Services Marketing Concept

Introduction

A service can be defined as an indefinable product. It is the act of performing something for the sake of someone or something. A service differs from a product in that; a product is tangible whereas a service can not be touched. Another difference is that a product can be purchased and consumed at a later date while a service is consumed at the time and point of purchase and cannot be stored in any form. It can not be owned and perishes after purchase. A service is like an experience that changes with time. It is very difficult to receive exactly the same service at different times. One can walk up into a hotel and receive excellent service and experience a poor service on another visit.

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Thereby, most of the service marketers put more emphasis on the nature of services, which include inseparability, intangibility, perishability, variability and right of ownership. This paper looks at the characteristics of services that distinguish them from products, the definition of service marketing and gives a brief overview of how this concept is used in service industries. It also gives a brief overview of an airline company (jet star) and how it uses service marketing to promote its services. Finally, it looks at relationship marketing and the importance of service quality to service industries.

Characteristics of services

Services have specific characteristics that are not found in products. One of these characteristics is inseparability; this means that the point of consumption and the provider of the service can not be separated. A service cannot be touched physically. An example of a service is a life insurance whereby the insurer receives a certificate but the service offered is intangible. Another characteristic of a service is that it is perishable and can not be stored to be consumed at a later date. It has to be consumed at the point of purchase for it to be termed as a service (Levitt 1981). One can not receive exactly the same kind of service since it can not be repeated.

Services are variable and they can never be identical especially because of the involvement of human resources. For instance, going to the same salon frequently for a similar service might experience variance in the level of customer satisfaction or speed. Last but not least, one can never acquire right of ownership from a service because it is just an experience. For instance, a mechanic may service ones car but that does not give him the right to own either the service or the equipment used by the mechanic.

What is service marketing?

This can be defined as a form of marketing that deals with the sale of services. Unlike the selling of products, selling of services is a tricky undertaking that requires a different marketing approach. Many companies offer both services and products but use different approaches for marketing (Zeithaml et al 1985). For instance, a computer shop may also offer services to its customers such as computer repair but use different approaches to market them. The main goal for service marketers is to not to persuade customers to purchase a particular product but to persuade them to do business with a given company located in a specific place.

For instance, a hotel offers service to its clients: it provides drinks or food that can be available in other hotels and it is, therefore, the responsibility of the marketer to convince people that a particular hotel is the best and its facilities are of high quality. Just like in marketing of products, service marketing covers issues such as the service on offer, the price, what makes it superior to other similar services and why people should go for that service excluding others. However, since services are intangible, service marketers have a hard task trying to convince consumers that the services being offered are of high quality and will have some benefits accrued to them.

Different marketers use different approaches when it comes to marketing; this depends on how they want people to perceive the company and the kind of information they want people to believe in regarding that particular company. For instance, a security company may want to portray itself as trustworthy and dependable while as a tourism company may want to portray itself as adventurous. Marketers should keep this in mind because at the end of the day, what is important is to convince people why they should go for a particular service offered by a particular company (Lovelock 1983).

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Some marketing schools give reliable techniques for service marketing while others are developed by people who are involved in service marketing. This can be through practicing marketing in a real situation where one gets an opportunity to learn more about people, their preferences and what they look for in a service. The main objective behind this encounter is to establish a long lasting relationship with the consumers so that in future they will come back for the same service in that particular company. This can only be achieved if the service is of the right quality and the brand does not play a major role like in the case of product marketing where the value of the product plays a significant role.

Jet Star and service marketing

Jet Star is an airline company based in Australia. It is one of the low cost companies with headquarters in Melbourne Victoria. Jet Star is an auxiliary of Qantas airlines, which was created to respond to the threats of competition from other low-cost airlines. Jet Star’s parent company is a strong firm that has withstood the test of time. It has a strong brand name preferred by many customers for both domestic and international air travel. As a form of service marketing, it offers other services that make air travel comfortable and more relaxed. On the domestic routes, Jet Star offers drinks and food to customers while on international routes especially on Airbus A330; it offers its services in two classes.

This has led to an increase in its annual profit especially from 2004 to 2008 when the service was in its initial stages. In 2007, Jet Star won the World Airline Award for low cost services and this gave it a competitive advantage over its rival firms (Rochfort 2009). The low cost service targets low income earners and middle class business people who rely on other means of transport due to the high charges of flights. Initially, these low cost services led to increased business which forced Jet Star to look for other aircrafts to cater for the increased demand for its services. Having introduced a low cost carrier service (LCC), Jet Star has increased its market share and is able to fight the threat from competitors. However, the future of this marketing strategy is not certain and the company has to look for other services to compliment the LCC. Such services include diversification of its services to other domestic areas that have no airlines, expansion into the international market and development of human resources.

