Services Marketing and Management, MKT 524 Evening MBA Elective Trimester 1, Fall 2001

Transcription

1 Services Marketing and Management, MKT 524 Evening MBA Elective Trimester 1, Fall 2001 Instructor: Dr. Mary Jo Bitner Office Hours: BAC489, after class and by appointment Contact: Class Times: 8AM-5 PM, Aug 18, Aug 25, Sept 8, Sept 22, Nov 10 Course Description Services dominate the US economy and are becoming critical for competitive advantage in companies across the globe and in all industry sectors. For manufacturers like GE and IBM, services represent their primary growth and profitability strategies into the 21 st century. Almost 40 percent of IBM s current revenues and over 60 percent of GE s current profits come from services. Superior service quality drives the competitive advantage of excellent companies like Charles Schwab, Marriott Hotels, and FedEx traditional service businesses. And the Internet is one big service the success of companies using this channel will depend heavily on the quality of their services from the customer s point of view. The course focuses on the unique challenges of managing services and delivering quality service to customers. The attraction, retention, and building of strong customer relationships through quality service (and services) are at the heart of the course content. The course is equally applicable to organizations whose core product is service (e.g., banks, transportation companies, hotels, hospitals, educational institutions, professional services, telecommunication, etc.) and to organizations that depend on service excellence for competitive advantage (e.g., high technology manufacturers, automotive, industrial products, etc.). In this course you will learn critical skills and gain knowledge needed to implement quality service and service strategies for competitive advantage across industries. You will learn frameworks for customerfocused management, and how to increase customer satisfaction and retention through service strategies. You will learn about service quality and how to calculate customer lifetime value and profitability. You will learn to map services, understand customer expectations and develop relationship marketing strategies. Throughout the course an emphasis is placed on the total organization and how effective marketing and customer focus must be coordinated across multiple functions. An underlying assumption of this course is that students learn best and retain the most through active participation in the learning process. Therefore, classroom sessions will consist of a mixture of short lectures, student discussions of material and assignments, case discussions, media presentations, active learning exercises, and guest speakers. Objectives to gain an appreciation for the unique challenges inherent in marketing and managing services, and developing/delivering quality service; to learn strategies, tools and approaches for addressing the unique challenges of service

2 management and marketing; to develop essential service quality knowledge and skills and be prepared to apply them in an actual business context; to become a more perceptive and effective manager and consumer through understanding the complexities of service design, delivery, and communication; to learn an appreciation of the interfunctional coordination necessary to deliver quality service. to further develop communication skills through written projects, team-based work and oral presentations. Required Text and Cases Services Marketing: Integrating Customer Focus Across the Firm by Valarie A. Zeithaml and Mary Jo Bitner, 2 nd Edition, McGraw-Hill, 2000 Packet: Most of the reading and cases for the class can be found in the text. The following additional items will be provided to you in a reading packet: PeopleSoft (case); Rosenbluth International and Biztravel.com (case); Tales from a Nonconformist Company (reading about Rosenbluth); Northwest Airlines and the Detroit Snowstorm (case). Supplemental Readings for future learning Our time together in this course is very short. We can only begin to cover many of the topics. Many of you will find your interest sparked, and you will want to read and learn more. To facilitate your future learning, you will be provided with a list of optional readings from Fortune, Business Week, and Harvard Business Review and other sources. You will also be provided with a list of services marketing and management books to further develop your knowledge of the course topics in the future. Highly recommended is the book Discovering the Soul of Service by best-selling author Leonard L. Berry, The Free Press, Grading Your grade will be determined based on your performance on the following assignments, described further below. Percent Points Due Learning Journal October 8 Class Participation ongoing Team Project Topic Statement Sept 8 Oral Progress Report Sept 22 Written Report (160 points) Nov 10 Presentation (80 points) Nov 10 Peer Evaluation (10 points) Nov 10 Case discussion/notes P/F see below as assigned Learning Journal Each student will turn in his/her personal learning journal following completion of the first four class sessions. The journal may be turned in anytime after Sept 22, with the absolute due date no later than October 8. The learning journal will include typewritten answers to learning journal

