Services Marketing:

People, Technology, Strategy

(8th edition, 2016)

SECTION 1
COURSE DESIGN AND TEACHING HINTS

INTRODUCTION
This instructor’s resource manual is designed to help you develop and teach a course on services
marketing, based on the text and cases contained in Services Marketing, eighth edition
(henceforth SM8). The manual is divided into six sections:
1. Course Design and Teaching Hints
2. Student Exercises and Projects
3. Teaching Insights for the Chapters
4. Case Teaching Notes
5. PowerPoint Slides

An electronic file containing each of the PowerPoint slides created specifically to be used with
this text is located on the World Scientific Publishing Co. Inc., U.S. website (accessible only
with permission from the publisher) at: http://www.worldscientific.com/

Objectives of the Manual

The principal goals of this manual are as follows:
 Discuss the learning objectives for each chapter to facilitate the instructor.
 Aid in the preparation and (if desired) serve as a basis for lectures.
 Emphasize integration of concepts, frameworks, and real-world practice throughout
the book.
 Provide brief answers to each of the questions at the end of the chapters.
 Suggest ideas for student projects, written assignments, and in-class discussions.
 Provide detailed notes on each of the cases in the book.
 Propose topics and teaching suggestions for specific class sessions and the sequence
in which these sessions might be taught.

Additional instructor aids include the following:

 A section on “Developing Your Own Course.”
 A note on “Teaching with Cases.”
 Two illustrative course outlines, which can serve as a departure point for developing
your own course outline.
 A note on “Studying and Learning from Cases” for optional distribution to students.

Website Supplement
To supplement the text and cases appearing in the book, additional materials including
downloadable cases will be placed on World Scientific Publishing Co. Inc., United States’

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dedicated website for SM8 as they become available. We encourage you to check this website
periodically for new materials and other information. The URL aims to do the following:
http://www.worldscientific.com/

Target Teaching Audiences

The eighth edition is equally suitable for courses directed at advanced undergraduates, MBA,
and EMBA students. It may be used for courses in either services marketing or service
management. SM8 places marketing issues within a broader general management context. The
book will appeal both to full-time students headed for a career in management and to EMBAs
and executive program participants who are combining their studies with ongoing work in
managerial positions.

Changes from the Seventh U.S. Edition of Services Marketing

SM8 represents a significant revision. Its contents reflect ongoing developments in the service
economy, new research findings, and enhancements to the structure and presentation of the book
in response to feedback from reviewers and adopters.

New Structure, New Topics. The chapter text is organized around a revised framework for
developing effective service marketing strategies that seamlessly builds on topics learned in
principles or marketing management courses. This framework allows for a flexible approach to
teaching and forms the structure of the book, enabling students to see how different chapter
topics relate to each other. The four parts cover the following:

PART I: UNDERSTANDING SERVICE PRODUCTS, CONSUMERS, AND

MARKETS
1. Creating Value in the Service Economy
2. Understanding Service Consumers
3. Positioning Services in Competitive Markets

PART II: APPLYING THE 4 Ps OF MARKETING TO SERVICES

4. Developing Service Products and Brands
5. Distributing Services through Physical and Electronic Channels
6. Service Pricing and Revenue Management
7. Service Marketing Communications

PART III: MANAGING THE CUSTOMER INTERFACE

8. Designing Service Processes
9. Balancing Demand and Capacity
10. Crafting the Service Environment
11. Managing People for Service Advantage

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PART IV: DEVELOPING CUSTOMER RELATIONSHIPS

12. Managing Relationships and Building Loyalty
13. Complaint Handling and Service Recovery

PART V: STRIVING FOR SERVICE EXCELLENCE

14. Improving Service Quality and Productivity
15. Building a World-class Service Organization

PART VI: CASE STUDIES

WHAT IS NEW IN THIS EDITION?

The eighth edition represents a significant revision. Its contents reflect ongoing developments in
the service economy, dramatic developments in technology, new research findings, and
enhancements to the structure and presentation of the book in response to feedback from
reviewers and adopters.

New Structure, New Topics

 Almost all chapters are now structured around an organizing framework that provides
a pictorial overview of the chapter’s contents and line of argument.
 New applications of technology are integrated throughout the text, ranging from apps,
M-commerce, and social networks, to robots, artificial intelligence, and biometrics.
 Each of the 15 chapters has been revised. All chapters incorporate new examples and
references to recent research. Significant changes in chapter content are highlighted
below.
 Chapter 1 “Creating Value in the Service Economy” now explores the nature of the
modern service economy more deeply and covers business-to-business (B2B)
services, outsourcing, and offshoring. The Service–Profit Chain, featured in Chapter
15 in the previous editions has been moved here to serve as a guiding framework for
the book.
 Chapter 2 “Understanding Service Consumers” covers the post-consumption
behaviors, including service quality, its dimensions, and measurement (SERVQUAL),
and how quality relates to customer loyalty. This was included in Chapter 14 in the
previous edition.
 Chapter 7 “Service Marketing Communications” is now neatly organized around the 5
W’s model, a new section on the services marketing communications funnel was
added, and the coverage of new media (including social media, mobile, apps, and
Quick Response [QR] codes) is significantly expanded.

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 Chapter 8 “Designing Service Processes” has a new section on emotion prints and
covers a more detailed service blueprinting.
 Chapter 11 “Managing People for Service Advantage” has new sections on a service-
oriented culture and how to build a climate for service, a section on effective
leadership in service organization, and leadership styles. Part of this content was
previously covered in Chapter 15 in the previous editions.
 Chapter 14 “Improving Service Quality and Productivity” now integrates key concepts
in the main body of the chapter instead of including them in the Appendix as seen in
the previous editions. They are total quality management (TQM), ISO 9000, Six
Sigma, and the Malcolm Baldrige and European Foundation for Quality Management
(EFQM).
 Chapter 15 “Building a World-class Service Organization” was completely
restructured to provide a recap and integration of key themes of this book. It now
features an auditing tool to assess the service level of an organization. It emphasizes
the impact of customer satisfaction on long-term profitability and closes with a call to
action.

FOR WHAT TYPES OF COURSES CAN THIS BOOK BE USED?

This text is designed for advanced undergraduates, MBA, and EMBA students. Services
Marketing places marketing issues within a broader general management context. The book will
appeal to both full-time students headed for a career in management and to EMBAs, and
executive program participants who are combining their studies with ongoing work in
managerial positions.

Whatever a manager’s specific job may be, we argue that he or she has to understand and
acknowledge the close ties that link the functions of marketing, human resource, and operations.
Keeping that in mind, we have designed this book so that instructors can make selective use of
chapters and cases to teach courses of different lengths and formats in either service marketing or
service management.

WHAT ARE THE BOOK’S DISTINGUISHING FEATURES?

Key features of this highly readable book include the following:

 A strongly managerial perspective, yet rooted in solid academic research,
complemented by memorable frameworks. Our goal is to bridge the all-too-frequent
gap between theory and the real world.

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 Text that is organized around an integrated framework that the reader immediately
can relate to. The framework cascades across the entire book. Each chapter also
provides a succinct chapter overview in pictorial form.
 Text that is clear, readable, and focused.
 A global perspective, with examples carefully selected from America, Europe, and
Asia.
 A systematic learning approach, with each chapter having clear learning objectives,
an organizing framework providing a quick overview of the chapter’s contents and
lines of argument, and chapter summaries in bullet form that condense the core
concepts and messages of each chapter.
 Opening vignettes and inserted boxes within the chapters are designed to capture
student interest and provide opportunities for in-class discussions. They describe
significant research findings, illustrate practical applications of important service
marketing concepts, and describe best practices by innovative service organizations.

