Services marketing

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Jump to: navigation, search Services marketing is a sub field of marketing, which can be split into the two main areas of goods marketing (which includes the marketing of fast moving consumer goods (FMCG) and durables) and services marketing. Services marketing typically refers to both business to consumer (B2C) and business to business (B2B) services, and includes marketing of services like telecommunications services, financial services, all types of hospitality services, car rental services, air travel, health care services and professional services. The range of approaches and expressions of a marketing idea developed with the hope that it be effective in conveying the ideas to the diverse population of people who receive it. Services are economic activities offered by one party to another. Often time-based, performances bring about desired results to recipients, objects, or other assets for which purchasers have responsibility. In exchange for money, time, and effort, service customers expect value from access to goods, labor, professional skills, facilities, networks, and systems; but they do not normally take ownership of any of the physical elements involved.[1] There has been a long academic debate on what makes services different from goods. The historical perspective in the late-eighteen and early-nineteenth centuries focused on creation and possession of wealth. Classical economists contended that goods were objects of value over which ownership rights could be established and exchanged. Ownership implied tangible possession of an object that had been acquired through purchase, barter or gift from the producer or previous owner and was legally identifiable as the property of the current owner. Adam Smiths famous book, The Wealth of Nations, published in Great Britain in 1776, distinguished between the outputs of what he termed productive and unproductive labor. The former, he stated, produced goods that could be stored after production and subsequently exchanged for money or other items of value. But unproductive labor, however honorable, useful, or necessary created services that perished at the time of production and therefore didnt contribute to wealth. Building on this theme, French economist Jean-Baptiste Say argued that production and consumption were inseparable in services, coining the term immaterial products to describe them.

[edit] Alternative View

A recently proposed alternative view is that services involve a form of rental through which customers can obtain benefits[2]. What customers value and are willing to pay for are desired experiences and solutions. The term, rent, can be used as a general term to describe payment made for use of something or access to skills and expertise, facilities or networks (usually for a defined period of time), instead of buying it outright (which is not even possible in many instances).[3][4]

There are five broad categories within the non-ownership framework 1. Rented goods services: These services enable customers to obtain the temporary right to use a physical good that they prefer not to own (e.g. boats, costumes) 2. Defined space and place rentals: These services obtain use of a defined portion of a larger space in a building, vehicle or other area which can be an end in its own right (e.g. storage container in a warehouse) or simply a means to an end (e.g. table in a restaurant, seat in an aircraft) 3. Labor and expertise rental: People are hired to perform work that customers either choose not to do for themselves (e.g. cleaning the house) or are unable to do due to the lack of expertise, tools and skills (e.g. car repairs, surgery) 4. Access to shared physical environments: These environments can be indoors or outdoors where customers rent the right to share the use of the environment (e.g. museums, theme parks, gyms, golf courses). 5. Access to and usage of systems and networks: Customers rent the right to participate in a specified network such as telecommunications, utilities, banking or insurance, with different fees for varying levels of access 6. Mobile Edition 7. Related Links: Pricing | Place | Promotion | Service Marketing Mix | Emarketing Mix 8. 9. What exactly are the characteristics of a service? How are services different from a product? In fact many organisations do have service elements to the product they sell, for example McDonalds sell physical products i.e. burgers but consumers are also concerned about the quality and speed of service, are staff cheerful and welcoming and do they serve with a smile on their face? 10. There are five characteristics to a service which will be discussed below. 11. 12. You cannot own and store a service like you can a product. Services are used or hired for a period of time. For example when buying a ticket to the USA the service lasts maybe 9 hours each way , but consumers want and expect excellent service for that time. Because you can measure the duration of the service consumers become more demanding of it. 13. 14. You cannot hold or touch a service unlike a product. In saying that although services are intangible the experience consumers obtain from the service has an impact on how they will perceive it. What do consumers perceive from customer service? the location, and the inner presentation of where they are purchasing the service?. 15. 16. Services cannot be separated from the service providers. A product when produced can be taken away from the producer. However a service is produced at or near the point of purchase. Take visiting a restaurant, you order your meal, the waiting and delivery of the