3 questions for each day, included on the syllabus. These should be no longer than 2-3 double-spaced typewritten pages per session. Learning Journals will be evaluated based on: (1) evidence of understanding and ability to apply relevant course concepts; and (2) quality depth, creativity, clarity of analysis and expression. Overall Class Participation Active student participation is essential to the learning process and to the success of the class. Therefore, you will be evaluated on your individual overall participation including attendance, participation in class discussions (including case discussions), and completion of exercises in class. To participate effectively students will read assigned text chapters and complete any out-of-class assignments prior to class time. Because this is an intensive course with limited number of class sessions, each student is expected to attend all sessions. Written Team Project, Presentation and Peer Evaluation Students will work on a final term project in self-selected teams of 4 or 5. The purpose of the project is to apply the concepts and tools learned in class to a real business situation of your choosing. Through the project students will practice oral, written and presentation skills as well as demonstrate knowledge of core services marketing and management concepts. Project topics are due on Sept 8. Each team will turn in the final project and present the project in class during final class session on Nov 10. Students may select their own teams and topics within the guidelines provided. A detailed handout with project guidelines and topic parameters will be handed out separately the first day of class. All team members are expected to contribute to the final project. You will be given some class time at the end of each session to work together as a team. Peer evaluations will be included as part of each team member s final project grade. Cases We will discuss five cases during the course. Case questions are included on the syllabus. You will be given credit for your oral participation in each case session, with the exception of the first case, PeopleSoft, on August 18 this will be a practice case. Each of the four remaining cases will be assessed on a pass/fail basis according to your level of participation points will be deducted from your grade for nonparticipation as described in the next paragraphs. To get full credit for the four cases, you must participate meaningfully in the discussion and turn in your written preparation notes at the beginning of the case discussion (make a copy for yourself so you will have something to refer to during class). Your notes can be handwritten in any form that is useful to you; the notes will not be graded, but rather reviewed to ensure that everyone comes prepared. If you do not turn in case notes for a given case, your course grade will be reduced by 10 points. If you are absent during a case discussion, your course grade will be reduced by 10 points. Thus, if you are absent AND do not turn in notes, you could lose as many as 20 points for each case missed.

4 SESSION 1 AUGUST 18 Preparation and Assignments for Each Class Session Topics: Introduction to SMM Frameworks for Marketing and Managing Services Customer Expectations and Perceptions of Services Preparation: Read Text Chapters 1, 3, 4, 18 PeopleSoft case (for discussion only no notes due for this case) Optional: A Turnaround Tale Business 2.0, December 12, 2000 (this is a recent article about PeopleSoft; can also be found on PeopleSoft s web site under recent news coverage ) PeopleSoft case questions: (1) What is PeopleSoft s product? Based on the case information, why was PeopleSoft so successful? (2) Analyze PeopleSoft s success using the Service Quality Gaps Model Chapter 18 (e.g., evaluate PeopleSoft s strategies for closing the 5 gaps in the model). (3) In your opinion, how can PeopleSoft sustain its growth and success? What challenges does the company face? Learning Journal Questions: Explain Gap 5 in the Service Quality Gaps Model. Why does this Gap occur? AND Apply one of the SMM frameworks (Services Marketing Triangle, 7 Ps, Gaps Model) to analyze a situation of your choosing in your own work environment. What did you learn from analyzing the situation in this way?

5 SESSION 2 AUGUST 25 Topics: Understanding Customers Through Research Customer Relationships/Loyalty/Customer Lifetime Value Strategies for Building Customer Loyalty Preparation: Read text chapters 5,6,7 Northwest Airlines and the Detroit Snowstorm case (for credit/turn in notes case in packet) Northwest Airlines Case questions: (1) Review the following concepts in your text in preparing this case: service recovery (ch 7), service encounter satisfaction (ch 4), service quality dimensions (ch 4), and lifetime value of the customer (ch 6). (2) What exactly went wrong? Why did it go wrong? Who, or what, is responsible the weather, a particular organization, several organizations? (3) What are the potential negative consequences for Northwest resulting from the situation? (4) Could this situation have been avoided? If not could it have been mitigated (and if so, how)? (5) What should Northwest Airlines do in response to this situation? Learning Journal Questions: Explain Gap 1 in the Service Quality Gaps Model. How and why does this gap occur? AND Is the concept of customer lifetime value relevant in your work environment? Why or why not? Compute lifetime value of a typical customer in your work setting. Justify and explain your calculations. What are the implications of this analysis? Apply the concepts presented in the Relationship Strategies Wheel to your work setting or to a past work situation. Which strategies are most relevant and why? Which types of customer research are most appropriate in your work environment? Describe an ideal research program to understand customer expectations and perceptions in this setting. Apply the concept of service recovery to your work situation. Is it relevant? Why? How could you improve your organization s current service recovery efforts?