We have designed this textbook to complement the materials found in traditional marketing
management texts. Recognizing that the service sector of the economy can best be characterized
by its diversity, we believe that no single conceptual model suffices to cover marketing-relevant
issues among organizations ranging from huge international corporations (in fields such as
airlines, banking, insurance, telecommunications, freight transportation, and professional
services) to locally owned and operated small businesses such as restaurants, laundries, taxis,
optometrists, and many B2B services. In response, the book offers a carefully designed
“toolbox” for service managers, teaching students how different concepts, frameworks, and
analytical procedures can be best used to examine and resolve the varied challenges faced by
managers in different situations.

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Case Studies:
The following is the list of case studies for the textbook arranged as per the chapter order in the
book. It is recommended that the instructors first check suitability of a case attached to the
chapter before prescribing the same for discussion.

Case 1 Sullivan Ford Auto World 610

Christopher H. Lovelock
Case 2 Dr. Beckett’s Dental Office 616
Lauren K. Wright
Case 3 Bouleau & Huntley: Cross-selling Professional Services * 620
Jochen Wirtz and Suzanne Lowe
Case 4 Uber: Competing as Market Leader in the United States versus 626
Being a Distant Second in China*
Jochen Wirtz and Christopher Tang
Case 5 Banyan Tree: Designing and Delivering a Branded Service 633
Experience
Jochen Wirtz
Case 6 Kiwi Experience* 643
Mark Colgate
Case 7 The Accra Beach Hotel: Block Booking of Capacity during a 652
Peak Period
Sheryl E. Kimes, Jochen Wirtz, and Christopher H. Lovelock
Case 8 Aussie Pooch Mobile 658
Lorelle Frazer
Case 9 Shouldice Hospital Limited (Abridged) 669
James Heskett and Roger Hallowell
Case 10 Delwarca Software Remote Support Unit* 680
Roy D. Shapiro and Paul E. Morrison
Case 11 Red Lobster 685
Christopher H. Lovelock
Case 12 Raleigh & Rosse: Measure to Motivate Exceptional Service* 687
Robert Simons and Michael Mahoney
Case 13 Singapore Airlines: Managing Human Resources for Cost- 695
effective Service Excellence*
Jochen Wirtz and Loizos Heracleous
Case 14 Dr. Mahalee Goes to London: Global Client Management* 704
Christopher H. Lovelock
Case 15 Royal Dining Membership Program Dilemma* 706
Sheryl E. Kimes, Rohit Verma, Christopher W. Hart, and

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Jochen Wirtz
Case 16 Starbucks: Delivering Customer Service 713
Youngme Moon and John Quelch
Case 17 LUX*: Staging a Service Revolution in a Resort Chain* 728
Jochen Wirtz and Ron Kaufman
Case 18 KidZania: Shaping a Strategic Service Vision for the Future* 744
James L. Heskett, Javier Renoso, and Karla Cabrera
Case 19–32 Additional case studies available for download 763
*newly-added cases

DEVELOPING YOUR OWN COURSE

This book gives you plenty of flexibility in putting together a course that will meet your own
specific teaching objectives. Many instructors will doubtlessly choose to use some subset of the
materials in the book or to re-sequence the materials to suit their preferences. Two important
considerations in sequencing of materials are: (1) to decide when you want to introduce certain
key concepts that will be referred to again in subsequent chapters, and (2) to ensure that each
module builds logically on the previous one.

One option for enhancing your course with updated materials on topics of particular interest to
you and your students is to supplement the content of the book with additional readings, which
may include topical articles from such management-oriented periodicals as the Financial Times,
the Wall Street Journal, Business Week, National Post (Canada), Fortune, Harvard Business
Review, and various industry-specific magazines. The business sections of daily and Sunday
newspapers often contain interesting information about local or national service businesses that
might serve as a topic for discussion. Good sources of more academically-oriented articles
include European Journal of Marketing, International Journal of Service Industry Management,
Journal of the Academy of Marketing Science, Journal of Marketing, Journal of Retailing,
Journal of the Market Research Society, Journal of Services Marketing, Journal of Service
Research, Managing Service Quality, Service Industries Journal, and Sloan Management Review
(however, this list does not exhaust all possibilities).Another option is to utilize information on
the Internet such as the Center for Services Leadership (CSL) at Arizona State University (ASU).
The CSL is a research center within the W. P. Carey School of Business at ASU, and an outreach
arm from ASU to the business community and the global academic community. The CSL was
founded in 1985 to pioneer the study of services when business schools were focusing primarily
on products and manufacturing enterprises. Since then, the CSL has established itself as a
globally recognized authority on how to compete strategically through the profitable use of
services. Finally, you may be able to enhance the students’ experience by referring them to
relevant corporate websites that provide insights into strategies that relate to the topic being

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covered in a specific class. The teaching notes for many of the cases include the address of one
or more relevant websites.

Course Prerequisites
 Discuss the learning objectives for each chapter to facilitate the instructor.
 Exposure to introductory marketing management course.
 Materials on economic and financial analysis in marketing (e.g., break-even analysis).
 If students have little exposure to basic marketing, build early lectures around
concepts like market segmentation, competitive analysis, consumer decision-making
processes, service positioning, and the marketing mix.

Class Format
 The duration of class should ideally be at least 70 minutes. This allows time for a
good case discussion and wrap up.
 Two sample course outlines are included, one for undergraduate classes and the other
for MBA or EMBA teaching. These samples should be seen simply as departure
points for developing your own course.

Guest Speakers
In our experience, students enjoy a presentation by a marketing manager from a local service
firm. It is helpful too to invite guest speakers to comment on a class discussion of a case that
deals with their industry, and then to talk about their own firm and encourage student questions.
The best way to ensure that a guest speaker is informative in ways that build usefully on the
course is to brief the individual in advance, share prior course material with him/her, and—most
important of all — ensure that time is allocated for student questions. A “planted” question from
the instructor can also help bring out a key insight from the guest speaker. One possible format
that worked is to ask a guest speaker to cover the following topics during a presentation:

1. Industry overview and financial aspects of your industry

2. Company overview and external forces affecting its performance
3. Major competitors
4. Service supply chain
5. Your marketing mix including major services and prices
6. Profile your major markets and customers
7. Please describe your job and the transition from university life to the work world
8. Career opportunities including internships and what you look for in a job candidate
9. Questions from students

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Written Assignments
Section 2 of the manual provides a variety of exercise that can be used as written assignments for
the students. In addition to that, instructors may wish to select one or more of the following:

1. Written analyzes of cases are assigned on a “rolling report” basis. Each student must
select one (or more) of the cases assigned and turn in a paper before completion of class. This
approach—which we recommend—has the virtue of spreading the instructor’s workload in
marking papers and of ensuring that at least a few students are very well prepared for the
class in question. Such an assignment could also be coupled with formal in-class
presentations.
2. Report on consulting projects. Students work individually or in teams to undertake
consulting projects with cooperating businesses. This approach is popular with MBAs and
other mature students. You should require students to submit a preliminary proposal to you
before approving a project to ensure that the topic is both appropriate and feasible within the
time constraints of the course. Setting an early date for submission of the proposals forces
students to work quickly, and select and scope out their projects. The assignment may be
limited to just a written report or it may include in-class presentations (note: presentations
can be time consuming and you may not be able to allocate more than one session for this
purpose).
3. Internet-based assignments. Various options are available here, including:
 You assign students to review specific sites related to in-text examples (or examples
of your own).
 You give an assignment offering a restricted choice of sites (e.g., compare and
contrast three bank sites and three consulting firm sites).
 Students are given wide latitude to search the Internet in pursuit of an individual or
group research project.

