Marketing of a Product and a Service Through the Use the Same Marketing Concepts - Research Paper Example

1. In attempting to highlight the difference between marketing of products and services, it is imperative to define the meaning of the two terms. According to McCarthy & Perreault (1990:218), a product means, “the need-satisfying offering of a firm.” A product may be a physical good or a service or a blend of both. On the other hand, a service is a deed performed by one party for another. It is not tangible like a good hence the approach to marketing these two different products is slightly different though the same marketing principles would be applied as highlighted below. As a point of departure, note should be taken that marketing is concerned with satisfying the needs of the customers with the aid of using various tools in meeting the marketing mixes. Providing the right product when and where and how the customer wants it is the major aim of marketing where marketers attempt to make sure that all of these elements fit together. The primary aim of marketing therefore, is attempting to satisfy the needs and interests of the customers profitably. It is a business concept that is meant to increase the profitability of a company. The major differences in marketing a product as a physical good and a service therefore, lies in the fact that a service is intangible and is often produced in the presence of the customer whilst a good can be purchased from any point of sale as long as the customer is convinced that he will get the satisfaction he is looking for in that particular good. Therefore, the unique characteristics of services make it a bit challenging to market them than marketing of physical goods. Whilst the marketer of goods is primarily concerned with the traditional marketing mix of four Ps namely product, place, price and promotion, the marketer of services has to take into consideration the three key players that are essential to ensure the success of a service offering. Strydom (2004) identifies the three players as the company, the providers and the clients. Interaction of these key players is essential for service delivery as they determine the type of service offered since a service is often created during the process of serving the different beverages. Basically, there are three types of marketing strategies that are peculiar to the marketing of services compared to goods. These are external, internal and interactive marketing. For services such as those offered by Starbucks in the form of coffee and other beverages and a unique relaxing environment, external marketing would serve the purpose of communication by the company to the consumer. In this communication, the company sets the level of client expectations of its services and this can be in the form of advertisements or personal selling. The company makes promises and should fulfil those promises such as the “customer intimacy” enshrined in Starbucks brand strategy. With marketing of physical goods, this element of intimacy may not be available where the customer will consume or use the service at a different place other than the one it has been purchased. When marketing goods, the marketer highlights the attractable qualities whilst the marketer of services attempt to make promises about the benefits to be gained from a certain service. Another form of marketing is interactive marketing. This involves interaction between the service delivery personnel and clients when they come into contact during the period the service is being performed. This particular instance involves keeping promises and performing up to the standard expectations of customers. With a physical good, the customers just buy and consume the product somewhere else unlike a service where a promise is kept alive during the period when the client consumes the product such as coffee inside the coffee house. This interaction is very important as it makes part of the service delivery. When someone is looking for a place to relax, interaction with various people especially the workers in the coffee shop would be the most ideal atmosphere. The third type of marketing related to services is internal marketing which specifically deals with enabling the promises. This involves training the personnel to perform to the highest expectations of customers. This is done so as to provide the customer with satisfactory service. Basically, marketing a service begins with giving the workers proper training so as to minimise the chances of making mistakes in front of the customers. Unnecessary mistakes would distract the customers and they would end up discrediting the services offered as substandard. So the main difference between marketing of services and product goods lies in that with a service, marketing often involves direct contact or physical interaction with clients unlike with physical goods which can be done using communication tools such as the media in form of advertising. In this particular case, a brief look at the unique characteristics of a service enables us to identify the most important features in achieving service quality at Starbucks. By virtue of the definition of service given above, it can be noted that there is a big difference between service products and physical products. Armstrong and Kotler (1996) identify five characteristics of services that distinguish them from physical products which the marketer must take into consideration namely, intangibility, inseparability, perishability, heterogeneity and ownership. The customer cannot touch the service which makes it difficult for him to decide if it is wise to purchase that particular product service. All the same, a service ought to be satisfactory to the customer. In some cases, a service cannot be seen or even be smelt hence it takes necessary steps on behalf of the marketer to convince the customer that he would be able to derive satisfaction from a particular service. This characteristic is very important to Starbucks since they would need to offer satisfactory services to their customers fully knowing that they have to enjoy them since they are not able to touch them physically or carry them away to their respective homes. Inseparability entails that the production of a service occurs during the same time the customers consume that particular service hence chances of making mistakes should be avoided at all costs. This means that the service providers must always meet the standard expectations of performance promised to their customers in the first place. This is also very important to Starbucks since they would risk loosing their customers if they fail to maintain satisfactory services during the periods they would be serving them. Poor performance would result in the customers shunning the place which would scare away even potential customers. The services are often heterogeneous in that they are produced by different people at different times hence there are variations in the services. However, these variations must not compromise quality hence the responsible staff at