Service Writing - A Review of Popular Brands and Their Importance

Transcription

1 Accepted for publication by the Journal of Services Marketing, forthcoming, Vol. 20, No. 1, 2006 Three perspectives on service management and marketing: rival logics or part of a bigger picture? David Ballantyne Associate Professor Department of Marketing University of Otago Dunedin, New Zealand dballantyne@business.otago.ac.nz April, 2005

2 Three perspectives on service management and marketing: rival logics or part of a bigger picture? Abstract Purpose: To locate the underlying service logic of each of three leading texts and examines points of variance. Design/methodology/approach: A critical review and comparative analysis of the main tenets of each text. Findings: Each text combines a service perspective and a relationship perspective to marketing management. Each author seems to favour a service perspective on some issues but at other times a relationship perspective. This apparent epistemological pluralism is resolvable and a pathway to synthesis suggested. Practical implications: What stands out in a critical reading of these texts is the provocation offered to readers to go beyond the limits of services marketing orthodoxy. In this there are implications for pedagogical development. Originality/value: Gives insights into the current debate on development of a more broadly based service-dominant logic of marketing. Paper type Conceptual paper Key words: Continuous learning; customer relationship management; integrated marketing communications; internal marketing; service-dominant marketing logic; values-driven leadership. Introduction This is a comparative analysis of three recent texts in the service management and marketing literature. The authors are all well known and respected as leading contributors to marketing theory and practice. To varying degrees, all three texts bring a service perspective and a relationship perspective to their subject matter. In other words, the authors have chosen to bring both service and relationship perspectives together as one. My interest in this article is to locate the underlying dominant logic of each author based on the evidence of the text. My approach is essentially interpretive I review each text in turn, outline the main features of each, and locate the underlying common logic and points of variance with practical implications in the context of an emerging service dominant marketing theory. The three authors are: Berry, Leonard L. (1999) Grönroos, Christian (2000) Storbacka, Kaj and Lehtinen, Jarmo R. (2001) 2

3 Berry (1999): Discovering the Soul of Service: The Nine Drivers of Sustainable Business Success Len Berry is professor of marketing and director of the centre for retailing studies at the Texas A &M University, and a prolific author. He is one of the early and respected pioneers in developing services marketing thought. In this, his latest text (1999), he highlights the importance of humane values in sustaining excellent business performance. His thesis is based on more than 250 in-depth interviews at 14 outstanding service companies. From these, Berry derived nine drivers for sustainable success, which taken together, account for the title of his book, Discovering the Soul of Service. Berry s nine drivers for sustainable success are: Values-driven leadership Strategic focus Executional excellence Control of destiny Trust-based relationships Investment in employee success Acting small Brand cultivation Generosity According to Berry, the greater the involvement of people in creating value for customers, the greater the service challenge becomes to operating effectively, especially when growing rapidly or when markets are competing on price (p.10). Also there is a very real challenge in retaining the initial entrepreneurial energy of the start up company. Because a service company s success is a function of its past performance and customer perceived reputation, expansion tends to create problems of scale, quality dilemmas, and supervisory complexity. These issues in turn test the strategic focus of the firm and any values-driven leadership that supports it. Berry claims his nine drivers of success in service businesses are interrelated and transcend the particulars of any one kind of business (p.16). He goes further when he asserts that these drivers are the humane values needed to sustain any service business over time, and that they impact not only customers but also employees, suppliers and the broader communities in which they are represented. It is through these humane values that Berry seeks to discover the soul of service I will briefly discuss each of his nine drivers of sustainable success in turn. Values-driven leadership The core values of Berry s exemplar companies were excellence, innovation, joy, teamwork, respect, integrity, and social profit. Of these, social profit is perhaps the most interesting. Berry defines social profit as occurring when the actions of companies produce net benefits to society beyond the marketing of goods and services and the creation of employment opportunities [which are] the necessary instruments of economic profits (Berry, 1999, p.36). Many businesses of course are involved in community 3