Exams
 Cases can be used for midterm and final exams purposes. Four hours is required if
administered in a formal exam.
 Cases can also be assigned on a take-home basis.
 Alternatively, set essay questions based on topics and concepts in the course.
 Exams can also be substituted by take-home written assignments and term papers
based on original research as these may be better indicators of students’ skills,
learning, and motivation.

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Evaluation of Students
 For active participation, a certain percentage of the course grade can be allocated to
class participation.
 Possible allocation of marks could be 30–40 percent for class participation, 20–30
percent for written assignment, and 30–50 percent for a final exam.
 For those preferring not to evaluate class participation, a common allocation is 20
percent for term paper, 40 percent for midterm exam, and 40 percent for final exam.

TEACHING A COURSE THAT INCLUDES CASES

It is common to hear of teaching by “The Case Method” as if there was only one way of doing it.
In practice, there are many different ways of using cases in a classroom environment and a wide
variety of instructor styles. The essence of case teaching is that students and instructors
participate in direct discussion of management problems. A case, as one faculty member
described it, “is the vehicle by which a chunk of reality is brought into the classroom to be
worked over by the class and the instructor.” Success in this endeavor requires a commitment by
both instructor and students to the use of cases as a key-learning tool. Your role as a teacher
includes choosing the material for study, setting learning goals for each class, and shaping and
facilitating the progress of class discussion. The major onus, however, for learning must be
placed on the students.

In this brief note, we will not attempt to produce an in-depth guide for case teaching. Instead, we
highlight some of the basic steps that you can take to make students comfortable and motivated
in what many of them may perceive as a somewhat different teaching environment in
comparison to that which they have been accustomed to in the past. The remarks that follow are
addressed primarily to the beginning case teacher rather than to the well-seasoned instructor.

Before the Term Begins

Classroom Setup
 Seats arranged in a horseshoe or semicircle, with the rows rising in banks behind each
other to produce better sight lines is a more appropriate physical arrangement.
 Acoustics should be good in facilitating class discussion without the need for
microphones.
 A built-in screen and electrical outlets for overhead projectors, electronic projectors,
and videotape players are also desirable features.

At the Beginning of the Course

Dispelling Student Misperceptions of “Old” Cases
 Some of the updated cases in this book date from earlier editions and others are
recent. Students may be misguided and think that only cases published within the past
12 months can possibly be relevant still.

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 Experienced instructors address this misconception right at the beginning of the

course, recognizing that if they fail to do so, students will not be motivated to invest
time in studying what they consider as “outdated” material.
 A number of the current best-selling cases from the Harvard Business School
collection were written more than a quarter of a century ago.

Grading Criteria
 At strongly case-oriented schools where cases are used in almost every session of a
marketing course, it is quite common for 40–50 percent of a student’s course grade to
be based on the quality and quantity of his or her class participation, with the balance
being derived from written assignments and performance on the final exam.
 We believe strongly that it is the instructor’s responsibility to motivate students to
participate in case discussions, to evaluate their performance, and to give individual
feedback. Grading student contributions meets these needs.

Setting Expectations
You should reinforce and expand upon the points in this note by clearly stating your expectations
of students in several crucial areas like the following:
 Good preparation for each class.
 Prompt arrival before each session begins.
 Complete attendance throughout the course.
 Regular participation in class discussions.
 Attentiveness to other students’ comments.
 Constructive comments to facilitate other students’ learning

Of course, these expectations will quickly prove unrealistic if the instructor does not set a good
example. Consistently begin and finish classes on schedule. Make clear by your own remarks
that you have been listening carefully to what students have been saying. Challenge
misstatements of facts, wrong numbers, and faulty reasoning—but do not teardown students in
the process, especially at the beginning of the course when many of them may be feeling nervous
and insecure. The challenge is to be supportive in demanding high standards of your students, so
that these standards become part of their own value system rather than a goal based upon fear of
embarrassment in front of their peers. The first few sessions of a case course can be crucial in
terms of establishing the necessary rapport and creating an atmosphere of mutual respect
between students and instructor.

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Getting to Know Students

 An important aspect of building this rapport is getting to know your students so that
you can both address and refer to them by name.
 Some schools make it easier for instructor and students to get to know each other by
providing online rosters that include the student’s name, photograph, and brief
biographical details.
 If your school has a student picture book, with “mug shots” of all enrolled students,
then you may be able to cut and paste each student’s picture onto that individual’s
completed data sheet.
 The data sheet is helpful for recording details of students’ class participation if you do
not have such a system online.

Quantitative Work
Only a few of the cases in the book can be prepared without any quantitative analysis. Indeed,
several cases require a fairly rigorous review of the data in the text and exhibits to determine
which numbers are important, credible, and need further manipulation to yield useful managerial
insights. So check early in the course that all students are familiar with basic concepts in
economic and financial analysis that relate to marketing.

As the Term Proceeds

 In case courses, feedback needs to be given at two or even three levels when required:
(1) the individual, (2) group projects, if any, and (3) the class as a whole. The quality
of case discussions depends on the performance of all students combined—including
both those who participate and those who do not.
 Plan on giving regular feedback to the class as a whole about the quality of class
discussions. If you feel that the depth of analysis was weak, the breadth of class
participation limited, or the arguments lacking in substantiation, then you should say
so. Similarly, you should acknowledge good performance by the class as a whole.
 Constructive criticism, offered in a supportive manner, will motivate the class and
make students want to perform well as a member of a larger group. Good quality
discussions should also be recognized. Praise, used selectively, highlights what has
been done well and should stimulate equal or even better performance in the future.
 Feedback to individual students is a separate, albeit related task. It usually takes
several weeks or more before you can make reasonable judgments about a student’s
overall caliber as a classroom participant.
 An outstanding contribution can be publicly acknowledged (One can praise students
in this manner, “That was an excellent insight, Anna!”) but it is usually more
productive to counsel weak performers out of the classroom. One exception to this
generalization concerns individuals who persist in making poor use of class time. If
you do not bring them up short, this inaction on your part may signal to other students
that their instructor is really indifferent to the quality of class discussion.

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 Frequent participation does not necessarily mean high-quality contributions and

students should understand that. You have to moderate the class, should the speaker
go off tangent in a discussion.
 The greater the weight that you place on participation as an input to grading, the more
likely you are to have students making office appointments and asking you, “How am
I doing?” By making good notes on each student’s data sheet or class card concerning
their participation (if any) in each session, you will be better placed to offer
individual students useful evaluations of their class performance as well as advice for
improvement.
 You may want to consider sending a personal memo midway through a course to each
participant containing general comments about their progress in the course.
 Group projects or preassigned presentations are often a good way of involving
students who find it hard to make spontaneous comments in class. In addition to
providing a change of pace in the classroom, this pedagogical device has the
advantage of forcing students to get involved with the case instead of just maintaining
a highly detached position.

Obtaining Feedback
 Feedback should be a two-way street. As an instructor, you should be seeking
feedback from your students as well as giving it to them.
 Feedback should already be obtained midway through the term exams as it may
indicate a need to make adjustments to either course content or your teaching
approach to maintain the balance of the course.
 Responses to a midterm evaluation form should be anonymous. The questions can
usefully cover several points. You can ask students to rate each case on a five-point
scale in terms of its contribution to their learning. It is important to link case
evaluation to learning, because students will tend to focus simply on whether they
enjoyed the class discussion or found the topic personally interesting otherwise.
 If you want more specific feedback, allow room for additional comments on specific
cases, however, experience suggests that only a limited number of students will take
the time to explain their ratings.
 You should also ask for open-ended comments or suggestions on the conduct and
progress of the course till date.
 Additional useful feedback (especially for an instructor who is relatively new to case
teaching) is to invite a more experienced colleague to sit in and observe one or more
of your classes. Another form of feedback is to audiotape or videotape the class for
subsequent review.

