TYPES OF MARKETING in the Service Industry ACO501 TYPES OF MARKETING in the Service Industry

Link Back Differentiate between the four service characteristics and provide examples. Define & discuss service culture [provide with realistic examples] Discuss ways in which hospitality firms can reduce variability & increase consistency.

Introduction Good service firms’ use marketing to position them strongly in chosen target markets. For example the Intercontinental affiliated properties position itself as offering a memorable experience that enliven the senses, instills well being and fulfils the unexpressed wishes and needs of our guests. These and other service firms establish their position through traditional marketing mix activities.

Contd Service differs from tangible products that often require additional marketing approaches. In a product business, products are fairly standardized and can sit on shelves waiting for customers. But in a service business, the customer and frontline employee interact to create the service. Thus service providers must work to interact effectively with customers to create superior value during service encounters. Effective interaction, in turn depends on the skills of front line service employees and on the service production and support process backing these employees.

Contd The concept of service profit chain is well illustrated by a story about how Bill Marriott Jr, chairman of Marriott Hotels, interview prospective managers Bill Marriott tells job candidates that the hotel chain wants to satisfy three groups: customers, employees and stakeholders. Although all of the groups are important he asks in which order the groups should be satisfied. Most candidates say the customer first.Marriott, however, reasons differently. First employees must be satisfied. If employees love their jobs and feel the sense of pride in the hotel, they will serve customers well. Satisfied customers will return frequently. Moreover, dealing with happy customers will make employees even more satisfied, resulting in better service and still greater repeat in business, all of which will yield a level of profits and will satisfy Marriott stakeholders

Contd This suggests that service marketing requires than just traditional external marketing using the four Ps. Figure 1.1 shows that service marketing also requires both internal marketing and interactive marketing.

Internal Marketing Internal marketing means that the service firm must effectively train and motivate its customer-contact employees and all the supporting service people to work as a team to provide customer satisfaction. For the firm to deliver consistently high service quality, everyone must practice customer orientation. It is not enough to have a marketing department doing traditional marketing while the rest of the company goes its own way. Everyone else in the organization must also practice marketing.

Interactive Marketing Interactive Marketing – means that perceive service quality depends heavily on the quality of the buyer – seller interaction during service encounter. In product marketing, product quality often depends little on how the product is obtained. But in services marketing, service quality depends on both the service deliverer and the quality of the delivery. The customer judges service quality not just on technical quality [quality of the food] but also on its functional quality [the service provided in the restaurant]

Figure 1.1: Three Types of Marketing in Service Industries Company   Internal marketing External Marketing Employees Customers Interactive Marketing

Marketing Mix After deciding on its overall marketing strategy, the company is ready to begin planning the details of the marketing mix, one of the major concepts in modern marketing. The marketing mix is the set of controllable, tactical marketing tools that the firm blends to produce the response it wants in the target market. The marketing mix consists of everything the firm can do to influence the demand for its product. The many possibilities can be controlled into four groups of variables known as the four Ps: product, price, place and promotion. Product means the goods and services combination the company offers to the target market. Price is the amount of money customers must pay to obtain the product. Place includes company activities that make the product available to target customers. Promotion means activities that communicate the merits of the product and persuade target customers to buy it.

Contd There is another concern, however, that is valid. It holds that the four Ps concept takes the seller’s view of the market, not the buyer’s view. From the buyer’s viewpoint, in this age of customer value and relationships, the four Ps might be better described as the four Cs:

Contd 4Ps 4Cs Product Customer solution Price Customer cost Place Convenience Promotion Communication   Thus whereas marketers see themselves as selling products, customers see themselves as buying value or solution to their problems. And customers are interested in more than just a price; they are interested in the total costs of obtaining, using and disposing of a product. Customers want the product and services to be as conveniently available as possible. Finally they want a two way communication. Marketers would do well to think through the four Cs first and build the 4Ps on that platform.

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