Starbucks should always ensure that the services offered meet the expected standards. On the other hand, the aspect of ownership distinguishes a service from a physical good. With a service, you are only entitled the right to use or enjoy a particular service without claiming ownership like a physical good for instance, consuming coffee in a nice environment does not entitle you to ownership of anything. When someone sacrifices to spend his money on something he cannot get at the end of the day, it means that he is only after deriving some form of psychological satisfaction that would give him some form of peace of mind. This therefore, must be the guiding principle as far as fulfilling the goal of marketing is concerned. A service is a perishable product which cannot be stored like a tangible good. Marketers should always make sure that they perform to the best of their ability since they risk loosing customers if they do not carefully manage their activities meant to satisfy the customers. Plans must be executed according to schedule as failure to do that would result in loss of prospective business. 2. a) Starbucks customer satisfaction scores declined as a result of the customisation initiative they embarked on. According to Kotler (1999), a company practices “customer intimacy” when it can customise its offering to a particular customer’s requirements. In this case, the customer can have a service his own way he deems satisfactory. The customer’s demands ought to be met as part of the service delivery which may be a bit complicated as some customers might have different tastes. Whilst it would be a noble idea to customize, the main danger would be the fact that only a few customers would be properly served as this process is quite long. Whilst, this initiative greatly improved customer satisfaction in that the clients were able to get exactly what they wanted, making some beverages required more steps which consumed more time. For instance making a venti tazoberry and crème required 10 steps which meant that other customers would have to wait for the first customer to be served since their staff compliment could not match the demands of each client. As a result, long queues emerged in most of its coffee shops. Customers generally hate standing in long queues to get a service which they think can make them relax. It can then be said that a service meant to increase greater satisfaction of the customers is negatively affecting the performance of the company as has been the case. When such a scenario is created from an attempt to improve service, then it becomes a disservice that would be the source of a decrease in the number of customers patronising the coffee shop. b) Starbucks’ ideal customers in terms of profitability are the affluent people who do white collar jobs. According to Randall (1994), competitive brands are likely to appeal to customers as they would develop loyalty and trust in that particular brand which is very advantageous in the long run. Loyal customers in this particular type of business can be the affluent who have a stable source of income. Whilst other average customers can also contribute to the revenue generated by Starbucks, the only problem that may arise may be the firm’s difficulty in identifying their interests as they may lack consistency. Marketing, particularly service provision is primarily concerned with satisfying the needs and interests of the customers which may be difficult to fulfil if you do not have regular, trusted customers who can be easily identified. Without a specific target market, it may be difficult to create a formidable brand. In this particular case, target marketing is very important as far as identification of clients is concerned. This can be achieved through market segmentation which is loosely defined as the attempt to put into segments or groups the potential customers who share similar characteristics and interests. This can be done on the basis of various factors such as age, psychographic, education as well as levels of income among others. In this particular case, the level of income would be used as a standard measure by virtue of the kind of business which constitutes a luxury to a greater extent. In most cases, it is the affluent people who can afford luxurious lifestyles which are often seen as lavish lifestyles in other sections of the less privileged members of the society. Business such as coffee shops is not meant for average people who in most cases would be struggling to make ends meet which would be naïve to set up such elite services for them. Indeed, the rich and affluent can afford lead such kind of lifestyles hence they should constitute the target market. Therefore, the affluent customers are more ideal in that they have the money to spend and this is the only way they can relax and interact with their business partners in most cases. Coffee shops were initially designed as a meeting place for business people where they would discuss about their businesses and share ideas as they offered relaxed environments which were convenient for such meetings. Besides the good services they would be offered, these elite people would be the major patrons of coffee shops as they would also want to discuss their business hence they have consistency in visiting the coffee shops. These form a stable customer base and the company would have to attract new clients on top of the ones already existing. Consistency is advantageous in that in terms of economic recession, the company would at least be assured of retaining its loyal customers contrary to average customers who may not be stable in their visits to the coffee shops. c) Customer service is concerned with satisfying the needs of the customers (Cant 2000). From the definition of a service given above, it can be noted that a service is an intangible thing hence its satisfaction can only be felt through the provision of excellent services. It should also be borne in mind that Starbucks is operating in a very competitive market environment hence, satisfactory service to its clients is the only way that can ensure its ability to remain viable and manage to retain its loyal customers. Failure to offer satisfactory service would result in the loss of customers who would be disgruntled by the poor service and opt to switch to other service providers. Highly satisfied customers are very valuable to Starbucks since its aim is to fulfil its promise of satisfying its clients. The services it offers are regarded as luxury which are not basic needs in the strict sense of the meaning of the services it offer hence people can do without them. A highly satisfactory service would help retain already existing customers as well as attract new clients. Competition is the major threat facing Starbucks hence it ought to strive by all means necessary to provide valuable services to its customers considering that they would not wish to waste their money on poor service. This is considered as a luxury hence any poor service would translate into loss of business as the customers would prefer to go to the shops where they would be assured of quality, satisfactory services. 