Why was the original marketing mix extended for the service sector - Essay Example

? Why was the original marketing mix extended for the service sector? Table of Contents Table of Contents 2 Introduction 3 Discussion 4 A Definition and importance of service marketing 4 What is service marketing? 4 The importance of 4p’s 4 B the service marketing Triangle 5 The extended P’s for the services marketing 6 Effectiveness of Expanding Traditional Marketing Mix to Service Organization 6 Effectiveness of the elements of service sector 9 Findings 9 Conclusion and recommendations 10 References 11 Introduction In this age of competitiveness and economic downturn, presentation of appropriate services to the customer is the prime requirement of any service organization without which an organization may not survive or prosper effectively in this age of tough rivalry. This is because the customers act as the prime potency of any organization but they need to be presented with qualitative services so as to retain them for longer period of time. Only then, a service organization might retain its reputation and brand image in the market among other rivals. However, to do so it is extremely essential to appoint talented and skilled staffs within the organization. This might act as a stimulant in enhancing the level of dedication and devotion of the employees towards work thereby amplifying their standard of performance. The productivity and efficiency of the organization might get enhanced thereby amplifying the rate of profit margin. The brand image and loyalty of the service provider might also get enhanced to significant extent as compared to many other rival players. Moreover, due to the presentation of qualitative services, the level of satisfaction of the customers might also get enhanced thereby amplifying their level of reliability. Hence, it might be depicted from the above mentioned paragraph that qualitative service acts as the guiding force to enhance the competence of the brand as well as its staffs thereby reducing its threat from new entrants. This report is divided into five phrases. It mainly highlights the important of marketing mix in case of service providing organizations. Along with this, it also describes the effectiveness of three P’s i.e. people, physical evidence and process within a service providing organization. Discussion A Definition and importance of service marketing What is service marketing? Service marketing is described as the process of promotion of the products and services to the customers so as to satisfy their needs and desires. The prime objective of service marketing is to present the desired quality of products or services at a competitive cost. It is done so as to satisfy the underlining desires and needs of the customers thereby amplifying their level of loyalty and dependency over the brand. The profit margin as well as productivity of the organization also gets enhanced in this age of competitiveness. Therefore, it might be stated that in spite of being a new phenomenon in marketing, service marketing gained significance mainly due to its urge to present qualitative and value-added services to its customers. Other than this, service marketing gained popularity due to its efforts to present the economic activities generated by the organization to its clients in an effective and disciplined way. For example: proper treatment facilities by the health care organizations, services offered by the hospitality providers such as NHS. The importance of 4p’s The term 4p’s are referred as product, place, price and promotion. Product: This part of the marketing decisions deal with the specifications of actual goods and services. It also takes into account the needs and the wants of the end users. The extent of product category includes warranties, support and guarantees. In case of service category it is difficult to apply the marketing decisions since services can only be judged by quality. In case of similar services the only parameter is quality. For example, customer service facility on a product sold by a company can be judged only by the number of satisfied customer feedbacks. In case of products with services there is ample scope to customize the offering and therefore customer encounter are of particular importance. Price: The next decision refers to setting up the price of a product which may not be monetary. In case of services the companies often provide good customer services for reputation and brand loyalty. Pricing of goods is easier than pricing of services. Services include labour as well as overhead costs. These costs should also be considered in pricing of services. Place: The process of how the product reaches to the customer is referred as place or distribution. It is know that service delivery is concurrent. It is not possible to store services and therefore location of service product is of prime importance. Promotion: The elements of services can be replicated easily and so promotion of service offering accrues much importance. B the service marketing Triangle Service marketing is an extended concept of traditional marketing. This means, service marketing organizations offers high concentration over mainly three P’s i.e people (employees), process (customers) and physical evidence (company). This is because praiseworthy service is the prime criteria for the organizations operating in service sectors. The extended P’s for the services marketing People: Service cannot be separated from the person offering it and hence people can act as the defining factor. A restaurant gets popular for its taste and also the services offered by the staffs. The top organizations provide customer service trainings for its employees. Process: The process of services cannot be ignored since it entrusts with the task of providing the same standard of service repeatedly. In recent times companies tend to maintain the service blue print of the delivery process. Physical evidence: Services are intangible in nature. Organizations try to incorporate some tangible elements into their offerings so as to enhance the customer experience. Restaurants focus on interior designing and decorations so as to offer a tangible experience to the guests. Effectiveness of Expanding Traditional Marketing Mix to Service Organization The traditional marketing mix is mainly associated with four P’s i.e. product, place, price and promotion. The elements of traditional marketing mix help in communicating the abilities and image or reputation of the firm to its target customers so as to enhance their level of awareness. Other than this, by knowing the features of the products or services of the firm, the degree of gratification of the customers might get enhanced. It is extremely essential for any organization to enhance its sustainability in this age of stiff competition. Similarly, in case of service marketing organizations, marketing mix plays a critical role. The service providers mainly offer high concentration over three elements, namely: people, process and physical evidence (Zeithaml & et. al, 2012, pp. 20-26). People - people or the employees act as the backbone of any service provider. This