Services marketing: Concepts, Strategies and Cases - Research Paper Example

Service Marketing of the of the Contents Introduction 3 Body 4 Part Tangible and intangible 4 Part 2: Challenges 6 Conclusion 13 References 15 Introduction Service marketing is an important concept in the marketing field. Marketing approach can be split into two different parts such as service marketing and goods marketing. There are two different segments of service marketing like business to business and business to consumer services. Service marketing encompasses wide array of services which can be defined as telecommunication services, hospitality services, financial services, health care services, air travel and professional services. These services have specific characteristics in order to address demand of target audience. Marketing challenges are a common issue for all service companies. The major focus of these companies is to highlight intangible or tangible element present within the service aspect. In this research study five different companies will be included belonging to different service sectors. The various service sectors chosen for this study are financial services, telecommunication services, airlines, hospitality and health care services. Financial services are usually provided by finance industry and are regarded as economic services. There is wide range of firms belonging to this industry like banks, insurance companies, real estate funds, credit unions, investment funds, accountancy companies, etc. Air transport services are another well-known service for travelling freight and passengers. Telecommunication service is all about enhancing transfer capabilities of user information through telecommunication systems. On the other hand, health care services are highly responsible for providing appropriate health care facilities to patients. Hospitality services are inclined towards providing guests accommodation facilities, travel, food, other amenities, etc. Body Part 1: Tangible and intangible Etisalat Etisalat is the brand name for Emirates Telecommunications Corporation. The company belongs to the telecommunication industry and was founded in 1976. Etisalat is a well-known telecommunication service provider based in UAE. In current scenario the company operates across 15 countries encompassing Asia, Africa and Middle East. The company is ranked as 12th largest operator of mobile network across the globe. Total customer base of the firm is about 150 million. Services being offered by the company are mobile and fixed line telephony, digital television and internet services. It can be stated that fixed line telephony and digital television is a form of tangible substance being offered by Etisalat. The company has even entered into approximately 150 roaming agreements, expanding across 186 countries. Internet services provided by the firm are 3G and 4G mobile internet access, post-paid or prepaid dial up internet access and broadband services. The company had even announced offering free national and local high definition calls. Air Arabia Air Arabia is regarded as the low cost airline in UAE market. This airline has its headquarters located in Sharjah, United Arab Emirates. Air Arabia offers flight services to its customers along with some additional amenities. The airline provides services across 51 destinations encompassing Europe, North Africa, Central Asia, Middle East, Indian subcontinent, etc. Air Arabia offers lowest flight prices possible in order to expand its customer base and increase satisfaction level of customers. Differentiating factor developed by Air Arabia is increasing base of connecting flights at Sharjah base. In overall context, Air Arabia offers intangible service elements to its customers. This is because major responsibility of airline is to provide safe journey to its passengers. Fleet service is the main area of concern for Air Arabia. In present scenario there fleet size has increased to 37. Air Arabia offers superior quality customer service at lowest cost possible. Abu Dhabi Commercial Bank Abu Dhabi Commercial Bank is a part of the wide banking industry. It was founded in 1985. This commercial bank is a public shareholding with limited liability. Abu Dhabi Investment Authority holds approximately 65% of total shares of this bank. The remainder percentage of shares is hold by other individuals. Abu Dhabi Commercial Bank is the largest in UAE market in terms of market capitalization and shareholder funds. Financial services to certain extent comprises of both tangible and intangible element. Major portion of these services are intangible since it deals with monetary services. On the contrary, monetary value being offered to customers is carrying an intangible element. The funds which are being offered by the bank or are stored in these institutions can be regarded as an intangible element. Financial services are also associated with giving financial advice to customers in order to ensure a financially stable situation. Seha Emirates Hospital Seha Emirates hospital is a private hospital located in United Arab Emirates. It forms a part of health care industry which is all about offering best quality health facilities to patients. Their mission is to improve life quality and health of communities. Seha Emirates has been able to set their position