Course Handout & Assessment Plan

IBS Ahmedabad
MBA Semester IV

SL MM 604 Services Marketing

Faculty Dr Manoj Bhatia

Email: mbhatia@ibsindia.org

Mob: 91-9662539662
TABLE OF CONTENTS

Week 1: Introduction to Services & Services Marketing Mix........................................................1

Study Objectives.......................................................................................................................1
Required Reading ....................................................................................................................1
Overview...................................................................................................................................1
Classroom Exercises................................................................................................................1
WEEK 2 : The Gaps model of Service Quality.............................................................................1
Study Objectives.......................................................................................................................1
Required Reading.....................................................................................................................2
Discussion Questions...............................................................................................................2
WEEK 3: Understanding the Customers Behaviour, Expectations & Perception.........................2
Study Objectives ......................................................................................................................2
Required Reading.....................................................................................................................2
Discussion Questions...............................................................................................................3
Week 4: Strategies for Services Marketing – Positioning & Differentiation..................................3
Study Objectives ......................................................................................................................3
Required Reading.....................................................................................................................3
Classroom Exercises................................................................................................................3
WEEK 5: Service Customers, Service Development and Design.................................................4
Study Objectives ......................................................................................................................4
Required Reading.....................................................................................................................4
Discussion Questions...............................................................................................................4
WEEK 6: Delivering and Performing Services
Employees’ and Customer’s Role in Service Delivery..................................................................5
Study Objectives ......................................................................................................................5
Required Reading.....................................................................................................................5
Discussion Questions...............................................................................................................5
Week 7: Managing Demand and Capacity
Integrated Services Marketing Communication............................................................................5
Study Objectives ......................................................................................................................5
Required Reading.....................................................................................................................6
Discussion Questions...............................................................................................................6
WEEK 8: Pricing of Services
.....................................................................................................................................................6
Study Objectives ......................................................................................................................6
Required Reading.....................................................................................................................7
Additional Reading....................................................................................................................7
Discussion Questions...............................................................................................................7
Classroom Exercises................................................................................................................7
WEEK 9: Service Quality Measurement, Role of CRM in Services, Current Trends....................7
Study Objectives.......................................................................................................................7
Classroom Exercises................................................................................................................8
Assessment summary...............................................................................................................9
Assessment criteria...................................................................................................................9
WEEK 1: INTRODUCTION TO SERVICES & SERVICES MARKETING MIX

STUDY OBJECTIVES
Students should strive to understand:

• unique characteristics of services

• marketing challenges unique to services marketing

REQUIRED READING
Text Chapter 1
Levitt, Theodore, (1980) “Marketing success through differentiation--of anything”
Harvard Business Review, Jan/Feb80, Vol. 58 Issue 1, p83
Lovelock, C., Patterson, P., Walker, R., (2004) Services Marketing 3rd Ed., Pearson-
Prentice Hall
Levitt, T. (1981). “Marketing Intangible Products and Product Intangibles”. Harvard
Business Review 59 (May-June), 94-102
Wirtz Jochen, “Growth of Service sector in Asia”, Singapore Nanyang Business Review, Vol.
1, No. 2, 5 – 18

OVERVIEW
Welcome to Services Marketing. Through the prescribed readings students will be
exposed to concepts that show how products are judged to be different from services
by customers, corporations, competitive service providers. Students will then be able to
define characteristics of a service offering and the market in which it competes. .

CLASSROOM EXERCISES
Look up one of the following firms on the Internet. From the information provided, discuss how
the firm or individual has dealt with the issues of intangibility, perishability, inseparability, and
variability

1. Garth Brooks (http://www.planetgarth.com)

2. United Airlines (http://www.ual.com)
3. Destiny Software (http://www.destinyusa.com)
4. Imperial Hotel Hong Kong (http://www.imperialhotel.com.hk)
5. Wendy's (http://www.wendys.com)

WEEK 2 : THE GAPS MODEL OF SERVICE QUALITY

STUDY OBJECTIVES.
Students should strive to understand:

• the gaps model of service quality framework.

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 • the most critical service quality gap to close is the customer gap, the difference
between customer expectations and perceptions.

