Marketing 654, Services Marketing, Pace University

Answers should be prepared to all of the questions below for each case.  All students should come to each class session with notes answering the questions for the case (or debate) assigned for each day.   Each student will select two cases to analyze in writing and hand in for grading (see course syllabus for more details), or will write a case from first-hand experience and analyze one of the cases below (see note at the bottom of this document).  All papers will be graded based on appropriate use of applicable textbook terms, responsiveness to the questions, presentation (including organization, appearance, grammar, punctuation, spelling, and readability), thoroughness of analysis, and demonstration of an understanding of the subject matter and assigned related reading.  All written analyses should be typed, double-spaced, and stapled.  Papers should clearly identify each question, and answer each separately.

1)  Euro Disney:  The First 100 Days

    1.  Assess Disney's decision to build a theme park in Europe.  Was the decision a wise one?  Why or why not?

    2.  What is Euro Disney's target market and what are the implications for the development and organization of the park?

    3.  Assess the implementation of Euro Disney's service delivery system.  What could the company have done differently?

    4.  What alternatives are now open to Euro Disney in terms of future development?

    5.  What recommendations would you make regarding a second theme park, cultural adaptations, staffing, and general management?

3) Is the Customer Always Right?

Prepare for a debate around the question "Is the Customer Always Right?".  Read chapter 4, and 158-161 in your text, and the separate articles distributed for this assignment, and formulate your arguments.  Students with last names starting with A - L will argue that the customer should always be treated as if he or she is right.  Students with names starting with M - Z will argue that the customer can sometimes be recognized as wrong.  The real issue here, of course, is not whether the customer is really always right, but whether the service provider should always respond as if the customer is right, or if there are too many potentially harmful or negative consequences to doing so all of the time.   It is, of course, easy to find middle ground in this argument, but we want to take the extremes for the sake of discussion.  After the debate, we will discuss your true feelings.

    3.  For each of the 10 situations at the end of the case, what is the issue?

     4.  For each situation, what are the alternative actions that could be pursued?

     5.  For each situation, what action do you recommend and why?

     6.  What are the keys to giving good service in a branch bank?

5) Estimating the Value of Service (Ace and Cumberland cases)

     Please read the two cases distributed separately: Ace Bank (B) and Cumberland Hotels (B).  Read both cases and decide what you think each company ought to do.  In both cases, company management is proposing improvement programs and we need to decide if these programs are advisable; i.e. will they pay off for the company?  Decide what you think they should do based on the data presented in the case.

     Then, after you have made your decision without the benefit of the computer program, answer the questions below using the ncompass discs.  If your last name starts with A-K, do ncompass analysis for the Ace Bank case.  If your name begins with L-Z, do the ncompass analysis for the Cumberland Hotels case.   For the other case (the one for which you are not doing ncompass analysis), you will be asked what you think the company ought to do, without benefit of the ncompass data.  If you wish, you may write up the case to which you are assigned as one of the two cases you are preparing for a grade.

To use the ncompass software, you need to first install it onto your computer's hard drive.  Put in disc 1 and tell your computer to run a:/setup.  Then click OK whenever prompted until it installs.  Put in disc 2 when prompted.  After the system is installed, leave in disc 2 and tell your computer to run a:/setupa.  This is an upgrade to the installation (The software authors made a mistake in the first installation program and sent me an update, which I copied onto disc 2).  It will tell you the directory already exists; just click OK.  You are now ready to run the program.

