Service Sector Marketing - Current Market Assessment, Market Penetration, and Marketing Mix - Term Paper Example

SERVICE SECTOR MARKETING Name: Grade Course: Tutor’s Name: (23 May, 2010) Table of Contents 1.0 Executive Summary 3 2.0 Introduction 4 3.0 Current Market Assessment 5 3.1 Market definition 5 3.2 Market Analysis 6 3.3 Customer Analysis 7 3.4 Competitor Analysis 7 3.5 Internal Analysis 8 3.6 Opportunities Analysis 8 4.0 Market Penetration 9 4.1 Business Volumes Objectives 9 4.2 Financial Objectives 9 5.0 Marketing Strategy for the future 10 5.1 Proposition 11 5.2 Sales Strategy (Product) 11 5.3 Pricing (Price) and Place 12 5.4 Communications Strategy (Promotion) 12 5.5 People 12 5.6 Process 13 5.7 Physical Evidence 13 5.8 Action Program 13 5.9 Controls 14 6.0 Conclusion 15 Reference 17 Appendix 1 20 Service Sector Marketing 1.0 Executive Summary Marketing is the method where businesses establish whether their products or services are of importance to clients, and the approach to use in trade, communications and business expansion. This paper gives a detailed coverage of a technological service business and how it can be run profitably and efficiently. It explains the Strength, Weakness, Opportunity, and Threats (SWOT) analysis, the 7-P’s, and the five porters methods approach that’s makes the business a success. It also gives an evaluation of the macro-environmental trends and identification of current and potential target audiences; strategy statement, objectives, positioning, the services marketing mix, implementation, evaluation, contingencies and covers the aspects of the services marketing plan. This ensures that those that clients get the best and so that the company establishes a loyal customer base. The services sector involves of an intertwined and complicated correlation of a process that involve the product, promotion, place, people, process, and customer service. In this case the product will be the service or services and fulfillment got from the services (Fitzsimmons, & Fitzsimmons, 2001). The business will involve technological services offered regionally across the country and further expansion globally. The business prospects will be based on competition, new clients, and the future market structure. Such services industries include; administrative, economic services, religious, technology among others. Strength weakness opportunities and threats (SWOT) analysis, a 7P’s strategy and the five porter forces approach will be important to its survival that will be based on the needs and prospects of the business. A clear roadmap for the expansion and maintenance of businesses are supposed to be set out. Efficient customer care will be the main methodology, in the bid to create a reputable brand and image. The plans to expand will first be set through mutual partners and share trading through initial public offers. Proper public relations, the press, billboards, the website, direct sales and marketing, events, brochures, among others are some of the preferred promotion strategies in the strategy. All the above factors will favor and support the growth of the business. 2.0 Introduction Marketing is the method where businesses establish whether their products or services are of importance to clients, and the approach to use in trade, communications and business expansion. Success is the priority in any business, thus this calls for very clear and elaborate steps at all the systems of the business. This must be followed by clear implementations, monitoring, and evaluation of the business to establish its worth. Marketing is one aspect of the business that must be clearly outlined and followed to foresee the growth and success of the business. And the success of any business makes everyone want to be associated with the business. The services sector however provides greater challenges since marketing them is more tasking and involving as opposed to goods. In services everyone seeks satisfaction in different ways; this means that balancing the satisfaction of all the customers is an uphill task. This is also due to the fact that the existing methods of marketing focus on the products and other tangible and physical goods. The traditional 4-P marketing strategy of Price, Promotion, Place, and Product was initially practiced for goods. The marketing of services requires the addition of other P’s i.e. participation, physical evidence and process to be able to fit in the marketing strategy of the services (Lewis, et, al. 1995). This paper gives a detailed coverage of a technological service business and how it can be run efficiently and profitably. It explains the Strength, Weakness, Opportunity, and Threats (SWOT) analysis, the 7-P’s, and the five porters methods approach that’s makes the business a success. It also gives an evaluation of the macro-environmental trends and identification of current and potential target audiences; strategy statement, objectives, positioning, the services marketing mix, implementation, evaluation, contingencies and covers the aspects of the services marketing plan. 3.0 Current Market Assessment 3.1 Market definition The services sector proves to be the most competitive sector in that the business must offer the best so that the customers may like the services and not seek them elsewhere (Berry, & Parasuraman, 1991. Just like in the case study of the Yogamoves Eileen proved to be the best and hence the preference for her business. This explains the extent of competition in the services industry). The business is affected by factors such as location, space, technology, customers among others (Levitt, 2009). The geographic position of the services must be in line with the culture and practices of the people around. It must be an acceptable norm so as to attract the targeted population. The services must also not be saturated in one region as this will increase competition which is not health for business. The services sector involves of an intertwined and complicated correlation of a process that involve the product, promotion, place, people, process, and customer service. In this case the product will be the service or services and fulfillment got from the services (Fitzsimmons, & Fitzsimmons, 2001). The business will involve technological services offered regionally across the country and further expansion globally. 