Services Marketing 7e, Global Edition

Chapter 15:
Striving for
Service Leadership

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Services Marketing 7/e

Chapter 15 Page 1

Overview of Chapter 15
The Service-Profit Chain
Integrating Marketing, Operations, and Human Resources
Creating a Leading Service Organization
In Search of Human Leadership

Slide 2010 by Lovelock & Wirtz

Services Marketing 7/e

Chapter 15 Page 2

The Service-Profit Chain

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Services Marketing 7/e

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The Service-Profit Chain

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Services Marketing 7/e

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Links in the Service-Profit Chain

1. Customer loyalty drives profitability and growth

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Services Marketing 7/e

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Firm Value Created by Customer

Satisfaction

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Services Marketing 7/e

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Qualities Associated with

Service Leaders
Understands mutual dependency
among marketing, operations, and
human resource functions of the
firm
Has a coherent vision of what it
takes to succeed
Strategies are defined and driven by
a strong, effective leadership team
Responsive to various stakeholders
Value created through customer
satisfaction

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Services Marketing 7/e

Chapter 15 Page 7

Integrating Marketing,
Operations, and
Human Resources

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Services Marketing 7/e

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Defining the Three Functions

Marketing Function

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Reducing Interfunctional Conflict

One challenge is to avoid creating functional silos

High-value creating enterprises should be thinking in terms of activities,

not functions

Top management needs to establish clear imperatives for each

function that defines how a specific function contributes to the
overall mission

Interfunctional transfers will provide a holistic perspective for individuals

Establishing integrated project teams

Having interfunctional service delivery teams

Appointing formally designated individuals to integrate objectives

Internal marketing and training

Commitment of top management

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Services Marketing 7/e

Chapter 15 Page 10

Creating a Leading
Service Organization

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Services Marketing 7/e

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From Losers to Leaders: Four

Levels of Service Performance
Service Losers

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Services Marketing 7/e

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Four Hurdles for Moving up the

Performance Ladder
Cognitive Hurdles

People cannot agree on causes of current problems and the need

for change

Resource Hurdles

Firm is constrained by limited funds

Motivation Hurdles

Prevent rapid execution when employees are reluctant to change

Political Hurdles

Organized resistance forces in forms from powerful vested

interests seeking to protect their positions

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Services Marketing 7/e

Chapter 15 Page 13

Leading Change in a Service

Organization Involves 8 Stages
1. Anchoring
2.
3.
4.
5.
6.
7.
8.
Putting together
Creating
Communicating
Empowering
Producing
Building
momentum
a new
an
sufficient
sense
appropriate
employees
behaviors
that
aofstrong
urgency
short-term
and
newvision
to
using
enough
vision
inact
organizational
toof
on
that
results
develop
broadly
where
team
that
to tackle
vision
to
to
the
create
direct
culture
impetus
organization
tougher
the
credibility
process
for
change
change
needs
andproblems
counter
to go cynicism

Source: John Kotter

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In Search of
Human Leadership

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Services Marketing 7/e

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Setting direction

Leadership vs. Management

Leadership

Setting direction

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Individual Leadership Qualities

Love for the business
See service quality as
foundation for
competing

Make communication a
priority
Work with a team on
decision-making

Recognize key role of

employees

Know when to change

when necessary

Driven by a set of core

values they pass on

Walk the talk

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Services Marketing 7/e

Chapter 15 Page 17

Leadership, Culture, and Climate

Leadership
Leadership traits are needed of everyone in supervisory or
managerial positions, including those heading teams
Organization Culture
Represents the shared

Perceptions/themes regarding what is important

Values, beliefs, and assumptions
Shares understanding about what works and what doesnt work
Styles of working and relating to others

Organizational Climate
The tangible surface layer on top of the organizations underlying
culture that requires radical rethinking of:

HRM activities
Operational procedures
Firms reward and recognition policies

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Services Marketing 7/e

Chapter 15 Page 18

Summary
Service profit chain provides summary of relationships between
key variables that explain service leadership
Four levels of service performance

Service losers

Service nonentities

Service
leadership
must cut across marketing, operations, and
Service
professionals
human
resources
Service
leaders
Leaders need to understand the difference between leadership
vs. management, as well as setting direction vs. planning
Leaders play a big part in nurturing an effective organizational
culture that moves an organization towards service leadership
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