6 SESSION 3 SEPTEMBER 8 Topics: Developing New Services Service Mapping Employee and Customer Roles in Service Delivery Preparation: Read text chapters 8, 11, 12, 13 Rosenbluth International and Biztravel.com case (for credit/turn in notes case in packet) Tales from a Nonconformist Company (reading about Rosenbluth, in packet) Team project topics due at the end of class Rosenbluth International and Biztravel.com case questions: (1) Why has Rosenbluth International been successful in its core business? Relate what Rosenbluth has done to the Service-Profit chain discussed in your text (pp ). The HBR article Tales from a Nonconformist Company (in your readings packet) is also helpful for understanding Rosenbluth s history and culture. (2) Why has Biztravel been successful to date, and what will it take to keep it successful going forward? What is important to customers doing business with an e-commerce firm like Biztravel? (3) What (if anything) does Biztravel.com do for Rosenbluth International? What (if anything) does Rosenbluth International do for Biztravel.com? Which company does more for the other? (4) What role does the customer play with Biztravel? How is this different from traditional travel services? (5) Compare the per ticket economics for Biztravel, Rosenbluth, and Preview Travel. What are the implications of the differences? What will it take for Biztravel to become profitable? (6) Should Bibeau blow out the high-service strategy? Why or why not? If not, what should he do? If he should blow it out, how should he do it? Learning Journal Questions: Explain Gaps 2 and 3 in the Service Quality Gaps Model. How and why do these gaps occur? AND Draw a service map for an existing service of your choosing (preferably one offered by the company you work for). Draft a memo to the management of the company offering this service explaining what they can learn from it and any implications for how they should manage or change the service. Think of a new service you would like to develop if you were an entrepreneur. How would you go about it? Describe what you would do and where you would get your information. At what stages might you incorporate service mapping and why?

7 Why are service employees critical to the success of any service organization? Describe the four basic human resource strategy themes (presented in chapter 11) and evaluate the importance of each in a context of your choosing (e.g., your own work environment or another company). SESSION 4 SEPTEMBER 22 Topics: Integrated Services Marketing Communication Services Pricing Preparation: Read text chapters 15, 16, 17 GE Medical Systems case (for credit/turn in notes case is in text) Jack s Encore (reading about GE can be found at: GE Medical case questions: (1) What are the primary components of Jack Welch s current growth strategy, or the Third Revolution at GE? Why is GE shifting into services? What are the challenges GE faces in its Third Revolution? (2) What are the services offered by GE Medical Systems? Who are their customers? What trends in the industry will affect their future growth? (3) Describe TiP and the philosophy/strategy behind it. What are the goals of TiP? How does it fit GEMS overall strategy? (4) Why has TiP TV been so successful? What are the benefits to customers? Does GEMS have a sustainable competitive advantage in TiP TV? (5) Analyze the effectiveness and benefits of GEMS service guarantee for on-site applications training. (6) Although TiP-TV can be purchased on a stand-alone basis, the majority (80%) of subscriptions sold include a GEMS service contract that masks the fee for TIP-TV. What must GEMS do to transition its customers from a free to a fee mentality? How can it overcome customer (and sales person) resistance to accept the need to pay for educational services? What are the arguments for and against free vs. fee? (7) Should GEMS consider moving the TiP customer education organization from a cost center (with the primary goal of customer satisfaction) to a P&L center? What are the implications and challenges? Learning Journal Questions: Explain Gap 4 of the Service Quality Gaps Model. How and why does it occur? AND Choose a service you are familiar with. Explain the service offered and develop a good service guarantee for it. Discuss why your guarantee is a good one, and the benefits to the company of implementing it. Many organizations and companies now firmly believe that it is not enough to satisfy customer; rather they must work to delight customers by exceeding their expectations. Discuss the pros and cons of embracing a strategy of exceeding customer expectations.

8 If you work in a manufacturing organization, what is the relevance of customer service and services to your company? Can a manufacturing organization have a service culture? SESSION 5 NOVEMBER 10 Topics: Technology and Service Course Conclusions Project Presentations Preparation: Ernst & Young and the Quality Improvement Customers Didn t Want cases (for credit/turn in notes cases are in text) Project Presentations Written Projects and Peer Evaluations Due Ernst & Young and Quality Improvement case questions: Background and issues (1) Describe the concept behind Ernie (customer benefits, market segment, positioning within E&Y s service offerings, goals). What services are offered through Ernie? (2) How was Ernie developed? Compare the process used to the new service development steps described in Chapter 10. (2) What are some of the challenges in marketing a totally new concept like Ernie? What lessons did E&Y learn along the way? (4) Examine the pricing strategies for Ernie. How do you believe prices for this type of service should be determined? (5) Describe the basic situation in the Quality Care case. What decision is Allan Moulter facing? What are the issues, challenges and tradeoffs? (6) Information technology is a powerful force in shaping service strategies. Used appropriately, it can increase customer satisfaction, improve efficiency, reduce costs, support front line staff, and even radically change how services are delivered. Decisions Compare and contrast the use of technology in the Ernst & Young case with the proposed computerized reception system in the Quality Care case. (7) What would you do if you were Allan Moulter at Quality Care? (8) Much of Ernie s success is credited to the uniqueness of the service and the intense interest in the Internet. It is likely that competitors will introduce offerings similar to Ernie. How can Ernst & Young sustain its competitive advantage and differentiation? What role will marketing play?

9