Marketing of Services Industry - Essay Example

? Services Marketing Marketing is considered a holistic field which encompasses both the concepts of service and product marketing in equal measure. Unfortunately, this is not the actual case as a majority of people in marketing either as scholars or sales persons still overemphasize on product marketing. This way, they tend to point at marketing as a concept only tailored for products which is misleading as the growth and competitiveness in the service industry has warranted adoption of marketing. The growth in service industry has been evident over the past half a century and it is not surprising that in major countries such as United States, Germany, Australia and Canada services account for about 70% of the gross domestic product (GDP). Besides, the industry continues to grow in leaps and bounds to a point that currently about one and a half of start ups are service oriented. One major stimulant to this growth is the long term economic growth of a majority of these economies which has led to particular emphasis on financial services, travel, entertainment, and personal care. These sectors form the bulk of service industry and the fact that far more businesses are starting on the same levels implying that there is eminent need for improved marketing concepts. These factors, as well as continued lifestyle changes, are coming as continuous pressures on the service industries. These are aspects and elements that Shostack had foreseen in the writing of his article breaking free from product marketing. At the time, product marketing was dominant as most industries and companies were bent on producing tangible products. In fact, any company which bordered on services was forced to adapt product marketing approaches. This was bound to fail with time as consumers would, with time, adopt preferences and approaches that would clearly differentiate product and service aspects. At the time, marketers considered the difference between products and services as purely bordering on tangibility. However, Shostack sought to disagree with this assertion holding that there were multiple other factors which differentiated service marketing from product marketing. In this study, we implore on Shostack’s view on use of tangibility as the distinguishing factor. Beyond this, the study will look at modern assertions on the differences between product and service marketing. To further understand service marketing as different from product marketing this study will also look at two other contemporary studies and their positions as well assertions. First, we examine the views of Ruskin Brown as detailed in his book titled marketing your service business. Just as Shostack asserts, service marketing cannot be adopted to fit product marketing. Rather, there is need to develop new concepts which consider the various differences between products and services. Brown states that even though it might be possible to consider the marketing mix for a service as detailed under the 4Ps of products, there is great need to expand the mix in a way that it allows a more meticulous analysis of the ingredients essential for successful service marketing. The author further asserts that most businesses fail to attain their goals as they lack understanding of the workings of the various elements of the extended mix. This imminently means that they fail to come up with required action to address these factors. To this end, Brown provides a detailed analysis of the elements of extended mix that would offer businesses an opportunity to redress their failures. Failures are identified by Shostack as emanating from the uninformed treatment of services as products. Brown insists on the extended mix which incorporates such elements as process, people, physical evidence, time, and resource. Process relates to the fact that services are performed and consumed concurrently. They are neither created nor do they posses any shelf life. Rather, service is an experience and, therefore, the core of the process is to handle the customer’s experience at the point of contact between the consumer and the service person. The main elements of the process are people and procedures. A second article with similar assertions is authored by Abhinandan K. Jain and is titled marketing information products and services. The article recognizes that service marketing should be different from product marketing. For services, the benefits accruing to the consumer cannot be realized until the he experiences the service. The specific necessities may only be determined only if there is close interaction between the supplier and the customer. Mostly, a customer is involved in coming up with the particular service such as generating a specialized reference list. To market a service, the contact person must posses adequate skills necessary in sensing customer requirements, be able to collaborate with the customer, and coordinate with the production system which brings forth the required service. The task of marketing, in this case, requires continual interaction with external customers often referred to as external marketing. This is a common feature for both service and product marketing. However, service marketing goes beyond this and often requires marketing to customer contact personnel also referred to as internal marketing in order to ready the organization in providing promised benefits to the external customers. Comparison These two contemporary studies only seem to extend Shostack’s assertion that services are very different from products and that the two cannot be treated to be the same especially for marketing purposes. The difference between the two articles and Shostack’s is that the former have taken their research further; unlike Shostack, they have gone beyond the single distinguishing factor which is tangibility. They have deepened the research to bring out other differences such as performance, perishable, people domination among others. The authors assert that this increasing list of differences raises the need for marketers to develop other concepts which add to the existent list of differences under products. In an endeavor to ensure this, Brown draws up a list of concepts that service marketers must include in their plans if at all they are to achieve any progress or results in marketing services. People, according to Brown, are an important component of the extended mix especially for the service provider as service is adding people to the product. It starts with the selection of persons with the right aptitudes and concludes with policies which ensure people posses the necessary knowledge on the service. Physical evidence is a feature of the extended mix which translates from the fact that a service is inherently intangible. The consumer will relate the physical accoutrements of that service irrespective of whether these are intentional or not, with the particular service being provided. It becomes critical for the service marketer to take charge of these tangibles and manage them to relay to the consumer the required impression and image. Time represents the only aspect of the extended mix that is measurable and which can determine the quality of