Services Marketing

Chapter 15:
Striving for
Service Leadership

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 Overview of Chapter 15
Services Marketing

The Service-Profit Chain

Integrating Marketing, Operations, and Human Resources

Creating a Leading Service Organization

In Search of Human Leadership

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 Services Marketing

The Service-Profit Chain

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 The Service-Profit Chain
Services Marketing

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 Links in the Service-Profit Chain
Services Marketing

8. Top
2. Customer 5. Employee 6. Employee
1. Customer 3. Value 7. Internal management
satisfaction 4. Quality and loyalty drives satisfaction
loyalty drives drives quality drives leadership
drives productivity service drives
profitability customer employee underlies the
customer drives value quality and employee
and growth satisfaction satisfaction chains
loyalty productivity loyalty
success

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 Firm Value Created by Customer
Satisfaction
Services Marketing

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 Qualities Associated with
Service Leaders
Services Marketing

Understands mutual dependency

among marketing, operations, and
human resource functions of the
firm

Has a coherent vision of what it

takes to succeed

Strategies are defined and driven by

a strong, effective leadership team

Responsive to various stakeholders

Value created through customer

satisfaction

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 Services Marketing

Integrating Marketing,
Operations, and
Human Resources

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 Defining the Three Functions
Services Marketing

Target right customers and build relationships

Marketing Offer solutions that meet their needs
Function Define quality package with competitive advantage

Create, deliver specified service to target customers

Operations Adhere to consistent quality standards
Function Achieve high productivity to ensure acceptable costs

Human Recruit and retain the best employees for each job
Resource Train and motivate them to work well together
Achieve both productivity & customer satisfaction
Function

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 Reducing Interfunctional Conflict
Services Marketing

One challenge is to avoid creating functional silos

High-value creating enterprises should be thinking in terms of activities,
not functions

Top management needs to establish clear imperatives for each

function that defines how a specific function contributes to the
overall mission
Interfunctional transfers will Appointing formally designated
provide a holistic perspective individuals to integrate
for individuals objectives
Establishing integrated project Internal marketing and training
teams
Commitment of top
Having interfunctional service management
delivery teams

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 Services Marketing

Creating a Leading
Service Organization

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 From Losers to Leaders: Four
Levels of Service Performance
Services Marketing

Bottom of the barrel

Service Patronized because there is no viable alternative
New technology introduced only under duress; uncaring
Losers workforce

Dominated by a traditional operations mindset

Service Unsophisticated marketing strategies
Consumers neither seek out nor avoid them
Nonentities
Clear market positioning strategy such that customers
Service within target segment(s) seek them out
Proactive, investment-oriented approach to HRM
Professionals
The crme da la crme of their respective industries
Service Names synonymous with outstanding service, customer
delight
Leaders Employees are empowered and committed

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 Four Hurdles for Moving up the
Performance Ladder
Services Marketing

Cognitive Hurdles
People cannot agree on causes of current problems and the need
for change

Resource Hurdles
Firm is constrained by limited funds

Motivation Hurdles
Prevent rapid execution when employees are reluctant to change

Political Hurdles
Organized resistance forces in forms from powerful vested
interests seeking to protect their positions

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 Leading Change in a Service
Organization Involves 8 Stages
Services Marketing
6. Producing 7. Building
1. Creating a sense
sufficient short-term momentum and
of urgency to
results to create using that to tackle
develop the impetus
credibility and tougher change
for change
counter cynicism problems

8. Anchoring new
2. Putting together a 5. Empowering
behaviors in
strong enough team employees to act on
organizational
to direct the process that vision
culture

3. Creating an
appropriate vision of 4. Communicating
where the that new vision
organization needs broadly
to go
Source: John Kotter

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 Services Marketing

In Search of
Human Leadership

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 Leadership vs. Management
Services Marketing

Leadership Management

Development of vision and strategies, Keeps current situation operating

and empowerment of people to
Setting direction through planning,
Planningbudgeting,
overcome obstacles, make vision organizing, staffing, controlling, and
happen
Creating visions and strategies that problem
A solvingprocess designed to
management
describe a on
Emphasis business,
emotionaltechnology, or
and spiritual produce orderly
Emphasizes results,
physical not change
resources
corporate culture
resources Works through hierarchy and systems
Works
In terms of whatpeople
through it should
andbecome
culture Keeps current system functioning
over long term and articulating
Produces useful change, especially
feasible way of achieving goal
non-incremental change

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 Individual Leadership Qualities
Services Marketing

Love for the business Make communication a

priority
See service quality as
foundation for Work with a team on
competing decision-making
Recognize key role of Know when to change
employees when necessary
Driven by a set of core Walk the talk
values they pass on

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 Leadership, Culture, and Climate
Services Marketing
Leadership
Leadership traits are needed of everyone in supervisory or
managerial positions, including those heading teams

Organization Culture
Represents the shared
Perceptions/themes regarding what is important
Values, beliefs, and assumptions
Shares understanding about what works and what doesnt work
Styles of working and relating to others

Organizational Climate
The tangible surface layer on top of the organizations underlying
culture that requires radical rethinking of:
HRM activities
Operational procedures
Firms reward and recognition policies
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 Summary
Services Marketing

Service profit chain provides summary of relationships between

key variables that explain service leadership

Four levels of service performance

Service losers Service professionals
Service nonentities Service leaders

Service leadership must cut across marketing, operations, and

human resources
Leaders need to understand the difference between leadership
vs. management, as well as setting direction vs. planning
Leaders play a big part in nurturing an effective organizational
culture that moves an organization towards service leadership

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