In summary, case teaching is a demanding but an exciting approach to education. Many

instructors find it a challenging and rewarding experience and we hope that you will, too.

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Sample Form—Student Data Sheet

[Course Title]
TO: Participants PHOTO

FROM: [Instructor’s Name] DATE:

To help me to get to know you better, would each of you please complete this information sheet
and return it as soon as possible?

Name and Address

Full Name_______________________________________________________________

What first name/nickname do you prefer to be called by? _________________________

Local Mailing Address_____________________________________________________

E-mail____________________________________ Phone______________________

Career Interests and Areas of Special Expertise

What career interests/plans do you have after graduation?
_______________________________________________________________________
_______________________________________________________________________
What full-time jobs (if any) have you undertaken?

Employer Location Job Title(s) Dates

________________________________________________________________________

________________________________________________________________________

________________________________________________________________________

Do you have special knowledge of any industry? Which one? ________________________

Degree(s) Sought
Which degree(s) are you currently studying for? ________________________________

Degree(s) previously obtained_______________________________________________

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SAMPLE COURSE OUTLINES

Starting on the following page, we present outlines for two courses.

Appendix 1–1: A four-day EMBA course on Services Marketing

Appendix 1–2: A 35-hour, one-semester MBA course on Services Marketing consisting

of26 sessions meeting twice a week for 75–80 minutes

Appendix 1–3: A 36-hour, one-semester undergraduate course on Services Marketing

consisting of 12 sessions of 3 hours each.

These outlines illustrate possible approaches to:

 Sequencing topics.
 Augmenting chapter coverage with cases.
 Using cases independently of chapters.
 Setting assignments for individual classes, including group presentations.
 Employing the learning from student exercises as inputs to class discussion.

These outlines should be seen simply as providing a useful point of departure for designing your
own course. Our goal in writing the book is to give instructors as much flexibility as possible and
to offer a good mix of cases from which to select. Some instructors will probably choose to
select just a subset of all the chapters and cases in the book (or decide to assign them in a
different sequence to match their own teaching objectives). Many of the cases are versatile
teaching tools that often embrace multiple issues and can be used to illustrate or reinforce
concepts from several different chapters. Suggested study questions are included at the end of
each chapter, but it is up to you to decide which — and how many — of these you wish to
assign.

As you think about assignments, be sure to consider students’ past exposure to marketing and
their ability to devote significant time to advance case preparation. When setting assignments for
specific dates check for possible conflicts (e.g., religious or other holidays, special events on
campus, exams or other heavy assignments in closely related classes) that may affect students’
attendance or at least impair their ability to prepare for an important class in your own course.

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___________________________________________________________
APPENDIX 1–1
SAMPLE COURSE OUTLINE FOR 20 SESSION EMBA COURSE
____________________________________________________________
COURSE OUTLINE

BMU5014: CONTEMPORARY ISSUES IN

BUSINESS – SERVICES MANAGEMENT

Instructor: Professor Jochen Wirtz, Ph.D.

E-mail: [email protected]
URL: www.jochenwirtz.com
LinkedIn: https://www.linkedin.com/in/jochenwirtz
DID: +65-6516 3656

Dear UCLA–NUS EMBA Participants!

Welcome to BMU5014 Contemporary Issues in Business—Services Management! This module has been developed
specifically for the UCLA–NUS Executive MBA Program. It contains the essential elements of the management and
marketing of services, and serves as a broad introduction to marketing, human resources, and operations management.
Because of your extensive work experience, real-life group projects are an integral part of this module. The
projects are pre-module assignments, followed by a class presentation. The program office will assign groups of about
six to seven members each and e-mail you the groupings shortly. Please discuss the topics then and let me have your
1st, 2nd, and 3rd choice of topics as soon as possible. The topics will be assigned based on relevant work experience as
well as your preferences. The available topics are evaluations and recommendations for the following company
initiatives/projects and their implementations:
 Transition from a Goods-centric towards a Service-centric Firm
 Loyalty Program
 Customer Relationship Management (CRM)/Customer Experience Management (CEM) Strategy Design
and Implementation
 Social Media Strategy for Marketing, Communications, and Service Transactions
 Customer Feedback System (CFS)
 Customer Service Process Redesign
 Service Quality Initiative
 (Lean) Six Sigma Implementation
 Frontline Staff Strategy and Service Culture Initiative
 Cost-effective Service Excellence Initiative
 If you have a specific service-related topic in mind that is not listed here but that complements this
module (e.g., churn management), please let me know.
Before commencing on your assigned topic, please draft the contents, structure and approach your assignment, and then
discuss it with me via e-mail and/or phone. We can then work together to scope and focus on the project. I am very
much looking forward to meeting you for this exciting module.
Jochen

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A. Introduction
This module focuses on the management and marketing of services, and complements the modules on Marketing
Strategy, Competitive Strategy and Business Policy, Logistics and Operations Management, Strategic Leadership and
Implementation, and the Management Practicum.

Creating and marketing value in today’s increasingly service- and knowledge-based economies require an
understanding of the powerful design and packaging of “intangible” benefits and products, high-quality service
operations and customer information management processes, motivated and competent frontline employees, a loyal and
profitable customer base, and the development and implementation of a coherent service strategy to transform these
assets into improved business performance.

The key objectives of this module are as follows:

 To provide an appreciation and understanding of the unique challenges inherent in managing,
marketing, and delivering service excellence at a profitable rate. Participants will be introduced to
and have the opportunity to work with tools and strategies that address these challenges
 To develop an understanding of the “state of the art” of service management.
 To promote a customer service-oriented mind-set

B. Content
 Creating and Capturing Value in the Service Economy
 The Service-Profit Chain
 Productizing and Branding the Service Experience
 Managing Customer Loyalty, using the Wheel of Loyalty—Customer Asset Management and
Loyalty Programs, CRM, Segmentation, and Tiered Services
 Understanding Service Quality and Diagnosing Quality Shortfalls
 Improving Service Quality through Complaint Management and Service Recovery
 Designing Effective CFSs to Drive Organizational Learning
 Managing Service Quality Initiatives and Redesigning Customer Service Processes
 Managing People for Service Advantage
 Designing and Delivering Service Experience
 Cost-effective Service Excellence
 Characteristics of Breakthrough Service Firms

C. Method of Assessment
 Group Project Presentation (assesses understanding of how services marketing applies to the
business world and professional presentation skills): 30 percent
 Class Participation (assesses critical thinking skills, understanding of how services marketing applies
to the business world, and communications skills): 30 percent
 Final Examination (open book; assesses conceptual and theoretical understanding of services
management): 40 percent

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D. Timetable and Outline of Sessions

Saturday, 14 May, pm

Session 1 Capturing Value in the Service Economy—The Service-Profit Chain

- Read—Wirtz and Lovelock (W&L), “Capturing Value in the Service Economy,” Chapter 1
Session 2 Productizing Services and Branding the Service Experience
- Case—Banyan Tree Hotels & Resorts (see W&L, Case 5, page 633)
- See: www.banyantree.com.

