A01_LOVE8749_07_SE_REV_FM.QXD 1/25/10 9:30 PM Page 1 S M ERVICES ARKETING P , T , S EOPLE ECHNOLOGY TRATEGY Global Edition A01_LOVE8749_07_SE_REV_FM.QXD 1/25/10 9:30 PM Page 2 This page is intentionally left blank. A01_LOVE8749_07_SE_REV_FM.QXD 1/25/10 9:30 PM Page 3 Seventh Edition S M ERVICES ARKETING P , T , S EOPLE ECHNOLOGY TRATEGY Global Edition Christopher Lovelock Yale University Jochen Wirtz National University of Singapore Boston Columbus Indianapolis New York San Francisco Upper Saddle River Amsterdam Cape Town Dubai London Madrid Milan Munich Paris Montréal Toronto Delhi Mexico City Sao Paulo Sydney Hong Kong Seoul Singapore Taipei Tokyo Editorial Director: Sally Yagan Manager, Visual Research: Beth Brenzel Editor in Chief: Eric Svendsen Photo Researcher: Kathy Ringrose Acquisitions Editor: James Heine Manager, Rights and Permissions: Zina Arabia Acquisitions Editor, Global Edition: Steven Jackson Image Permission Coordinator: Debbie Latronica Editorial Project Manager: Kierra Kashickey Manager, Cover Visual Research & Permissions: Editorial Assistant: Karin Williams Karen Sanatar Director of Marketing: Patrice Lumumba Jones Cover Art: ©BC photography/Alamy Senior Marketing Manager: Anne K. Fahlgren Media Editor: Ashley Lulling Marketing Manger, International: Dean Erasmus Media Production Project Manager: Lisa Rinaldi Marketing Assistant: Melinda Jensen Full-Service Project Management: Elm Street Senior Managing Editor: Judy Leale Publishing Services Project Manager: Clara Bartunek Composition:Integra Software Services Pvt. Ltd. Senior Operations Supervisor: Arnold Vila Printer/Binder:Edwards Brothers Operations Specialist: Ilene Kahn Cover Printer: Lehigh-Phoenix Senior Art Director: Jayne Conte Color/Hagerstown Cover Designer: Jodi Notowitz Text Font: 10/12 Palatino Credits and acknowledgments borrowed from other sources and reproduced, with permission, in this textbook appear on appropriate page within text (or on page 625). This is a special edition of an established title widely used by colleges and universities throughout the world. Pearson published this exclusive edition for the benefit of students outside the United States and Canada. If you purchased this book within the United States or Canada you should be awarethat it has been im- ported without the approval of the Publisher or the Author. Copyright © 2011, 2007, 2004 by Christopher H. Lovelock and Jochen Wirtz, © 2001, 1996, by Christopher H. Lovelock. Pearson Education, Inc., publishing as Prentice Hall, One Lake Street, Upper Saddle River, New Jersey. All rights reserved. Manufactured in the United States of America. This publication is pro- tected by Copyright, and permission should be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise. To obtain permission(s) to use material from this work, please submit a written request to Pearson Education, Inc., Permissions Department, One Lake Street, Upper Saddle River,New Jersey 07458. Many of the designations by manufacturers and seller to distinguish their products are claimed as trade- marks. Where those designations appear in this book, and the publisher was aware of a trademark claim, the designations have been printed in initial caps or all caps. 10 9 8 7 6 5 4 3 ISBN 13: 978-0-13-611874-9 (Print) ISBN 10: 0-13-611874-7 ISBN 13: 978-1-29-201424-1 (PDF) A01_LOVE8749_07_SE_REV_FM.QXD 1/25/10 9:30 PM Page 5 With gratitude and in loving memory of Christopher Lovelock, One of the guiding lights of services marketing. Co-author, mentor, and friend, And above all, an inspiration. —JW A01_LOVE8749_07_SE_REV_FM.QXD 1/25/10 9:30 PM Page 6 This page is intentionally left blank. A01_LOVE8749_07_SE_REV_FM.QXD 1/25/10 9:30 PM Page 7 ABOUT THE AUTHORS As a team, Christopher Lovelock and Jochen Wirtz provide a blend of skills and experience that’s ideally suited to writing an authoritative and engaging services marketing text. Since first meeting in 1992, they’ve worked together on a vari- ety of projects, including cases, articles, conference papers, two Asian adaptations of earlier editions of Services Marketing, and the new text book Essentials of Services Marketing. In 2005, both were actively involved in planning the American Marketing Association’s biennial Service Research Conference, hosted by the National University of Singapore and attended by participants from 22 countries on five continents. The late Christopher Lovelockwas one of the pioneers of serv- ices marketing. He consulted and gave seminars and workshops for managers around the world, with a particular focus on strategic planning in services and managing the customer expe- rience. From 2001 to 2008, he had been an adjunct professor at the Yale School of Management, where he taught services mar- keting in the MBAprogram. After obtaining a BCom and an MAin economics