Tailored Clothing

TV Repair Socks Typing Service

Vacation Package Tax Consultant Xeroxing/Copying

Each group is to rank its list in terms of goods/services, starting with the product that is the best

example of a “good” at the top and ending with the product that is the best example of a “service” at

the bottom. Alternatively (or additionally) groups can rank their list in terms of the

tangible/intangible continuum (starting with “most tangible” at the far left of the continuum and

ending with “most intangible” at the far right of the continuum). This task should take approximately

15 minutes.

A member of each group then writes its rankings on the board or on an overhead. If more than one

group has the same list, these groups should record their rankings side-by-side. The following

questions can be asked during a whole class discussion to bring closure to the exercise:

What do the products at the top of the list (or the left of the continuum) have in common?

What do the products at the bottom (or the right of the continuum) have in common?

What do the products in the middle have in common?

Students can also be asked about any difficulties that arose in ranking the products. It is likely they

will point out that many products have elements of both goods and services (or tangibility and

intangibility). This discussion would be a good lead-in to the concept of core and supplementary

benefits.

QUESTIONS TO USE WITH CHAPTER OPENING VIGNETTE

Chapter 1: All Businesses are Service Businesses

1. Discuss the meaning of the statement, “all businesses are service businesses.” Can you think of any

exceptions? If so, justify your position.

2. What are some ways in which consumer product companies such as Apple and Samsung are also

service providers?

3. What are some other industries that are likely to experience the rise of disruptive collaborative service

such as those exemplified by Uber and Airbnb? Why?

ACTIVE LEARNING ACTIVITIES

1. After students have received the syllabus for your class (but before it has been discussed), you can

have them analyze it for tangible/intangible clues about the service delivery. By working in pairs for

about 10 minutes, students should come up with a good list of clues. Then the instructor can initiate a

whole class discussion by asking the following questions:

What things did you notice about the syllabus?

How does it differ from syllabi you have received in other classes?

How is it similar?

What do you think it tells you about this course or the instructor?

What interests you in the syllabus? What worries you?

This exercise is an excellent way to do two tasks at once. It allows the instructor to reinforce the

important information in the syllabus in a way that gets students actively involved, and the discussion

can be a nice introduction to some of the basic service marketing concepts in Chapter 1. (Eight

different syllabi are provided as examples in Section 2 of this instructor’s manual.)

Student comments about the syllabus might include: “easy to follow layout;” “lots of ways to reach

the instructor–even email!;” “many different ways to show that you understand the material;” “only

two exams!;” “attendance is important” (this can lead to a discussion of creating a “class culture”

over the semester which will only happen if people are in class most of the time); or “good

performance is rewarded.”

If you are so inclined, you might have students identify the “House Rules” for the course which can

then be added to the syllabus. Examples might include:

Please treat others like you would like to be treated!

Don’t talk while people are presenting or asking questions.

Respect everyone’s opinion.

Come to class prepared and participate in class discussions.

No note passing or chair rambling.

If you come late to class and a presentation has already begun, please wait outside.

Don’t pack up your stuff until class is dismissed.

Leave the classroom as clean (or preferably cleaner) than you found it.

Allowing students to set House Rules helps them take ownership of the class very early in the term.

2. Find an advertisement for a product in one of the major categories on the Continuum of Evaluation

(i.e., high in search qualities, high in experience qualities, and high in credence qualities). Write a

short paper explaining where you think the product falls on the Continuum and why. You should also

discuss the ways the ad either capitalizes on the predominant qualities of the product (e.g., search

characteristics) or attempts to overcome them in some way. Include the ad (or a copy) with your

paper.

[Note: A good example comes from the ad campaigns for milk. Milk is a very tangible product that is

high in search attributes. Rather than stressing the tangible aspects, though, the advertisers decided to

try to build on intangibles like glamour, fame, and fitness with their ads that show famous sports

heroes, models, TV celebrities, etc. with milk mustaches. By contrast, ads for credit card companies

(whose products are much more in the experience/credence realm) tend to show pictures of things

customers can buy or experience through the use of a credit card. These companies are interested in

providing consumers with tangibles that can be associated with their products.]

POTENTIAL VIDEO CLIPS TO USE IN ILLUSTRATING CHAPTER 1 CONCEPTS

“Dumb and Dumber” – At the very beginning of the movie, a chauffeur (Jim Carey) picks up

a woman and takes her to the airport, narrowly missing accidents along the way (he seems to fall in

love). The woman leaves a briefcase at the airport and the chauffeur runs in to pick up briefcase and

hustles to the gate to try to get it back to her (and thus provide “good service”).