3.2 Market Analysis The technological sector is dynamic and has great potential. In the services sector the market is huge and the target will only be based on the resources that the business has. The business will start with a sub-set of a bigger market then target the larger market when resources allow. Market segmentation will help the business identify homogeneity or help in the separation of processes of services delivery if the competition is very high. For marketing to be efficient the environment must be characterized by increasing shift of technology, interdependent states, stable economies, and a sound and social accountability (McDonald, & Dunbar, 2004). The economic growth of Australia has been relatively increased stably. There are favorable social, economic, technological, local, national & international conditions that favor the services industry (Fitzsimmons, & Fitzsimmons, 2004). These conditions make the services sector have a segmented market share, proper leadership, involved players, and positive market shifts that favors the industry. The sector boasts of offering proper solutions to the existing problems at the best prices with the services being diverse in presentation to suit the needs of the customer. This however is not void of the huddles of advertisement and a strong sales team to sell the services to the masses. It is future to taken into account when the services industry is being established. The long-term future of the business is of much priority since its growth prospects will be based on the future prospects of the business (Mohan, 2005). These prospects will be based on competition, new clients, and the future market structure. Such services industries include; administrative, economic services, religious, technology among others. 3.3 Customer Analysis Technology has a very high demand by clients worldwide this is because they are the key to many changes in the world today. When the business is established then net worth customers must be identified and the means to make them loyal to the business followed to the letter. The business must also focus to increase the customer base in the business and tap all potential customers (Bitner, & Hubbert, 1994). The business must conduct a strength weakness opportunities and threats analysis of its survival that will be based on the needs and influences, the decision makers, and the criteria of making the decision. The customers must be carefully and tactfully handled to ensure their satisfaction. 3.4 Competitor Analysis The Porter’s five forces analysis of a business the main focus is mainly on competition. The forces are; the hazard of new participants gaining access to the market, the increase of aggressive rivalry, the hazard of emergence of substitute services, the bargaining power of the buyers, and the bargaining power of the supplies (Porter, 2008). Once these forces are taken care of then the business is destined to prosper. This can be achieved from such measures as; blocking of new entrants, higher capital, better consumer loyalty, and a strategic competitive plan. The technological sector is characterized by many innovations and different department this ensures that competition is stiff in each department (Warnaby, et, al. 2002). 3.5 Internal Analysis A large capital base for the business will ensure a stable business and will be the main force that will scare other competitors from the services sector. High capital ensures high income and revenue that guarantees the business an upper hand in competition. This integration of the business’s mission, vision, and objectives with properly planned and executed principles makes the services industry stay a-float (Pine, & Gilmore, 1998). The traditional 4-P marketing strategy of Price, Promotion, Place, and Product was initially practiced for goods. The services sector requires the addition participation, physical evidence and process to be able to fit in the marketing strategy of the services sector; this makes it the 7-P’s strategy (Baldwin, & Clark, 1999). 3.6 Opportunities Analysis As Zeithaml, & Bitner, (2000) express in their book services marketing the business faces a bright future if the potential is exploited maximally. The Strength, Weakness, opportunity, and Threats (SWOT) analysis of the business will help establish the major success that the business can achieve. The business may have faced issues like inadequate capital, staffing, lack of space, and unawareness of the customers about the services as it started but this is conquered in the long-run through the business’s success. 4.0 Market Penetration Since this is a technological services business the target will be mainly those in the urban areas particularly the youth i.e. cities, and big towns. This ensures that those that are enthusiastic with technology to get the best and so that the company establishes a loyal customer base that will guarantee the future since the youth carry on the technology as they grow (Kortler, 1994). The company aims to grow within the region and to have branches around the country and even beyond borders and establish a renowned brand name within the technology service industry. 4.1 Business Volumes Objectives The business will establish clear customer care guidelines to asses the needs and preferences of the customers in each region and work on providing the best services. The heads of every local branch will be responsible to ensure their branch grows and will be answerable to the head at the head quarters. All the targets of the local branches must be met with excellent services being offered to promote and sell the brand name of the company (Gabbott, & Hogg, 1994). 