Service Marketing

Characteristics of a Service

1. Lack of ownership. 2. Intangibility

3. Inseparability

meal, the service provided by the waiter/ress is all apart of the service production process and is inseparable, the staff in a restaurant are as apart of the process as well as the quality of food provided. 17. 18. Services last a specific time and cannot be stored like a product for later use. If travelling by train, coach or air the service will only last the duration of the journey. The service is developed and used almost simultaneously. Again because of this time constraint consumers demand more. 19. 20. It is very difficult to make each service experience identical. If travelling by plane the service quality may differ from the first time you travelled by that airline to the second, because the airhostess is more or less experienced. A concert performed by a group on two nights may differ in slight ways because it is very difficult to standardise every dance move. Generally systems and procedures are put into place to make sure the service provided is consistent all the time, training in service organisations is essential for this, however in saying this there will always be subtle differences. 21. 22. Characteristics of a Service

4. Perishibility

5. Heterogeneity

23.

Recent trends in sm

Image Source Companies engaged in service must continue to reinvent themselves in order to survive the global market. Service companies must constantly instill competitive change in their organization to stay alive. Many business gurus believe that change is no longer optional but inevitable.Big companies that went down in the past failed to recognize important trends in their internal and external environment that were affecting their business. As a rule, decision makers of service companies must be well informed on the different trends in their internal and external environment so that they will be guided on what corporate changes they will implement in their respective companies. Below are some trends that are shaping the marketing approach of service companies:

Focus on Customer Service and Customer Satisfaction. Companies of the past focused too much on their internal being. Their capital expenditures were geared towards expansion of network, technical superiority, and market domination by size or scale.

These companies failed to recognize that unless customer needs are taken to account, these initiatives will not bring success or profit.

Focus on the Service Value. Customers want value for their money and they expect that companys offerings must be of prime quality at the least possible price. This is opposite to the principle of business operations. Companies will need more money to execute firstclass service because it requires investment on well-experienced employees which eventually require higher salaries, high-end facilities, additional employee trainings which all boils down to an increase operational expenditures. Managers of service companies are tasked to design a service model that are valuable to their customers but priced reasonably. In the past, companies believe that as long as they are big in terms of scale, size, and resources, their perceived value is high. This is no longer true today. The best judge of your companys value is your customers. Focus on Information Technology. One of the best contributions of technology is information. Technological advances led to the availability of information in all sectors of the organization. Examples of information are consumers purchasing behavior, consumers consumption pattern, consumers data information and so on. Information made the decision making process of top executives easy and later resulted to further innovation and improvement on the companys strategic direction. Companies who failed to use information also failed to understand their customers. Focus on Globalization. Globalization has swept companies from all over the world by storm. Local markets are already saturated by local players and the best way to expand their sales is to tap emerging international markets. However, internationalization approach is not as simple as transporting your service to another country. If your companys service model is effective in your local market, it is not a guarantee that it will also be effective in other countries. Culture, social behavior, and customs of the foreign country must always be taken into account. Many companies who jumped in the globalization band wagon failed to adjust their service approach when setting-up a foreign franchise. In the fast-food industry for instance, MC Donalds beef burger may not be a hit in countries like India because cows are sacred in this country. Some American fast-food chains that established franchise in the Middle East or some parts of Asia changed the ingredients of their food products and modify the service orientation of their staff in order to adapt to the taste and customs of the locals.

Read more in Marketing and Advertising Nine Ways to Increase the Value of Your Ads Without Writing Brand New Ones Business Marketing Success These are just some of the emerging trends that managers of service companies must consider. Companies that did not recognize these signs and failed to adapt to these trends have suffered and send millions or even billions of their resources in to the trash bin.