• four gaps that occur in companies, which are called provider gaps, are
responsible for the customer gap.

REQUIRED READING
Text Chapter 2
Parasuraman, A.Z., V.A. Zeithaml and L.L. Berry (1985) "A conceptual model of
service quality and its implication for further research" Journal of
Marketing Vol 49, Issue 4(Fall85): 41-50.
Brown, S. W. and Teresa A. Swartz (1989) "A gap analysis of professional service
quality" Journal of Marketing 53: 92-98.

DISCUSSION QUESTIONS
1. Think about a service you receive. Is there a gap between your expectations and
perceptions of that service? What do you expect that you do not receive?

2. : Which of the four provider gaps do you believe is hardest to close? Why?

WEEK 3: UNDERSTANDING THE CUSTOMERS BEHAVIOUR, EXPECTATIONS & PERCEPTION

STUDY OBJECTIVES
Students should strive to understand:

• how consumers choose and evaluate services, through focusing on factors that
are particularly relevant for services.

• the elements of consumer behavior that a services marketer must

understand: choice behavior, consumer experiences, and post experience
evaluation.

• what influences customer perceptions of service and the relationships among

customer satisfaction, service quality, and individual service encounters.

• service quality and its five key dimensions: reliability, responsiveness,

empathy, assurance, and tangibles.

REQUIRED READING
Text Chapter 3, 4 and 5
Brady, MK. And Cronin, J.J. (2001), “Some new thoughts on conceptualizing perceived
quality: a hierarchical approach”, Journal of Marketing, 65 (3), 34-49.
Dabholkar, Prathibha A . Shepherd, CD Thorpe DI (2000), “A comprehensive
framework for service quality: an investigation of critical conceptual and

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 measurement issues through a longitudinal study”, Journal of retailing
76 (2) pp139

DISCUSSION QUESTIONS
1. The Internet has the potential to change the way consumers search for
information about services, evaluate them, and even choose them. The following
Web sites provide excellent examples of how behaviour may differ when
consumers buy online. Have a look at some of these sites and then we’ll discuss
the potential changes in class.
www.eBay.com
www.keralatourism.org
www.irctc.co.in
www.makemytrip.com
2. Describe several instances where a service company’s explicit service
promises were inflated and led you to be disappointed with the service outcome.
3. How do consumers perceive services across cultures?

WEEK 4: STRATEGIES FOR SERVICES MARKETING – POSITIONING & DIFFERENTIATION

STUDY OBJECTIVES
Students should strive to understand:

• various positioning techniques

• how positioning can be differentiated

• types of errors in positioning

REQUIRED READING
Text Chapter 5, 6
Collier David A and Meyer Susan M., “A Service Positioning Matrix”, International
Journal of Operations & Production Management Vol. 18 No. 12, 1998, pp. 1223-1244

CLASSROOM EXERCISES
Look up the following companies on the Internet. In what stage of the service life cycle would
the firm be operating? What do you think is their competitive advantage? What consumer
positioning strategy are they attempting to promote?

1. Cruise For Less Discount Cruises (http://www.cruiseforless.com)

2. Nastic International (http://www.nastec.com)
3. Tom Gill Oldsmobile Repair (http://www.tomgill.com)
4. First Air Express, Inc. (http://www.firstair.com)

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WEEK 5: SERVICE CUSTOMERS, SERVICE DEVELOPMENT AND DESIGN

STUDY OBJECTIVES
Students should strive to understand:

• the importance of recovery from service failures in keeping customers and

building loyalty.

• the nature of consumer complaints and why people do and do not complain.

• strategies for effective service recovery, together with examples of what does
and does not work.

• the challenges inherent in service design.

REQUIRED READING
Text Chapter 8, 9
Hess Jr Ronald S, Ganesan Shankar &Klein Nooreen M. , Service failure and
Recovery:The impact of Relationship factors on Customer satisfaction”,
Journal of Academy of Marketing Science,Vol31 No2pg127-145
Hoffman, K. Douglas, (1995) “Tracking service failures and employee recovery efforts”,
Journal of Services Marketing, 9 (2/3), p 49
Mattila, Anna S. (2001) "The effectiveness of service recovery in a multi-industry
setting" Journal of Services Marketing,15 (6/7), p 583

DISCUSSION QUESTIONS
1. Why is it important for a service firm to have a strong recovery strategy? Think of a
time when you received less-than-desirable service from a particular service
organization. Was any effort made to recover? What should/could have been
done differently? Do you still buy services from the organization? Why or why not?
Did you tell others about your experience?