3. a) The tangible indicators of quality from a customer’s perspective include the cleanliness of the utensils they physically use whenever they visit the coffee shops as well as the general appearance of the shop. These are the items they can at least see or touch hence they should always appear in such an attractive manner. A generally clean environment appeals to the customers under normal circumstances. Whenever customers develop a negative perception about an area, the result would be that they would end up shunning the place hence an attractive environment should make lasting impressions. Since most of the services are intangible, at least an attractive environment would mollify the customers as they would benefit from the homely environment. b) The steps involved in service delivery at the Starbucks include planning which encompasses the identification of the needs of the customers, finding means of satisfying them and service delivery among others. Planning is the first step in establishing and running a business as it sets out the necessary steps that ought to be taken in the running of any business. The laid down plans ought to be carefully coordinated in such a way that ensures that they comply with the expected goals to be achieved. Implementing the plans is also one major step which is mainly concerned with monitoring progress. All these steps are very important as they form an integral part of delivering quality service to the customers. c) Standardisation involves sorting of products according to size and quality (McCarthy 1990). It is important in that it reduces the need for sampling of the products. It is possible especially in differentiating customised services from ordinary services as the ordinary services can be offered through the use of menu cards alone. First class services should be clearly marked and defined though they would be accessed under one roof to avoid confusion and delays. If all the services are sorted according to their quality, then it reduces the hassles of service providers in identifying what the customers would need which would be advisable as far as upholding the principle of customer service is concerned. This also reduces unnecessary delays as certain sections of the workforce would specialise in catering for each particular type of service. Standardisation is very important throughout the process of fulfilling as well as satisfying the needs of the customers as the company is developing other new strategies that may attract new clients. In most cases, customers are concerned with receiving standardised services that are almost commensurate with the money they would spend. Substandard services normally detract the clients who are after getting value for money from the services rendered to them. d) The potential fail points are located along the process of customising services to the clients. Meeting the requirements of all the customers in this process is not an easy to do task. This whole process would consume more time in preparing the beverages which would in turn mean that other customers would have to wait for longer periods which is likely to result in loss of patience among the clients. This can further result in loss of confidence over what could be described as lack of customer care which is not good for the survival of Starbucks whose business is determined by customer satisfaction. Steps such as differentiating the sections of the coffee shops where each particular service would be obtained would greatly help in the reduction of time wasted by other customers in the queues who would prefer to get ordinary services. The workers ought to be divided into categories where some would specialise in serving customized services while others would serve other ordinary beverages. This can be the best remedy in ensuring smooth flow of business as it would reduce confusion among the clients who may use the same point of sale instead of differentiating. e) The potential measures of performance can be seen through different factors such as the satisfaction of the customers, positive suggestions from customers as well as an increase in the number of customers. Statistics to show customer satisfaction can be obtained from indoor surveys that can be done through interaction with customers. Positive feedback would entail that the customers are satisfied with the service offered which would mean that the company is performing well and ought to keep up the reputable standards. What can satisfy the customers is quality in this particular case. The services offered cannot be quantified in any way hence quality is used as a measure of satisfaction. If people are gratified by the services offered, then it means that they are satisfied with the kind of deal they would be getting. A decline in the number of customers would indicate that somehow the customers are not satisfied which can be used as an indicator to measure performance. If a company is offering good service, there is no way it can loose its customers. Therefore, any sign of a decline in the number of customers is an indication of poor performance that needs attention in order to attract more customers. In this way, it is very important for any organisation to keep record of the statistics of its customers so as to ensure that it is better positioned to notice if there is any negative growth in its statistics. In the event that there have been no major economic changes likely to affect the spending of the consumers, any decline in customer statistics would point to the effect that there have also been a decline in the quality of service. On the other hand, potential measures of performance can be seen through an increase in the number of customers who would visit the Starbucks for their coffee or any other related service. People are not driven by impulse buying in such luxury products as the ones offered by this company hence the increase in customers would mean that they are being attracted by something. Over and above, it can be noted that marketing of a product and a service is a bit different though they use the same marketing concepts as a result of their differences in appearance. It can also be noted that customer service declined at Starbucks mainly as a result of the introduction of customised service that was aimed at meeting individual needs. Whilst this marketing strategy is good for improvement in meeting customer needs, it is time consuming that resulted in the long queues of customers waiting to be served. It can thus be concluded that customer service is very important in ensuring the provision of quality service. References Armstrong, G. & Kotler P.(1996) Principles of Marketing, 7th Edition, Englewood Cliffs: Prentice Hall. Berry T. & Wilson D. (2001), On Target: The Book of Marketing plans. How to develop and implement a successful marketing Plan. Palo Alto Software, Inc USA. Burgess S.M. (1998), The New Marketing, Zebra Press, SA. Cant M.C. 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