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Chapter 13 - Services: The Intangible Product Marketing 6th
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
9
2 If Uber or Lyft fails to pick up a customer in a timely fashion, what should they do to rectify the
service failure?
Both companies should follow these steps:
1. Listening to the Customers and Involving Them in the Service Recovery – allow the customer to
Additional Teaching Tips
In this chapter, students learn the difference between marketing a product vs. marketing a service.
Students find that since a service can’t be “seen” or measured with a quantifiable outcome, that the
marketing strategy must be different in marketing services. The building blocks of service quality are the
foundation of the chapter, which then dovetails into how to improve customer service through the
methods to reduce delivery gaps.
The Broadmoor Hotel example in the text is strongly recommended to allow students to apply the five
service quality areas. A good way to do this is to divide the class into 4 or 5 groups and have them
tackle the case. Then open classroom discussion by dialogue in comparing/contrasting the responses
from each of the groups. Of course, a good understanding of the five service qualities is needed before
assigning the case. One good way to do this after discussion/lecture on the topic is to divide the class into
groups. Have each group develop a role-play skit on (1) good customer service incorporating the five
service quality areas and an alternate skit on (2) bad customer service.
Students have fun with the skit exercise and it often brings out some humorous acting moments.
Instructors will want to assign different topics (popular food chain, hotel, college bookstore, retail chain,
etc.) to each group to get them focused on the skit and not thinking up “what” to complete the skit on.
Each group presents the “good” skit first in which the audience (the rest of the class) takes notes and
discussion takes place on how the five service qualities were present. The group then performs their “bad
service skit” in which discussion follows on how to incorporate good service techniques and improve the
service gaps.
On-line teaching tip: Instructors can have students complete this same exercise by having students
record individual skits/scenarios and uploading them to the online platform. Other learners in the online
environment can then post their analysis on the five service qualities and either their suggestions on
improving the delivery gaps or write a paper outlining the same concepts (meanwhile the other learners
are also preparing their own skits). Instructors may want to pair students on the responses in the online
forum. For fun, instructors may want to have the class use online voting to vote on the best
“performance.”
Chapter 13 - Services: The Intangible Product Marketing 6th
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
10
Connect Activities
Activity
Type
Learning Objectives 13-
01
02
03
04
05
Wegmans Services Its Employees and Its Customers
Case Analysis
X
X
Services Marketing Differs from Product Marketing
Click & Drag
X
Understanding Service Gaps
Click & Drag
X
Netflix: Service Excellence 24/7
Video Case
X
Sweetwater
Video Case
X
X
X
FedEx: Excellence in Customer Service
Video Case
X
X
X
Transportation Network Services: Uber vs. Lyft vs.
Taxis
Case Analysis
X
X
X
X
ISeeIt Video Case: Service Quality
Video Case
X
X
Wegmans Services Its Employees and Its Customers
▪ Activity Type: Case Analysis
▪ Learning Objectives: 13-01, 13-03
▪ Difficulty: Hard
▪ Activity Summary: This case describes the unique customer service approach of Wegmans, a
supermarket chain. Students answer questions applying chapter concepts to the case.
Activity
▪ Introduction: Many grocery stores strive to meet customers' needs. However, for Wegmans, that is
not enough. Wegmans works to exceed customers' needs and expectations on a daily basis. In an
industry where over three-fourths of consumers do not believe that traditional supermarkets can
provide anything different from nontraditional markets such as Walmart, Wegmans has been able to
develop a strong and loyal customer base.
▪ Concept Review: Providing good customer service can add value to a firm's products. Even firms
that primarily sell tangible goods (such as clothing stores) view service as a way to establish a
sustainable competitive advantage. Firms can be pure services-based businesses or they can use
service as a differentiating tool to help them sell physical products. The marketing of services differs
from product marketing, however, in four fundamental ways: services are intangible, inseparable,
variable, and perishable.
Follow-Up Activity
For another, photo-intensive view of what’s good about Wegmans, show the following in class:
http://www.buzzfeed.com/rachelysanders/why-wegmans-is-the-greatest-supermarket-ever
You can ask students to note the following:
▪ Which items on the list are related to products, and which to services? The list points out that grocery
stores are somewhere in the middle of the product/service continuum. And note that Wegmans is
Chapter 13 - Services: The Intangible Product Marketing 6th
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
11
exemplary in both areas. The case talks mostly about services, but the product assortment is equally
attractive.
▪ The Wegmans formula truly creates loyal customers and fantastic word of mouth. Skim the
comments—when was the last time you saw such unanimously glowing comments on the Internet?
▪ Note the number of items that have to do with the Tangibles component of service quality.
Services Marketing Differs from Product Marketing
▪ Activity Type: Click & Drag
▪ Learning Objectives: 13-01
▪ Difficulty: Medium
▪ Activity Summary: Students are presented with eight statements about services—four related to a
health club and four related to a hotel. They must classify each of them in two ways: (a) by the
difference between products and services the statement represents, and (b) whether the statement
represents a customer experience or a marketing activity.
