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Journal of Services Marketing

Three perspectives on service management and marketing: rival logics or part of a bigger picture?
David Ballantyne

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David Ballantyne, (2006),"Three perspectives on service management and marketing: rival logics or part of a bigger picture?",
Journal of Services Marketing, Vol. 20 Iss 1 pp. 73 - 79
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(1984),"A Service Quality Model and its Marketing Implications", European Journal of Marketing, Vol. 18 Iss 4 pp. 36-44 http://
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(1994),"From Scientific Management to Service Management: A Management Perspective for the Age of Service Competition",
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Review article

Three perspectives on service management


and marketing: rival logics or part of a
bigger picture?
David Ballantyne

Downloaded by Universite Laval At 12:27 13 May 2016 (PT)

Department of Marketing, University of Otago, Dunedin, New Zealand


Abstract
Purpose To locate the underlying service logic of each of three leading texts and to examine 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.
Keywords Relationship marketing, Customer service management, Continuing development, Marketing communications, Marketing strategy,
Marketing theory
Paper type Conceptual paper

Berry (1999), Discovering the Soul of Service:


The Nine Drivers of Sustainable Business Success

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:
1 Berry, Leonard L. (1999).
2 Gronroos, Christian (2000).
3 Storbacka, Kaj and Lehtinen, Jarmo R. (2001).

Len Berry is a distinguished professor in retailing and


marketing leadership 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.
Berrys nine drivers for sustainable success are:
1 Values-driven leadership.
2 Strategic focus.
3 Executional excellence.
4 Control of destiny.
5 Trust-based relationships.
6 Investment in employee success.
7 Acting small.
8 Brand cultivation.
9 Generosity.

The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0887-6045.htm

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

Journal of Services Marketing


20/1 (2006) 73 79
q Emerald Group Publishing Limited [ISSN 0887-6045]
[DOI 10.1108/08876040610646590]

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Three perspectives on service management and marketing

Journal of Services Marketing

David Ballantyne

Volume 20 Number 1 2006 73 79

service companys 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 need to be enacted together 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 the values
represented by these drivers that Berry seeks to discover the
soul of service
I will briefly discuss each of his nine drivers of sustainable
success in turn.

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 Berrys
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
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.

Values-driven leadership
The core values of Berrys 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 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 firms 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 companys reason for
being, and a foundation for the other eight success drivers
which follow.

Trust-based relationships
Trust-based relationships provide confidence for interaction
between key stakeholder groups. In Berrys 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.

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 sub-strategies
that reflect changing business activities and their design and
redesign. What is interesting is that in Berrys 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.

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

Executional excellence
Berrys 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
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Three perspectives on service management and marketing

Journal of Services Marketing

David Ballantyne

Volume 20 Number 1 2006 73 79

earlier performance formulations by Berry and his colleagues


especially the people component of the now classic
SERVQUAL (service quality) assessment model of
Parasuraman et al. (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. Berrys 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.

coordinative value 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 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

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
Berrys formulation, challenging and changing the rules
becomes an antidote to bureaucratic inertia.

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, 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.

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 firms 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.

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

Generosity
In using the term generosity Berry has in mind a firms
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 firms 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 Berrys sample companies is that each of the nine
drivers contributes something important to sustainable
success. However, taking the nine drivers together, as a
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Three perspectives on service management and marketing

Journal of Services Marketing

David Ballantyne

Volume 20 Number 1 2006 73 79

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).

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.

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In other words, the first principle is a particular customer


orientation, the second is a co-producing 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).

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 providers 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 providers process,
as in the Clasp strategy, warrants critical comment. This
seems to signal a wavering of strategic intent, given that 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.

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:
.
In the establishing phase, exchanging knowledge and
building an appropriate emotional connection is the
priority (p. 69). There are various transition points in
peoples lives (like first job, getting married, etc) when
needs are greater, and so a providers 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,
pp. 87-8). 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

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
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Three perspectives on service management and marketing

Journal of Services Marketing

David Ballantyne

Volume 20 Number 1 2006 73 79

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 TQMs 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.

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, p. viii).

Operationally, Gro nroos 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.