4 support programs but the strategic intent here is central to organisational purpose and mission. The critical point that Berry has gleaned from his research is that good works are not just a dividend to the community from a firm s economic profits but good works are a contributor to those economic profits. Whatever the particular core values of leaders, they need to be demonstrated in action and connect with employees aspirational values to sustain high levels of employee discretionary effort. These values are a company s reason for being, and a foundation for the other eight success drivers which follow. Strategic focus Values provide the focus and strategy is the means of their achievement. Berry distinguishes between core strategy which seldom changes, and the crafting of substrategies that reflect changing business activities and their design and redesign. What is interesting is that in Berry s sample companies, the core strategies share some common traits: a market-focus rather than a product-focus, a tendency to serve underprovided market needs, and to do so in a superior manner. These core strategies are implemented through sub-strategies and market offerings. The key point is that core strategies are fairly stable over time whereas sub-strategies change in response to innovation and market need. Executional excellence Berry s sample companies show a deep concern for continuous improvement; that is, learning from what has gone before. This included finding the right people to deliver the service, people whose personal values match the core values of the company. Also, as front line service performance can be stressful work, this needs to be recognised and worked through within organisations. Berry also recognises the power of managing physical cues to set service expectations. For example, leather seats, and attention to meal service, when taken together, become signature cues that Midwest Express airlines cares about their customers flight experience (p. 91). Service customisation, managing fluctuating demand patterns, active and continuous listening to customers by means of a suite of research instruments and monitors, and a permanent procedural structure for continuous improvement which involves many levels of employees in the formal review processes are all part of sustainable business success and part of the basics of service management covered in Berry s earlier texts on service quality. Nevertheless, they are lessons that need repeating. Control of destiny Control of destiny means staying centred on the customer. In addition, a certain independence of spirit is required that enables innovative action, yet resisting the temptation to grow fast, to follow the competition mindlessly, or to broaden strategic focus at the expense of maintaining excellence (p. 112). One attribute of the research sample of companies that stood out was that many of them seemed to act like private (family owned) companies rather than large public 4

5 organisations. Berry puts this down to exceptional leadership (p. 117). There also seems to be an historic imprint still at work, from the times when the early owners acted out the core values, and these have over time become culturally embedded. This characteristic seems to extend to an almost obsessive control of processes in the entire value chain, which leads some of the sample companies to refuse to outsource, indeed, to bring everything that is strategically critical to customer value creation in-house. Trust-based relationships Trust based relationships provide confidence for interaction between key stakeholder groups. In Berry s sample companies, this means between a company and its customers, its suppliers, and its employees. In customer relationships, gains might come in the form of the relatively lower cost of keeping customers rather than going out and getting new ones. In supply relationships, the practical benefit of trust becomes visible through the sharing of information and resources with consequential cost savings. For Berry, trust is the basis of all relationships and this takes hold when specific business interactions cease to be viewed in isolation and start to be seen as a progression of past experiences likely to continue into the future (Berry, 1999, p.124). In other words, a tipping point is reached when trust develops sufficiently to give structural support for exchanges of value in the future. Investment in employee success Many firms treat employees as interchangeable units of production and are loath to invest in superior performance. However as Berry explains, The sample companies invest in personnel who stay rather than save [in skills and knowledge development, etc] on those who leave (Berry, 1999, p. 159). These investments aim at a strong sense of beginning, continuous learning, and a shared sense of ownership in the company and its aspirations. There are parallels here with earlier performance formulations by Berry and his colleagues especially the people component of the now classic SERVQUAL (service quality) assessment model of Parasuraman, Zeithaml and Berry (1988). Much of what employees can do or could do in service interaction with customers is constrained by the policies and procedures that direct their actions. Berry s conclusion is that customer success is a function of the employee sense of success (Berry, 1999, p. 181). Yet this may be overstating the case. Not all employee satisfiers connect to external customer satisfaction (Ballantyne, 1997, p. 356). Management might for example be pulling the wrong levers and ignoring other critical customer impact issues. Acting small Berry recommends that exemplar firms constantly challenge and change the way they do business, at the detail level, to make it easy for customers to deal with them. Acting small means a willingness to tackle a multitude of job design policies and technical procedures which do not adequately serve the customer. In growing enterprises, it is more difficult to keep acting small without making a special effort. However, in Berry s formulation, challenging and changing the rules becomes an antidote to bureaucratic inertia. 5

