Service Management and Marketing: Customer Relationship Perspective (2nd edition)

Citation

Brodie, R.J. (2002), "Service Management and Marketing: Customer Relationship Perspective (2nd edition)", European Journal of Marketing, Vol. 36 No. 9/10, pp. 1164-1166. https://doi.org/10.1108/ejm.2002.36.9_10.1164.1

This first edition of this text was published in 1990. While this is called a second edition, there has been considerable change and development, to the point where Grönroos claims in his preface this is a totally new book. However, while the new edition has new content, its basic philosophy of providing a broad service management perspective on business is unchanged. While the book might initially be thought of as a services marketing text, the scope is far broader. Grönroos takes the view that all businesses are service businesses and the book offers a management perspective that reflects this. Thus it is just as relevant to manufacturers of physical goods and organisations in the public sector as it is to what have traditionally been thought of as service firms.

The second edition augments the first edition by integrating another decade of research and business writings. New chapters have been included, chapters have been dropped and the remaining chapters have been substantially rewritten. This provides a pleasant surprise when compared with new editions of many North American texts which usually have very minor developments.

A basic premise adopted by Grönroos is that services are inherently relational. Thus what is needed is a customer relationship approach to management that focuses on creating shareholder value. This relationship management approach recognises the importance of the role of intellectual capital in creating value. Thus the value processes associated with internal customers (employees) are just as important as the value processes with external customers.

An important contribution of this book is the way Grönroos develops the logic of service competition (or cooperation). He argues that this approach is appropriate for most businesses and supersedes the strategies that focus on the core product, price/cost and image. While service competition is nothing new, what has become more important is the strategic importance of services to most organisations to the point where it is the basis of their competitive advantage.

While the term marketing is used in the title, Grönroos recognises the type of marketing needed for customer management and service competition is different from the traditional marketing. This is because marketing management has traditionally focused on obtaining customers and not focused on the management processes associated with the retention of customers. When retention of customers is emphasised then the boundaries between what is marketing and what is management are blurred. What is central is the way relationships are managed.

The first eight chapters focus on the basic perspective and building‐blocks needed for the customer relationship approach, while the remaining eight chapters focus on more specific management issues:

1. 1.

   (1) The service relationship imperative: managing service competition.

2. 2.

   (2) Managing customer relationships: an alternative paradigm in management and marketing.

3. 3.

   (3) The nature of services and service consumption, and its marketing consequences.

4. 4.

   (4) Service and relationship quality.

5. 5.

   (5) Quality management in services.

6. 6.

   (6) Return on service relationships.

7. 7.

   (7) Managing the augmented service offering.

8. 8.

   (8) Principles of service management.

9. 9.

   (9) Managing service productivity.

10. 10.

    (10) Managing marketing‐ or market‐oriented management.

11. 11.

    (11) Managing total integrated marketing communication.

12. 12.

    (12) Managing brand relationships and image.

13. 13.

    (13) Market‐oriented organisation: structure resources and service processes.

14. 14.

    (14) Managing internal marketing: a prerequisite for successfully managing customer relationships.

15. 15.

    (15) Managing service culture: an internal service imperative.

16. 16.

    (16) Conclusions: managing relationships and the six rules of services.

The later chapters that focus on specific management issues are up to date and challenging. I was particularly interested in the way the topics “Market‐oriented management”, “Integrated marketing communication” and “Managing brand relationships and image” were integrated into the relationship management approach. However, while the chapter on “Return on service relationships” provides an excellent foundation for the management of the value of relationships, it would have been useful for this framework to be used more in the chapters on the specific management issues. For example, little attention is given to the value of brands and the way the equity of brand relationships could be managed. Similarly, while an excellent framework for valuing and managing customers is developed, this is not integrated with the recent North American literature about customer equity.

One limitation of the book is that it does not pay explicit attention to managing services in the e‐commerce environment. While the relationship management processes may not differ much, this is a “hot” topic. It would have been useful to have a chapter devoted to this topic that drew on the latest academic and business writings.

The structure and content of the text lend themselves ideally to a final year undergraduate or MBA services management or marketing course. It could also serve as supplementary introductory reading for a PhD seminar on this topic. The book is very well written and easy to comprehend but is also intellectually challenging. It is very much a European text, so is not cluttered with many of the pedagogical features of the more bulky North American counterparts. However, it does include a number of useful mini cases that could serve as a basis for stimulating class discussion. At the end of each chapter there are a good set of up to date further readings and a set of reference notes about the literature that has been used to develop the chapter.

The book is also suitable to practising managers and consultants who would like to stimulate their thinking. It has a good index, so a view on any management issue can be easily accessed.

In conclusion, I endorse the comments made by Philip Kotler who claims that the book is “the most scholarly and provocative examination of services marketing that he has seen”, and Jag Sheth, who writes “It is the most comprehensive and integrative textbook in the field. And the real icing on the cake is its unique customer relationship perspective to service marketing”. We have waited for a decade for this new edition and the wait has been worthwhile. This is an original and insightful book that carefully draws on a broad range of literature. Apart from using it for teaching it is an essential addition to the library of any academic who is working in this area.