Sunday, 15 May, full day

Session 3 Understanding Service Quality—The Gaps Model

- Read—W&L, “Improving Service Quality and Productivity,” Chapter 14
Session 4 Managing Customer Loyalty I—The Wheel of Loyalty
- Read—W&L, “Managing Relationships and Building Loyalty,” Chapter 12
Session 5 Managing Customer Loyalty II—Customer Base Segmentation, Tiered Services, CRM, and Loyalty
Programs
- Case—DHL (case is provided in the course pack)
- Group Presentation—CRM/CEM Strategy Implementation
Session 6 Staging a “Service Revolution” to Improve a Service Culture and Service Quality Fast
- Case—LUX* Resorts (see W&L, Case 17, page 728)
- Read—Wirtz and Kaufman (2016), “Engineering a Service Revolution,” NUS Business School
Working Paper (paper is provided in the course pack)
Guest Speaker: Paul Jones, CEO, LUX* Hotels & Resorts
- See http://www.luxresorts.com/

Monday, 16 May, full day

Session 7 Improving Service Quality I—Complaint Management and Service Recovery

- Read—W&L, “Complaint Handling and Service Recovery,” Chapter 13
Session 8 Cost-effective Service Excellence I—Dual Culture Strategy at SIA
- Case— SIA (see W&L, Case 13, page 695)
- See http://www.singaporeair.com/en_UK/about-us/
- See http://www.youtube.com/channel/UCIrr4E2y6Cv-2FSxk1_PBGQ
Group Presentation—Social Media Strategy

Session 9/10 Site Visit to SIA (leave NUS at 1:00 pm)

- See www.singaporeair.com

Tuesday, 17 May, pm

Session 11 Improving Service Quality II—Customer Feedback Systems

- Exam Preparation I
Session 12 Group Presentations—Use of Social Media in Customer Service Transactions
Guest Speaker: Joseph Baladi, CEO BandAsian
- See http://www.brandtalkasia.com/

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Wednesday, 18 May, pm

Session 13 Improving Service Quality III—Customer Service Process Redesign and Service Quality Initiatives
- Read—W&L, “Building a Word-class Service Organization,” Chapter 15
- Group Presentation—Strategic Customer Service Process Design
Session 14 Improving Service Quality IV
- Group Presentation— Cost-effective Service Excellence
Guest Speaker: Stone Cheung, UCLA–NUS EMBA Alumnus and Regional Associate Director:
CRM, Customer Engagement, Behavioral Insights, Loyalty Marketing, AEGON
- See https://www.linkedin.com/in/stancheung and http://www.aegon.com

Thursday, 19 May, pm

Session 15 Managing People for Service Advantage I—Understanding and Managing Conflicts in Frontline
Roles
- Read—W & L, “Managing People for Service Advantage,” Chapter 11
Session 16 Managing People for Service Advantage II—The Service Talent Cycle: Getting HR Right in Service
Organizations

Guest Speaker: Frederick A. Eck—NUS EMBA Alumnus and Founder, Principal and President of
The Randolph Group
- See http://randolphgrp.com

Friday, 20 May, pm

Session 17 Guest Speaker: Liew Mun Leong, Chairman, Changi Airport Group, former founding President and
CEO of CapitaLand Limited.
- See www.changiairport.com
Session 17 - Group Presentation—Transition from a Goods- towards Service-centric
- Exam Preparation II

Saturday, 21 May, pm

Session 19 Cost-effectives Service Excellence II—Industrializing Services, Service Operations, and Designing
the Service Experience
- Case—Shouldice Hospital (see cases section in textbook)
- See www.Shouldice.com
Session 20 Characteristics of Breakthrough Service Firms and Wrap-up of Module
Final Exam

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E. Pre-module Assignments and Group Presentations

The pre-module assignments are a group effort. The key deliverable is a 30-minute class presentation
(exclusively Q&A) and a self-explanatory PowerPoint deck. All tools, frameworks, and other supplementary
materials should be provided in the appendix to the main PowerPoint deck. The PowerPoint reports will be
shared with all course participants via the online program of NUS, Integrated Virtual Learning Environment
(IVLE) (please inform us beforehand if the material is confidential).

The class presentation should highlight and sensitize the class to critical issues that are important for the
issues/topics at hand. The focus is on application and experience, not on theory which is covered in the
textbook and lectures. To ensure effective learning for the entire class, please present the key points in 30
minutes or less to allow class discussion during and after your presentation. The time for Q&A will be 15
minutes; that is, the total air time for each group will be limited to 45 minutes.

Discuss a few case options with me before proceeding with your project beyond the initial research stage.
Feel free to use one of the current or former employers of a group member as the case for presentation, and
if appropriate, invite their management to your presentation (after discussion with me). Also, please discuss
your presentation outline with me before finalizing it.

Group Presentation: Assessment of a Shift from a Goods-centric Company into the Service
Space
1. Assess the journey of a goods-centric company into the servicespace. Explore:
- What went well?
- What could have been done better? What went wrong?
- What steps do you recommend next from the status quo?
- Determine the critical success factors for moving a company from being goods-centric to a
service-centric organization?

Group Presentation: Assessment of a Loyalty Program

1. Assess the effectiveness of a Loyalty Program against its objectives. What do you think is the
potential of the loyalty program for various strategic and marketing objectives, including increasing
customer value and enhancing the service experience, increasing share of wallet, cross-selling/up-
selling, reducing churn, gaining customer insight, assessing effectiveness of specific marketing
initiatives, and cementing the ownership of the customer relationship.
2. Based on your analysis, which aspects of the loyalty program do you think the firm could further
improve on?

Group Presentation: Assessment of a CRM or CEM Strategy and Its Implementation

1. Analyze the implementation of a CRM or Customer Engagement Management (CEM) Strategy.
What went right, what problems were encountered, and what are the lessons for future CRM
implementations?
2. Which areas do you think the firm could further improve on, that is, what are the next steps for its
CRM or CEM strategy?

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Group Presentation: Social Media Strategy in a Service Context

1. Identify a service firm that succeeded in using social media as a key channel for marketing,
customer engagement and service delivery. Explore what enabled its success, what were some of
the key success drivers, barriers/risks and how they were mitigated, and what other firms can learn
from this case.

Group Presentation: Analysis of a Customer Feedback System

1. Conduct a diagnostic analysis of the CFS of a service firm. Examine all aspects of the current CFS,
including data collection, reports, and attitudes of management and frontline staff towards customer
feedback.
2. Identify potential gaps that exist between current and best practices.
3. What would you recommend to the firm, to cost-effectively improve its customer-driven learning
via its CFS?

Group Presentation: Assessment and Recommendations of a Customer Service Process Redesign

Initiative
1. Select a customer service process redesign project that had a major impact on the satisfaction of any
firm’s customers. Select a service firm one of your group members is familiar with. Analyze what
went right, what problems were encountered, and what are the lessons for other service firms
interested in conducting major customer service process redesign work?

Group Presentation: Assessment and Recommendations for a Service Quality Initiative

1. Analyze a Service Quality Initiative in a service firm one of your group members is familiar with.
What went right, what problems were encountered, and what are the lessons for other service firms
interested in implementing a similar initiative?

Group Presentation: Assessment and Recommendations for a Six Sigma Implementation

1. Analyze a (lean) Six Sigma Implementation in a service firm one of your group members is familiar
with. What went right, what problems were encountered, and what are the lessons for other service
firms interested in implementing a similar initiative?

Group Presentation: Frontline Staff Management and Service Culture

1. Analyze a service firm that significantly improved its service quality, productivity, and sales
effectiveness (if applicable) delivered by its frontline employees. Focus on the following:
- Determine the critical success factors for achieving these improvements:
- What went wrong?
- What could have been done better?
- What further improvements do you recommend from the status quo?

