The Services Marketing

System and Customer

Psychology
Banwari Mittal
Northern Kentucky University
Julie Baker
University of Texas at Arlington

If there is one thing both thoughtful managers and academic scholars

would agree on, it is that the management of a service business is any-
thing but similar to running a physical goods business. From health
care to utilities, and from banking to entertainment, the growing service
industry worldwide appears to he a vibrant stage where people and tech-
nology, physical structures and vehicles, materials and information,
scripts and protocols, and myriad communications and actions are being
orchestrated to deliver the service performance. Witnessing this staged
performance, and indeed the target of it, is the customer, whose satis-
faction the services managers strive for. Managing a service business,
which is far more complex than a physical goods business, therefore
entails a need to understand the dynamics of customer response to the
multifaceted service performance. Psychological theories can help un-
ravel customer experience in the complex services marketing system.
The articles in this issue do just that, building both on services research
of the past three decades and on time-honored psychological theories.
To summarize their contribution, the services marketing system is
briefly described below, followed by a brief editorial commentary as-
signing a place to each article in that system.

Psychology & Marketing Vol, 15(8):727-733 (December 1998)

© 1998 John Wiley & Sons, Inc. CCC 0742-6046/98/080727-07
727
THE SERVICES MARKETING SYSTEM

A services marketing system consists of seven Ps (Booms & Bitner,

1981). Four of these are the conventional four Ps ofthe marketing mix,
comprising product, price, place, and promotion. Product translates for
services as service design, and place as location and distribution (e.g.,
distance to service sites, home delivery, 24-hour availability, etc.). Price
and promotion have common meaning for goods and services. To these
four Ps are added three other Ps, unique to services; people (service
employees who produce and deliver the service), process (the service
production procedures and protocol), and physical facilities (the sur-
roundings in which the service production is housed). These three Ps
comprise the service delivery system. See Figure 1.
The interface between the customer and the service delivery system
is the service encounter. It is useful to think of both the customer and
the service encounter as part ofthe services marketing system, because
the service encounter is where the service actually happens. Further-
more, the customer is not merely a passive recipient ofthe service prod-
uct; rather, he or she actually helps produce the service. Without his or
her participation, no matter how brief and perfunctory, the service could
not happen.
The logic of including the encounter and the customer within the ser-
vices marketing system is inescapable. It is often said that service is a
performance, in the same ilk as theater or an opera or a concert is (Grove
& Fisk, 1983). It calls upon very specific skills on the part ofthe service
provider, it unfolds in time, and it infiuences as well as is influenced by
the immediate and ongoing reaction and response of the service-recip-
ient customer just as the theater audience's reaction may affect the art-

Defensive Strategies
Marketing Mix Service • Value-Added
Common to Delivery • Value-Recovery
Goods and Services System
Customer

Encounter
Level of Contact-
•Cbntrqi',
Participation

Customer Response
• Affect
• Evaluation
• Behavior

Figure 1 The Services Marketing System

728 MITTAL AND BAKER

ists' performance. For the customer, the experience is complex. The cus-
tomer brings certain expectations to the service scene, communicates
them well or poorly, faces a standard or customized service delivery,
passively receives it or tries to mold it, finds explanations for failure or
success, feels joy or anger, and bonds to or distances him- or herself
from the service provider. It is clear that an understanding of such wide-
ranging customer experience in the service process will help service pro-
viders become more effective in their service performance.
The five articles in this special issue advance such understanding.
Two of them focus, separately, on two Ps unique to services—process
and people. One explores the effect of services strategies designed to
keep customers forever; the remaining two explore the intricacies of the
interaction between the delivery system and the customer. Collectively,
the domain of the five articles is the service encounter—the interface
between the service delivery system and the customer. The context of
the studies is the customer experience in these service encounters.
Three of the five articles are empirical. They form the middle of this
Special Issue. In the first of the three empirical papers, Houston, Bet-
tencourt, and Shanmuganathan propose and test an integrative model
of customer response to queue waiting in a service environment. The
m^odel is integrative in that it recognizes and brings into focus disparate
infiuences on customer reactions to waiting. Field theory is aptly used
here, because the theory frames a response as an outcome of factors
from multiple contexts (i.e., fields) surrounding the individual. Houston
et al. argue that just such a complex of multiple forces (both within the
individual and the situation) acts to determine the service customer's
response to service queue waits. Illustratively, and as the authors em-
pirically verify, wait acceptability depends not only upon the duration
of the wait, but also on sucb factors as personal costs of waiting, prior
individual expectations, and the importance of the particular transac-
tion. In turn the wait does not produce negative affect (e.g., anger) by
itself; rather it also depends on management's palliative actions (e.g.,
explanation or apology) and on the customer's attribution of the cause
for queue delay.
In the second empirical article, Pieters, Bottschen, and Thelen take
us on an interesting journey, qualitatively exploring the web of cus-
tomer desires and expectations from service contact personnel. Utilizing
the means-end chain theory and its qualitative method, employed pre-
viously for exploring the meaning of products but not services, these
authors explore the motivational linkages underlying customer expec-
tations of service employees. Interestingly, this method uncovered three
expectation clusters the authors term decision help, customer control,
and relational value. Customers desire certain service-employee behav-
iors, for example, because they assist customers in making decisions.
Other employee behaviors are desired for their relational or social-ex-
change value, and still others are desired so that the customer perceives

