Services Marketing is a Form of Marketing Which Focuses on Selling Services

8/6/2019 Services Marketing is a Form of Marketing Which Focuses on Selling Services

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EducatSERVICE MARKETING AND ROLE OF CONSUMER IN SERVICEMARKETING

Introduction

Services marketing is marketing based on relationship and value. It may be used to market aservice or a product.

Marketing a service-bases business is different from marketing a product-base business.

Services marketing is a form of marketing which focuses on selling services. Services can betricky to sell and the marketing approach for them is much different than the approach for

products. Some companies offer both products and services and must use a mixture of styles; for example, a store which sells computers also tends to offer services such as helping people select

computers and providing computer repair. Such a store must market both its products and thesupporting services it offers to appeal to customers.

When people market services, the goal is not to get customers to buy a product, but to get peopleto do business with a particular company, often in a specific location. For example, a restaurantoffers a service: It provides food to customers, both on-site and in to-go form in many cases.When the restaurant markets itself, it must convince people that it is preferable to other restaurants and that its facility is worth the trip.

As with the marketing of products, the marketing of services covers issues like what is beingoffered, what the price point is, how it compares to similar things, and why people should choose

that particular iteration over other options. With services, which are often intangible in nature,consumers must also be convinced through services marketing that the service is something theyneed which will have some sort of benefit.

There are different approaches which can be taken in services marketing, depending on how people want the position the company and what kind of messages they want people to take awayfrom the marketing. A company might want to project itself as reliable and trustworthy if itoffers a service like security, or fun loving and adventurous for services like travel planning. Inall cases, people must be shown why it is that they would want to pay for services the companyoffers

Marketing schools usually discuss various techniques which can be used in services marketing.People may also develop their own techniques as they practice marketing in the real world andlearn more about what people look for, how they shop for services, and what makes a serviceappealing. Often, the goal is to establish a personal relationship with customers so that they willreturn for the company's services in the future, rather than taking their business elsewhere. Theloyalty is often to the quality of the service, rather than to a specific brand or image, and this


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makes services marketing somewhat different than product marketing, in which it is the value of the product which is important.

In most countries, services add more economic value than agriculture, raw materials andmanufacturing combined

In developed economies, employment is dominated by service jobs and most new job growthcomes from servicesJobs range from high-paid professionals and technicians to minimum-wage positionsService organizations can be any sizefrom huge global corporations to local small businessesMost activities by government agencies and nonprofit organizations involve services

Marketing revolves around 4 Ps viz. product, price, promotion and place but service marketingincludes 3 more Ps i.e. people, physical evidence and process.

Building relationships with customers has been the long goal of service marketers.But now withthe advent of internet computerized interaction has taken place and communication betweencustomer and service provider has reduced although there are very few service providers who

provide individual services.

Acts of Services :

y Administrative service, a part of the work load of university facultyy C ivil service, career employees of governmenty C ommunity service, volunteer service for the benefit of a community, or a punishment

that may be imposed by a courty C ustomer service, provision of assistance to customers or clientsy Table servicey D omestic service, employment in a residencey Fan service, a Japanese term referring to something which is specifically designed to

entertain fansy Military service, a country's armed forcesy Public services, services carried out with the aim of providing a public goody Selfless service, a service which is performed without any expectation of result or award.

Secrets of Service Marketing to Customers .

Customer Service Secret Number One - Build Business to C ustomer Loyalty. This is mynumber one customer service secret, and is by far the most important one. I was taught aboutBusiness to C ustomer Loyalty many, many years ago, before I started my own business, when Istill worked as a hotel detective in a ritzy down town C algary hotel. The hotel insisted that everyone of us who had contact with their customers know the customer by his full name and, when

possible, other personal or business information about him.

Customer Service Secret Number Two - provide true customer service. In todays marketenvironment, service has become a clich and it seems like everyones doing it. So, if


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everyone is doing it, why not jump ahead of the wolf pack by providing even more creative, personalized service to your customers than your competitors can?

