Study Questions and Exercises

IM for Lovelock & Wirtz, Services Marketing 6/e Teaching Notes for Cases - Section 5

CASE 1

SUSAN MUNRO, SERVICE CONSUMER

OVERVIEW

The case follows a business school student from morning to late afternoon as she uses a wide array of services during the course of a busy day.

TEACHING OBJECTIVES

· Get students to recognize and discuss how many services they use routinely in the course of their daily lives

· Examine the needs met by specific personal services

· Identify when alternative goods, services, or self-service could meet the same needs

STUDY QUESTIONS

1. Identify each of the services that Susan Munro has used or is planning to use. Categorize them according to the nature of the underlying process.

2. What needs is she attempting to satisfy in each instance?

3. What proportion of these services: (a) involve self-service, (b) some degree of customer involvement with the production process, and/or (c) dependence on the service provider? Where do you see more potential for self-service and what would be the implications for customer and supplier?

(Optional extra question) In each case, are there any alternative goods or services (including self-service) that could solve her need?

4. What similarities and differences are there between the dry-cleaning store and the hair salon? What could each learn from studying the other?

______

ANALYSIS

1. Identify each of the services that Susan Munro has used or is planning to use. Categorize them according to the nature of the underlying process

The list of services Susan consumes is quite extensive as she attempts to satisfy many different needs during the course of her day:

People processing

· Bus trip

· Food stand (take-out bagel and coffee—but failed to get either)

· Food court—burger and latte, consumed at table on site. Note: food service is hard for some students to define because it includes both processing of physical items—food and beverage (possession processing), servicing customers who wait in line (people processing), and in a sit-down environment, rental of tables and chairs (people processing). But the core product is food for personal consumption, hence the categorization here and in Fig. 2.1, people processing.

· Hair salon

· Optometrist (future)

Possession processing

· Water service (shower)

· Mail (outbound to PO)

· Cleaners

· Mail (inbound to home mailbox)

· New cleaners (future)

· Electricity service for lighting, refrigerator, etc. (tricky, this one!)

· Pizza delivery

Mental stimulus processing

· Weather forecast (on Web)

· Three courses

- Finance

- Business strategy

- Business Spanish

· Language lab

· Voice telephone

Information processing

· Internet service provider

· ATM (some might argue that because it delivers physical cash, it should be possession processing!)

· Insurance

· Bank account

2. What needs is she attempting to satisfy in each instance?

· Internet (information about the weather)

· Mailing a letter (communication with another party)

· Bus (transportation)

· Business school (self-improvement and enhancement of future employment opportunities)

· Lunch and a latte (eliminating hunger and thirst—in addition to getting a caffeine buzz)

· Banking (convenient access to her monetary assets)

· Telephoning (confirm hair appointment)

· Hairdresser (improve personal appearance through cleaning, styling, and grooming; enhance personal hygiene)

· Dry cleaners (maintenance of physical possessions; improve personal appearance)

· Picking up mail (information from new and current service providers)

· Insurance payment (protect assets)

· Planned eye exam (maintain effective vision and eye health)

· Dinner delivery (convenient reduction of hunger for self and roommates)

(Optional extra question) What alternative goods or services (including self-service) could solve her need in each instance?

· Internet weather forecast: accessing radio, TV, or newspaper reports on the weather; owning a thermometer and barometer; or physically observing the weather herself

· Mailing a letter: telephoning, faxing, or e-mailing her information or visiting the other party in person

· Bus: walking, bicycling, carpooling with a friend, buying a car or motorcycle and driving herself, or taking a taxi

· Business school: taking courses over the Web or via television; buying books and/or CDs/tapes for self-study; enrolling in a correspondence course

· Lunch and a latte: choosing alternative food and beverage vendors in the student union; walking to an outside restaurant, bringing her lunch from home

· Telephoning: use payphone instead of cell phone, make personal visit, possibly e-mail; borrow friend’s phone

· Banking: interacting with a teller at one of her bank’s branches; using an alternative financial intermediary such as a post office savings account (if offered in her country); keeping her money hidden under her mattress at home

· Hairdresser: cutting and washing her hair herself (or getting a friend/family member to do it); paying a service provider to come to her apartment do the work; letting her hair grow into a new style

· Dry cleaners: using a self-service machine in a Laundromat; washing, drying, and cleaning her clothes at home (depending on the specific fabrics); buying new clothes

· Picking up mail: receiving the information from service providers by visiting their sites or communicating with them via fax, e-mail, or telephone

· Insurance: bearing the risk herself

· Planned eye exam for new contacts: no real alternative to visiting a trained practitioner (no known self-diagnostic equipment yet for this type of work)

· Dinner delivery: purchasing ingredients and making the meal at home; ordering Chinese take-out that she could pick up herself

3. What proportion of these services: (a) involve self service, (b) some degree of customer involvement with the production process, (c) dependence on the service provider? Where do you see more potential for self-service and what would be the implications for customer and supplier?