6 Brand cultivation The common view is that service offerings are intangible, heterogeneous, and produced and consumed at the same time. The meaning of brands in a service context therefore has particular significance, because the provider company is the brand, and the integrity of the brand is the integrity of the company. In other words, to experience the service product is to know it. The more a service dominant logic underpins a firm s offer, the more the shift from product brand to company brand takes hold (p. 199). Also, in relatively labour intensive service businesses, human interaction with customers has a critical role in building and positioning a brand. In my view, these issues are not widely understood by practitioners. Generosity In using the term generosity Berry has in mind a firm s community obligation to be fair in policies and practices, and how this impacts on its financial performance as part of a virtuous circle (p. 217). For Berry, generosity is not an outcome of success but a critical input. This is strategic philanthropy, where generous acts benefit the company as well as the recipients, strengthening the organisation and its stakeholder community. Interest in broadening a firm s stakeholder group has attracted considerable comment in the strategic management literature since the publication of an influential text by Freeman that contained a deceptively simple but broad definition of stakeholders, viz....all of those groups and individuals that can affect, or are affected by, the accomplishment of organizational purpose (Freeman, 1984, p.46). Discussion How do great service companies stay great? The evidence from Berry s sample companies is that each of the nine drivers contributes something important to sustainable success. However, taking the nine drivers together, as a coordinative system, they become a success sustainability model. Some caveat to the viability of the model is appropriate and it is provided by Berry sustainable success requires above all and in addition to the nine drivers extraordinary leadership, commitment and determination. This is another way of saying values-driven leadership which returns us appropriately to the beginning, in a continuing cycle of leadership based on action and reflection. Storbacka and Lehtinen (2001): Customer Relationship Management: Creating Competitive Advantage through Win-win Relationship Strategies Kaj Storbacka is a past professor at the Swedish School of Economics and Business Administration in Helsinki and Jarmo Lehtinen is an associate professor at the University of Tampere. Together these authors bring a Nordic School sensibility to service management and relationship marketing in their writings, but as also they have extensive practical experience in customer relationship management (CRM), their approach has some unique features. Storbacka and Lehtinen assert that CRM is not a software system but a way of enabling people to work effectively with customers. The task as they see it is to win the hearts, 6

7 minds, and patronage of customers, and build longevity into relationships. What stands out immediately is that the authors differ in their perspective from many CRM commentators because it is their intention to provoke strategic marketing thinking and innovative practice. They also stand apart from technology-driven expert providers of CRM systems who confuse the nature of customer relationships with statistical relationships between data points. The main features of their approach follow. Relationships as processes Storbacka and Lehtinen choose to view relationships as processes because relationships may contain (or support) many encounters (or episodes) over time. The idea that a relationship is a process is epistemologically contestable, however Storbacka and Lehtinen wish to emphasise that a broadening of all kinds of mutual benefits and cost savings (not just gaining recurrent sales) will help the longevity of the relationship through which both sides win. As the authors say, Without a thorough understanding of value creation, it is difficult to develop a relationship which is beneficial to both customer and provider (Storbacka and Lehtinen, 2001, p.6). In other words, the question becomes what is my customer trying to do, and can I help improve on it? This approach makes clear that the provider is concerned with transferring competence, in whatever form useful to the customer. Given this, any discussion about whether the offering is a product or a service becomes redundant, and traditional product differentiation becomes a special form of process differentiation (p.11). Storbacka and Lehtinen summarise their perspective on CRM on this way: To emphasise a catalyst role for helping customers to create value for themselves To participate in customer value creation as a process, where exchange includes the interaction between provider and customer, and not just a product or service in a finished sense To develop strong relationships with customers with the intent of expanding the possibilities for more customer value creation. In other words, the first principle is a particular customer orientation, the second is a coproducing activity with customers, and the third is a relationship sustaining principle, setting up conditions for a recurrence of the cycle. As the authors explain, a customer relationship consists of (or contains) everything the provider and customer do together (p. 9). Different phases of customer relationships Different phases of the customer relationship cycle require different strategic emphases to increase relationship value. To sort out the opportunities and costs, the authors define separate phases for establishing, enhancing and ending a relationship (p. 68). Here are some comments: 7

