HONG KONG BAPTIST UNIVERSITY

DEPARTMENT OF MARKETING
FIRST SEMESTER 2001-2002

SUBJECT : MKT 3860 Services Marketing

PREREQUISITE : MKT 2310 Marketing Management

INSTRUCTOR : Noel Y.M. Siu (Tel.: 2339 7529 Rm: WLB 608)

INTRODUCTION
This course is designed to introduce you to the modern marketing philosophies and practices of
services marketing. The purpose is to provide an overview of the services marketing process and
its differences from the marketing of consumer products. The course will cover both theory and
application. The growing significance of services marketing beyond its traditional connotations of
advertising and personal selling will also become apparent.

Principle issues to be explored include:

* Understanding services
* Strategic issues associated with services
* The Ps of services marketing
* Determination of services quality
* Globalizing services marketing

TEXTBOOK
Zeithaml, V.A. and Bitner, M.J. (2000), Services Marketing: Integrating Customer Focus Across
the Firm, 2nd Edition, N.Y.: McGraw-Hill.

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OTHER REFERENCES

Lovelock, C.H. and Wright, L. (1999), Principles of Service Marketing and Management, N.J.:
Prentice-Hall.

Kurtz, D.L. and Clow, K.E. (1998), Services Marketing, N.Y.: John Wiley & Sons.

Lovelock, C.H.(1996), Services Marketing, 3rd ed., Englewood Cliffs, N.J.: Prentice-Hall.

Bateson, J.E.G. (1995), Managing Services Marketing, 3rd Ed., Florida: The Dryden Press.

Baron, S. and Harris, K. (1995), Services Marketing: Text and Cases, London: Macmillan.

Rust, R.T., Zahorik, A.J. and Keiningham, T.L. (1996), Service Marketing, N.Y.: Harper Collins.

You are required to read relevant articles from various journals such as:
Journal of Services Marketing
Journal of Marketing
Journal of International Consumer Marketing
Journal of Consumer Research
International Journal of Service Industry Management

ASSESSMENT
Class participation and discussion 20%
Written assignment 10%
Group project
written 20%
oral 10%
Final exam 40%

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 MKT 3860SERVICES MARKETING
1ST SEMESTER 2001-2002
TOPIC OUTLINE

WEEK DATE TOPIC CHAPTER1

1 Sept 5 Understanding services marketing: an introduction

Zeithaml(Z) 1
Sept 3-7 No tutorial

2 Sept Understanding the gaps model Z. 2 (2nd ed.)

12 Z. 2 (1st ed.)
Tutorial 1: Group Formation
Sept 10-
14
3 Sept Understanding customer expectations and perceptions Z. 3 and 4
19
Tutorial 2: Services Marketing Mix
Sept 17-
21
4 Sept Listening to customers through Marketing Research Z. 5
26
Tutorial 3: The Gap Model
Sept 24-
28
5 Oct 3 Understanding Customer Relationship and Service Recovery Z.6 and 7

Oct 1-5 Tutorial 4: Service Quality

(Oct 1-2: public holiday)

6 Oct 10 Service Design and Servicecape Z. 8 and 10

Oct 8-12 Tutorial 5: Mystery Shoppers

7 Oct 17 Enhancing Customer-Defined Service Standards Z. 9

Oct 15-19 Tutorial 6: Story of a Service Hero

8 Oct 24 Employees and Customers in Service Delivery Z. 11, 12

Oct 22-26 Tutorial 7: Debate I

(Oct 25: public holiday)

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The information in this column is for your reference only. You need to read other reference books and journal
articles

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9 Oct 31 Intermediaries and Electronic Channels in Service Delivery Z. 13

Oct 29 Tutorial 8: Debate II

-Nov 2
10 Nov 7 Managing Demand and Capacity Z. 14

Nov 5-9 Tutorial 9: Case Studies – AT & T (Text pp. 550 – 566) and
GE Medical Systems (Text pp. 588 – 604)

11 Nov 14 Marketing Communications of Services Z. 15

Nov 12-16 Tutorial 10: Case Studies – Custom Research Inc. (Text pp.
530 – 549) and Euro Disney (Text pp. 511 – 529)

12 Nov 21 Pricing of Services Z. 16

Nov 19-23 Tutorial 11: Group project presentation

13 Nov 28 Special Topic on eCRM Other

References
Nov 26-30 Tutorial 12: Group project presentation

14 Dec 5 Conclusion

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Tutorial 1: Group Formation
• Groups are formed for the tutorial exercises and group projects

• Please prepare for each tutorial. The extent of knowledge advancement will be highly
dependent on your active participation and commitment in the whole learning process. You
are expected to complete each tutorial exercise before the class.