To run the program, first click on the ncompass icon (or find it in your program files).  Once you have the ncompass window, click on the open file button on the toolbar (or the pull down menu) and open the appropriate file for your case (ace.cpd or cumber.cpd).  Then you can check out whatever customer satisfaction data, etc. that you want to using the toolbar icons.  To do calculations, you will need to first input data.  To start inputting, you need to use the Input pulldown menu from the top of your screen.  All of the data you will need to input can be found in the case.  You can also adjust numbers if you want to experiment with different scenarios.  You will need to input a number of different things.  These are all on the list under the input pulldown menu.  Just click on each one and enter the appropriate data.  Data needed includes observed retention rate, market information (market size, market share, growth rate), average profit (neither case provides enough information to differentiate between satisfied and dissatisfied customers, so just put the same number in for each line), and improvement efforts. Under improvement efforts, you will need to first select a focus for your efforts, selecting both a process and a subprocess (you should select first those being considered in the case, but you can then experiment with others).  Then you need to go to the customer segment tab and tell what % of customers you want to be dissatisfied after the improvements.  Then you will go to the financial information tab to enter the costs of the program in each year you are expected to be working on the improvements (the case gives you cost
information) and the discount rates (15%) and years (3) suggested in the case questions.  After you enter all the appropriate data, you will be able to check the market share impact and the profit impact (including return on investment) by clicking on the appropriate tool bar icons.    Have fun!

     Questions for Ace Bank (B)

     Answer these before using the ncompass software:

     1.  Is management correct to focus on the training of its front line personnel?  Why?

     2.  Approximately what is Ace Bank's current customer retention rate?

     To answer the next questions, open the Ace.cpd file in the ncompass directory.  (To calculate NPV, assume a 3 year time horizon and a discount rate of 15%).

     3.  What will be the market share impact of maintaining the current level of teller training (assuming everything else remains the same)?  What will be the market share impact if the bank decides to implement the more intensive teller training program?

     4.  Will the efforts to improve teller training have a positive impact on profits the first year?  Why?  What about year three?  What does this imply about quality improvement programs?

     Questions for Cumberland Hotel (B)

     Answer these questions before using the ncompass software:

     1.  Approximately how many customers are there in the market?

     2.  Approximately how much does Cumberland Hotels spend for bathroom supplies each year?  If the company begins the new supply program, what will be the cost for the year (show how you arrived at your answer)?

     To answer the next questions, open the file Cumber.cpd in the ncompass directory.  (To calculate NPV, assume a 3 year time horizon and a discount rate of 15%).

     3.  Will the efforts to improve the bathroom supplies have a positive impact on profits?  What about market share?

     4.  Will converting the restaurants have a positive impact on profits?  What about market share?

     5.  Which program (if any) should Cumberland Hotels implement?  Why?

6)  GE Medical Systems

    1.  What are the primary components of Jack Welch's current growth strategy, or the "Third Revolution" at GE?

    2.  Why is GE shifting into services, and where do the growth opportunities appear to be?

    3.  What are the services offered by GE Medical Systems and who are their customers?

    4.  Describe TiP, including the philosophy behind it and its goals.  How does it fit with GE's overall strategy?

    5.  Why has TiP TV been so successful?  What are the benefits to customers?

    6.  Analyze the effectiveness (using criteria from chapter 7) and benefits of GEMS' service guarantee for on-site applications training.

    7.  Discuss some alternative actions available to GE Medical with respect to the TiP TV program including approaches to charging for the service and how the organization functions within GE.  Be sure to analyze the pros and cons of each alternative.

    8.  Recommend what GE Medical should do in terms of charging for TiP TV and internal organization.

7)  Ernst and Young and Quality Improvement

    1.  Describe the concept behind "Ernie" (customer benefits, market segment, positioning within E&Y's service offerings, goals).

    2.  How was Ernie developed?  Compare the process used to the new service development steps described in chapter 8.

    3.  Discuss the issues and challenges faced in the Quality Improvement case.

    4.  Compare and contrast the use of technology in the Ernst and Young case with the proposed computerized reception system in the Quality Improvement case.

    5.  Describe the alternatives open to Allan Moulter in the Quality Improvement case.  Discuss pros and cons of each alternative and make a recommendation for action.

    6.  What should Ernst and Young do to sustain its competitive advantage and differentiation?

8)  Virgin Atlantic Airways

    1.  What does VAA stand for in the minds of consumers?

    2.  What does VAA do well that leads to positive customer value perceptions?  As part of your answer, discuss briefly the VAA model.