8 In the establishing phase, exchanging knowledge and building an appropriate emotional connection is the priority (p. 69). There are various transition points in people s lives (like first job, getting married, etc) when needs are greater, and so a provider s offering may be of critical interest depending upon whether it relates well to those life transitions, or to change-points specific to particular individuals (p. 72). The authors mention a number of ways to build up knowledge of customers behaviour, such as developing affinity groups with an emotional connection (one well known example of this is the Harley Davidson cycle clubs), and using spearhead tactics which involve offering potential customers a way to trial a particular element of the broader offering. One observation I make here is that whatever the relationship strategy, trusting and being trustworthy is critical, and this involves making difficult judgments often with insufficient information about integrity, capability and commitment (Ballantyne, 2004). In the enhancing phase, resources are directed to deepening the value of what is exchanged, and to shifting from a customer satisfaction focus to a relationship strength focus. Satisfaction is not easy to measure, as the authors point out. For a start, there are methodological complexities in measuring customer service experiences against their expectations, even allowing for various tolerances on some attributes that customers may permit (p. 82). Furthermore, past customer satisfaction is not an adequate predictor of future customer loyalty because there is always the prospect that better competitor offers may tempt the customer. There is also the ever present prospect that the next cycle of interaction with the customer might fail in critical encounters (Storbacka and Lehtinen, 2001, p ). Relationship bonds may of course allow for a degree of dissatisfaction from time to time without threatening the relationship. Customers who are in the ending a relationship phase may send early signals such as complaints, decreased interaction and purchasing behaviour (p. 91). Complaining customers can be difficult to deal with but this is an opportunity to discover the source of their difficulty and perhaps take corrective action at the level of policies and procedures in other words, other customers may be experiencing the same difficulty and these relationships might be saved before the problem reaches distress levels. When customer relationships come to an end it will be because one party or the other no longer sees the value in it. For a provider, ending a relationship is a time for reflection on the cost of lost future earnings, and contemplating the likelihood of negative word of mouth yet to come (Storbacka and Lehtinen, 2001, p.92). Relationships and strategies Storbacka and Lehtinen claim that the most effective relationship strategies develop from knowledge of the customers value creation processes. However, this takes us to the heart of the strategic fit philosophy that they are advocating. As a guide, the authors discuss their recommended strategy options evocatively as Clasp, Zipper and Velcro. This division of three types is bases on the assessed degree of customer adaptation required relative to the degree of provider adaptation. They claim the Clasp strategy to be the most common, as this involves the customer adapting to the provider s process. The Zipper is based on mutual adaptation and the authors see this as a special case, as in various B2B partnerships. Last, the Velcro strategy involves the provider adapting to the customer processes and here the authors caution against wide-scale use of this approach on the grounds of cost and complexity to manage. The idea of the customer adapting to the provider s process, as in the Clasp strategy, warrants critical comment. This seems to signal a wavering of strategic intent, given that 8

9 the competency of the provider is on trial in making or initiating the particular kind of value creating adaptation. Or are the authors merely being pragmatic in saying that it is the customer who must do most of the adapting, most of the time? The answer seems to be that companies should make conscious decisions about what kinds of relationship strategies they want to pursue and communicate these strategies to the customer in an intelligible way (Storbacka and Lehtinen, 2001, p.112). On the other hand, a customer might also have some strong words to say on the matter! It seems that customers who sense an arrogant, inflexible provider may not stay around if they have to do all the adapting. It is easy to see how the Clasp strategy badly managed could descend into production-oriented conflict, although this is not what the authors are advocating. Relationships that have similar structural profiles become portfolios for strategy setting and for analysing the value of the customer base (or the data base in CRM software systems). The point of particular interest to the authors is that different relationships will have different revenue and cost profiles (Storbacka and Lehtinen, 2001, p. 43). These two factors plus customer longevity determine relationship profitability. Relationships and structure The authors set out a number of technical pointers to examine what they call the structure of a customer relationship. Understanding the experience of a customer through many past acts and episodes helps explain the state of the relationship existing between the customer and the provider at any particular point in time, and may help predict future patterns of activity as well. There are opportunities for data gathering at customer interaction points in the process, points located at specific times and places. Once a firm understands the nature of the activities that are of value to the customer, they can make improvements or take steps to fix weaknesses, or eliminate unwanted steps in the process and thereby improve cycle time and reduce costs (p. 43). These ideas follow TQM s concept of value transfer achieved through linked processes or value chains (Oakland, 1989). Analysis of the value of a customer to the firm is usually an attempt to differentiate between profitable and unprofitable relationships. This is not as straight forward as it may at first appear because most companies do not have adequate information capture systems. Even with state of the art CRM software, the information needed may still be beyond the reach of capture, or perhaps the cost of capture outweighs the benefits. This is an ongoing concern and many CRM software systems are currently well short of payback or breakeven. Discussion As Storbacka and Lehtinen acknowledge, their interest is the potential for matching customer value creating processes and provider processes, in a disciplined way at the strategic level, at the customer interface, and in operational knowledge management support. Their perspective involves a shift in the traditional concept of marketing exchange, to remove the nexus between transactions and exchange, and allow for the inclusion of unexpressed customer needs and all kinds of future value previously outside discrete transactionally determined time horizons. Overall, the authors logic follows the path chosen by Norman and Ramirez (1993) in seeking a strategic fit between customer relationships and organisational competencies. 9

