Services Marketing

Chapter 2 : The Nature of Services Marketing

Evolution of Service Firms

A Different Approach For Marketing Services

Narrow Definitions of Marketing
Lack of Appreciation for Marketing Skills
Different Organizational Structures
Problems in Determining Costs for Pricing
Constraints and Opportunities for Not-for-Profit Organizations
Other Challenges

The Services Marketing Triangle

The Services Marketing Mix

People
Physical Evidence
Process

Key Marketing Issues Before A service Organization

Managing Differentiation
Service premises
Packaging
Service Personnel
Tools and Equipment Used
Customers
Convenience
Name of the service establishment
Managing Productivity
Managing Service Quality

New Avenues In Services Marketing

Chapter Summary

A service firm, unlike a manufacturing firm, does not manufacture but rather performs something for the customer. It delivers an experience that is intangible, heterogeneous, inseparable and imperishable in nature. Thus, marketing of services is different from the marketing of products and goods.

Service firms have evolved over the years along with the evolution that took place in the business environment in which they were operating. The evolution of service firms has been largely in response to the fierce competition in the service industry and realization of the need to incorporate the goal of total customer satisfaction into corporate philosophies. This has become essential for firms to survive and prosper.

The unique characteristics of intangibility, heterogeneity, inseparability and perishability, as well as the distinctive features of service firms such as lack of appreciation for marketing skills, narrow definition of the marketing function, a different organization structure, difficulty in determining costs for pricing the service, and constraints and opportunities in the not-for-profit sector have made it necessary for service marketers to adopt a different approach for marketing services.

The services marketing triangle depicts the relationship between the three components of the service delivery process, namely, the customers, the front-line employees, and the company. The interactions that take place among these three components comprise external marketing, internal marketing and relationship or interactive marketing, respectively.

The services marketing mix is the mix of marketing elements that help service firms to successfully operate the business. In addition to the 4 P's of marketing goods (product, price, place and promotion), service firms are characterized by three additional P's, namely people, physical evidence and process.

The key marketing issues that face any service firm relate to managing differentiation, managing productivity and managing quality. The rapid changes in technology and the business environment have served to provide new avenues for service marketers to market and differentiate themselves.

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