in this industry by following a set of values. They aim at providing safe, timely and compassionate therapeutic and diagnostic approaches. Seha Emirates offer cost effective, accurate and easily accessible consultations and medical services to all patients. There is a department in this hospital who are focused on learning and teaching so as to increase skills and expertise of all members. The hospital encompasses certain specialties such as general surgery, neurosurgery, paediatric surgery, internal medicine, pediatrics, orthopedics, ENT, dentistry, Obs&Gym and plastic surgery. Seha Emirates have some good professionals on board who are expert in their respective fields. Grand Hyatt Dubai Grand Hyatt is a five star hotel located in Zabeel, United Arab Emirates. This belongs to the large hospitality industry and was founded in 2003. In the initial stage of its incorporation it was the largest hotel with 674 rooms. The hotel comprises of 14 restaurants, offering something unique to guests. In hospitality industry services can be classified as both intangible and tangible. This is because additional amenities provided by hotels are tangible aspect of overall service. Arabic cuisine is basically served in this hotel and this add-on to its competitive advantage. Tangible element of Grand Hyatt is its cuisine or delicacies which can be properly felt by guests. On the other hand, gesture of staff, timely services, etc., are all intangible aspects of this industry. It can also be stated that extensive care is taken by management regarding interiors and accommodation facilities. This in turn forms tangible element from guest’s perspective. Part 2: Challenges Service companies mainly face challenges in terms of differentiating tangible from intangible element. The tangibility spectrum is further classified in figure1. Figure 1: Tangibility Spectrum (Source: Lovelock and Wirtz, 2011) The tangible and intangible component generally denotes different kind of service companies. For instance fast food joints follow in middle of the spectrum, whereas airlines belong to intangible dominant and automobiles lies in tangible dominant (Lovelock and Wirtz, 2011). Service Marketing Triangle is another concept which helps to analyze various aspects associated with service marketing. Service marketers basically witnesses challenge in three important domains. Firstly, understanding needs and service expectations of customers is a major issue. Then transforming services into tangible substance for customers and efficiently handling promises made to customers. Figure 2 clearly describes the service marketing triangle. Figure 2: Service Marketing Triangle (Source: Shanker, 2002) As per figure2, external marketing is all about outlining essential service features to customers. It is inclined towards promises made by a company to customers. On the other hand, interactive marketing are the procedures through which such promises are kept. At the interaction phase, customers directly meet with employees. It is essential that service companies recruit talented individuals who can convey intangible component of service to customers. Internal marketing is a mechanism by which organization states departments and individuals to be customer of one another. Employees need to provide services not only to external customers but also to each other within a system (Shanker, 2002). The service marketing mix not only encompasses product or service, place, price and promotion but even takes into consideration physical evidence, processes and people as stated in figure 4. Figure 3: Service Marketing Mix (Source: Hoffman and Bateson, 2010) Service quality which is considered to be another challenge is dependent on various factors. There are certain determinants of service quality like competence, reliability, tangibles, access, credibility, etc., as outlined in figure4. Figure 4: Determinants of Service Quality (Source: Hoffman and Bateson, 2010) According to figure3, there are two dimensions of service quality that is perceived service and expected service. External agents play a vital role in developing base of expected service but it is even dependent on service quality determinants. Service delivery often witnesses gap in terms of perceived and expected service quality level. These gaps need to be addressed appropriately by firms in order to sustain their market position. The Gap Model has been elaborated in figure 5. Figure 5: Gap Model of Service Quality (Source: Gilmore, 2003) The gap model as described in figure 5 clearly states that there are five major gaps in service design such as knowledge gap, delivery gap, standards gap, service gap and communication gap. These gaps mainly result due to service delivery, customer expectations, ineffective communication channels, management perceptions, etc. In overall context, some of these identified gaps can be observed in case of hospitality industry. This industry generally represents certain percentage of intangible domain along with tangible domain. Grand Hyatt is a well-known hotel located in United Arab Emirates but it is surrounded by wide array of marketing challenges. Hospitality industry is an intensely competitive market segment since threat of new entrants is high and services offered are easily imitable. The first marketing challenge linked with Grand