• Discussion question: One of the underlying frameworks for the subject is the services
marketing mix. Discuss why each of the three new mix elements (process, people, and
physical evidence) is included. How might each of these communicate with or help to satisfy
an organization’s customers?

Tutorial 2: Services Marketing Mix

• Visit two local retail service providers that you believe are positioned very differently (e.g.
McDonald’s and a fine-dining restaurant). From you own observations, compare their
strategies on the elements of the services marketing mix.

• Present your findings to the class. You can use role-play to show their contrasting
characteristics.

Tutorial 3: The Gap Model

• Each group will be assigned to discuss a particular gap in the class. As a group, you need to
identify a case (from newspapers, magazines, websites, etc.) which is about the particular
gap.

• In the class, present the case, the seriousness of the problem and how you think the problem
can be avoided, in the first place, and solved.

Tutorial 4: Service Quality

• As a group, identify a service type (e.g. banking, airline, education). Interview at least 10
people about their perceptions towards service quality of the service, whether the five
dimensions of quality are relevant, and which are most important in determining quality of
that particular type of service.

• Present your findings and observations to the class.

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Tutorial 5: Mystery Shoppers
• You are now a group of mystery shoppers.

• Identify a store that you are familiar. Work out a list of items that you think are important
service standards. You can refer to pp. 120-121 in your textbook for reference. You don’t
need to adopt all items from the text. But please develop your own items. The items must be
specific and measurable. Convert the list into a questionnaire.

• You need to go to the store and consume their product/service. After experiencing the whole
process, you need to fill in the questionnaire individually.

• Present your list and findings as well as sharing your experience as mystery shoppers.

Tutorial 6: Story of a Service Hero

“A good recovery can turn angry, frustrated customers into loyal ones. It can, in fact, create
more goodwill than if things had gone smoothly in the first place. Consider how Club Med –
Cancun, part of the Paris-based Club Mediterranee, recovered from a service nightmare and won
the loyalty of one group of vacationers.

The vacationers had nothing but trouble getting from New York to their Mexican destination.
The flight took off six hours late, made two unexpected stops, and circled thirty minutes before
it could land. Because of all the delays and mishaps, the plane was en route for ten hours more
than planned and ran out of food and drinks. It finally arrived at two o’clock in the morning,
with a landing so rough that oxygen masks and luggage dropped from overhead. By the time the
plane pulled up to the gate, the soured passengers were faint with hunger and convinced that
their vacation was ruined before it had even started. One lawyer on board was already collecting
names and addresses for a class-action lawsuit.

Silvio de Bortoli, the general manager of the Cancun resort and a legend throughout the
organization for his ability to satisfy customers, got word of horrendous flight and immediately
created an antidote. He took half the staff to the airport, where they laid out a table of snacks and
drinks and set up a stereo system to play lively music. As the guests filed through the gate, they
received personal greetings, help with their bags, a sympathetic ear, and a chauffeured ride to the
resort. Waiting for them at Club Med was a lavish banquet, the staff had rallied other guests to
wake up and greet the newcomers, and the partying continued until sunrise. Many guests said it
was the most fun they’d had since college.

In the end, the vacationers had a better experience than if their flight from New York had gone
like clockwork. Although the company probably couldn’t measure it, Club Mediterranee won
market share that night. After all, the battle for market share is won not by analyzing
demographic trends, ratings points, and other global measures, but rather by pleasing customers
one at a time.”

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• If you were one of the customers, how would you feel in the whole process? Would you still
buy the service from the Club Med? Would you tell others about your experience?

• Can you think of an alternative means to solve the same problem?

• Discuss the benefits to a company of having an effective service recovery strategy.

Tutorial 7 - 8: Debate
The purpose of the exercise is to train you to be more critical on some key issues. Two weeks
will be scheduled for two debates. In each week, two debate teams will choose a topic and draw a
lot to decide they are “for” or “against” the statement. You are expected to collect sufficient
information (e.g. some current statistics or argument from scholars or practitioners with
evidence) for the debate from various sources.