from the University of Edinburgh, he worked in advertising with the London office of J. Walter Thompson Co. and then in cor- porate planning with Canadian Industries Ltd. in Montreal. Later, he obtained an MBA from Harvard and a PhD from Stanford, where he was also a postdoctoral fellow. Professor Lovelock’s distinguished academic career included 11 years on the faculty of the Harvard Business School and two years as a visiting professor at IMD in Switzerland. He has held faculty appointments at Berkeley, Stanford, and the Sloan School at MIT as well as visiting professorships at INSEAD in France and The University of Queensland in Australia. Author or co-author of over 60 articles, more than 100 teaching cases, and 27 books, Professor Lovelock has seen his work translated into 14 languages. He served on the editorial review boards of the Journal of Service Management, Journal of Service Research, Service Industries Journal, Cornell Hospitality Quarterly, and Marketing Management, and served as an ad hoc reviewer for the Journal of Marketing. Widely acknowledged as a thought leader in services, Christopher Lovelock has been honored with the American Marketing Association’s prestigious Award for Career Contributions in the Services Discipline. His article with Evert Gummesson, “Whither Services Marketing? In Search of a New Paradigm and Fresh Perspectives” won the AMA’s Best Services Article Award in 2005. Earlier, he received a best article award from the Journal of Marketing.Recognized many times for excellence in case writing, he has twice won top honors in the BusinessWeek European Case of the Year award. For further information, see www.lovelock.com. 7 A01_LOVE8749_07_SE_REV_FM.QXD 1/25/10 9:30 PM Page 8 8 About the Authors Jochen Wirtz holds a Ph.D. in services marketing from the London Business School and has worked in the field of serv- ices for over 20 years. He is a tenured associate professor at the National University of Singapore (NUS) where he teaches services marketing in executive, MBA, and undergraduate programs. He is also the founding director of the dual degree UCLA– NUS Executive MBAProgram, a Fellow of the NUS Teaching Academy, and an Associate Fellow of Executive Education at Saïd Business School, University of Oxford. Professor Wirtz’s research focuses on service marketing and has been published in over 80 academic journal articles, 100 conference presentations, and some 30 book chapters. He is a co-author of more than 10 books, including his latest— Essentials of Services Marketing (Prentice Hall, 2009) and Flying High in a Competitive Industry: Secrets of the World’s Leading Airline(McGraw Hill, 2009). In recognition of his excellence in teaching and research, Professor Wirtz has received 20 awards, including the prestigious, university-wide Outstanding Educator Award at the National University of Singapore and the 2009 Best Practical Implications Award by Emerald Group Publications. He serves on the editorial review boards of 10 academic journals, including the Journal of Service Management, Journal of Service Research, Journal of Service Science, and Cornell Hospitality Quarterly, and is an ad hoc reviewer for the Journal of Consumer Research, and Journal of Marketing. Professor Wirtz chaired the American Marketing Association’s biennial Service Research Conference in 2005 when it was held for the first time in Asia. Professor Wirtz has been an active management consultant, working with inter- national consulting firms, including Accenture, Arthur D. Little, and KPMG, and major service firms in the areas of strategy, business development, and customer feedback systems. Originally from Germany, Professor Wirtz spent seven years in London before moving to Asia. For further information, see www.JochenWirtz.com. A01_LOVE8749_07_SE_REV_FM.QXD 1/25/10 9:30 PM Page 9 ABOUT THE CONTRIBUTORS OF THE CASES Benjamin Edelmanis an assistant professor at Harvard Business School Lorelle Frazeris a professor at Griffith University, Australia James L. Heskettis Baker Foundation Professor at Harvard Business School Roger Hallowellis an affiliated professor of strategy at HEC Paris and a former profes- sor at Harvard Business School Sheryl E. Kimes is a professor at the School of Hotel Administration, Cornell University Jill Kleinis an associate professor of marketing, INSEAD, France Youngme Moon is Donald K. David Professor of Business Administration at Harvard Business School John A. Quelch is Senior Associate Dean and Lincoln Filene Professor of Business Administration at Harvard Business School Stowe Shoemaker is Associate Dean of Research and Donald Hubbs Distinguished Professor at Conrad Hilton College of Hotel and Restaurant Management, University of Houston Lauren Wrightis a professor of marketing, California State College, Chico 9