Services marketing
Services marketing is a sub-field of marketing, which can be split into the two main areas of goods marketing (which includes the marketing of fast-moving consumer goods (FMCG) and durables) and services marketing. Services marketing typically refers to both business to consumer (B2C) and business to business (B2B) services, and includes marketing of services such as telecommunications services, financial services, all types of hospitality services, car rental services, air travel, health care services and professional services.
Services are (usually) intangible economic activities offered by one party to another. Often time-based, services performed bring about desired results to recipients, objects, or other assets for which purchasers have responsibility. In exchange for money, time, and effort, service customers expect value from access to goods, labor, professional skills, facilities, networks, and systems; but they do not normally take ownership of any of the physical elements involved.[1]
There has been a long academic debate on what makes services different from goods. The historical perspective in the late-eighteen and early-nineteenth centuries focused on creation and possession of wealth. Classical economists contended that goods were objects of value over which ownership rights could be established and exchanged. Ownership implied tangible possession of an object that had been acquired through purchase, barter or gift from the producer or previous owner and was legally identifiable as the property of the current owner.
More recently, scholars have found that services are different than goods and that there are distinct models to understand the marketing of services to customers.[2] In particular, scholars have developed the concept of service-profit-chain to understand how customers and firms interact with each other in service settings,[3]
Adam Smith’s famous book, The Wealth of Nations, published in Great Britain in 1776, distinguished between the outputs of what he termed "productive" and "unproductive" labor. The former, he stated, produced goods that could be stored after production and subsequently exchanged for money or other items of value. But unproductive labor, however" honorable,...useful, or... necessary" created services that perished at the time of production and therefore didn’t contribute to wealth. Building on this theme, French economist Jean-Baptiste Say argued that production and consumption were inseparable in services, coining the term "immaterial products" to describe them.
Alternative View
A recently proposed alternative view is that services involve a form of rental through which customers can obtain benefits.[4] What customers value and are willing to pay for are desired experiences and solutions. The term, rent, can be used as a general term to describe payment made for use of something or access to skills and expertise, facilities or networks (usually for a defined period of time), instead of buying it outright (which is not even possible in many instances).[5][6]
There are five broad categories within the non-ownership framework
- Rented goods services: These services enable customers to obtain the temporary right to use a physical good that they prefer not to own (e.g. boats, costumes)
- Defined space and place rentals: These services obtain use of a defined portion of a larger space in a building, vehicle or other area which can be an end in its own right (e.g. storage container in a warehouse) or simply a means to an end (e.g. table in a restaurant, seat in an aircraft)
- Labor and expertise rental: People are hired to perform work that customers either choose not to do for themselves (e.g. cleaning the house) or are unable to do due to the lack of expertise, tools and skills (e.g. car repairs, surgery)
- Access to shared physical environments: These environments can be indoors or outdoors where customers rent the right to share the use of the environment (e.g. museums, theme parks, gyms, golf courses).
- Access to and usage of systems and networks: Customers rent the right to participate in a specified network such as telecommunications, utilities, banking or insurance, with different fees for varying levels of access
In defining service marketing we can modify the definition of American Marketing Association on Marketing by adding the following changes. Services Marketing is an organisational function and a set of process for identifying or creating, communicating, and delivering value to customers and for managing Customer relationship in a way that benefit the organisation and stake holders.
See also
- Customer experience
- Industrialization of services business model
- Servitization of products business model
- Service system
- Service blueprint
- Service quality
- SERVQUAL
- Service Design
References
- ^ Christopher Lovelock and Jochen Wirtz (2011), Services Marketing – People, Technology, Strategy. 7th ed., Upper Saddle River, New Jersey: Prentice Hall
- ^ Anderson, Eugene W., Claes Fornell, and Roland T. Rust. "Customer satisfaction, productivity, and profitability: Differences between goods and services." Marketing science 16.2 (1997): 129-145.
- ^ Loveman, Gary W. "Employee satisfaction, customer loyalty, and financial performance an empirical examination of the service profit chain in retail banking." Journal of Service Research 1.1 (1998): 18-31.
- ^ Lovelock, C., Gummesson, E. 2004. Whither Services Marketing?: In Search of a New Paradigm and Fresh Perspectives. Journal of Service Research 7 (1) 20-41
- ^ Lovelock, C., Gummesson, E. 2004. Whither Services Marketing?: In Search of a New Paradigm and Fresh Perspectives. Journal of Service Research 7 (1) 20-41
- ^ Christopher Lovelock and Jochen Wirtz (2011), Services Marketing – People, Technology, Strategy. pg 14, 7th ed., Upper Saddle River, New Jersey: Prentice Hall
- Valarie Zeithaml, Mary Jo Bitner and Dwayne Gremler, Services Marketing
- Beckwith, Harry (1997). "Selling The Invisible: A field Guide To Modern Marketing", Warner Books.