Service Management and Marketing: Managing the Service Profit Logic, 4th Edition

CHAPTER 1THE SERVICE AND RELATIONSHIP IMPERATIVE: MANAGING IN SERVICE COMPETITION

“Everyone faces service competition. By providing service, firms make themselves meaningful for their customers.”

INTRODUCTION

In this introductory chapter the logic of service as a business perspective and the relationship between service and customer interactions are discussed, and the concept of service competition is introduced. Service as a strategy in comparison with other strategic approaches is considered in detail. Strategic and tactical implications of a service strategy and of a relationship approach to customers are outlined. The concept of service logic and its implications for the value generation process and value co-creation are then presented. Further, the meaning of a customer relationship approach and a number of aspects of customer relationships are discussed. Finally, some central aspects of the book are presented as guidelines for the reader. After having read this chapter the reader should understand the logic of service and the characteristics of a service strategy, and know which strategic and tactical implications follow from such a strategy. It should also be clear how value evolves for customers as value-in-use and what roles the firm and customer have in the value process.

ONCE UPON A TIME: A CASE OF SERVICE AND CUSTOMER RELATIONSHIPS

In a village in ancient China there was a young rice merchant, Ming Hua.¹ He was one of six rice merchants in that village. He was sitting ...