Hyatt is dominance of intangible elements over value creation. This in turn makes it difficult for customers to differentiate a particular company’s service with that of its competitors. Secondly, customers at times also are involved within the service co-production procedure. Service provider such as restaurant staff of Grand Hyatt needs to work in collaboration with customers in context of self-service. However desired level of task execution might not be achieved and this would adversely affect satisfaction level of customers. Another marketing challenge observed in hotels is inclusion of people to be a part of service experience. The customer satisfaction level is affected through behavior of sales personnel. These sales personnel or staffs of Grand Hyatt have to be well trained to deliver required service quality to customers. Any kind of indifferences in their behavior tends to make customers shift their mindset from expected service quality to perceived one. Other marketing challenge witnessed by the company is variance in operational outputs and inputs. Grand Hyatt encompasses a wide set of operations and it often becomes difficult to maintain reliability or quality of offered service. Customers are bound to witness operational failures if a balance is not achieved between inputs and outputs. There is lump sum investment made by Grand Hyatt on such operational facilities but it eventually varies over time. For instance, investment is being done on accommodation and restaurant facilities but there are chances of technical failure which disrupts the entire mechanism. Time factor can be classified as the biggest challenge for all service companies. This element cannot be represented in advertisement campaigns and neither can be well communicated to customers. Time factor plays a vital role in service marketing. Customers consider time to be equivalent to money (Gilmore, 2003). Target audience always demand for service at convenient time. This proves to be a challenge for the company since demanded service might not be provided to customers at specified time. The major reason behind this is unavailability of staff base, urgent requirements in another department, operational failure, etc. This in turn initiates a negative perception about service quality in consumer mind. Grand Hyatt is operating in a service space which is bound to witness changes. These changes can be in terms of consumer taste and preferences or technological advancements occurring in the market place. Marketing challenges that has been identified are closely knitted with such changes taking place in external environment. There are different strategies which can be implemented so as to reduce these marketing challenges. Grand Hyatt can focus on developing vivid images as a symbolic representation of their offered service. This would help to emphasize more on physical clues and eradicate the dominance of intangible elements. As per figure 5, this strategy would help to address gap 1 or knowledge gap. This gap is basically formed due to differences in consumer perception and expected service level. When guests are involved in service delivery then advanced technology needs to be incorporated. User friendly equipments can be utilized for enhancing customer support and increasing efficiency quality of service design. Customers need to be trained so as to ensure that any service failure do not result due to miscommunication between two parties. On the other hand, employees also need to be trained in order to ensure that delivery gap is eliminated. Service companies such as Grand Hyatt needs to possess best professionals in order to deliver promised service quality to customers. Conclusion According to this study, service marketing is a critical aspect in marketing field. There are different dimensions associated with marketing. Product marketing is totally different from the concept of service marketing. This is because it is often not possible to highlight intangible elements of service. Service companies usually witness a major challenge in this domain. Intangible aspect can be felt by customers but it cannot be outlined by companies. This in turn results into communication gap since firms are not able to transmit service quality to customers. Service marketing comprises of extended marketing mix which is denoted through 7Ps. In this study five service companies have been highlighted belonging to different service categories. They are mainly financial services, hospitality, health care services, airlines and telecommunication service. A wide array of marketing challenges have been identified and it is been applied on Grand Hyatt. The major challenges witnessed by the company are in terms of maintaining service delivery time and training employees who forms a part of service delivery process. There are procedures to overcome such challenges and make perceived service equivalent to expected service level. References Gilmore, A. (2003). Services marketing and management. London: SAGE. Hoffman, K. and Bateson, J. (2010). Services marketing: concepts, strategies, & cases. USA: Cengage Learning. Lovelock, C. and Wirtz, J. (2011). Services marketing – people, technology, strategy. Upper Saddle River, New Jersey: Prentice Hall. Shanker, R. (2002). Services marketing. New Delhi: Excel Books India. Read More