2. Explain the logic behind these two quotes: “a complaint is a gift” and “the customer
who complains is your friend.”

3. Why is it challenging to design and develop services?

4. Compare two services on the Internet. Discuss the design of each in terms of
whether it meets your expectations. How could the design or the service process
be changed? Which one is most effective and why?

5. Starbucks: Delivering Customer Service – Case

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 WEEK 6: DELIVERING AND PERFORMING SERVICES
EMPLOYEES’ AND CUSTOMER’S ROLE IN SERVICE DELIVERY

STUDY OBJECTIVES
Students should strive to understand:

• the importance of creating a service culture in which providing excellent service

to both internal and external customers is a way of life.

• the critical importance of service employees in creating customer satisfaction

and service quality.

• the primary channels through which services are delivered to end customers.

• the strategies that are used to manage service delivery through intermediaries.

REQUIRED READING
Text Chapter 12, 13 & 14
Brady MK, Cronin JJ (2001) “Customer Orientation: Effects on Customer Service
Perceptions and Outcome Behaviors” Journal of Service Research, Vol.
3, No. 3, 241-251

DISCUSSION QUESTIONS
1. Define service culture. Why is service culture so important? Can a
manufacturing firm have a service culture? Why or why not?

2. Select a service provider (your dentist, doctor, lawyer, hair stylist, beautician,
chartered accountant) with whom you are familiar and discuss ways this person
could positively influence the five dimensions of service quality in the context of
delivering his or her services.

WEEK 7: MANAGING DEMAND AND CAPACITY

INTEGRATED SERVICES MARKETING COMMUNICATION

STUDY OBJECTIVES
Students should strive to understand:

• the key reasons for service communication challenges.

• integrated service marketing communications.

• the implications of time, labor, equipment, and facilities constraints combined

with variations in demand patterns.

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REQUIRED READING
Text Chapter 15 & 16
Kotler, P. and J. Scheff (1997) Standing room only. Strategies for marketing the
performing arts, Boston, Massachusetts, Harvard Business School
Ng, Irene C. L., Wirtz, J, Lee, Khai Sheang, (1999) “The strategic role of unused
service capacity”, International Journal of Service Industry Management, Vol. 10
Issue 2, p. 211 - 244

DISCUSSION QUESTIONS
1. Discuss the four common types of constraints (time, labour, equipment, and
facilities) facing service businesses and give a real example of each

2. Why do service organizations lack the capability to inventory their services?

Compare a car repair and maintenance service with an automobile
manufacturer/dealer in terms of inventory capability e.g. Maruti Suzuki Authorised
Service Centres and Maruti Suzuki Dealers in your city

3. Which of the key reasons for provider gap 4 discussed in the beginning of
Chapter16 is the easiest to address in a company? Which is the hardest to
address? Why?

4. Why is internal marketing communication so important in service firms? Is it

important in product firms?

5 Fluctuating demand contradicts the notion of market orientation because casual

workers are not interested in service quality.

WEEK 8: PRICING OF SERVICES

STUDY OBJECTIVES
Students should strive to understand:

• pricing objectives and strategies

• that pricing of services differs from pricing of goods from a company’s

perspective

• what value means to customers and the role that price plays in value.

• the impact of service on getting new customers.

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REQUIRED READING
Text Chapter 17 & 18
Avlonitis, George J. and Kosttis A. Indounas (2005) "Pricing objectives and pricing
methods in the services sector" Journal of Services Marketing 19(1): 47-
57.
Dawes, John (2004) "Price changes and defection levels in a subscription-type market:
can an estimation model really predict defection levels?" Journal of
Services Marketing 18(1): 35-44.