One size shoe does not fit all feet. Nor is one type of customer service suitable for all your customers. Lets say your advertised featured customer service is Home D elivery. The first

customer may welcome this Home D elivery because its difficult for him to get out and shop in person

Customer Service Secret Number Three - The C ustomer Is always Right. If a customer comes to you about a complaint, be very serious about how you handle it. Is the customer upsetand angry? First, calm him with words and action and show that you are serious about doingsomething to correct the problem. Even if it is obvious that hes wrong, sometimes its better for repeat business to take the loss and compensate the customer.

Customer Service Secret Number Four - be honest with your customers. If your customer even suspects that you are trying to pull something over on him, you can kiss that customer

goodbye - permanently! Were you fortunate enough to purchase an item from a wholesaler at adiscount price? Instead of being tempted to richly improve your bottom line, pass that saving onto your customer. This will ingrain confidence in your customer so that, in the future, your customers will know where to come for REAL savings.

Customer Service Secret Number Five - educate your staff to be equally as concerned aboutyour customers as you are. A final bit of advice about customer service; If you arent takingcare of your customers, your competition will. Print that advice out in large, bold letters and

past it above your cash register.

Services Marketing Strategies

y C hoosing the right global marketing strategy is vital for taking your business or organization worldwide. Not every type of campaign or plan will work for everycompany, so it is important to discuss all your options with a professional marketingconsultant.

y Interview and then hire a marketing firm that specializes in developing and implementingan international marketing strategy. The easiest way to select the best firm is to issue arequest for proposal (RFP) to selected firms.

Significance of service marketing-

1) Least possible defence on technology:- our dependence on sophisticated technology hasincreased . D eveloped countries are technologically advanced and so they do not face any

problem while integrating the national development . The developing countries aretechnologically backward and so their problem are more complicated .

2) Raising the standard of living :- for increasing the standard living we should increase therate of capital formation ,economic transformation and national income . It is also


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important mases are aware of living style and behavior. Service marketing concentratesits attention on all components and helps human resources.

3) Generation and expansion of job opportunities :- service sector creates and expands jobopportunities .it is meant that we increase the contribution of services to gnp andmotivate organization to participate

4) Optimum utilization of untapped resources :- Service sector provides opportunities tomake optimum utilization of untapped resources.The personal care services ,tourism,entertainment , hotel, etc.if not utilized is a national waste.

5) Paying avenues for capital formation:- The contribution of capital formation to the process of socio-economic transformation is appreciable for transforming nationaleconomy, it is essential that we activate our efforts for capital formation .It means our investment are termed to be productive.

Services marketing relates to the marketing of services, as opposed to tangible products. Aservice (as opposed to a good) is typically defined as follows:

y The use of it is inseparable from its purchase (i.e., a service is used and consumedsimultaneously)

y It does not possess material form, and thus cannot be touched, seen, heard, tasted, or smelled.

y The use of a service is inherently subjective, meaning that several persons experiencing aservice would each experience it uniquely.

For example, a train ride can be deemed a service. If one buys a train ticket, the use of the train istypically experienced concurrently with the purchase of the ticket. Although the train is a

physical object, one is not paying for the permanent ownership of the tangible components of thetrain.

Services (compared with goods) can also be viewed as a spectrum. Not all products are puregoods, nor are all pure services. An example would be a restaurant, where a waiter's service isintangible, but the food is tangible.


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Role of Consumers in Service Process :

The customers presence in the service process is linked to the facility design. He is said to benon-existent in the manufacturing process. The automobiles which are manufactured in factoriesare not concerned with eventual buyers as the buyers see the product for the first time in the

showroom.

The customer can play an active part in the process of providing service. The given belowexamples show us the knowledge, experience, motivation and also honesty of a customer directlyaffect the performance of the service system.

1. Accurate medical record of a patient can influence the effectiveness of attending physician in terms of diagnoses and prescribe appropriate drugs.

2. Education of a student is largely determined by a students own efforts and commitmentstowards delivering good educations.

3.

The popularity of super markets and discount stores is based on the fact that thecustomers are willing to appreciate the benefits of retailing process.

