Service Marketing, Its Nature and Strategies

Services Marketing

Recent years have seen a sharp increase in services. Currently, services make up between 75 and 80 percent of the US GDP (GDP). The services sector is still expanding. Nearly four out of every five occupations in the US are predicted to be in the service sector by 2014. With services accounting for around 64% of the global economy's gross domestic product, the service markets are expanding even more quickly.

The service industry is very diverse. The courts, employment service, hospitals, police and fire departments, military services, schools, and the postal service are just a few of the ways that the government provides services. Private not-for-profit organizations provide services through institutions like hospitals, churches, foundations, museums, charities, and charities. Airlines, hotels, banks, insurance firms, law firms, consulting firms, entertainment and telecommunications companies, real estate companies, retailers, and many more businesses provide services.

Nature and Characteristics of a Service

When creating a marketing strategy, a company must take into account four unique service characteristics: intangibility, inseparability, variety, and perishability.

Service Intangibility

It describes products or services that cannot be seen, felt, tasted, heard, or odored prior to purchase. People having cosmetic surgery, for instance, are unable to preview the outcome before making a purchase. The only thing an airline traveler has is a ticket and the assurance that both they and their luggage will arrive safely at their destination. The consumer searches for "signals" of service quality to lessen uncertainty. They merely infer quality based on the setting, inhabitants, cost, available technology, and communications. The task of the service provider is to convey the proper messages regarding service quality while making the service real in one or more ways.

Manufacturing physical commodities is followed by storage, sale, and consumption. However, the production and consumption of services all occur at the same time, after they have been sold. In service marketing, the service provider is regarded as the product.

Service Inseparability

It indicates that whether the suppliers are computers or people, the services cannot be separated from them. An employee of a service is regarded as a component of the service if they perform the service. One of the unique aspects of services marketing is the provider-customer interaction, which takes place as the service is being produced. The outcome of the service is influenced by both the provider and the client.

Service Variability

It means that the type of services offered and when, where, and how they are delivered affect their quality. For instance, some hotels, like Rooftop, have a reputation for offering the best customer service. However, in a specific Rooftop hotel, one employee working the registration desk can be kind and productive, while the other employee nearby might be sluggish and rude. Even one Rooftop employee's level of service changes depending on how they are feeling and how they are feeling at the moment.

Service Perishability

The services cannot be saved for sale or use at a later time, according to this. Some medical professionals charge patients for missed appointments because the value of the care was only present at that time and vanished once the patient failed to come. When demand is steady, the perishability of services might not be a concern. However, service businesses typically face challenging issues when demand changes. For instance, public transportation companies must own significantly more equipment than they would if demand was consistent throughout the day due to rush-hour demand. As a result, service businesses typically develop tactics to produce a better match between supply and demand. Off-season rates are lower at hotels and resorts to draw in more guests. Additionally, restaurants use part-time staff to service patrons at busy times.

Marketing Strategies for Service Firms

Like manufacturing companies, good service providers employ marketing to establish a strong presence in their chosen target markets. Traditional marketing mix actions are how service businesses establish their positions. Services, however, typically require additional marketing strategies because they are different from tangible things.

The Service Profit Chain

In service marketing, the customer and the front-line employee work together to create the service. The abilities of front-line service personnel and the systems supporting them are essential for effective interaction. Therefore, effective service businesses pay close attention to both their clients and their staff. They are aware of the relationship between employee and client satisfaction and service firm earnings.

Service marketing requires more than just the four Ps of conventional external marketing. Internal and interactive marketing are also forms of service marketing.

Internal marketing entails that service providers must train and motivate their customer-facing staff and support staff to collaborate as a team to satisfy customers. All employees should be customer-focused, according to marketers.

According to interactive marketing, the effectiveness of the buyer-seller connection during the service encounter is typically a major determinant of service quality. Product quality in marketing generally has little bearing on the method of production. However, in the marketing of services, the service provider and the quality of the delivery both affect the service's quality.

Managing Service Differentiation

Service marketers typically lament the challenge of differentiating their services from those of rivals in today's environment of fierce pricing rivalry. Customers worry more about the price than the provider when they perceive the services of many providers to be identical.

By employing more competent and dependable customer-contact personnel, creating a superior physical environment in which the service product is provided, or developing a superior delivery method, service firms can differentiate their service delivery from that of their competitors. For instance, as a more convenient way to purchase, the majority of food chain stores now provide home delivery and online shopping. Additionally, the majority of banks give their customers access to their account information practically anywhere—from an ATM to their cell phone.

Managing Service Quality

A service company could set itself apart from the competition by continuously providing a better level of quality. The consumer-driven quality movement has now attracted many members from the service sectors. Similar to product marketers, service providers had to figure out what their target clients wanted in terms of service quality.

Unfortunately, defining and evaluating service quality is more challenging than doing so for products. It is more challenging to agree on the quality of a haircut than it is on the quality of a hair dryer, for instance. The capacity of a service organization to hold on to its consumers depends on how regularly it provides them with value, which is likely the best indicator of quality. High service standards are set by reputable service providers. They keep a careful eye on competitors' and their own service performance. They strive for flawless service, never settling for merely good service.

Managing Service Productivity

Service providers are under intense pressure to boost service productivity since their expenses are rising quickly. They have various options for doing this. They might acquire new employees who will work harder or more proficiently or they may retrain the current workforce. Additionally, by offering some quality, they can raise the quantity of their service. With the inclusion of machinery and standardized production, the provider might "industrialize the service," following McDonald's assembly-line strategy for selling fast food.

The company must, however, watch out for driving up productivity to the point that it compromises quality. A service company may become more effective in the near term as a result of efforts to industrialize a service or reduce prices. However, that may also weaken its capacity over time to take the initiative, uphold service quality, or react to client demands and desires. Therefore, the company must be conscious of how they develop and provide client value when working to increase service productivity. They must take care to avoid deactivating the "service," in other words.

Reference

Kotler, P., & Armstrong, G. (2013).Principles of Marketing.Chennai: Pearson India Education Services Pvt Ltd.

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