GUEST EDITORIAL 729

being in control of the interaction. These specific clusters are interesting
in themselves, hut the article's utility goes heyond them and illustrates
a method that service managers may utilize to identify the web of cus-
tomer interaction expectations in their own contexts.
Finally, in the third empirical article, Duhe and Maute examine the
question of whether defensive marketing strategies are helpful in win-
ning a service customer's loyalty toward the service firm. They juxtapose
two related defensive strategies: value added (where enhanced cus-
tomer benefits accumulate with repeated patronage) and value recovery
(where service failures are compensated). They argue that, following
social-exchange psychologist Rusbolt's investment model, the two strat-
egies should influence customer satisfaction and loyalty differently.
Their results show that a value-added strategy enhances customer sat-
isfaction only if a value-recovery strategy is already in place. Further-
more, a value-recovery strategy enhances enduring (long-term) loyalty
as well as situational (immediate) loyalty in both high and low compet-
itive environments; in contrast, a value-added strategy enhances cus-
tomer loyalty (both enduring and situational) only under conditions of
low competition.
Two conceptual articles flank the three empirical articles. At the
front-end is an invited article penned especially for this issue by Bear-
den, a noted consumer researcher, along with his colleagues Malhotra
and Uscategui. These authors build a conceptual model of the relation-
ship between the level of customer contact in a service encounter and
customers' service satisfaction. Their premise is that not all customers
in all situations desire a high level of contact with the service contact
person. This is an intriguing perspective that adds depth to our under-
standing of the customers' service experience. The authors propose that
specific customer characteristics, employee characteristics, and service
characteristics influence whether customers desire high or low levels of
contact and how that preference translates into their satisfaction with
the service experience. Eleven specific propositions are offered that pro-
vide a rich source of ideas for future testing both by academics and by
managers. The work of Bearden et al. is grounded in broad and eclectic
theory, and it is at the same time pragmatically informed and inform-
ative, illuminating the right confluence of conditions under which both
low-contact and high-contact services would separately be effective in
producing customer satisfaction.
The second conceptual article, also invited, concludes the Special Is-
sue. In it, noted consumer researcher van Raaij, with his colleague
Pruyn, presents a European perspective, focusing on the service en-
counter. Like Bearden et al., Raaij and Pruyn reflect on the multiple
influences on customers' view of the service encounter. They take us on
a whirlwind tour of the microprocesses (both cognitive and affective)
occurring inside the mind of the service customer. The view of the ser-
vice customer Raaij and Pruyn offer us is one of a very active, very

730 MITTAL AND BAKER

involved customer caught in the midst of a dynamic event that is social
as well as commercial. In this setting, the customer is experiencing the
service as well as participating in it. His or her evaluation depends on
levels of self-participation and control over the process. This complex
process is given some order by the use of such explanatory theories as
attribution, self-perception, and equity. The exposition is made mana-
gerially relevant by delineating the customer evaluation processes along
two broad managerial concerns: the problems of service validity (Is the
correct service produced?) and service reliability (Is the service correctly
produced?). The resulting propositions are a rich potpourri of ideas to
excite future academic researchers and thoughtful practitioners alike.
In summary, tbe five articles presented in this issue contribute to the
development of services theory, offer psychological explanations of ser-
vices customer response, enhance managerial understanding, and pro-
vide a rich source of ideas for further development and testing.
The guest editors for this special issue bad three goals: to publish
articles that anchor explanations of service-customer response in psy-
chological theories, to present the thinking of an international group of
service researchers, and to provide service managers with perspectives
for designing more effective service marketing strategies. The five ar-
ticles in this issue advance these goals.
As regards the first goal, articles were sought that did not merely
measure consumer responses (e.g., evaluations, satisfaction, loyalty,
etc.), but examine these responses in terms of some basic psychological
processes. The studies in this issue draw from an array of theories and
frameworks in psychology: field theory, attribution theory, the invest-
ment model of ongoing relationships, theories of personality (e.g., social
anxiety, self-efificacy), and means-end chain theory.
Toward the second goal, the submitted articles came from researchers
in Europe, Asia, Australia, Canada, and of course, the U.S. The three
articles that passed the double-blind review process represent U.S. and
non-U.S. origins well. To these three were added two invited articles.
Departing from convention, the guest editors sought authors without a
prior established record in services marketing research; the invitees
(one from the U.S. and one from Europe) had to be renowned scholars
in consumer behavior, willing to apply their expertise to a domain rel-
atively new to them. Bill Bearden and Fred Raaij accepted this chal-
lenge, and in separate articles they, with their co-authors, offer a wealth
of fresh ideas to the field.
Toward the third goal (namely, to offer insights to practitioners), a
three-prong strategy was adopted. First, the articles had to deal with
consumer response to service marketing strategies. Thus, contextuaily,
the research was to be situated in one or tbe other element of the mar-
keting mix and/or strategy. The selected articles speak to such practical
concerns of managers as wait time, physical facility designs, improving
the employee-customer interface, and the efficacy of defensive market-