Activity
▪ Introduction: Two national firms, the Prestige Hotel and Pro Fitness chains, strive to deliver quality
service to their customers. To do so, they address the four core differences between services and
goods. In the following scenario, you will be asked to categorize statements about the customer's
experiences and the firm's marketing efforts by the core difference they represent.
▪ Concept Review: Economies of developed countries like the United States have become
increasingly dependent on services. For example, service industries like retail and information
services account for about two-thirds of the U.S. gross domestic product (GDP) and the lion's share
of U.S. jobs. The marketing of services differs from goods marketing because of the four fundamental
ways in which services differ from goods: They are intangible, inseparable, variable, and perishable.
Follow-Up Activity
In small groups, have students discuss how the four characteristics of services apply to university
education. Some ideas:
▪ Intangibility: Although education has tangible elements, the actual learning process is intangible, and
it can sometimes be difficult to assess its long-term value until much later.
▪ Inseparability: The instructor and the student both have important roles in the delivery of educational
services. Classroom education is “more inseparable” than asynchronous online classes since the
student can, at least up to a point, set his/her own schedule for learning.
▪ Perishability: If a class ends up having two or three empty spaces in the fall, those spaces can’t be
“saved” until the spring, when the class may have a waiting list.
▪ Variability: Many factors can contribute to variability in the educational experience. Obviously,
variability can come from differences in instructors’ approaches, or in differences in mood or alertness
of the instructor from one day to the next. An old, broken-down classroom with uncomfortable desks
may lead to a different experience from one in a comfortable, bright, attractive room. Different
Chapter 13 - Services: The Intangible Product Marketing 6th
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
12
students may experience the same class in different ways because of variation in their knowledge,
experience, interest level, and degree of effort.
Understanding Service Gaps
▪ Activity Type: Click & Drag
▪ Learning Objectives: 13-02
▪ Difficulty: Medium
▪ Activity Summary: The student is presented with four examples of problems caused by service
gaps, and four possible solutions for problems related to gaps, and must classify these items
according to the related gap.
Activity
▪ Introduction: Apartment complexes often look for ways to recruit new tenants and retain current
tenants. Although apartment complexes offer the tangible benefit of shelter to their tenants, many
apartment complexes also offer additional services to tenants to encourage tenants to stay or to
support the rent prices. The following scenario identifies the several service gaps of a company that
runs an apartment complex as well as solutions for reducing these service gaps.
▪ Concept Review: Customers have certain expectations about how a service should be delivered. A
service gap occurs when the delivery of a service fails to meet customer expectations. There are four
types of service gaps: knowledge gap, standards gap, delivery gap, and the communications gap. It is
important for marketers to identify these gaps and develop strategies for minimizing them.
Follow-Up Activity
Divide the students into groups and have one student in each group briefly describe a service failure s/he
experienced (either as the customer or as the provider). Ask the group to decide which gap(s) caused the
problem, and identify what could have been done differently to prevent the problem. Then share the
stories and analysis.
This topic could also be assigned as an individual writing prompt.
Netflix: Service Excellence 24/7
▪ Activity Type: Video Case
▪ Learning Objectives: 13-02
▪ Difficulty: Medium
▪ Activity Summary: This case explains how Netflix delivers quality service to its customers. After the
video ends, students are asked questions about the video and related course concepts.
Chapter 13 - Services: The Intangible Product Marketing 6th
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
13
Activity
▪ Introduction: Netflix is an online movie rental service that distributes more than two million DVDs per
day. Customers are offered a variety of experiences as part of the service at the Netflix.com website:
They can rate movies, create a personalized movie queue, and watch previews customized to their
tastes.
▪ Concept Review: A knowledge gap occurs when marketers don't understand what their customers
want. They may not be providing customers enough service or the right kind of service, in which case
customers will be disappointed. To understand customer expectations, marketers analyze service
quality through comprehensive studies and by interacting with customers.
▪ Video: The video is presented to the student below the introductory information. The video plays
embedded on the page, after which questions are presented.
Follow-Up Activity
Class discussion: What new challenges does Netflix face in delivering quality service, now that so much
of its business involves streaming video instead of DVD shipments? What gap(s) do these challenges fall
into? (For this discussion to work, you need to have some Netflix customers in your class; it’s a popular
enough service that you will probably have at least a few.)
Some possible answers:
▪ The streaming service has fewer movies available than does the DVD service; this is especially true
for the newest and oldest titles. A DVD customer who switches to streaming might be disappointed if
they were expecting a comparable selection. This is a communication gap, not a knowledge gap:
Netflix certainly understands that customers want more movies, but they have contractual issues to
work out with movie studios.
▪ With the DVD service, Netflix’s service quality is dependent on good performance by the US Postal
Service. The company has worked closely with the USPS to ensure fast delivery, and located
distribution centers close to as many customers as possible.
But with streaming, Netflix’s performance depends on every Internet provider that sits between its
servers and its customers’ computers, creating major potential for delivery gaps. (You may also want
to discuss the net neutrality debate if you’re up to date on it.)
