Hot Topics in Services

1
Hot Topics in Services

• Ruth N. BoltonProfessor of MarketingW. P. Carey
  Chair in Marketing
• Center for Service Leadership
• W. P Carey School of Business
• Arizona State University

2
Hot Topics The Managerial Context for Academic
Research

• A New Organization Reality
• Marketing has become more complex with multiple
  challenges role/value of marketing, emphasis on
  accountability, balancing short term bottom line
  orientation vs. long term brand building and
  organic growth, changing customer dynamics,
  marketing mix issues, evolving media and channel
  relations, etc.
• This requires marketing leaders to assess and
  build marketing organizations with new and
  different skills, competencies, capabilities,
  processes and technology.
• Vargo and Lusch (2004) have a vision of
  marketing at the center of the integration and
  coordination of the cross-functional processes of
  a service-dominant business model. Whereas, Hunt
  2004 argues that Instead, it will be marketing
  as a general management responsibility of the top
  team that will play the crucial roles of (1)
  navigation through effective market sensing, (2)
  articulation of the new value proposition, and
  (3) orchestration by providing the essential glue
  that ensures a coherent whole.

3
(1) A New Organizational Reality

• Big M marketing is required that shows how a
  service organization can create, communicate and
  deliver value for customers by integrating and
  coordinating cross-functional processes to
  produce coherent, mutually beneficial outcomes.
• It demands that we incorporate a broader set of
  variables. In this way, we can obtain a better
  understanding of how background factors or
  context variables moderate the effectiveness of
  marketing variables on business performance
  outcomes. models of service and relationships
  must be extended to incorporate a broader set of
  variables. By background factors, I refer to
  critical organizational activities that act as
  boundary conditions (in experimental parlance) or
  contingencies (in strategic parlance).
• Emerging markets, marketing to the bottom of the
  pyramid

4
(2) The Service Brand Service Innovation

• Brand Relevance The Service Brand
• B2C and B2B marketers are challenged with
  addressing the importance and relevance of the
  brand at every touch point with customers.
• Establishing value of a brand, building brand
  equity and relating it to profitable growth
  requires
• new insights into customers and their interaction
  with brands (e.g., service experiences)
• new methods/tools for measuring brand value and
  importance.
• Disciplined Innovation Service Innovation
• Service innovation is critical to achieving
  competitive advantage and organic growth.
• Key challenge is sustaining innovation, such as
  through solution selling. Marketing leaders
  require a disciplined approach to put the right
  people, processes and capabilities in place.

5
(3) Metrics and Performance

• There is intense pressure on marketing leaders to
  justify investment (ROMI) and connect marketing
  to bottom line, enterprise-wide performance.
  Despite considerable attention on over the last
  few years, marketers are seeking the right
  metrics, processes, tools for assessing and
  measuring marketing in general, as well as
  specific marketing programs.
• How should we evaluate investments in technology,
  training programs, alliances (e.g., changing
  service suppliers) within the customer equity
  framework thereby linking marketing actions to
  strategic evaluations of these investments (e.g.,
  Srivastava, Shervani and Fahey 1998)?
• How should marketers incorporate intangibles such
  as customer satisfaction, branding strategies or
  new product innovation into their decisions. Can
  we extend our treatment of these investment
  decisions from aggregate models of shareholder
  value to individual (company-specific) level
  models?
• How should we accommodate approaches to resource
  allocation across organizational unit within
  models of customer equity approach (which
  typically allocate resources across customers and
  marketing decision variables)?
• Forward looking metrics and peripheral vision

6
(4) Customer Service Experiences

• Customer choices and clout are increasing while
  marketing productivity is declining (e.g., due to
  fragmentation of media). Marketers must involve
  the customer in the marketing process and build a
  sense of collaboration and reciprocity with their
  customers (dual creation of value,
  co-production). All of which require new
  customer insights and innovative marketing
  strategies and tactics.
• Dynamic models are required that can describe
  path dependent outcomes, whereby relationships
  are influenced by how the organization responds
  to customers, competitors and markets (and vice
  versa).
• RC (2006) identify real time marketing,
  dynamic customer satisfaction and dynamic
  interaction and customization as three topics
  that require additional research. They are
  advocating the development of dynamic models in
  which the customer is an active, rather than a
  passive participant, to whom the organization
  responds.
• Research should intensify its study of the
  effects of actions by competing service
  organizations. This extension is especially
  challenging in the current economic environment
  which is characterized by fuzzy market boundaries
  that allow competition to penetrate from adjacent
  market spaces.

7
(5) New Media Channels

• Proliferation of marketing options, fragmentation
  of media and convergence of media and channels
  have altered traditional marketing mix and
  resource allocation strategy.
• Given new media for reaching customers and
  prospects, marketers have questions about
• determining the right marketing mix
• measuring the effectiveness of alternatives,
  especially the newest vehicles/devices (PCs via
  broadband, 3-GB mobile phones, iPods with video,
  satellite radio, in-store digital media, RFID,
  others)
• Online versus offline behavior
• Role of WOM and social networks
• Societal implications