4.2 Financial Objectives The company investments must keep on growing especially due to the plans to expand to other countries or extending globally. The profits must hit projected figures and even surpass expected targets. A plan of cumulative profit margins would work with the profits being ploughed back to business to provide efficient and better services (Lovelock, and Wright, 1998). The key indicators of growth would be; high profits, expansion of the branches and networks, and an increased customer base for the business. More assets will also be an indicator of growth. The business will mainly rely on the loyal customer base for its growth and will work to the establishment of a renowned brand name within the region which will act as its selling point to other areas. 5.0 Marketing Strategy for the future Marketing is one aspect of the business that must be clearly outlined and followed to foresee the growth and success of the business. The services sector however provides greater challenges since marketing them is more tasking and involving. In services everyone seeks satisfaction in different ways as opposed to goods. Without a strategy that suits the future the service sector is doomed to collapse. The service marketing mix comprises off the 7-p’s. These include: Product, Price, Place, Promotion, People, Process, and Physical evidence (Baldwin, & Clark, 1999). It is relatively easier to manage products because they can be standards instead of services. Services has many factors which need to be taken in to considerations such as physical evidence, people and processes which are used for the design of services as compared to products which has less factors. Products can also be produced en-mass and packed but services must wait till the customer arrives, also characteristics of a service that are lack of ownership, intangibility, inseparability, perish ability, and heterogeneity make it more complex than a product. To avoid collapse of the services sector to ensure that appropriate measures are put in place. With this well blend 7-P’s formula the services sector will be better managed for a bright future. This quantifies as the product since it is the traded unit between the client and business. The price is the unit of exchange or the measure for exchange. The place is considered as the location of the business (McKenna, 1988). An increased client base and assets and capital base will be core to future success. 5.1 Proposition The company must be clear and comprehensive this will ensure value proposition for the service offered to the clients (Yin, 2003). These should enlist the FIRM"s distinctive competence, distinct definition of the offering to the market and guard against the competition from rivals. This will also help in fostering Strategic alliances in the event to ensure survival and prosperity in the industry (Keller, 2003). The positioning will also help in defining the synergy obtained from any alliances or supply chain relationships in the industry. 5.2 Sales Strategy (Product) No marketing can work out without a sales strategy. Marketing involves all process and protocols of transfer of the services to the clients. This may be either through E-commerce, entrepreneurship, trade, and sales and marketing (Schmitt, 2003). The product in this case refers to the service bought by the client to give the satisfaction required. The technological services vary broadly from data provision and education for all the people regarding technology. The services are replicated throughout the region and globally, with any developments in technology introduced to ensure a competitive advantage (Gustafsson, & Johnson, 2003). A clear roadmap for the expansion and maintenance of business shall be set out. Efficient customer care will be the main methodology, in the bid to create a reputable brand and image. The plans to expand will first be set through mutual partners and share trading through initial public offers. The partners will help in establishing services which will add value to the services offered by the company. Business proceedings cannot be affected by the partners unless they are to add value (Tam, 2004). 5.3 Pricing (Price) and Place Every service has a unique price. It is determined with the standard procedures followed and the technology involved. There is unique price for each process since they are not the same. It’s necessary for the prices to take into considerations the cost of production and affordability of the service by the customer (Normann, & Ramirez, 1994). The cost of the service must be lower than the prices so as to realize profits. Valuable services may be rated at higher costs to ensure categorizing of the services within various groups of income. The place involves the; delivery model, resource requirements, special skills requirements, timing estimates, and training needed. 5.4 Communications Strategy (Promotion) The services sector must first develop a medium for the message. This must put in to account the targeted groups (i.e. the youth, the clients, staff and the general public) and balance them to come up with a clear and most appropriate strategy of promoting the services so that they can be bought. Proper public relations, the press, billboards, the website, direct sales and marketing, events, brochures, among others are some of the preferred promotion strategies. 