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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]
