Services Marketing 7e, Global Edition
Chapter 15:
Striving for
Service Leadership
Slide 2010 by Lovelock & Wirtz
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
Slide 2010 by Lovelock & Wirtz
Services Marketing 7/e
Chapter 15 Page 3
The Service-Profit Chain
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Services Marketing 7/e
Chapter 15 Page 4
Links in the Service-Profit Chain
1. Customer loyalty drives profitability and growth
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Services Marketing 7/e
Chapter 15 Page 5
Firm Value Created by Customer
Satisfaction
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Services Marketing 7/e
Chapter 15 Page 6
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
Slide 2010 by Lovelock & Wirtz
Services Marketing 7/e
Chapter 15 Page 7
Integrating Marketing,
Operations, and
Human Resources
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Services Marketing 7/e
Chapter 15 Page 8
Defining the Three Functions
Marketing Function
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Services Marketing 7/e
Chapter 15 Page 9
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
Slide 2010 by Lovelock & Wirtz
Services Marketing 7/e
Chapter 15 Page 10
Creating a Leading
Service Organization
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Services Marketing 7/e
Chapter 15 Page 11
From Losers to Leaders: Four
Levels of Service Performance
Service Losers
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Services Marketing 7/e
Chapter 15 Page 12
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
Slide 2010 by Lovelock & Wirtz
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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Services Marketing 7/e
Chapter 15 Page 14
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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Services Marketing 7/e
Chapter 15 Page 16
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
Slide 2010 by Lovelock & Wirtz
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
Slide 2010 by Lovelock & Wirtz
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
Slide 2010 by Lovelock & Wirtz
Services Marketing 7/e
Chapter 15 Page 19