5.5 People The presence of qualified and appropriate staff is an essential factor to any service provision. The process of recruitment should be elaborate with the training being intense so that they can deliver the services appropriately so that the organization will gain competitive advantage. Delivery of services by employees are a main factor which is considered by consumers, therefore if the employees gives good services consumers are contented and they come back for repeat services (Russell, 2009). The staff should be equipped with the required interpersonal proficiency, aptititude, and service acquaintance to provide the service that consumers are paying for (Schmitt, 2003). The high standards of staff training will be a selling point for the business to create a better image and brand. 5.6 Process Refers to systems that make the business to deliver efficient services to the clients, this should be very efficient and ensure smooth running of the business’s procedures. It should also be impressive to the clients so that they can be attracted to the business (Selden, 1997). The business will enhance technological measures of payment and delivery of service so that they can be fast, efficient and satisfactory to the client. Misunderstanding would be mitigated by establishing proper channels of communication. 5.7 Physical Evidence Physical Evidence is the service mix which allows the client to formulate judgments on the business. Service provision perception is essential on the impact of the organization as most clients will mostly make their decisions based on the services being offered by the organization hence organizations perceptual plan of the service (Kortler, 2002). 5.8 Action Program Once the business is started, the management plan must be strict and efficient. These involve proper implementation of the proposal and ensure maximum growth. The business proposal intends to be global with at-least a year after introduction (Levitt, 1996). In the first two months evaluation and monitoring will be done for establishment of business in a major city. The expansion will continue to major cities that have high demand for technological services with several branches in every city. The biggest milestone will be to start global operations of the technological business. Given the short time frame given precautionary measures should be taken at all levels in order to make it a success. The search for a strategic partner and the trading of the shares to the public to ensure increased capital for business should be handled professionally, transparently and accountability (Payne, 1993). The establishment of a large customer base will be the main strategy for business growth therefore the process of hiring and training of staff will not be compromised so that the business acquires the best staff to push further the agenda of efficient customer service forward. Proper public relations, the press, billboards, the website, direct sales and marketing, events, brochures, among others are some of the preferred promotion strategies that will boost the awareness of the business as it grows (Kotler, & Keller, 2009). This will boost the image and branding of the business so that the business’s goodwill from customers may increase. The 7-P (Product, Price, Place, Promotion, Physical Evidence, Process and People) strategy will be perfectly implemented at all level to give the business a competitive advantage in areas of high competition. 5.9 Controls Even at the best controlled situations errors are bound to happen, but with proper emergency the business will properly be cushioned against any errors. The business will set up various departments at all level so as to assess the services that contribute to the business’s growth and eliminate those that are a liability at different places. The plan to acquire funds to go global may have hitches but the presence of the options of financial assistance in form of grants or loans will be an emergency measure just in case partners and stocks fail. Other methods of advertisement will be considered once the proposed methods prove unfruitful to the business. This will be in order to sell the message of the business and create an admirable brand of business. The most important of the whole process would be to ensure close implementation, monitoring, and evaluation at every stage to identify the success of the business. This will monitor the progress and enable periodical reports so as to assess the performance of the business operations at all times (Lindsay, & Rocchi, 2003). 6.0 Conclusion Almost all business priority, aim and objective are to maximize profits. If this ultimate goal is not met then the business plan has failed or is implemented poorly. The technological sector is very dynamic and this makes it very competitive but with properly laid down plans it remains to be the best industry to invest in since there is high demand. Due to the nature of services i.e. they are inseparable, intangible, perishable, variable, and their right to ownership their marketing strategy remains complicated and variable. The service marketing mix comprises off the 7-p’s. These include: Product, Price, Place, Promotion, People, Process, and Physical evidence which makes the marketing simplified (Smith & Albaum, 2004). The customer service focused marketing will always aim at giving solutions, information, value, and access to the client. The services sector proves to be the most competitive sector in that the business must offer the best so that the customers may like the services and not seek them elsewhere. The business is affected by factors such as location, space, technology, customers among others. The geographic position of the services must be in line with the practices of the people around and most of all be accepted by the client. It must be an acceptable norm so as to attract the targeted population (Stone & Desmond, 2007). In this case the product will be the service or services and fulfillment got from the services. 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London, Sage publishers. Zeithaml, V.A., & Bitner, M.J. (2000). Services Marketing. UK, McGraw-Hill Appendix 1 Action plan Read More