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Slide 2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 15 - 1

Competitive MarketingStrategies

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Market Defender Strategies

Blocking Strategies

-Performance guarantees

-Intensive advertising

-Controlling location or access

-Higher switching costs

-Satisfied customers

Retaliation Strategies

-Reducing service trail

-Fight aggressively to maintain market share

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Market Defender Strategies

Adaptation strategies

-Match the new entrants offers

-Expand the service package

-Develop a service niche

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Organizing for ServiceLeadership

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Customer-Led versus Market-OrientedPhilosophies of Management

Firms may lose market leader position if listen too closely tocurrent customers

Service leadership requires curiosity, risk taking

Customer-led businesses focus on understanding expresseddesires of customers in currently served markets

Market-oriented businesses commit to understand current/latent customer desires plus competitors plans, capabilities

Scan market more broadly, have longer-term focus

Work closely with lead users (windows to future vs. anchors topast)

Combine traditional research with experimentation, observation

Conclusion: Pursue customer satisfaction, but set limits onbeing led by customers, especially during rapid change

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Integrating Three Functional Imperatives

Customers

Marketing

ImperativeHuman Resources

I

mperative

Operations

Imperative

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Defining Three Functional Imperatives

Marketing Imperative Target right customers and build relationships

Offer solutions that meet their needs

Define quality package with competitive advantage

Operations ImperativeCreate, deliver specified service to target customers

Adhere to consistent quality standards

Achieve high productivity to ensure acceptable costs

Human Resource ImperativeRecruit and retain the best employees for each job

Train and motivate them to work well together

Achieve both productivity and customer satisfaction

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Reducing Intra-Organizational Tension

Transfers and cross training

Cross functional taskforces

New tasks and new people

Process management teams

Gain-sharing programs

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The Search for Synergy:A Top Management Perspective

What do we want?

What can we do?

What do our

customers want?

What do our employees,

intermediaries, and

other partners want?

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From Losers to Leaders:Moving Up the Service Performance Ladder

Service LeadersService Leaders Pioneers of their respective industries like Jan Carlzon of SAS

,Fred Smith of FedEX, Colin Marshal of British Airways,Ray Korcof McDonald and Herbert Kelleher of South West Airlines.

Names synonymous with outstanding service, customer delight

Service Professionals Clear positioning strategy

Sustained reputation for meeting customer expectations

Service Non-entities Traditional operations mindset Rudimentary marketing, often emphasizing price discounts

Service LosersOnly survive because of lack of viable alternatives in marketplace

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Leadership forChange Management InvolvesEight Stages

Create sense of urgency to develop impetus for change

Put together strong team to direct process

Create appropriate vision of where organization must go

Communicate new vision broadly

Empower employees to act on vision

Produce sufficient short term results to create credibility

Build momentum to tackle tougher problems

Anchor new behaviors in the organizational culture

Source: John Kotter

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Transformational Leadership May RequireChanging Corporate Culture

Corporate Culture: Shared perceptions regarding what is important

Shared values about what is right and wrong

Shared understanding about what works and what doesnt

Shared beliefs about whythese things are important Shared styles of working and relating to others

Climate for Service--Tangible working environment atopunderlying culture. Influential factors include:

Shared perceptions concerning practices, procedures and types ofbehaviors that get rewarded

Clarity about mission and values, level of commitment to common

purpose

Flexibility: freedom to innovate, sense of responsibility, standards