10 Gronroos (2000): Service Management and Marketing: A Customer Relationship Management Approach Christian Gronroos is a professor of marketing and chairman of the Centre for Relationship Marketing and Service Management (CERS) at the Hanken Swedish School of Economics and Business Administration in Helsinki. He is the author of many leading edge texts and articles in service management marketing and one of the earliest influential researchers in relationship marketing. This second edition text (2000) is based in part on an earlier seminal work (1990), and it is easy to see how it might appeal to new readers as a totally new book (Gronroos claims as much in his preface). On the other hand, it remains grounded in the Nordic School tradition in its emphasis on interactions at the customer interface between the customer s value generating processes and service production/delivery processes. In the first edition this was expressed as managing the moments of truth and in the second a broader overall framework emerges consistent with the first, but expressed this time as customer relationship management. In my view, the use of the term CRM, or customer relationship management is not especially helpful in conveying the integrated meaning Gronroos intends. This is because technology issues now dominate much of the understanding of CRM. However, for Gronroos, customer relationship management is strategic and aligned with the term relationship marketing. He explains his intended meaning as:... (managing) the whole relationship between a firm and its customers, with all its various contacts, interactive processes and communication elements (Gronroos, 2000, preface, viii) Operationally, Gronroos sees managing customer relationships as a triangulation of promises. First there is giving promises (making value propositions to customers), then keeping promises (delivering value in interaction with customers) and also enabling promises (continuous development in operational excellence and internal marketing). In this way, keeping valuable customers becomes as important as getting them in the first place; and the advocacy of existing customers becomes an important source of new business. This is a large, comprehensive book, so I intend to comment on what I see as his key concepts. Then will follow some comments on Gronroos approach to integrating marketing communications, which I see as the most interesting new development since his first edition. Six rules of service Gronroos has distilled six rules of service (2000, pp ) as follows: 1. The service mindedness of employees 2. Demand/capacity assessment involving the knowledge of the front line staff 3. Flexibility in customer/supplier interactions as a function of quality control. 4. Marketing and the role of the part-time marketer 10

11 5. New technology diffusion, efficiency and customer perceptions of value 6. Guidance support and encouragement of senior management. This is a normative listing and perhaps the last of these is the most important as a leadership factor (discussed also by Berry). As he puts it, barriers to achieving a service oriented approach relate to an outdated management philosophy and old (rigid) organisational structures (Gronroos, 2000, p. 383). He also emphasises that senior management are often unaware of the critical facilitating role that non-marketers have in the creation of value in any service oriented businesses. Integrated marketing communication In this new edition, Gronroos emphasises the need for integrated communications which support customer relationship management. Comments made earlier which give emphasis to making promises, keeping promises and enabling promises make especially good sense in this communications context. The author discusses what he calls a relationship dialogue process (Gronroos, 2000, pp ) in which various processes interconnect over time (see Figure 1). First, there is a planned customer communication process. This is essentially one way communication, or persuasive message making. Second, there is interaction, where customer value is created between provider and customers. Third, one-way planned communications and two-way interactions support the customer value creation process as messages from one part of the communication process reinforce messages from the other. Also, any negative experiences the customer has with the offering in use can be reported back to the provider company. Finally, where appropriate, the parties might go deeper into value co-creation, and learn from each other in dialogue. It is this final point that seems to contain seeds for future development. Figure 1 The relationship dialogue process BEGINNING OF THE PLANNED COMMUNICATION PROCESS BEGINNING OF INTERACTION PROCESS VALUE PROCESS EPISODES IN AN INTERACTION PROCESS SALES ACTIVITIES DIRECT MARKETING ACTIVITIES SALES PROMOTION ACTIVITIES MASS COMMUNICATION ACTIVITIES 11