Two groups in each tutorial need to choose a topic for debate from the following list:

• The Disneyland project can boost the tourism business in the future.
• Electronic channels can replace face-to-face contact with service providers.
• Service cannot be standardized.
• Empowerment is always the best approach for effective service delivery.
• Customers are always right

Each team will select three members for the debate. There should have a chief in each team. The
procedure is:

Each one is given no more than 3 minutes for the speech (we will follow the usual sequence that
any debates would observe). 10 minutes will be open to the floor to challenge the teams. Team
members need to respond to challenges. Then each chief is given no more than 3 minutes to
conclude the debate.

A timekeeper is needed in each week. The non-debate teams in each tutorial will act as judge.

Tutorial 9 –10: Case Assignment

Students need to present their answer of a particular case in the class. Since the time limit is 15
minutes, you are strongly advised to select the main points for the presentation. Some students
will serve in a critique group. The assignment will be submitted right after the presentation.

Tutorial 11 – 12: Project presentation

Each group is given no more than 15 minutes to do the presentation. Poor time management

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may cause score reduction. 5 minutes will be allocated for Q & A.

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Written Assignment (10%)

• Students will need to do one of the following cases:

• The case of AT & T (Text pp. 550-566)

• The case of GE Medical Systems (Text pp. 588-604)
• The case of Custom Research Inc. (Text pp. 530-549)
• The case of Euro Disney (Text pp. 511-529)

• The length of the assignment is not more than 2,000 words. In your assignment,
you need to give a brief background/ introduction and answer the questions in a cohesive
way.

• Hand in your assignment right after your presentation.

AT & T:

1. Discuss Falcone’s formation and management of his services salesforce.

2. How do the skills needed for small versus large markets differ, and what did Falcone do to
bridge the gap?

3. Analyze Falcone’s actions in the context of the HR strategy wheel in chapter 11.

4. Are there things you would do differently? What would you do next if you were Falcone?

GE Medical Systems

1. What are the services offered by GE Medical Systems? Who are their customers? What
trends in the industry will affect their future growth?

2. Why has TiP TV been so successful? What are the benefits to customers? Does GEMS have
a sustainable competitive advantage in TiP TV?

3. 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 ‘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’?

4. Should GEMS consider moving the TiP customer education organization from a cost centre
(with the primary goal of customer satisfaction) to a profit & loss centre? What are the
implications and challenges?

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Custom Research Inc.

1. Has Custom Research Inc. correctly analyzed what is causing their problems in improving
profitability?

2. Evaluate the process and procedures used by Jeff Pope in dividing customers into categories
of profitability. What are the problems in the way the analysis has been done?

3. What should Judy Corson, Jeff Pope, and Custom Research Inc. do?

Euro Disney: The First 100 Days

1. Was Euro Disney successful in its first 100 days? Why or why not? Please discuss with
reference to its target markets, service concept and service delivery.

2. What do we learn from comparing Tokyo Disneyland to Euro Disney?

3. What lessons has Euro Disney learned which could be applied to the development of the
second theme park? Should the park be adapted for the local market from the US model, and
if so, in what ways? Should Euro Disney proceed with the next step of development? What
recommendations would you make regarding staffing, training, and general management?

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Group Project (20%)

• Work in a group, choose an organization that you are familiar and study the services that it
provides. The organization can either be profit-making or not-for-profit one.

• Use the Critical Incident Technique described in Chapters 5 to gather data from customers.

• Each member interviews at least 10 “customers” who should not be your classmates or your
close friends. There should have a wide spectrum of the demographic profiles.

• In your report, you need to justify the choice of the organization and the methodology.

• Present introduction, summary of the literature, methodology, findings and recommendations.

You are required to attach a sample of the data in the appendix. The marks you gain are
dependent on the quality of your work and the level of difficulty involved.

• The following articles are reserved in the library for your reference. You need to read other
relevant references as well.

Gremler, DD and Bitner, MJ (1994). “The Internal Service Encounter”, International Journal
of Service Industry Management, 5, 2, 34-56.

Bitner, MJ, Booms, BH and Tetreault, MS (1990).“The Service Encounter Diagnosing

Favorable and Unfavorable Incidents”, Journal of Marketing, 54, Jan, 71-84.

Bitner, MJ, Booms, BH and Mohr, LA (1994). “Critical Service Encounters: The Employee’s
Viewpoint”, Journal of Marketing, 58, October, 95-106.

• The length of the assignment is not more than 3,500 words. The submission deadline is:
November 30, 5p.m.

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