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Group Presentation: Cost-effective Service Excellence Initiative

1. Identify a service firm that aims to deliver service excellence in a cost-effective manner. Focus on
the following:
- How does the firm try and pursue this dual strategy?
- What strategic approaches does the firm deploy to pursue this strategy (e.g., dual focus,
automation, streamlined sales tax [ST], industrialized service approach)?
- What is going well?
- What could be done better?
- What next steps/developments do you recommend from the status quo?

F. Preparation for Case Discussions

Please prepare each case discussion by first working independently through the discussion questions (i.e.,
form your own conclusions and recommendations), and only then discuss it with your study group.

Case: Banyan Tree — Developing a Powerful Service Brand

1. What are the factors that contributed to Banyan Tree’s success?

2. Can Banyan Tree maintain its unique positioning in an increasingly overcrowded resorts market and
grow globally?

Case: DHL
1. What do you see as the main challenges in implementing this segmentation in DHL’s customer
database?
2. How would you recommend DHL to address those challenges?
3. What are the various possible practical applications of this segmentation methodology by other
functional department (e.g., sales, customer service, etc.)?

Case: SIA
1. Describe what is so special about SIA’s five elements of its successful HR practices?
2. Evaluate the effectiveness of each element’s contribution towards SIA’s leadership in service
excellence and cost-effectiveness.
3. Despite evidence that such practices help service firms achieve higher company performance, many
organizations have not managed to execute them this effectively. Why do you think this is the case?
4. Why do you think U.S. full service airlines are largely undifferentiated as low-quality providers?
What are the reasons that none of the full service airlines positioned itself and deliver as a high-
quality service provider?

Case: LUX* Resorts

1. What were the main factors that contributed to LUX* Resort’s successful service revolution?
2. What key challenges do you see in what LUX* did in carrying out its transformation? How were they
addressed and what else could have been done?

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3. What next steps do you think LUX* should take to cement its strong service culture, continue service
innovation, and maintain its high profitability?

Case: Shouldice Hospital

1. Assume that Shouldice Hospital wants to expand its capacity, how should it control and manage its
service quality?
2. Assuming a profit maximization motive, would you recommend any changes to its current
marketing mix?

G. Literature

Main Text
 Jochen Wirtz and Christopher Lovelock (2016), Services Marketing: People, Technology,
Strategy, 8th ed., World Scientific Publishing Co., USA.

Supplementary Texts on Services Marketing and Management

I found the books of great value on the various aspects of the topics covered in this module. They are
presented in alphabetical order by surname of the first author. The reading materials are for those interested
in exploring services topics more deeply and are not required for this course.
 Janelle Barlow and Claus Moller (2008), A Complaint is a Gift. 2nd ed., Berrett-Koehler
Publishers.
 Jonah Berger (2013), Contagious: Why Things Catch On. Simon & Schuster.
 Leonard L. Berry and Kent D. Seltman (2008), Management Lessons from Mayo Clinic:
Inside One of the Most Admired Service Organizations, McGraw–Hill
 Sriram Dasu and Richard B. Chase (2013), The Customer Service Solution: Managing
Emotions, Trust, and Control to Win Your Customer’s Business, McGraw–Hill.
 Thomas J. DeLong, John J. Gabarro and Robert J. Lees (2007), When Professionals Have
to Lead: A New Model for High Performance. Harvard Business School Press.
 James A. Fitzsimmons and Mona J. Fitzsimmons (2013), Service Management:
Operations, Strategy, Information Technology. 8th ed., McGraw–Hill.
 Frances Frei and Anne Morriss (2012), Uncommon Service: How to Win by Putting
Customers at the Core of Your Business. Harvard Business Review Press.
 James L. Heskett, W. Earl Sasser, Jr. and Leonard A. Schlesinger (2015), What Great
Service Leaders Know and Do: Creating Breakthroughs in Service Firms. Berrett-Koehler
Publishers.
 Tony Hsieh (2013), Delivering Happiness: A Path to Profits, Passion, and Purpose. Grand
Central Publishing

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 Robert Johnston, Graham Clark, and Michael Shulver (2012), Service Operations
Management: Improving Service Delivery. 4th ed., Prentice Hall.
 Ron Kaufman (2012), Uplifting Service: The Proven Path to Delighting Your Customers,
Colleagues, and Everyone Else You Meet. Evolve Publishing.
 Doug Lipp (2013), Disney U: How Disney University Develops the World’s Most Engaged,
Loyal, and Customer-Centric Employees.
 Robert F. Lusch and Stephen L. Vargo (2014), Service-Dominant Logic: Premises,
Perspectives, Possibilities. Cambridge University Press.
 Richard L. Oliver (2010), Satisfaction: A Behavioral Perspective on the Consumer. 2nd ed.,
M.E. Sharpe.
 Roland T. Rust, Katherine N. Lemon and Das Narayandas (2005), Customer Equity
Management. Pearson Prentice Hall.
 Valarie A. Zeithaml, Mary Jo Bitner and Dwayne D. Gremler (2012), Services Marketing:
Integrating Customer Focus Across the Firm, McGraw–Hill, 6th edition.
 Valarie A. Zeithaml, Stephen W. Brown, Mary Jo Bitner, and Jim Sala (2014), Profiting
from Services and Solutions: What Product-Centric Firms Need to Know. Business Expert
Press.
 Laurie Young (2005), Marketing the Professional Service Firm. John Wiley & Sons.

Leading Service Research Centers

There are a number of research centers that focus exclusively on service research. They are as follows (in
alphabetical order):
 The Cambridge Service Alliance at the University of Cambridge in England
(http://cambridgeservicealliance.eng.cam.ac.uk).
 The Center for Excellence in Service of Robert H. Smith School of Business at University
of Maryland (www.rhsmith.umd.edu/ces).
 The CSL at the W. P. Carey School of Business at ASU (http://wpcarey.asu.edu/csl).
 The Institute of Service Excellence at the Singapore Management University
(http://ises.smu.edu.sg).
 The Service Research Center at Karlstad University in Sweden (www.ctf.kau.se).

Listing of Other Resources

There are a number of websites and blogs of firms with in-depth service expertise and leading service
providers, but blogs and their contents and focus change fast. I, therefore, list a few companies you can
follow on LinkedIn or search for their websites and blogs:

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 Firms: Accenture, Disney Institute, Forrester, McKinsey & Company, Salesforce.com, UP!
Your Service College.
 For a listing of leading service-related blogs see: 50 Customer Experience Blogs You
Should Be Reading, available at http://www.ngdata.com/50-customer-experience-blogs-
you-should-be-reading.
 Service design and innovation uses many different tools and methods originating from
various disciplines. Several websites provide further resources, e.g.,
ServiceDesignTools.org and ServiceDesignThinking.com.

H. Academic Honesty and Plagiarism

Academic integrity and honesty is essential for the pursuit and acquisition of knowledge. The University
and School expect every student to uphold academic integrity and honesty at all times. Academic dishonesty
is misrepresentation with the intent to deceive, or failure to acknowledge the source, or falsification of
information, or inaccuracy of statements, or cheating at examinations/tests, or inappropriate use of
resources.

Plagiarism is “the practice of using someone else's work or ideas and passing them off as one’s own” (The
New Oxford Dictionary of English). The University and School will not condone plagiarism. Students
should adopt this rule — you have the obligation to make clear to the assessor which is your own work and
which is the work of others. Otherwise, your assessor is entitled to assume that everything being presented
for assessment is entirely your own work. This is a minimum standard. In case of any doubts, you should
consult your instructor.