ADDITIONAL READING
Hotels close VIP lounges in some cities, send guests to Starbucks or Seattle's Best instead

Coke vs. Pepsi: Soda brand can influence your hotel choice

DISCUSSION QUESTIONS
1. Which approach to pricing (cost-based, competition-based, or demand-based)
is the most fair to customers? Why?
2. Name three services you purchase in which price is a signal to quality. Do you
believe that there are true differences across services that are priced high and
those that are priced low? Why or why not?
3 Services marketing is just setting a price and advertising it.

CLASSROOM EXERCISES
Look up one of the following firms on the Internet. Discuss the perceived value of the service
based on the price and information given. See if you can locate examples of differential pricing,
price bundling, yield management, or multiple-use discounts

1. Metro RV (http://metrorv.com)
2. The Centre For Cosmetic Surgery (http://www.orbonline.net/~centcosm)
3. Capital Lithro Limited (http://www.capital-litho.co.uk)
4 Camp High Rocks (http://www.highrocks.com)
5. Cruise Holidays (http://www.capt-cruise.com)

WEEK 9: SERVICE QUALITY MEASUREMENT, ROLE OF CRM IN SERVICES, CURRENT TRENDS

STUDY OBJECTIVES
Students should strive to understand:

• measure the quality in services

• relationship marketing, its goals, and the benefits of long-term relationships for
firms and customers.

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 • relationship development strategies – including quality core service, switching
barriers, and relationship bonds.

• current trends in various sectors viz tourism, telecom etc

CLASSROOM EXERCISES
Look up one of the following firms on the Internet. Identify which determinants of service quality
they appear to demonstrate: tangibles, reliability, responsiveness, assurance, and/or empathy.

1. Delta Airlines (http://www.delta.com)

2 Walt Disney World (http://disneyworld.disney.go.com)

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Assessment

ASSESSMENT SUMMARY

Form of assessment Length Weightage Due date

Case Study Discussion & 10% Week 3

Analysis report 1000 words
Major Research Project 40-45 pages 10% Week 10
Written report

Mid Term Exam 20% Week 8

Class Participation in 10% Continuous during

three weeks
Discussion Questions &
Exercises

Final Examination 3 hrs 50% January 2011

To pass this course you must obtain a passing mark (50%)

There are no supplementary examinations in this course,

ASSESSMENT CRITERIA
Assessment of your assignments will take into account:

• relevance of your answer to the question

• clarity of expression

• supporting arguments, reflecting engagement with relevant readings, text and other relevant
materials

• proper acknowledgment of sources and use of a bibliographic convention

• logical planning and sequence

• overall presentation of written assignments and presentation materials

Late assignments will not be marked.

Assignment feedback

The feedback on your assignments will include:

• comments on how well you met the assessment criteria

• details on your progress as demonstrated by your performance in the assessment

• suggestions for improvement

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Assignment 1 — Case Study Analysis Report (Individual)

Students will have two case discussions for assessment during the course followed by
submission of analysis on any one of them.

Your assignment should have a strong emphasis on analysis. Do not summarise case facts
since this adds no value to your analysis and doesn’t demonstrate depth of understanding. You
should apply relevant theoretical concepts. Your discussion in report should demonstrate
understanding of a wide range of concepts covered in class sessions (and required reading) —
and an ability to apply those concepts to a specific situation.

Students will be rewarded for succinct logical argument and correct referencing. Your
analysis should not be more than 1000 words.

This assignment counts for 5% of the overall marks for this course

If necessary, more details will be provided in the class.

SUBMISSION DEADLINE: Please submit your assignment (case analysis report) by

Friday of week 3 by 17.00 hours. You can submit your work earlier but not later than the
due date.

Assignment 2 — Major project –Service Organisation report (groups of 4

students)

The major project will be done in groups of 4. It involves studying a service organisation.
Students will learn basics in a specific industry and demonstrate understanding of marketing
concepts in that industry. Data will be collected via secondary data. You can choose to do a
project on a firm in an industry of your choice,
Note that you will be expected to use references – see below for details.

Directions
In order to gain expertise, students will be expected to complete written assignments that
illustrate key concepts from class in their chosen industry. Students will investigate a service
industry of particular interest to them. The purpose of report is two-fold. First, it allows students
to apply various concepts introduced during the semester. Second, it allows students to acquire
a deeper understanding of one particular service industry (hopefully one you are interested in).