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 Normann and Ramirez (1993) in seeking a
strategic fit between customer relationships and organisational
competencies.

Six rules of service


Gronroos has distilled six rules of service (2000, pp. 376-7)
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.
5 New technology diffusion, efficiency and customer
perceptions of value.
6 Guidance support and encouragement of senior
management.

Gronroos (2000), Service Management and


Marketing: A Customer Relationship Management
Approach

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.

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 customers
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

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. 278-81) 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
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Three perspectives on service management and marketing

Journal of Services Marketing

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Volume 20 Number 1 2006 73 79

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Figure 1 The relationship dialogue process

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.
Berrys executive leaders are exemplars endowed with
family-based values. This may well be the source of
inspirational leadership. Storbacka and Lehtinens
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.

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.
Discussion
A core product strategy is seldom enough to achieve or sustain
competitive advantage in todays markets, whatever the firms
business may be. Instead, Gronroos argues that any firm
needs to offer and communicate service solutions to connect
with the customers 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 authors original text (see
for example, Gronroos, 1990, pp. 138-45). However, this
second edition leaves no doubt that he sees relationships as
pivotal in effective service management and marketing.

Comparative analysis of perspectives

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

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 Berrys 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
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Three perspectives on service management and marketing

Journal of Services Marketing

David Ballantyne

Volume 20 Number 1 2006 73 79

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 than a stand alone departmental effort (see for
example, Ballantyne, 2003; Varey and Lewis, 1999).

Ballantyne, D. (2003), A relationship mediated theory of


internal marketing, European Journal of Marketing, Vol. 37
No. 9, pp. 1242-60.
Ballantyne, D. (2004), Dialogue and its role in the
development of relationship specific knowledge, Journal
of Business and Industrial Marketing, Vol. 19 No. 2,
pp. 114-23.
Berry, L.L. (1999), Discovering the Soul of Service: The Nine
Drivers of Sustainable Business Success, Free Press, New York,
NY.
Freeman, R.E. (1984), Strategic Management: A Stakeholder
Approach, Pitman, Boston, MA.
Gronroos, C. (1990), Service Management and Marketing,
Lexington Books, Lexington, MA.
Gronroos, C. (2000), Service Management and Marketing:
A Customer Relationship Management Approach, Wiley,
Chichester.
Normann, R. and Ramirez, R. (1993), From value chain to
value constellation, Harvard Business Review, Vol. 71 No. 4,
pp. 65-77.
Oakland, J.S. (1989), Total Quality Management, Heinemann,
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 No. 1,
pp. 12-40.
Storbacka, K. and Lehtinen, J.R. (2001), Customer
Relationship Management: Creating Competitive Advantage
through Win-win Relationship Strategies, McGraw-Hill,
Singapore.
Tichy, N.M. and Cardwell, N. (2002), The Cycle of Leadership,
HarperBusiness, New York, NY.
Varey, R. and Lewis, B. (1999), A broadened conception of
internal marketing, European Journal of Marketing, Vol. 33
Nos 9-10, pp. 926-44.
Vargo, S.L. and Lusch, R.F. (2004a), Evolving to a new
dominant logic for marketing, Journal of Marketing, Vol. 68
No. 1, pp. 1-17.
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
No. 4, pp. 324-35.
Zuboff, S. (1988), In the Age of the Smart Machine, Basic
Books, New York, NY.

Rival logics?
Putting all this together, I see Berrys 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 and
Caldwell (2002) have 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 Associations summer
conference (2004), the European Academy of Marketings
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: Berrys thesis is concerned more with what
managers can do and the values that might inspire it;
Gronroos more with why they should do it; and Storbacka
more with how it should be done. In this way, any apparent
epistemological pluralism is resolved. 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.

Further reading
Holmlund, M. (1997), Perceived Quality in Business
Relationships, Report No. 66, Center for Relationship
Marketing and Service Management (CERS), Swedish
School of Economics and Business Administration,
Helsinki, p. 96.

References

Corresponding author

Ballantyne, D. (1997), Internal networks for internal


marketing, Journal of Marketing Management, Vol. 13
No. 5, pp. 343-66.

David Ballantyne can be contacted at: dballantyne@


business.otago.ac.nz

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