Download Hot Topics in Services

Hot Topics in Services
Ruth N. Bolton
Professor of Marketing
W. P. Carey Chair in Marketing
Center for Service Leadership
W. P Carey School of Business
Arizona State University
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.”
(1) A New Organizational Reality
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“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.
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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).
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Emerging markets, marketing to the bottom of the pyramid
(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.
(3) Metrics and Performance
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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
(4) Customer Service Experiences*
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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).
R&C (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.
(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:
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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, instore digital media, RFID, others)
Online versus offline behavior
Role of WOM and social networks
Societal implications