This can be seen in the fast food restaurants. Here the customers cannot place orders directlyfrom a menu but is expected to throw cups and plates in the dustbin. Here the customer expects a faster service and reasonable prices. The service providers benefit in followingways:

1. There are few personnel who require supervision.2. The customer provides labour when required.

Therefore, the service capacity varies directly with demand rather than being fixed size of thestaff employed. Here the customers act like temporary employees. This starategy is beingreceiving great acceptance in the educated society, where self reliance is high valued. Instead of

being a passive buyer, the customer becomes a potential contributor to G D P.

Consumers Behavioral Role in Service Marketing:

The study of consumers helps firms and organizations improve their marketing strategies byunderstanding issues such as how

y The psychology of how consumers think, feel, reason, and select between differentalternatives (e.g., brands, products, and retailers);

y The psychology of how the consumer is influenced by his or her environment (e.g.,culture, family, signs, media);

y The behavior of consumers while shopping or making other marketing decisions;y Limitations in consumer knowledge or information processing abilities influence

decisions and marketing outcome;


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y How consumer motivation and decision strategies differ between products that differ intheir level of importance or interest that they entail for the consumer; and

y How marketers can adapt and improve their marketing campaigns and marketingstrategies to more effectively reach the consumer.

One "official" definition of consumer behavior is "The study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services,experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society." Although it is not necessary to memorize this definition, it brings up some useful

points:

y Behavior occurs either for the individual, or in the context of a group (e.g., friendsinfluence what kinds of clothes a person wears) or an organization (people on the jobmake decisions as to which products the firm should use).

y C onsumer behavior involves the use and disposal of products as well as the study of howthey are purchased. Product use is often of great interest to the marketer, because this

may influence how a product is best positioned or how we can encourage increasedconsumption. Since many environmental problems result from product disposal (e.g.,motor oil being sent into sewage systems to save the recycling fee, or garbage piling up atlandfills) this is also an area of interest.

y C onsumer behavior involves services and ideas as well as tangible products.y The impact of consumer behavior on society is also of relevance. For example,

aggressive marketing of high fat foods, or aggressive marketing of easy credit, may haveserious repercussions for the national health and economy.


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Service Marketing in the Developed Countries: y Almost all the developed countries have made significant contribution in the

development of service sector. The transformation of potential buyers into actualconsumers is a difficult task. It requires transformation in the approach of theentrepreneurs.

y The sophistication in the field of communication, standard system of education multi pronged medical facilities made available by hospitals, world class, consultancy services,customer oriented banking services, etc.. justify that service sector of the US economyare exceptionally advanced. This advancement has raised the contribution of servicessector to the GNP and the national economy.

y The credibility of the modest contribution to the process of development goes to theservice marketing. The entrepreneurs find it convenient to initiate qualitative andquantitative improvement by applying marketing practices.

y D eveloped countries are found to be innovative. They create new concepts and new ideas

and so they have enough that they can sell. The major contribution made by Americaneconomy today is the services because ultimately it is the value added which is theservice part.

y D evelopments in the field of banking services in the west testify that developed countrieshave initial application of marketing strategies in the service sector. The incomingtechnological sophistication has made possible an expansion in the area of servicemarketing.

Service Marketing in the Developing Countries :

y D evelopment strategies adopted by the developed countries simplify the task of policymaking for the developing countries. The experiences of the last decades indicate that thedeveloped countries have been accorded overriding to the service sector. This has done

by them to conserve the natural resources for the coming generations. They have alsodone this to make optimum utilization of different sectors to diversify their developmentand raise the level of income.

y Undoubtedly these countries have succeeded in achieving their desired goals and havechanged the way and style of living of the whole society while utilizing the sector, theyhave applied marketing strategies.

y Services sectors in the Indian economy have been rising. It accounted for 28% G D P in1960-61 at constant prices. It share has increased upto 40% in 1980s. It is natural thatacceleration of growth of the service sector results in deceleration in the growth of

primary and secondry sectors. To make the services productive it is not only necessarythat we increase the shares but also important that marketing strategies are followed inthe right direction. D eveloping countries have to make efforts for alignment of serviceswith innovative marketing approach keeping in view the socio economic developments.