Sweetwater
▪ Activity Type: Video Case
▪ Learning Objectives: 13-02, 13-03, 13-05
▪ Difficulty: Medium
▪ Activity Summary: This case discusses Sweetwater Sound, an online retailer of audio equipment
and music-related products. After the video ends, students are asked questions about the video and
related course concepts.
Chapter 13 - Services: The Intangible Product Marketing 6th
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
14
Activity
▪ Introduction: Sweetwater Sound was started in 1979 as a professional recording studio. Now named
simply Sweetwater, it has evolved into one of the leading online retailers of recording and audio
equipment, musical instruments, and accessories. Central to its success is the company's passion for
exceptional customer service. Sweetwater offers free shipping and a free 2-year warranty on all items
sold. It hires staff with real-world experience in music and recording and then extensively trains them
on delivering exceptional service. Sweetwater's sales engineers personally follow up on all customer
orders. Sweetwater also offers extensive post-sales support. By fully understanding customer service
quality, Sweetwater is among the best at actually delivering it.
▪ Concept Review: Today, services account for almost 80% of U.S. GDP. Beyond this economic
impact, providing exceptional customer service is a critical component in delivering value to
customers. Marketing services has some fundamental differences from marketing tangible goods. To
deliver exceptional service, marketers need to understand and reduce various service gaps. They
also need to understand the five dimensions of service quality. If things go wrong with the service
delivery, prompt and fair service recovery is imperative. In this activity, you will be applying your
knowledge of marketing services to the specific case of Sweetwater.
▪ Video: The video is presented to the student below the introductory information. The video plays
embedded on the page, after which questions are presented.
FedEx: Excellence in Customer Service
▪ Activity Type: Video Case
▪ Learning Objectives: 13-02, 13-03, 13-05
▪ Difficulty: Medium
▪ Activity Summary: FedEx prides itself on excellent customer service. This video case describes
some of its initiatives. After the video ends, students are asked questions about the video and related
course concepts.
Activity
▪ Introduction: Delivering high-quality service is a top priority at FedEx. The company seeks to offer
excellent, consistent service across all communication channels and through the entire customer
experience. This philosophy permeates the entire organization. Attention to service quality helps to
generate customer loyalty and repeat business, which is one key to FedEx’s success.
▪ Video: The video is presented to the student below the introductory information. The video plays
embedded on the page, after which questions are presented.
Follow-Up Activity
With an operation as large and complex as FedEx’s it is important to design and operate their services
efficiently and effectively. Have the students work in groups, with each group choosing one of the gaps in
the Gaps Model. If they were managers at FedEx responsible for closing that gap, what problems would
they look out for, and what actions would they take?
Chapter 13 - Services: The Intangible Product Marketing 6th
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
15
Transportation Network Services: Uber vs. Lyft vs. Taxis
▪ Activity Type: Case Analysis
▪ Learning Objectives: 13-01, 13-02, 13-03, 13-04
▪ Difficulty: Medium
▪ Activity Summary: This case discusses how Uber and Lyft operate, how they compare to taxi
services, and the challenges they face. Students answer questions applying chapter concepts to the
case.
Activity
▪ Introduction: Local transportation options have expanded recently due to the launch of Uber and
Lyft; these services seek to address some of the problems with taxi services. The goal of this
exercise is to check your understanding of services marketing and management frameworks by
applying these frameworks to the services offered by Uber and Lyft. This activity is important because
services represent a large portion of our economy, and effective management and marketing of
services is crucial to the success of many businesses.
Follow-Up Activity
Ask the class if anyone has used Uber or Lyft, and how the service experienced performed on the five
building blocks of service quality (reliability, responsiveness, assurance, empathy, and tangibles). Also,
ask if any students have driven for Uber or Lyft, or have considered doing so, and to discuss the
challenges of driving for the companies in terms of the gaps model. Although both companies enforce
some standards to try to standardize service quality, the rating system is probably the most powerful tool
for closing any delivery gap, since drivers know that low ratings will cause them to be dropped by the
service.
ISeeIt Video Case: Service Quality
▪ Activity Type: Video Case
▪ Learning Objectives: 13-01, 13-03
▪ Difficulty: Easy
▪ Activity Summary: This video case explores different aspects of service quality for a coffee shop.
Activity
▪ Introduction: Service quality is difficult to measure given that each customer has a different
expectation about a service experience. While the service gap, which is the difference between
customers' expectations and the service experienced, can be difficult to analyze, Martha can still
focus on ensuring that every customer has a similar quality experience. To do this, she focuses on
the tangibles—making sure dirty tables are cleaned, and ensuring the reliability of the Coffee
Collective’s coffee by training her baristas on how to make each cup of coffee taste the same. Martha
makes sure her servers are responsive to the needs of the customer by making sure that they know
their jobs well. She also encourages employees to have empathy for their customers so that
Chapter 13 - Services: The Intangible Product Marketing 6th
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
16
employees can put themselves in the customer’s shoes. By focusing on these service quality
attributes, she hopes to ensure that every customer leaves satisfied and becomes a loyal customer
who talks positively about their experiences.
▪ Video: The video is presented to the student below the introductory information. The video plays
embedded on the page, after which questions are presented.