Although the Australian economy has been doing well and the future is promising, Jet Star has to overcome some obstacles before it realises its full potential. First, there is the government requirement which it has to adhere to before being allowed to expand its services, increased capital costs, skilled labour requirements and rivalry from other firms (Rochfort 2009). Another major risk is that the company is not guaranteed of a ready market in the rural areas. However, the company’s technological developments have boosted its standing in regard to observing keeping clean environmental through the efficient use of energy. This has also had an impact on the sociological and cultural differences since consumers want firms to be more socially responsible.

Relationship Marketing

Relationship marketing is a concept that has evolved through time to incorporate service marketing. It can be defined as the process of attracting and promoting good customer relationship. In the marketing literature, the genesis of contemporary relationship marketing as we are acquainted to today can be drawn back to an extract by Schneider (1980) in which he observes: “What is surprising is that researchers and businessmen have concentrated far more on how to attract customers to products and services than on how to retain customers” (p60).

The major concept behind relationship marketing is to attract and retain loyal customers as well as honouring their commitment and performance. It is a concept that was widely used in the ancient times although many modern marketers are relying on this concept (Egan 2001). Because of intense competition and rivalry, many service industries have realised the importance of relationship marketing and the benefits accrued to it.

Marketers and customers in service organisations such as hotels, banks and hospitals have to interact with each other in order to strengthen the bond that exists between them for better results. As a form of relationship marketing, Jet Star provides reserved seating where customers are allowed to book their seats in advance; a service that was launched in 2006 as the first service of its kind in Australia. It also provides online booking for customers who may not make it to the booking offices due to various reasons. Because of its good services and relationship with its customers, it was recognised as the official airline for the Australia Rugby league and its aircrafts were decorated with advertisements to mark the relationship with the national league in 2008 (O’Sullivan 2010).

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Importance of Service Quality

Defining and determining quality service is of significance to providers of all services. As rivalry in service industries has augmented, the concept of service quality has turned out to be more and more important. Service quality has been recognised as a determinant of market size, return on investment and cost reduction (Anderson & Zeithaml 1984). Additionally, Devlin and Dong (1994) observe that in a progressively competitive environment, service quality is vital to business success. In their study, they connected the concept of service quality to customer contentment. In due course, it is customer satisfaction or contentment that leads to an increase in market share and profits.

Service organisations basically offer two forms of quality: technical quality and practical quality. Technical quality is the extent to which a business is able to do things in the “right” way as measured alongside some technological “industry standard.” Nevertheless, in service sectors, understanding of the technical quality of services is an area of service professionals. For that reason, Parasuraman, et al (1985) made a conclusion that consumers naturally rely on understanding properties when assessing service quality. They developed the SERVQUAL scale. This scale was premeditated to expose extensive areas of high or low service quality and can be used to show service quality trends over time, particularly when used with other service quality procedures.

Conclusion

A service is an intangible service that is consumed at the point of purchase. It has no right of ownership and this differentiates it from products. Service marketing can, therefore, be defined as a form of marketing that is undertaken for the purpose of creating awareness of a given service provided in a particular company. To make service marketing more beneficial, marketers should aim to create good relationship between customers and suppliers. This is called relationship marketing. To put into practice effectual relationship marketing, any organization, regardless of size, has to create and uphold a good relationship with its clientele, employees and all its stakeholders. The customer-supplier liaison is to a great extent an important issue in relationship marketing and unquestionably across the whole marketing discipline. Besides the formation of good relationship marketing, service organizations should aim at providing service of high quality as this will attract more customers.

Reference List

Anderson, C. and Zeithaml, C. P. 1984. Stage of the Product Life Cycle, Business Strategy, and Business Performance, Academy of Management Journal, 5-24. Web.

Devlin, S J. & Dong H. K. 1994. Service Quality From the Customer Perspective, Marketing Research, Vol. 6, No. 1, 5-13. Web.

Egan, J, 2001. Relationship Marketing: Exploring relational strategies in marketing. Pearson Education Limited. Edinburgh Gate, England. Web.

Levitt, T. 1981. Marketing Intangible Products and Product Intangibles, Harvard Business Review, pp. 94-102. Web.

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Lovelock, H. 1983. Classifying Services to Gain Strategic Marketing Insights, Journal of Marketing, Vol. 47, pp. 9-20. Web.

O’Sullivan, M. 2010. Qantas to Receive First Boeing 787 in 2012. Qantas. Web.

Parasuraman, A, et al. 1985. A Conceptual Model of Service Quality and Its Implications for Future Research, Journal of Marketing 49 (Fall), 41-50. Web.

Rochfort, S. 2009. Qantas revs up Jet star expansion. The Sydney Morning Herald. Web.

Schneider, B. 1980. The Service Organization: Climate Is Crucial. Organizational Dynamics. 9 (2), 52-65. Web.

Zeithaml, V. A, et al. 1985. Problems and Strategies in Services Marketing, Journal of Marketing, Vol. 49, pp. 33-46. Web.

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