These categories are split 40 percent–35 percent–25 percent below, but are open to debate and you should not be rigid about the classifications. Note that “involvement with the production process” could also apply in some measure to any interactive electronic transaction, but only physical activities have been classified in this category below

· Self-service: Internet access, weather forecast, sending mail, telephone, ATM banking, language lab, electricity, water

· Physical involvement with production process: Classes, hairdresser, eye exam, bus travel, three food services on campus

· Dependence on service provider: dry cleaners, mail delivery, pizza delivery, insurance, automatic deduction of bank funds

· More self-service opportunities include video-on demand for certain classes (which would mean that a lecture could be prerecorded and used many times at the students’ convenience and using their own or the school’s equipment for viewing); self-service in a dry cleaning, which involves setting up a store with machines for customers to use themselves

4. What similarities and differences are there between the dry cleaning store and the hair salon? What could each learn from the other?

Both services involve physical, tangible actions, but they are directed at different types of recipients. The dry cleaning store is a possession processing service, while the hair salon involves people processing. Susan must be physically present during the delivery of her haircut, and she actively participates in service delivery by making decisions about the cutting and coloring of her hair.

By contrast, she has very little involvement with the dry cleaning of her clothes besides delivering and picking them up. Both services could improve the timeliness of their service delivery (because Susan waited twenty minutes for her hairdresser and her suit wasn’t ready as promised). The dry cleaning establishment could learn how to manage the tangible aspects of the service factory by making the visible portion of its store cleaner, brighter, and more professional in appearance. It could also train and motivate its employees to provide better customer service. It’s difficult to come up with a suggestion about what the hair salon could learn from this particular dry cleaner. If all of Susan’s clothes had been completed on time, the dry cleaner would have provided a better model of providing service in a timely manner.

TEACHING SUGGESTIONS

This simple case is a good ice-breaker for an early class and, depending on which questions you ask, could be sufficient for anything from fifteen to forty-five minutes of class discussion—perhaps a little more if you subsequently ask students to describe how their own days differ from Susan’s.

The case can be assigned in advance or, because it will take only five minutes to read, even assigned for a quick reading during the class itself. You can use it to bring home to students how many services we use routinely during the course of a normal day without thinking much about them, how dependent we are on technology for service delivery, and the multi-service nature of a modern university.

Be sure to get them to highlight the little things that please or annoy them about service providers’ facilities and personnel even though they do not affect core competences (e.g., the trendy decor of the hair salon, dirty fingernails, unpleasant smells, failure to make eye contact, other customers not pulling their weight on self-service such as table cleaning, etc.).

CONCLUDING COMMENTS

Comments on Services Used

· Daily life involves use of a broad spectrum of services, many of which we take for granted and barely even notice.

· Some services low involvement, “always there” utility-like, don’t involve regular choice decisions on brand or provider (banking, telephone, Internet, electricity).

· Many services are repetitive and on predictable cycles, although frequency varies (e.g., daily bus, food, periodic hairdresser visits, dry cleaning, occasional eye check-ups).

· Four service personnel are somewhat prominent: bus driver (positive), food cart attendant (neutral?), haircutter (positive), cleaning store attendant (negative).

· Payment methods vary—only a few (presumably) involve cash—for example, tip for cutter, probably pay for cleaners, food items. Some are paid for upfront (tuition, bus pass, automated insurance premium).

· There are many self-service elements (ATM, telephone, Internet, food service, mailbox drop-off, language lab); could go further with video-on-demand finance class.

What Will Susan Probably Remember?

· No coffee, no bagels at food stand (reinforces past disappointments; may make alternative plans in future)

· Long lines at sandwich shop in Food Court (may avoid at certain times)

· Tired of salad bar (may give up on this, eat off campus)

· Good strategy class (recommend to others, maybe another course from same prof)

· Language lab learning is fun—may increase desire for more self-service, on-demand learning rather than classroom lecture experiences as in finance

· Good hair session—will stick with salon, may recommend, despite unpunctuality

· Bad experience at dry cleaners—will probably try out new store with coupon