    3.  Where is VAA vulnerable, i.e., what are their potential weaknesses?

    4.  What are possible actions for VAA to take in the future to bolster strengths and address weaknesses?

    5.  What actions do you recommend and why?

9) Shouldice Hospital

     1. What is the bundle of benefits purchased by the consumer from Shouldice Hospital?  In what ways is Shouldice's offering different from other hospitals?

     2. What is the target group of customers?  Who are they, and what do they have in common apart from a hernia?

     3. Identify as many growth alternatives available to Shouldice as you can.  Which alternative would you recommend and why?  (Select just one preferred approach, then give priority to the others or suggest others you might do as well).

     4. Analyze Shouldice's performance on the five dimensions of service quality:  reliability, responsiveness, empathy, assurance, and tangibles.  How does each dimension contribute to Shouldice's overall image or position in the marketplace?

10) Encounter with an American Airline

     1.  Did the airline do a good job of service recovery?  If not, why not?

     2.  Rewrite the story in the first person to reflect the way it should have happened.  The only thing you can't change is that the plane has mechanical problems, the flight is cancelled, and the passenger needs to spend the night.

     3.  Describe the backstage changes that will need to occur to make the changes you have suggested.

     4.  Discuss which of the changes you've recommended can be done at very little additional cost and which ones will be very costly.  Can you justify the expense of all of the changes you have recommended or just some of them?

     5.  If management tells you you can make only three changes, which ones would you make?  Why?

11)  A T & T (A and C)

    1.  Discuss Falcone's formation and management of his services salesforce.

    2.  What did Falcone's services salesforce do to break into the small business market?

    3.  How do the skills needed for small versus large markets differ, and what did Facone do to bridge the gap?

    4.  What do you think the results of the satisfaction survey will show?  (fill out one of your own with what you think the averages will be).  Discuss the more extreme of your answers.

    5.  Comment on the strengths and weaknesses of Falcone's strategy to make employees feel like customers (outlined in case C)

12) Encounter with Marriott

     1. Why does Marriott overbook rooms, resulting in some customers needing to be sent elsewhere?  Is this an appropriate practice?  Are there certain situations where it is appropriate and others where it is not, or doesn't it matter what the situation is?  What should Marriott's policies be on overbooking?

     2.  Did the clerk handle this situation in the best way he could?  Could he have done anything better?  If so, how?

     3.  If we accept that the hotel was overbooked (and that this cannot be changed), could Marriott have handled the situation differently to avoid having two unhappy customers?  Describe another approach Marriott could have used, and discuss which would have the best results and why.

     4.  How did the second woman get a room when there were no rooms available?  Why was she given a room when the professor was not?

     5.  Based on the tangible evidence and other information provided in the case, how does Marriott's positioning differ from Hyatt's?

13)  Club Med

    1.  Should Jean Lallement be happy or dissatisfied with the current situation (at the time of the case) at Club Med?  Why?

    2.  For each of the 11 comments described at the end of the case, describe a) the issue, b) alternative actions or responses that could be pursued, c) your evaluation of Mr. Lallement's response outlined in exhibit 6, and d) the action you recommend and why.

    3.  What is the key to Club Med's succeeding in North American markets?  What, if anything, will need to change in management and marketing programs?

14)  North Pittsburgh Telephone Company

    1.  What are the various choices facing Greg Sloan?  Evaluate the pros and cons of each choice.

    2.  What additional information would you want to help you make a decision?

    2.  What would you recommend as a pricing strategy?  Why?

    3.  How would you implement your approach?
 
 

Note:  In lieu of one of the cases above (or as an addition to seek to improve a grade), any student may opt to write a case based on one of his or her service encounters.  If so, the case should be similar to those used above and should include a decision to be made, appropriate questions, and suggested answers to those questions.