Marketing Strategies for Service Firms 203
and observable style of handling customers that embodies its intended customer value
proposition (in this case, luxury accommodations). Finally, service companies can
choose among different processesto deliver their service. For instance, McDonald’s out-
lets offer self-service, while Olive Garden restaurants offer table service.
A service encounter is affected by both visible and invisible elements (see
Figure 4-4). Consider a customer visiting a bank to get a loan (service X). The cus-
tomer sees other customers waiting for this and other services. The customer also
sees a physical environment (the building, interior, equipment, and furniture) as
well as bank personnel. Not visible to the customer is a whole “backroom” produc-
tion process and organization system that supports the visible business. Thus, the
service outcome, and whether or not people will be satisfied and ultimately remain
loyal to a service provider, are influenced by a host of variables.^11
In view of this complexity, Gronroos has argued that service marketing requires
not only external marketing, but also internal and interactive marketing (Figure 4-5).^12
External marketingdescribes the normal work to prepare, price, distribute, and promote
the service to customers. Internal marketingdescribes the work to train and motivate
employees to serve customers well. Berry has argued that the most important contribu-
tion the marketing department can make is to be “exceptionally clever in getting every-
one else in the organization to practice marketing.”^13
Interactive marketingdescribes the employees’ skill in serving the client. Because
the client judges service not only by its technical quality(e.g., Was the surgery success-
ful?) but also by its functional quality(e.g., Did the surgeon show concern and inspire
Figure 4-4 Elements in a Service Encounter