GUEST EDITORIAL 731

ing strategies often employed by services marketers. Second, the articles
had to be written in a style accessible and useful to managers. Tactics
utilized for this purpose included setting up the problem in a real-world
rather than an academic research context, avoiding citations in the in-
troduction, and in subsequent text limiting them to those most relevant
and deserving of credit, articulating theories substantively (rather than
assuming away the substance by citations to prior expositions), pre-
senting results also in substantive rather then merely statistical terms,
and placing technical details in appendices. Guest editors, not authors,
deserve blame, if any, for these tactical departures from conventional
practice. Finally, the authors were enjoined to spell out, nontrivialiy,
the managerial implications of their work. As a result, the flve articles
are scholarly as well as practical. Furthermore, they are reader-friendly
to a broad audience, including managers and academics in other disci-
plines.
It has been a pleasure for us to bring this Special Issue together. We
are fortunate to have had the chance to work with a dedicated group of
authors, whose close attention to our goals and suggestions and to re-
viewer input helped us collectively achieve high quality as well as read-
ability for a broad audience. In this partnership, our reviewers, listed
in this issue, worked very hard, accommodating our often urgent re-
quests for help, and encouraging us in our goals and efforts; to them,
we offer our sincere gratitude. We are also deeply grateful to Rajan
Nataraajan, who in his capacity as Executive Editor came to our rescue
whenever we needed guidance. Finally, our authors deserve deep ap-
preciation for all their labors. As we saw the five articles evolve into
their present shape, the key ideas in them provoked and intrigued us
constantly. We delight in offering them to our readers and hope that
readers find them as rewarding as did we.

LIST OF REVIEWERS FOR THIS SPECIAL ISSUE

Eugene Anderson Neeli Bendapudi

University of Michigan The Ohio State University
Tor Wallin Andreassen John Bowen
Norwegian School of Management, Norway University of Nevada Las Vegas
Jill S. Attaway Edward C. Chang
Illinois State University Northern Kentucky University
Emin Babakus Catherine A. Cole
The University of Memphis University of Iowa
Barry J. Babin Pratibha Dabholkar
University of Southern Mississippi University of Tennessee
James H. Barnes Laurette Dube
University of Mississippi McGill University
Steve Baron Christine Ennew
Manchester Metropolitan University University of Nottingham
United Kingdom Great Britain

732 MITTAL AND BAKER

Renee Florsheim Keith B. Murray
Loyola Marymount University Bryant College
Ronald F. Goldsmith Richard Olshavsky
Florida State University Indiana University
Cathy Goodwin Amy L. Ostrom
Penn State Great Valley Arizona State University
Jerry Gotlieh Rik Pieters
Western Kentucky University Tilburg University
Kent Grayson The Netherlands
London Busine.ss School Matthew D. Shank
Great Britain Northern Kentucky University
Michael HartHne Patricia Sorce
Louisiana State University Rochester Institute of Technology
Doug Hoffman Dave Stewart
University of North Carolina at Wilmington University of Southern California
Dawn Iacobucci John E. Swan
Northwestern University University of Alabama—^Birmingham
Susan Keaveney Shirley Taylor
University of Colorado^Denver Queen's University
Scott W. Kelley Canada
University of Kentucky Gail Tom
Soren Kock California State University at Sacramento
Swedish School of Economics and Bus. Admin. W. Fred van Raaij
Finland Erasmus University Rotterdam
Veronica Liljander The Netherlands
Swedish School of Economics and Bus. Admin. Ehzabeth Wilson
Finland Louisiana State University
Kenneth R. Lord Rohert B. Woodruff
Niagra University The University of Tennessee
Greg Marshall Arch G. Woodside
University of South Florida Tulane University
Ozzie Mascarenhas Judy Zaichkowsky
University of Detroit Mercy Simon Fraser University
Daryl McKee Canada
Louisiana State University
John Mowen
Oklahoma State University

REFERENCES
Booms B. H., & Bitner, M. J. (1981). Marketing strategies and organizational
structures for services firms. In J. H. Donnelly & W. R. George (Eds.), Mar-
keting of services (pp. 47-51). Chicago: American Marketing Association.
Grove, S., & Fisk R. (1983). The dramaturgy of services exchange: An analytical
framework for services marketing. In L. Berry, G. Shostack, & G. Upak
(Eds.), Emerging perspectives on services marketing (pp. 45-49). Chicago:
American Marketing Association.
Correspondence regarding this article should be sent to: Banwari Mittal, De-
partment of Management and Marketing, College of Business, Northern Ken-
tucky University, Highland Heights, KY 41099 (Mittal$b@NKU.EDU).

GUEST EDITORIAL 733