Marketing of Services. Literature Review in relevancies of: Bestwash GmbH

Introduction:

Literature Revue

Definition of Services Marketing:

A traditional definition of marketing is provided by the Chartered Institute of Marketing:

The management process which identifies anticipates and supplies customer requirements efficiently and profitably. (Palmer, 2004, P.8)

The marketing mix for services:

The marketing mix for services is not only the same as by the Goods marketers. They have the 4Ps: Product Place Promotion Price. Early analysis by Borden (1965) of marketing mix elements was based on a study of manufacturing industry at a time when the importance of services to the economy was considered to be relatively unimportant. More recently, the 4Ps of the marketing mix have been found to be too limited in their application to services. Particular problems that limit their usefulness to services are as follows. (Palmer, 2004 P.10)

4Ps:

Product:

Products are something which is produced by physical act or labor. In marketing, a product is anything that can be offered to a market that might satisfy a want or need. However it is much more than just a physical object. It is the complete bundle of benefits or satisfactions that buyers perceive they will obtain if they purchase the product. It is the sum of all physical, psychological, symbolic, and service attributes. ( en.wikipedia.org/wiki/Product)

Pricing:

Pricing is one of the four aspects of marketing. The other three parts of the marketing mix are product management, promotion, and distribution. It is also a key variable in microeconomic price allocation theory. Pricing is the manual or automatic process of applying prices to purchase and sales orders, based on factors such as: a fixed amount, quantity break, promotion or sales campaign, specific vendor quote, price prevailing on entry, shipment or invoice date, combination of multiple orders or lines, and many others. Automated systems require more setup and maintenance but may prevent pricing errors. (en.wikipedia.org/wiki/Pricing)

Promotion:

The specification of these four variables creates a promotional mix or promotional plan. A promotional mix specifies how much attention to pay to each of the four subcategories, and how much money to budget for each. A promotional plan can have a wide range of objectives, including: sales increases, new product acceptance, creation of brand equity, positioning, competitive retaliations, or creation of a corporate image

+2 or 3 Ps:

In the context of services marketing, Booms and Bitner (1981) have therefore suggested an extended "7-Ps" approach that contains the following additional "Ps":

People:

All people directly or indirectly involved in the consumption of a service, e.g. employees or other consumers. An essential ingredient to any service provision is the use of appropriate staff and people. Recruiting the right staff and training them appropriately in the delivery of their service is essential if the organisation wants to obtain a form of competitive advantage. Consumers make judgements and deliver perceptions of the service based on the employees they interact with. Staff should have the appropriate interpersonal skills, aptititude, and service knowledge to provide the service that consumers are paying for. Many British organisations aim to apply for the Investors In People accreditation, which tells consumers that staff are taken care off by the company and they are trained to certain standards (www.learnmarketing.net/servicemarketingmix.htm)

Process:

Procedure, mechanisms and flow of activities by which services are consumed. The additional "P" of "processes": "How" a product is produced becomes increasingly crucial to a large number of consumers – just think about cosmetics (animal testing) or cars (recycling).

The biggest advantage of this discussion however is probably that those who discuss it deepen their own knowledge – not only about the marketing mix in particular but also about marketing in general.

Physical Evidence:

The environment in which the service is delivered. It also includes tangible goods that help to communicate and perform the service. The first two additional Ps are explicit (People, Process) and the third one (Physical Evidence) is an implicit factor. Where is the service being delivered? Physical Evidence is the element of the service mix which allows the consumer again to make judgements on the organisation. If you walk into a restaurant your expectations are of a clean, friendly environment. On an aircraft if you travel first class you expect enough room to be able to lay down!

illustration not visible in this excerpt

More goods as Services…?

illustration not visible in this excerpt

"Managing the evidence" refers to the act of informing customers that the service encounter has been performed successfully. It is best done in subtle ways like providing examples or descriptions of good and poor service that can be used as a basis of comparison. The underlying rationale is that a customer might not appreciate the full worth of the service if they do not have a good benchmark for comparisons. (Levitt)

The dichotomy between physical goods and intangible services should not be given too much credence. These are not discrete categories. Most business theorists see a continuum with pure service on one terminal point and pure commodity good on the other terminal point. Most products fall between these two extremes. For example, a restaurant provides a physical good (the food), but also provides services in the form of ambience, the setting and clearing of the table, etc. And although some utilities actually deliver physical goods — like water utilities which actually deliver water — utilities are usually treated as services. (http://en.wikipedia.org/wiki/Goods_and_services)

The service-goods continuum

Distinguishing features of services

Zeithaml, Parasuraman, and Berry sum up four common factors that characterize all services: intangibility, inseparability of production and consumption, perishability, and heterogeneity. Services are said to be intangible because they are performances rather than objects, and they cannot be touched or seen in the same manner as goods; rather, they are experienced, and consumers´ judgments about hem tend to be more subjective than objective.(Bateson, 1995. P9)

Inseparability:

Services cannot be separated from the service providers. A product when produced can be taken away from the producer. However a service is produced at or near the point of purchase. Take visiting a restaurant, you order your meal, the waiting and delivery of the meal, the service provided by the waiter/ress is all apart of the service production process and is inseparable, the staff in a restaurant are as apart of the process as well as the quality of food provided. (http://users.wbs.warwick.ac.uk/dibb_simkin/student/glossary/ch11.html)

Perishability:

Services last a specific time and cannot be stored like a product for later use. If travelling by train, coach or air the service will only last the duration of the journey. The service is developed and used almost simultaneously. Again because of this time constraint consumers demand more. A characteristic of services whereby unused capacity on one occasion cannot be stockpiled or inventoried for future occasions. (Dibb Simkin Pride Ferrel P. 324)

Heterogeneity:

Heterogeneity refers to the potential for variability in the performance of services and problems of lack of consistency that cannot be eliminated in services as they frequently can be with goods.( Baeteson P11.)

It is very difficult to make each service experience identical. If travelling by plane the service quality may differ from the first time you travelled by that airline to the second, because the airhostess is more or less experienced. A concert performed by a group on two nights may differ in slight ways because it is very difficult to standardise every dance move. Generally systems and procedures are put into place to make sure the service provided is consistent all the time, training in service organisations is essential for this, however in saying this there will always be subtle differences.

References:

- Palmer, Adrian: Principles of Services Marketing 4th edition 2005
- Levitt, T. (1981) "Managing intangible products and product intangibles", Harvard Business Review, May-June, 1981, pp.94-102
- Booms, B. H. and Mary-Joe Bitner (1981), "Marketing Strategies and Organisation Structures for Service Firms", in Marketing of Services, J. H. Donnelly and W. R. George, Eds. Chicago: American Marketing Association.
- K. Douglas Hoffman John E.G. Baeteson Essential of Service Marketing 1997
- John E.G. Baeteson Managing Services Marketing Text and Readings 3rd edition 1995
- Dibb Simkin Pride Ferrel, Marketing 4th Edition Houghton Mifflin by the Warwick University,England
- www.learnmarketing.net/servicemarketingmix.htm
- www.wikipedia.org
- Donald Cowell The Marketing of Services 1993, Oxford