“Father of the Bride” – In this movie, the parents of a bride-to-be have discussions about

planning a wedding. In one scene early in the movie, the family is sitting around the dinner table

discussing the options for a wedding and reception. Then, the father1 George Banks (Steve Martin)

and mother (Diane Keaton) discuss reasons for hiring a wedding coordinator. The father eventually

agrees to join the mother and daughter in meeting with the wedding coordinator (Martin Short). This

clip could be used to illustrate the characteristics of service, as well as the three additional Ps of

service (people, process, and physical evidence).

POSSIBLE WEB SITES FOR CHAPTER 1

Company Location

Amazon.com www.amazon.com

American Customer Satisfaction Index www.theacsi.org

Center for Service Leadership, ASU www.cob.asu.edu/csl

Charles Schwab & Company www.schwab.com

Cisco Systems www.cisco.com

EBay www.eBay.com

FedEx Corporation www.fedex.com

General Electric Company www.ge.com

IBM Global Services www.ibm.com/services

Mayo Clinic www.mayoclinic.com

Marriott International Inc. www.marriotthotels.com

PetSmart www.petsmart.com

Singapore Airlines www.singaporeair.com

Southwest Airlines www.southwest.com

Williams Sonoma www.williams-sonoma.com

Zane’s Cycles www.zanes.com

APPROPRIATE CASES FOR CHAPTER 1

From previous Zeithaml, Bitner, and Gremler Services Marketing texts:

Zappos.com 2009: Clothing, Customer Service, and Company Culture [included in the sixth

edition of this text: Zeithaml, Bitner, and Gremler (2013) Services Marketing: Integrating

Customer Focus Across the Firm, New York, NY: McGraw-Hill Companies]

Michelin Fleet Solutions: From Selling Tires to Selling Kilometers [included in the sixth edition

of this text: Zeithaml, Bitner, and Gremler (2013) Services Marketing: Integrating Customer

Focus Across the Firm, New York, NY: McGraw-Hill Companies]

People, Service, and Profit at Jyske Bank [included in the sixth edition of this text: Zeithaml,

Bitner, and Gremler (2013) Services Marketing: Integrating Customer Focus Across the Firm,

New York, NY: McGraw-Hill Companies]

easyCar.com [included in the fourth edition of this text: Zeithaml, Bitner, and Gremler (2006)

Services Marketing: Integrating Customer Focus Across the Firm, New York, NY: McGraw-Hill

Companies]

General Electric Medical Systems [included in the fourth edition of this text: Zeithaml, Bitner,

and Gremler (2006) Services Marketing: Integrating Customer Focus Across the Firm, New

York, NY: McGraw-Hill Companies]

Starbucks: Delivering Customer Service [included in the fourth edition of this text: Zeithaml,

Bitner, and Gremler (2006) Services Marketing: Integrating Customer Focus Across the Firm,

New York, NY: McGraw-Hill Companies]

Virgin Atlantic Airways [included in the third edition of this text: Zeithaml and Bitner (2003)

Services Marketing: Integrating Customer Focus Across the Firm, New York, NY: McGraw-Hill

Companies]

Northwest Airlines and the Detroit Snowstorm [included in the third edition of this text: Zeithaml

and Bitner (2003) Services Marketing: Integrating Customer Focus Across the Firm, New York,

NY: McGraw-Hill Companies]

Chartered Bank of Canada [included in the first edition of this text: Zeithaml and Bitner (1996)

Services Marketing, New York, NY: McGraw-Hill Companies]

From other sources:

Alaska Airlines: For the Same Price, You Just Get More… [Harvard Business School Case,

9-800-004, 2000]

Efteling: Growing a Miracle on Fairy Tales, by Rik Pieters and Paul Driessen, Tilburg University,

Tilburg, The Netherlands, a CD Rom Case, 2000. [Contact: f.g.m.pieters@kub.nl;

p.h.driessen@kub.nl.]

Four Seasons Hotels and Resorts [Harvard Business School Case 9-800-385, 2000]

PeopleSoft (1996), available through ITSMA [Information Technology Services Marketing

association, One Militia Drive, Suite 4, Lexington, MA; (781) 862-8500]