12 Source: Grönroos (2000) Discussion A core product strategy is seldom enough to achieve or sustain competitive advantage in today s markets, whatever the firm s business may be. Instead, Gronroos argues that any firm needs to offer and communicate service solutions to connect with the customer s value generating processes. Thus all firms become service firms. Further, as services are inherently relational (derived from the dynamics of interaction), he sees no conflict between a service perspective and a customer relationship management approach. A relationship perspective was also part of the author s original text (see for example, Gronroos, 1990, pp ). However, this second edition leaves no doubt that he sees relationships as pivotal in effective service management and marketing. Comparative analysis of perspectives What stands out in a critical reading of these texts is the provocation offered to readers to go beyond the limits of services marketing orthodoxy. Getting to the essence of an effective service business philosophy is the common agenda of each author, but with differing emphasis. I see Berry s work as a treatise on values-based service leadership where relationship development between management and employees becomes part of the means to achieve better customer relationships and service success. What stands out in Storbacka and Lehtinen is the operational emphasis to managing customer relationships which aims to find new ways to connect the value creating processes of both provider and customer. For Gronroos, a broadly based service perspective and customer relationship management go hand in hand, and he would advocate that this applies to manufacturing firms as well as service firms. Berry s executive leaders are exemplars endowed with family-based values. This may well be the source of inspirational leadership. Storbacka and Lehtinen s perspective is more calculative and managerially pragmatic, based as it is on reasoned evidence of the profit profile of various customer relationships. Their view is that value creation must combine the development of relationships with customers with a transfer of competencies to customers. On the other hand, Gronroos takes a democratic managerial stance, calling for sensitivity to changing business contexts as well as an appreciation of the limits of any managerial action that does not carry employee and customer relationships along with it. Technology based CRM? In many ways the relationship sustaining promise of CRM technology is deceptive. Customer data can certainly be captured, warehoused and mined for internal circulation. Yet firms do not just capture and process information from the market and adapt to it. To generate new knowledge, organisations must also reshape (or reframe) common assumptions within the firm on which their existing knowledge is built (Zuboff, 1988). To say that this is a matter of culture change is to abstract the nature of the problem and the solution. As Storbacka has noted, the problem is that company know how (competencies) may expire at a faster rate than technology based customer relationship knowledge. As to the sustaining of know-how, the authors all stress continuous learning and internal marketing. However as this is often a disputed marketing responsibility, there is a role for a cross-functional approach within the firm, where continuous learning and knowledge renewal become a collaborative activity rather 12