is because; people and service is entirely related with one another and so its presence marks a significant impact. Without people or employees, a service providing organization may not operate or sustain in this age among other rival players. Since, the employees or staffs of an organization are often prepared to offer high quality of services to its customers so as to increase their image and fame within their minds. However, in order to offer qualitative services, an efficient leader or manager is extremely essential. The leader or the manager might act as the guiding force for the employees or people of the organization thereby amplifying their dedication or performance of services. Only then, the quality of the service might get enhanced thereby amplifying the level of efficiency and recognition of the brand in the market among others. For example: A manager in a restaurant is always present to hear the feedbacks from the customers so that, they might rectify those defects. Along with this, both their food as well as services might be praised by the customers in the market. Therefore, it might be stated that the entire status of a service providing organization rests on the hands of its staffs or people. So, they need to offer high level of dedication over their assigned duties in order to satisfy the needs and wants of the customers effectively. For which, confident and strong-minded personality individual are extremely essential (Shanker, 2002, pp. 256-289). Process - it is also another essential element of service marketing mix. It is essential as it helps in ensuring the quality or standard of the service presented by the employees of the organization to its customers. Maximum extent of the organizations desire to recruit experienced and talented staffs so as to enhance their quality of services as compared to other rival players. This is because it is the only weapon by which a service provider might fascinate or retain its customers for longer period of time thereby amplifying its total sale volume and profitability ratio. Side by side, with the help of best quality of services, a service provider might enhance its brand image and equity in the market thereby reducing the threat of new entrants. Along with this, value-added services might also help the organization to retain its sustainability in this competitive age as compared to others. For example: the organization of IBM retained its portfolio in the market only due to its process or standard of delivering the technical or support services. Moreover, the services offered by the organization are just perfect and beyond the imagination of the customer. So, its market share is higher as compared to Infosys or TCS (Sisodia, 2011). Physical evidence - it is also another essential element of service marketing without which a service providing organization may not prosper in the entire globe among other rival players. This is because it comprises of the intangible items like dress codes, equipments, facility and many other requirements. All these services are presented to the customers in order to enhance their rate of satisfaction and pleasure so that they might remain with this specific brand for longer period of time. Such type of services also helps in reducing their level of switch over costs as well. Thus, physical evidence helps to enhance the experiences of the customers thereby reducing the underlining defects. Hence, it is extremely essential for any service providing organization to retain its aggressiveness and dominance in the market among other existing rival players. For example: a hair spa offers the facility of sofa, magazines, televisions and many other things in order to enhance their level of relaxation and contentment. Presentation of such services also helps in enhancing the degree of pleasure and uniqueness among other rival players. Hence, it might be clearly depicted that all the three elements, process, people and physical evidence are entire related with one another. One might not work effectively, if the other two fails to operate (Porter, 1986, pp. 145-156). Effectiveness of the elements of service sector A service provider might create a strong foot-hold in this age only if all the elements of service marketing are working appropriately (Booms & Bitner's, 1981, pp. 234-278). This means, if the service perceived from an organization fails to meet the expectation level of the customer, then it creates a huge gap. This gap hampers the level of loyalty and satisfaction of the customer over the services of the organization thereby hindering its entire image. Apart from this, if the perceived behaviour or attitude of the staffs does not match with the expectation level of the customer, then also a gap arise. Due to which, the level of reliability and dependency of the customer reduces significantly to a certain extent. So, it’s extremely essential for any service providing organization to meet the expected levels of the customers in order to retain them for longer period of time among others (Hoffman & Bateson, 2010, pp. 345-378). Findings In this age, the degree of service providing organizations are enhancing as compared to goods manufacturing units. This is mainly due to its highest quality of service as presented below: Thus from the above figure, it might be clearly revealed that the rate of service providing organizations is increasing at a high rate as compared to products. This is mainly due to its high quality of services and remarkable behaviours (Apte, 2004, pp. 214-278). Conclusion and recommendations Conclusively it might be depicted that the sustainability of a service providing organization is mainly due to its quality of services as well as its culture and behaviours of the employees. If all these aspects remain perfect then the growth and profit margin of the organization might get enhanced to a sky-soaring height as compared to other rival players. Side by side, the demand and brand image of the organization might also get enhanced thereby amplifying its competitiveness in the market among others. Therefore, it is extremely essential to improve the quality of services along with the traits of personality so as to satisfy the requirements and needs of the customers. Only then, the loyalty and recognition of the organization as well as its services might remain in the supreme position as compared to others. References Apte, G. (2004). Service Marketing. London: Sage. Booms, B. & Bitner's, M, J. (1981). Marketing Strategies and Organizational Structures for Service Firms. London: Sage. Hoffman, D, K. & Bateson, J, E, G. (2010). Services Marketing: Concepts, Strategies, & Cases: Concepts, Strategies, and cases. Germany: John Wiley & Sons. Porter, M, E. (1986). Competition in Global Industries. New York: Springer. Sisodia, S. (2011). Service Marketing. [Online] Available at: http://faculty.mu.edu.sa/public/uploads/1358240153.7851SERVICES_MARKETING_share.pdf. [Accessed on November 27th 2013]. Shanker, J. (2002). Service Marketing. New York: Springer. Zeithaml, V, A. & et. al. (2012). Services Marketing Integrating customer focus across the firm. Wilson2ePrelims, 27, 2, pp. 1-26. Read More