Additional guidance is available at:

http://www.nus.edu.sg/registrar/adminpolicy/acceptance.html#NUSCodeofStudentConduct

Online Module on Plagiarism: http://emodule.nus.edu.sg/ac/

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APPENDIX 1–2
Sample Outline for a 26-Session  80 Minutes MBA Course
____________________________________________________________

PART I: Understanding Service Markets, Products, And Customers

1. Introduction to Module and Services Marketing

Key Issues
 Introduction of course, goals, marking, and use of cases, etc.
 Powerful forces are transforming service markets
 Four broad categories of services—a process perspective
 Services pose distinct marketing challenges
Required Reading
 Chapter 1, “Creating Value in the Service Economy”

2. How Service Characteristics Affect Marketing Strategy

Key Issues
 The traditional marketing mix applied to services
 The 7 Ps of services marketing
Required Reading
 Chapter 1, “Creating Value in the Service Economy”

PART II: Applying the 4 Ps of Marketing to Services

3. Consumer Behavior in a Services Context

Key Issues
 The three-stage model of consumer behavior
 High- and low-contact service encounters
Required Reading
 Chapter 2, “Understanding Service Consumers”
 Prepare Bouleau & Huntley: Cross-selling Professional Services case

4. Positioning Services in Competitive Markets—1

Key Issues
 Positioning Maps and Strategy
 Market segmentation forms the basis for focused strategies
 Service attributes and levels
Required Reading
 Chapter 3, “Positioning Services in Competitive Markets”

5. Positioning Services in Competitive Markets—2

Required Reading
 Prepare Uber: Competing as Market Leader in the United States versus Being a
Distant Second in China Case

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6. Developing Service Products: Core and Supplementary Elements

Key Issues
 Core and supplementary services
 The Flower of Service
 Service branding
 New service development
Required Reading
 Chapter 4, “Developing Service Products and Brands”
 Prepare the Flower of Service exercise

7. Adding Value and Developing New Services

Key Issues
 Service branding
 New service development
Required Reading
 Chapter 4, “Developing Service Products and Brands”

8. Distributing Services—1
Key Issues
 Service delivery options for serving customers
 Cyberspace delivery of service elements
 Role of service intermediaries
Required Reading
 Chapter 5, “Distributing Services Through Physical and Electronic Channels”
 Prepare Dr. Mahalee Goes to London: Global Client Management Case

9. Distributing Services—2
Key Issues
 Service franchising
 International distribution of services
 Role of intermediaries
Required Reading
 Chapter 5, “Distributing Services Through Physical and Electronic Channels”

10. Service Pricing—1

Key Issues
 The pricing tripod
 Revenue management
 Implementing service pricing
Required Reading
 Chapter 6, “Service Pricing and Revenue Management”

11. Service Pricing—2

Key Issues
 Revenue management, inventory buckets, and rate fences

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 Ethical concerns and perceived fairness of pricing policies

Required Reading
 Prepare Accra Beach Hotel Case

12. Educating Customers and Promoting Services

Key Issues
 Role of marketing communications
 Challenges of services communications
 The marketing communications mix
 Role of corporate design
Required Reading
 Chapter 7, “Service Marketing Communications”
 Prepare Revenue Management of Gondolas Case

PART III: Managing The Customer Interface

13. Service Blueprinting

Key Issues
 Service blueprinting
 Service process redesign
Required Reading
 Chapter 8, “Designing Service Processes”
 Prepare the Service Blueprinting Exercise

14. The Customer as Co-producer

Key Issues
 The customer as co-producer
 Self-service technologies
 Managing jaycustomers
Required Reading
 Chapter 8, “Designing Service Processes”
 Prepare Shouldice Hospital case

15. Balancing Demand and Supply

Key Issues
 Productive capacity — definition and management
 Demand cycles
 Demand analysis and forecasting
 Demand management
Required Reading
 Chapter 9, “Balancing Demand and Capacity”

16. Waiting Lines and Reservations

Key Issues
 Psychology of waiting time

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 Queuing theory
 Managing waiting lines and reservations strategies
Required Reading
 Chapter 9, “Balancing Demand and Capacity
 Prepare application exercise 3

17. Crafting the Service Environment

Key Issues
 Servicescape
 Components of the servicescape
 Dimensions of service environment
Required Reading
 Chapter 10, “Crafting the Service Environment”

18. Managing People for Service Advantage

Key Issues
 Frontliners as boundary spanners and role conflicts
 Cycles of failure, mediocrity, and success in HR management
 The Wheel of Successful HR in service firms
 Empowerment of employees
 Service teams
 Service culture
Required Reading
 Read Chapter 11, “Managing People for Service Advantage,”
 Prepare Menton Bank Case

PART IV: Implementing Profitable Service Strategies

19. Managing Relationships and Building Loyalty

Key Issues
 Lifetime value of a (loyal) customer
 Relationship marketing
 The Wheel of Loyalty
 Tiered services
Required Reading
 Read Chapter 12, “Managing Relationships and Building Loyalty”
 Prepare LUX*: Staging a Service Revolution in a Resort Chain Case

20. Guest Speaker

21. Developing Loyalty Programs

Key Issues
 Loyalty bonds
 Membership/loyalty marketing
 Customer defections/churn
 CRM

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Required Reading
 Read Chapter 12, “Managing Relationships and Building Loyalty,”
 Prepare Royal Dining Membership Program Dilemma case

22. Complaint Handling and Service Recovery

Key Issues
 Service guarantees
 Effective Service Recovery
 CFSs
Required Reading
 Chapter 13, “Complaint Handling and Service Recovery”
 Prepare Starbucks: Delivering Customer Service Case

23. Improving Service Quality

Key Issues
 Elements of service quality
 SERVQUAL scale
 Service quality gaps
 Hard and soft measures of service quality
 TQM, ISO 9000, Malcolm Baldrige, and Six Sigma (Chapter 14)
Required Reading
 Read Chapter 14, “ Improving Service Quality and Productivity”
 Prepare review question 3 and application exercise 1

24. Linking Productivity and Quality Strategies

Key Issues
 Service productivity: efficiency versus effectiveness (Chapter 14)
Required Reading
 Read Chapter 14, “Improving Service Quality and Productivity”
 Prepare responses to review questions 6 and 7, application exercise 5

25. Striving for Service Leadership

Key Issues
 Cross-functional integration between marketing, operations, and HR
 Levels of service performance assessment
Required Reading
 Read Chapter 15, “Building a World-class Service Organization”

26. Review Session

Key Issues
 Highlight key issues raised in course
 Add any other powerful issues raised in class discussions, presentations, projects, etc.

Main Text
 Jochen Wirtz and Christopher Lovelock (2016), Services Marketing: People,
Technology, Strategy, 8th ed., World Scientific Publishing Co. Inc., USA.

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Summary Comments on Course Design

The above course outline suggests useful ways of matching readings and cases to specific
chapters, but these are not the only alternatives.

This outline can serve as the basis for helping you to design a course using alternative class
formats (e.g., 10 sessions of three hours), 24 sessions  75 minutes, and so forth. Obviously, with
fewer contact hours, it will be necessary to cut back or even eliminate the coverage of certain
topics or to use fewer cases and readings.

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APPENDIX 1–3
Sample Outline for an Undergraduate Course
12 Weeks, 12 Sessions, 3 Hours per Session

A. Course Objectives, Expectations, and Assessment

The objectives of this module are as follows:

 To provide an in-depth appreciation and understanding of the unique challenges
inherent in managing and delivering quality services. Participants will be introduced
to and have the opportunity to work with tools and strategies that address these
challenges.
 To develop an understanding of the “state of the art” service management thinking.
 To promote a customer service-oriented mind-set.