Requirements
These sections are to help you demonstrate your understanding of the concepts from class and
ability to apply them in a particular industry. You are expected to bring your expertise to the
class through this semester, so that your classmates may benefit from the insight you have
gained.

SO_MP1 Industry analysis (3-4 pages)

 W hat is the firm/industry you have selected?
Analyse the industry e.g. trends, competitors (think broadly)
What role does technology play in this industry?
Where would you locate this industry on the “tangibility” spectrum? Why?
What are the unique challenges this industry faces?

SO_MP2 Typical Service offering (2-3 pages)

What are customer expectations of service for this firm?
What “bundle of benefits” are typically received by customers for this firm?
Discus the experiences for a typical customer of this firm (Optional for Study Abroad
Program)

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SO_MP 3 Employee and customer roles (2-3 pages)
What are the roles of customers and employees in coproducing the service?
Does this the same for all customers?
E xplain if internal marketing is appropriate and whether and how it is practiced.

SO_MP4 Customer Loyalty (1-2 pages)

Which types of customers are loyal to this firm? Why?
What could be done to build customer relationships for this firm?

SO_MP5 Physical Evidence (1-2 pages)

What role does the servicescape play in this firm? (Pictures may be helpful here)
How might the servicescape be used as a source of competitive advantage?

SO_MP6 Innovation (2-3 pages)

What innovations have been introduced in this firm/industry? (use illustration and/or
examples)
How successful have this/these innovations been?
What others might be used?

SO_MP7“Speculation” Section (2-3 pages)

In general, what are strengths/weaknesses of this firm?
(Be sure to provide evidence to defend and support your opinions)
What opportunities/threats do you see for this firm/industry?
What do you think the future holds for this firm/industry?

Note: You need to include relevant theory and/or models at appropriate places discussed
in class and in the texts, to obtain a high grade/marks.

Report Length: Main body total: 40-45 pages. 1.5 or double spaced, 12 point font.

After collecting all of this information, a final report is required. This should include all of the
following:
Table of contents. Immediately following the Executive Summary should be a table of contents
for your report. You may put the report together in any order you like, provided there is some
logical reasoning (apparent to the reader) for the sequence you have chose. (not included in
page count)
Main body of report. Students are expected to include each of the above 7 components, in the
final report. You should revise each section, as necessary, as you develop the final report. The
main body of the report should include an introduction that sets up what is going to be
discussed in the later pages. (page limits as above – 20-22 pages).
Conclusion. The report should end with a brief conclusion section that ties the entire project
together and reveals major insights gained during the research process about your chosen
service industry (1-2 pages).
References. You need to reference your work or ideas.
(not included in page count)

Total pages (excluding cover, contents page and references 40-45 pages)

Proposal - Due date: Friday of week 2 by 17.00 hours

You should submit in a written summary (2-3 pages) of:
o Selected industry
o How information will be collected to develop the case
o Summary of issues facing industry
(Note that there are no marks associated with this proposal, it is for me to ensure that
you have a viable project)

Report - Due date:

Friday of week 7 by 17.00hours

This assignment counts for 25% of the overall marks for this course

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Main Text

Valarie Zeithaml and Mary Jo Bitner (2003), Services Marketing, 3rd ed., Tata McGraw-Hill

Supplementary Readings

Christopher H. Lovelock and Jochen Wirtz (2004), Services Marketing, 5th ed., Upper Saddle
River, New Jersey: Prentice Hall.

Christopher H. Lovelock, Jochen Wirtz, and Tat Hean Keh (2002), Services Marketing in Asia:
Managing People, Technology, and Strategy, Singapore: Prentice Hall

John E.G. Bateson and K. Douglas Hoffman (1999), Managing Services Marketing, 4th edition,
London: Dryden Press

Christopher H. Lovelock, Paul G. Patterson, Rhett H. Walker, Services Marketing: An Asia-Pacific and
Australian Perspective, 4th Edition

Rao Pramod and Gandhawe Sarika, Services Marketing - A multi dimensional approach, ICFAI
University Press

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