13 than a stand alone departmental effort (see for example, Ballantyne, 2003; Varey and Lewis, 1999). Rival logics? Putting all this together, I see Berry s perspective as leadership centred, one in which the transformational approach of the leader makes a difference within the firm, and between the firm and its customers. This is similar to what Tichy (2002) has called a virtuous teaching cycle, where a combination of strategy, values and emotion are acted out and the results then selectively used to determine the next steps. The main theme in Storbacka and Lehtinen is an elaboration of the logic and operational techniques for use by managers within a customer relationship strategy. Their book hardly mentions CRM technology and yet the role of technology might be expected to dominate a CRM text. Having said that, it is clear to the reader where technology interfaces might be located as enablers. Gronroos perspective sits between the other two, with his customer relationship approach evolving from the service logic he has adopted. For Gronroos, service is unavoidably relational, which is a consequence of customer/supplier interaction, thus a service perspective requires a customer relationship approach. In a related way, Vargo and Lusch (2004a, b) have recently proposed a view of marketing where value is co-created through service experiences and relationships in the sharing of resources, which leads to the production of goods. Furthermore, goods function as service distribution mechanisms, post-sale. In other words, service is dominant. This service dominant challenge to marketing orthodoxy is gaining attention in academic circles, with special sessions scheduled at the American Marketing Association s summer conference (2004), the European Academy of Marketing s annual conference (2005), and the Australia and New Zealand Marketing Academy annual conference (2005). Taking a three-way view of the dominant service logics expressed in the texts under review in this article, it comes down to this: Berry s thesis is concerned more with what managers can do, Gronroos more with why they should do it, and Storbacka more with how it should be done. The authors are not in conflict with each other, and each makes a complementary contribution to our understanding of service concepts and relationship values in marketing, in what is emerging as a new theory-based pedagogical development in marketing. References Ballantyne, David (1997), Internal networks for internal marketing, Journal of Marketing Management, Vol. 13, pp Ballantyne, David (2003), A relationship mediated theory of internal marketing, European Journal of Marketing, Vol. 37, No. 9, pp Ballantyne, David (2004), Dialogue and its role in the development of relationship specific knowledge, Journal of Business and Industrial Marketing, Vol. 19, No. 2, pp

14 Berry, Leonard L. (1999), Discovering the Soul of Service: The Nine Drivers of Sustainable Business Success, Free Press, New York. Freeman, R. E. (1984), Strategic Management: A Stakeholder Approach, Pitman, Boston, MA. Gronroos, Christian (1990), Service Management and Marketing, Lexington, Lexington, Mass. Grönroos, Christian (2000), Service Management and Marketing: A Customer Relationship Management Approach, Wiley, Chichester. Holmlund, M. (1997), Perceived quality in business relationships, Center for Relationship Marketing and Service Management (CERS), Swedish School of Economics and Business Administration, Helsinki, Finland, Report No. 66, p. 96. Normann, R. and Ramirez, R. (1993), From value chain to value constellation, Harvard Business Review, July-August, pp Oakland, John S. (1989), Total Quality Management, Heinemann, Jordan Hill, Oxford. Parasuraman, A. Zeithaml, V. A. and Berry, L. L. (1988), A multiple item scale for measuring consumer perceptions of service quality, Journal of Retailing, Vol. 64, Spring, pp Storbacka, Kaj and Lehtinen, Jarmo R. (2001), Customer Relationship Management: Creating Competitive Advantage through Win-win Relationship Strategies, McGraw Hill, Singapore, Tichy, Noel M. and Cardwell, Nancy (2002), The Cycle of Leadership, Harper Business, New York. Varey, Richard and Lewis, Barbara (1999), A broadened conception of internal Marketing, European Journal of Marketing, Vol. 33, No. 9-10, pp Vargo, S. L. and Lusch, R. F. (2004a), Evolving to a new dominant logic for marketing, Journal of Marketing, Vol. 68 (January), pp Vargo, S. L. and Lusch, R. F. (2004b), The four service marketing myths: remnants of a goods-based manufacturing model, Journal of Service Research, Vol. 6, pp Zuboff, S. (1988), In the Age of the Smart Machine, Basic Books, New York, N.Y. 14

15 About the Author David Ballantyne PHD (Hanken), M Mgmt (Monash), Grad Dip Org Beh (Swin) David Ballantyne is an associate professor of marketing at the University of Otago, and an International Fellow at the Centre for Relationship Marketing and Service Management, Hanken Swedish School of Economics in Helsinki. He is a co-author with Martin Christopher and Adrian Payne of Relationship Marketing: Bringing Quality, Customer Service and Marketing Together (1991), the first text published internationally in this now expanding field of marketing inquiry. A second edition was published in 2002 as Relationship Marketing: Creating Stakeholder Value. David is a past director of the Total Quality Management Institute of Australia, and has held senior executive positions in marketing research, public relations, strategic marketing and service management. He is a member of the editorial review boards of the Journal of Business-to-Business Marketing, Management Decision, and the International Marketing Review. His research interests are internal marketing, services marketing, B2B marketing, and dialogue as a co-creative learning mode in marketing practice. address: dballantyne@business.otago.ac.nz 15