Where Does the Customer Fit in a

Service Organization? (Fig. 2.1)

 Consumers rarely involved in manufacture of goods but

often participate in service creation and delivery
 Challenge for service marketers is to understand how
customers interact with service operations
 Flowcharting clarifies how customer involvement in service
encounters varies with type of process - see Fig. 2-1:
 People processing (e.g., motel stay): customer is physically involved
throughout entire process
 Possession processing (e.g., DVD repair): involvement may be limited to
drop off of physical item/description of problem and subsequent pick up
 Mental stimulus processing (e.g., weather forecast): involvement is
mental, not physical; here customer simply receives output and acts on it
 Information processing (e.g., health insurance): involvement is mental -
specify information upfront and later receive documentation of coverage

Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 2- 1
 High-Contact and Low-Contact Services

High Contact Services

 Customers visit service facility and remain throughout
service delivery
 Active contact between customers and service personnel
 Includes most people-processing services
Low Contact Services
 Little or no physical contact with service personnel
 Contact usually at arm’s length through electronic or
physical distribution channels
 New technologies (e.g. Web) help reduce contact levels
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 2- 2
 Levels of Customer Contact with Service
Organizations (Fig. 2.2)

Emphasizes encounters
High with service personnel
N ur sing Hom e
HairCut
4 - Star Hote l
Ma na g e me nt Con sulting
Go od Re sta ura nt
Tele ph one Ba nking
Airlin e Tra ve l (Econ.)

Re ta il Ba nking Car Re pa ir
Motel In sura nce
Dry Clea ning
Fa st Food
Movie Theater

Ca bl e TV
Subway

• Internet Banking
Mail Based Repairs

Emphasizes encounters
with equipment
Internet-based
Services
Low

Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 2- 3
 The Purchase Process for Services
(Adapted from Fig. 2-3)

Prepurchase Stage
 Awareness of need
 Information search
 Evaluation of alternative service suppliers
Service Encounter Stage
 Request service from chosen supplier
 Service delivery
Postpurchase Stage
 Evaluation of service performance
 Future intentions

Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 2- 4
 Factors that Influence
Customer Expectations of Services (Fig. 2.4)

Explicit & Implicit

Personal Needs Service Promises
Word-of-Mouth
Desired Service Past Experience
Beliefs about
What Is Possible
ZONE
OF
TOLERANCE
Perceived Service
Alterations
Adequate Service Predicted Service

Situational Factors

Source: Adapted from Zeithaml, Parasuraman & Berry

Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 2- 5
 Components of Customer Expectations

 Desired Service Level: wished-for level of service quality

that customer believes can and should be delivered

 Adequate Service Level: minimum acceptable level of

service

 Predicted Service Level: service level that customer

believes firm will actually deliver

 Zone of Tolerance: range within which customers are

willing to accept variations in service delivery

Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 2- 6
 Customer Satisfaction is Central to the
Marketing Concept

 Satisfaction defined as attitude-like judgment following a

service purchase or series of service interactions
 Customers have expectations prior to consumption, observe
service performance, compare it to expectations
 Satisfaction judgments are based on this comparison
 Positive disconfirmation if better than expected
 Confirmation if same as expected
 Negative disconfirmation if worse than expected

 Satisfaction reflects perceived service quality, price/quality

tradeoffs, personal and situational factors
 Research shows links between customer satisfaction and a
firm’s financial performance
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 2- 7
 Customer Delight:
Going Beyond Satisfaction

 Research shows that delight is a function of 3 components

 Unexpectedly high levels of performance
 Arousal (e.g., surprise, excitement)
 Positive affect (e.g., pleasure, joy, or happiness)

 Is it possible for customers to be delighted by very

mundane services?

 Progressive Insurance has found ways to positively surprise

customers with customer-friendly innovations and
extraordinary customer service

Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 2- 8
 A Service Business is a System Comprising
Three Overlapping Subsystems

Service Operations (front stage and backstage)

 Where inputs are processed and service elements created.
 Includes facilities, equipment, and personnel
Service Delivery (front stage)
 Where “final assembly” of service elements takes place
and service is delivered to customers
 Includes customer interactions with operations and other
customers
Service Marketing (front stage)
 Includes service delivery (as above) and all other contacts
between service firm and customers

Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 2- 9
 Service Marketing System:
(1) High Contact Service--e.g., Hotel (Fig. 2.7)

Service Marketing System

Service Delivery System Other Contact Points
Advertising
Service Operations System Other
Customers Sales Calls
Interior & Exterior Market Research
Facilities Surveys
Billing / Statements
Technical Equipment The
Core Customer Miscellaneous Mail,
Phone Calls, Faxes, etc.
Service People Random Exposure to
Facilities / Vehicles
Other Chance Encounters
Backstage Front Stage with Service Personnel
(invisible) (visible) Customers
Word of Mouth

Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 2 - 10
Service Marketing System:
(2) Low Contact Service--e.g., Credit Card (Fig. 2.8)

Service Marketing System

Service Delivery System Other Contact Points
Service Operations System

Advertising
Mail
Market Research
The Surveys
Technical Self Service
Core Equipment Customer Random Exposures
Facilities, Personnel
Phone, Fax,
Web site etc. Word of Mouth
Front Stage
Backstage (visible)
(invisible)

Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 2 - 11
 Service as Theater

“ All the world’s a stage and all

the men and women merely
players. They have their exits
and their entrances and each
man in his time plays many
parts”

William Shakespeare
As You Like It

Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 2 - 12
 The Dramaturgy of Service Delivery

 Service dramas unfold on a “stage”--settings may change as

performance unfolds

 Many service dramas are tightly scripted, others improvised

 Front-stage personnel are like members of a cast
 Like actors, employees have roles, may wear special
costumes, speak required lines, behave in specific ways

 Support comes from a backstage production team

 Customers are the audience—depending on type of
performance, may be passive or active

Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 2 - 13
 Role and Script Theories

 Role: A set of behavior patterns learned through

experience and communication

 Role congruence: In service encounters, employees and

customers must act out defined roles for good outcomes

 Script: A sequence of behavior to be followed by employees

and customers during service delivery
 Some scripts (e.g. teeth cleaning) are routinized, others flexible
 Technology change may require a revised script
 Managers should reexamine existing scripts to find ways to improve
delivery, increase productivity, enhance experiences

Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 2 - 14