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Challenges to service marketing :Managing, growing, and profiting with both product and service businesses are challengingtasks. But the challenges are different from one to the other. Listed below are some of the mostcommon and difficult challenges of growing and managing consulting, professional, or technology service businesses that don't necessary apply to product businesses.

y Clients can't see or touch services before they purchase them. This makes servicesdifficult to conceptualize and evaluate from the client perspective, creating increaseduncertainty and perception of risk. From the firm's perspective, service intangibility canmake services difficult to promote, control quality, and set price.

y Services are often produced and consumed simultaneously. This creates specialchallenges in service quality management that product companies do not even consider.Products are tested before they go out the door. If a product has quality problems while in

production, the company can fix them and customers are none the wiser. Service production happens with the customer present, creating a very different and challengingdynamic.

y

Trust is necessary. Some level of trust in the service organization and its people must beestablished before clients will engage services. This is as important, sometimes moreimportant, than the service offerings and their value proposition.

y Competition is often not who you think. C ompetition for product companies are other product companies. C ompetition for service companies are often the clients themselves.Sure, sometimes you find yourself in a competitive shootout (some firms more thanothers), but often the client is asking 'should we engage this service at all' and 'if so,should we just do it in-house'.

y Brand extends beyond marketing. Brand in service businesses is about who you are asmuch as what you say about yourself. And internal brand management andcommunications can be equally as vital to marketing success as are external

communications.y Proactive lead generation is difficult. Many service companies have tried, and failed, at

using lead generation tactics that work wonders for product companies. Implementedcorrectly, traditional product techniques, such as direct marketing and selling, can work for services, but the special dynamics of how clients buy services must be carefullywoven into your strategy.

y Service deliverers often do the selling. Many product companies have dedicated salesforces. For services, the selling is often split between sales, marketing, professional, andmanagement staff.

y Marketing and sales lose momentum. Most product companies have dedicatedmarketers and sellers. They market and sell continuously, regardless of the revenue levels

they generate. In many services companies the marketers and sellers also must manageand deliver. This can often lead to the Services Revenue Rollercoaster-wide swings

between revenue and work overflow, and revenue and work drought.y Passion is necessary, yet elusive. The more passion, spirit, hustle, and desire your staff

brings to the organization every day, the more revenue and success you will have. Thecorrelation between staff passion and financial success is direct and measurable (as is thecorrelation between lack-of-passion and organizational failure). Yet institutionalizing

passion, while necessary, is agonizingly elusive.


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Service Marketing Triangle

Service marketing involves 3 types of marketing:1. EXTERNAL MARKETING2. INTERNAL MARKETING3. INTERACTIVE MARKETING

1. External Marketing : "Setting the Promise"

All organizations operate within environments. That is, all profit-making and not-for- profit organizations are surrounded by, and must contend with, external forces. Managerscannot govern the nature of these environmental forces. These uncontrollable influencesaffect consumers behaviour and organizations development of effective marketingmixes.

Marketing to EN D -USERS. Involves pricing strategy, promotional activities, and all communication withcustomers. Performed to capture the attention of the market, and arouse interest in the service.

2. Internal Marketing : "Enabling the Promise"

Internal marketing (IM) is a process that occurs within a company or organizationwhereby the functional process aligns, motivates and empowers employees at allmanagement levels to deliver a satisfying customer experience. Over recent years internalmarketing has increasingly been integrated with employer branding, and employer brand


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management, which strives to build stronger links between the employee brandexperience and customer brand experience

Marketing to EMPLOYEES. Involves training, motivational, and teamwork programs, and all communication with

employees. Performed to enable employees to perform the service effectively, and keep up the promise made to the customer.

3. Interactive Marketing : (Moment of Truth, Service Encounter)

Interactive Marketing refers to the evolving trend in marketing whereby marketing hasmoved from a transaction-based effort to a conversation. Interactive marketing is notsynonymous with online marketing , although interactive marketing processes arefacilitated by internet technology.

This refers to the decisive moment of interaction between the front-office employeesand customers, i.e. delivery of service. This step is of utmost importance, because if the employee falters at this level, all prior efforts made towards establishing a relationship with the customer, would be wasted.

Services Marketing is a Form of Marketing Which Focuses on Selling Services

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