ch01 PPT For Class

John Wiley & Sons Ltd
2016
Service Management and

Marketing 4e / Christian Grnroos /
9781118921449
Everyone faces service

competition. By
providing service, firms
make themselves
meaningful for their
customers
2016

Marketing 4e / Christian Gronroos /
9781118921449
The nature of service and customer

relationships
Service is support for customers individual processes in a
way that facilitates their value and this support is enabled
when knowledge and skills are used on resources
The ultimate goal of service-based business is to facilitate
value creation for the customer which in return enables the
service provider to capture value from the relationship with
service as a mediator
Service is a process, where the service providers resources
and the customer often interact to some extent.
To become a service provider, the resources of the firms
offering can be of any kind such as physical goods, service
activities, information or combination of these.
Key relationship-based
characteristics
The service provider and customer
engage in in long term business
contact
The relationship requires that the
service provider gains insights into
the customers everyday processes
The goal of a relationship is mutual
value creation (win-win situation)
3 important strategic requirements

of a relationship strategy
Redefine the business as a service business and
the key competitive element as service competition
(competing with service and a total service
offering, not just a sale of rice alone)
Look at the organization as a process management
perspective and not from a functionalistic
perspective. (to manage the process of supporting
and facilitating value creation for the villagers, not
only to distribute rice)
Establish partnerships and a network to handle the
whole services (close contacts with well known rice
farmers)
3 tactical elements of a relationship

strategy
1. seek direct contacts with
customers and other business
partners (such as rice farmers)
2. Build a database covering a
necessary information about
customers and others
3. Develop a customer-centric
service system
Commercial Analysis of
Business
Commercial Outcome of the Business based
on three elements
1. Capital wealth in the form of money or
assets invested in a business to generate
income
2. Costs total money time and resources
associated with a purchase or activity
3. Revenue total amount of money received
by the company for goods sold or services
provided during a certain time period
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Two variables of business

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2 Variables from commercial pt. of

view
Profit Variable dominating focus on
revenues and revenue generation or
dominating focus on costs.
Process Variables dominating focus
on the firms resources and
processes or dominating focus on the
customers resources and processes.
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Various Position/Focus of
Firms
Customer Focus - dominating interest in their own
resources and processes as well as in the price they are
required to pay
Traditional Merchants Focus focus on selling
Product Business Focus - management and
organizations mental focus is dominated by an interest
in the firms own resources and processes, concern for
cost and cost-efficiency.
Service Business Focus -business approach that is
characterized by a dominating focus on gaining in-depth
insight into the customers process and resources and
on how revenues are generated for the firm.
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A customer Focus: the firm as a

service business

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13
Process Management
Perspective
an ongoing relationship with customers where
customer looks for value support by the total
service offering requires internal collaboration
among departments that are responsible for
different elements of the offering such as the
core product, advertising the product,
delivering the product, taking care of the
complaints and rectifying mistakes and
quality faults, maintaining the products,
billing routines, product documentation .
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Functionalistic organization
It allows sub-optimization, because
every activity and corresponding
department within a company is
more oriented towards specialization
within departments than
collaboration between them

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4 types of resources are central

to the development of
successful service system
1. Customers take a much more active role
2. Technology- computerized system and
information technology used in design,
production, administration, service and
maintenance
3. Employees- attitude, performance and
commitment
4. Time spend by the customer with supplier
should not be wasted
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Customer value and value

creation
Service Management requires a customerfocused outside-in approach.
Value for customers and the service
providers capability to support its
customer process
Value-in-exchange - when sale is
concluded and money is paid for the
resource
Value in use evolves over time during the
usage or consumption process
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Value generation process

What the service provider does and what the
customer does in the total process of creating
value for the customer.
Value generation process can be divided into
three (3) spheres
A customer sphere (1) customer alone and (2) w/
customers ecosystem(family, friends, bus associates)
A joint sphere-customer directly interacts w/ service
provider
A provider sphere the firm compiles resources such
as products, services, information; to facilitate the
customers creation of value in use
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Value co-creation: value for the customers

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Value for the service

provider

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John Wiley & Sons Ltd

Service Management and

Everyone faces service

Service Management and

The nature of service and customer

3 important strategic requirements

3 tactical elements of a relationship

Service Management and

Two variables of business

John Wiley & Sons Ltd

Service Management and

2 Variables from commercial pt. of

Service Management and

Service Management and

John Wiley & Sons Ltd

Service Management and

John Wiley & Sons Ltd

Service Management and

A customer Focus: the firm as a

John Wiley & Sons Ltd

Service Management and

Service Management and

John Wiley & Sons Ltd

Service Management and

John Wiley & Sons Ltd

Service Management and

4 types of resources are central

Service Management and

Customer value and value

Service Management and

John Wiley & Sons Ltd

Service Management and

Value generation process

Service Management and

Value co-creation: value for the customers

John Wiley & Sons Ltd

Service Management and

Value for the service

John Wiley & Sons Ltd

Service Management and

John Wiley & Sons Ltd

Service Management and

John Wiley & Sons Ltd

Service Management and

John Wiley & Sons Ltd

Service Management and

John Wiley & Sons Ltd

Service Management and

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