Expectations from Participants

 Come to each class well prepared to be able to discuss the required readings and
assigned cases in detail. For each case discussion in class write your analysis and
recommendations beforehand.
 Provide the respective groups with their data/reports by the due date (e.g., service
encounter journals, complaint/complement letters).
 Actively participate in lectures and tutorials as much of the learning will come from
discussions during class. Display a name sign in all lectures.
 Give a professional group presentation that is relevant to the lecture topics and
interesting for the class (once a week).
 Internalize the concepts covered in the course and be able to creatively use them in an
applied context. This course is all about understanding the theory and application of it
in the real world.

Components of Assessment

 Final Test (open book): 40 percent

 Group Presentation: 35 percent
 Individual Assignments: 15 percent
 Class Participation: 10 percent

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B. Class Schedule

Week 1 New Perspectives on Marketing in the Service Economy—Trends and

Opportunities
Week 2 Consumer Behavior—Managing and Understanding the Service Experience
Week 3 Marketing Mix I: The Service Product
Case Presentation: Sullivan Ford Auto World
Week 4 Marketing Mix II: Distributing Services
Marketing Mix III: Pricing of Services and Revenue Management
Date Due for Service Encounter Journal Template
Week 5 Marketing Mix IV: Communications Mix for Services
Case Presentation: The Accra Beach Hotel
Project Presentation: Pricing Models for Mobile Phone Services
Date Due for Complaint and Compliment Letters
Week 6 Service Delivery I: Designing Customer Service Processes
Service Delivery II: Crafting the Service Environment
Week 7 Service Delivery III: Managing People for Service Advantage
Case Presentation: Banyan Tree: Designing and Delivering a Branded
Service Experience
Week 8 Marketing Implementation I: Managing Customer Loyalty
Lifetime Customer Value (LTV), Loyalty Programs, and CRM
Date Due for Company Response Analysis of Complaint and Compliment Letters
Week 9 Marketing Implementation II: Complaint Handling and Service Recovery
Date Due for Service Encounter Journal Analysis
Week 10 Marketing Implementation III: Improving Service Quality and Productivity
Case Presentation: Royal Dining Membership Program Dilemma
Week 11 Marketing Implementation IV: Striving for Service Leadership
Project Presentation: Recommend-a-Friend Programs Analysis
Project Presentation: Analysis of Complaint/Compliment Letters and Managerial
Implications
Week 12 Wrap up of Course
Project Presentation: Service Encounter Journal Analysis—Drivers of
(Dis)Satisfaction
Project Presentation: Service Encounter Journal Analysis—How to Get Loyal
Customers
Date Due for Course Folder Documenting Individual Assignments and Case
Preparations

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C. Overview—Assignments
In this module, you will have to do the following individual and group assignments—they are
presented in approximate order of their due dates.

Assignments—Individual
1. Case write-up for each case: one to two page write-up(s) for each case in bullet points.
2. Complaint and compliment letters.
3. Analysis of company response and your reaction to that response.
4. Six service journal encounters and their analyses.
5. Submission of course folder containing copies of all your individual assignments (see list
above).

Assignments—Groups
1. One case presentation, submit PowerPoint charts on the day of the presentation, but no
report or write-up.
2. One project, including presentation and report. Submit both on the day of the
presentation.

Some individual assignments have to be handed to groups who will analyze those assignments for
the class. Therefore, the assignments have to be passed to the respective groups on time during the
break at the respective classes as outlined in the timetable. The groups are not responsible for
chasing individual students on their respective deliverables. Rather, on the due date, each group
will submit a list of all students who submitted their deliverables on time. Please note that 10
marks will be deducted for late delivery of each item from the total grade for the Individual
Assignment Grade.

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D. Outline of Lectures and Readings

1. New Perspectives on Marketing in the Service Economy and Frameworks for

Understanding Services
Key Issues
 Macroeconomics, trends, and opportunities
 Distinctive marketing challenges posed by services
 Categorization of services
Required Readings
 Wirtz and Lovelock, Chapter 1

2. Consumer Behavior—Managing and Understanding the Service Experience

Key Issues
 The three-stage model of consumer behavior applied to services
 Customer expectations
 The service delivery system
 Theatre as a metaphor for service delivery
 Role and script theories applied to services
Required Readings
 Wirtz and Lovelock, Chapter 2

3. Key Element I: The Service Product and Positioning

Key Issues
 Key steps in service planning
 Core and supplementary services
 The Flower of Service—adding value via supplementary services
 Branding of services
 New service development
Required Readings
 Wirtz and Lovelock, Chapter 4

4. Key Element II: Designing the Communications Mix for Services

Key Issues
 Communication strategies for services
 Branding and communications
Required Readings
 Wirtz and Lovelock, Chapter 7

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5. Key Element III: Pricing Services and Revenue Management

Key Issues
 Objectives and foundation for setting prices
 Cost-based, value-based, and competition-based pricing
 Revenue management
 Ethical concerns and perceived fairness of pricing policies
Required Readings
 Wirtz and Lovelock, Chapter 6

6. Key Element IV: Distributing Services

Key Issues
 Distribution channels for services
 Type-of-contact as determinant of channel options
 Global distribution systems
Required Readings
 Wirtz and Lovelock, Chapter 5

7. Service Delivery I: Designing Customer Service Processes

Key Issues
 Blueprinting as a basic tool for understanding and managing service
 Processes
 Service process redesign
 Increasing customer participation
 Balancing demand and capacity
 Minimizing perceptions of waiting time
Required Readings
 Wirtz and Lovelock, Chapter 8

8. Service Delivery II: Designing the Service Environment

Key Issues
 The servicescape model
 Dimensions of service environments
 Engineering customer service experiences
Required Readings
 Wirtz and Lovelock, Chapter 10

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9. Service Delivery III: Managing People for Service Advantage

Key Issues
 Importance of service personnel
 Conflicts in boundary—spanning roles and implications of role stress
 The cycles of failure, mediocrity, and success
 Selection, training, and motivation of service staff
 Service leadership and service culture
Required Readings
 Wirtz and Lovelock, Chapter 11

10. Marketing Implementation I: Managing Customer Loyalty

Key Issues
 The economics of customer retention
 Managing the customer pyramid
 The Wheel of Loyalty
 Loyalty programs
 Customer churn diagnostics and retention
 CRM Strategies
Required Readings
 Wirtz and Lovelock, Chapter 12

11. Marketing Implementation II: Customer Complaints and Service Recovery

Key Issues
 Consumer complaining behavior
 Principles of effective service recovery systems
 The power of service guarantees
 Organizational learning through effective CFSs
Required Readings
 Wirtz and Lovelock, Chapter 13

12. Marketing Implementation III: Improving Service Quality and Productivity

Key Issues
 Defining and measuring service quality
 The quality model: diagnosing service quality failures
 Tools for analyzing and addressing service quality problems
 Return on quality
 Defining and measuring service productivity
 Improving productivity
Required Readings
 Wirtz and Lovelock, Chapter 14

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13. Marketing Implementation III: Building a World-class Service Organization

Key Issues
 Integrating Marketing, Operations and Human Resources
 From losers to leaders—four levels of service performance
Required Readings
 Wirtz and Lovelock, Chapter 15

E. Main Text
 Jochen Wirtz and Christopher Lovelock (2016), Services Marketing, 8th ed., World
Scientific Publishing Co. Inc., United States.

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