the service offered. The marketer should try to achieve either or a couple of the elements under time; these are punctuality, availability, duration, speed off response, and speed of innovation. Achieving either of these or a number of them would accord a marketer or business a competitive advantage against competitors. Resource is considered the fabric of all the other elements under extended mix. It identifies that a service is performed and consumed at the same time, and has no shelf time unlike a product. It also follows that the presentation of the service is dependent on resources such as people, cars, hotel beds etc or any other object utilized to provide the service capacity. It also appreciates the fact that services are demanded dependent on resources. Thus the service provider must come up with strategies that make certain that their businesses are always able to maximize the match between demand and resource. This should be in a way that the business avoids losing customers due to wanting services during high demand or the business suffocating as a result of overinvestment during low seasons. Like Shoastack, Brown recognizes that restricting service marketing to the concepts of product management would not deliver the required results mainly because it would ignore the concepts addressed earlier. These, Brown adds, do not invalidate 4Ps but extends these to include other essential concepts which emphasize that the difference between a product and service is not really tangibility but is much deeper. Intangibility Shostack is opposed to the idea that services are just like products except for intangibility. At the same time, he acknowledges that the element of intangibility cannot be ignored when formulating a service oriented marketing plan. His greatest concern at the time was the fact that even with the acknowledgement that services were separated from product by intangibility, there was still no distinct marketing concepts. Further, Shostack calls for proper understanding of the often thin line between tangible and intangible elements. He continues to provide an example of automobile marketing where he cites that this often takes the form of product marketing an aspect that cannot be contested. However, automobile marketing has also aspects of intangibility such as transport. Transportation should not necessarily be marketed together with automobiles but it also forms a critical part in marketing of the product. This is because transportation is an independent marketing element and can be marketed solely. Besides, automobiles only provide one option of meeting the transport needs of the society. Such a scenario presents marketers with a dilemma on how automobile should be defined. This is because there is the option of defining automobiles as a service which in this case is the car (which is a product) which is considered a by product. In this case of marketing automobiles, it cannot be ignored that both elements, intangible and tangible exist, and that these are vitally marketed. This begs the question why these two can be marketed in the same way yet they come with different qualities. Most importantly, one would wonder why there is an attempt to compress them into a single phrase. A further dilemma results in the marketing of airline services. This is predominantly a service yet it has definite aspects of a product in this service such as interior design, food and drink, seat design etc. These elements can alter the reality of this service in the customer’s mind. Consequently, it becomes important for marketers to pay particular attention to tangible and intangible elements not because they are purely responsible for drawing distinctions between services and products, but because they form a basic part which determines consumers’ perception. Further, Shostack rings in an interesting perspective on tangibility. He holds that even services have a tangible aspect which he terms as tangible clues. He cites an example of a customer trying to determine the quality of service before using it. Shostack point’s that in these circumstances the consumer uses tangible clues to provide tangible evidence around these services. Unfortunately, service marketers had paid little attention on the tangible evidence and were never articulated in marketing. Perhaps the reluctance to understand the importance of tangible clues in formulating strategies for service marketers resulted from minimal research on the authority of tangible evidence in creating a worthwhile strategy for the service marketer. In marketing of products, tangible evidence is availed by the product itself. Unfortunately, this is not the case with services whom tangible evidence includes larger considerations in contrast to product marketing. These considerations were much larger than the one’s already evaluated in the marketing field at the time. Service marketers should thus emphasize on developing and differentiating realities by altering the tangible clues. Handling evidence should take precedence in service marketing since service reality is attained by the consumer through the deduction process which is informed by the impression brought about by the product evidence. Due to the fact that product marketing has definite biases, service marketers are frequently faced with the challenge of recognizing unique forms of evidence that are normally easy to control. The result is that these marketers fail to realize that they should be part of marketing responsibilities. This importance of intangibility is critical in creating a worthwhile marketing plan not only for the time that the service marketing concepts had not been developed but is also as critical in current times. This is especially because it provides marketers with specific areas of focus whose emphasis would definitely create some value through customer satisfaction. These specific areas include a means to identify tangible clues which consumers utilize in trying to understand services they have not bought. Understanding these, which also provide tangible evidence to the consumers, creates a way for the marketers to create impressions on these customers. This definitely provides a competitive advantage to the service business. In conclusion, I am in agreement that services are uniquely different to goods. This is not only informed by the very important aspect of intangibility but multiple other factors such as lack of shelf life, performance, and people domination. These elements and multiple others provide evidence for services being uniquely different to goods. This also provides evidence as to why most service businesses have chosen to use a different set of marketing mix. This as mentioned within the study adds other aspect to ensure that all aspects of a service are identified and dwelt on. This way, there is a clear cut distinction on service and product marketing. This is a fact which also underlines my assertion that services are uniquely different to goods/products. Bibliography Jain, A. K. (2000). Marketing Information Products and Services: A Primer for Librarians and Information Professionals. New York: IDRC. Ruskin-Brown, I. (2005). Marketing your service business. London: Thorogood. Read More