Marketing Strategies in Services

These selected definitions leave us with very clearly defined issues in relations to marketing. Marketing has a process i.e. the various activities which are performed during the process of marketing. Marketing has a concept i.e. philosophy of doing business, social exchange process involving willing consumers and procedures. The marketing- an orientation, a state of mind combining the above to process and concepts possible.

THE MOST IMPORTANT ISSUE IN MARKETING IS TO ESTABLISH, STRENGTHEN & DEVELOP CUSTOMER RELATIONS, WHERE THEY CAN BE COMMERCIALIZED AT A PROFIT & WHERE INDIVIDUAL & ORGANIZATIONAL OBJECTIVES ARE MET

An understanding of Marketing Strategy

Marketing Strategy: Companies Perspective

It is a a long-term activity It provided for the overall achievement of objectives It provided a broad plan of action It helps to sell as large a quantity as possible It helps in maximizing profits

Four major bases to explain marketing strategy

These are: the marketing mix, the product life cycle market share and competition and positioning

The Marketing Mix Base

A common approach in the literature is simply to link these issues to the elements of the marketing mix. Foxall defines marketing strategy as being an indication of how each element of the marketing mix will be used to achieve the marketing objective. Chang and Campo-Flores: a range of marketing component strategies which constitute the total marketing strategy like, product strategy, distribution strategy, sales promotion strategy and pricing strategy.

The PLC Base

Other writers extended this theme of the marketing mix to the concept of the product life cycle. Kotler, Baker and Doyle outline that the marketing strategy for a particular product needs to be modified as the product moves through the various stages of its PLC. This is based upon a change of the mix at the different stages, so that a change is made in the relative degree of reliance of each element, giving a different mix, and hence a different marketing strategy, titling it as life cycle marketing strategies.

The Competition & Market Share Base

Another approach used in the literature to explain the issues involved in marketing strategy is to link the latter to market share and competition. A major example here comes from the work of Bloom and Kotler. Their approach is firstly to explain how a company can identify its optimal market share, given a particular set of conditions. Having identified this level the company needs a marketing strategy to achieve the optimum, the second stage is to select a strategy from a range to strategies that are designed to build, maintain or even reduce market share. However, within each of these share-linked marketing strategies they also advocate a range of further strategies, again based upon the elements of the marketing mix.

However, overall this approach of linking marketing strategies to market share appears to be merely the utilization of the elements of the marketing mix, linked with an objective or aim (and therefore not a strategy) which is concerned with a pre-determined level of achievement (being market share).

In addition to the market share link, competitive marketing strategies have also been described by Kotler. He advocates an approach in which the company has a range of competitive marketing strategies from which to choose, depending upon which of four strategies ranges the companys market share dictates that it falls into.

The Positioning Base

Another approach from the literature in the explanation of marketing strategy is to utilize the concept of positioning. The major overall problem here is the variation given in the literature as to the meaning of positioning. Wind and Claycamp explain a products position as its overall situation in the market relative to its sales, market share and profitability. Cravens sees positioning as being the selection of a marketing strategy from a range of alternatives, although the latter can be considered to be component parts of corporate strategy as developed by Ansoff

The concept of positioning can also be explained in terms of both market and product positions Kolter: the company investigates the segmentation of a particular market and then decides which segment or segments to participate in. This selection is referred to as market positioning. For each segment the company requires a product, or products, and the number of products developed, plus their overall nature, is referred to as product positioning.

In Sum
Marketing Strategy consists of the ANALYSIS, STRATEGY DEVELOPMENT and IMPLIMENTATION activities in: Developing a vision about the market(s) of interest to the organization, selecting Target market strategies, positioning strategies designed to meet the value requirements of the customers in each market target, setting objectives, and developing, implementing and managing the various elements of the marketing programme.

CRITICAL SUCCESS FACTORS

The CSFs relate to limited strategic areas where results, as expected, would insure a successful competitive performance of the organization.

There are some key areas where things must go in strategically right direction for the business to flourish.

CSFs are those variables which management can influence through its decisions that can affect the overall competitive positions.

These variables, which prove determinants of organizations success or failure, are subject to change, over time, as they are affected by competition.

Each situation has its own specific requirements.

10 rules of Service Strategy

Rule 1:Internal Marketing Programme

are prerequisite for success
If the part-time marketers fail, the marketing process fails.

Eg, Alberger, George ball and Sons, Dominos

The Services Marketing Triangle

Company (Management)
Internal Marketing
Enabling

External Marketing Setting the Promise

the Promise

Employees

Customers Interactive Marketing Delivering the Promise

Rule 2: Clear Positioning

Positioning Criteria For Services

Services

can be positioned according to:

specific product features benefits or needs satisfied usage occasions user categories their relationship to another specific service
Organisation

as a whole can adopt a

position
Eg. GBS,

Repositioning
May be needed because: Original position was inappropriate
The

nature of customer demand has changed provider seeks to get a more profitable market segment

Service

Rule 3: Identify Elements of Product Package & Tangible Evidence

Augmented product
Core product Primary Characteristics AUXILIARY CHARACTERISTICS

Product Strategy & Product Concept

Selection and blending of a products primary and auxiliary dimensions into a unified mix emphasizing a particular set of consumer benefits

Eg, GBS, AD Color Consultant

Molecular Model of George Ball & Sons

Distribution Price

Vehicle
Councilors

Funeral Sr.
Funeral Directors

Doctor

Type of Coffin

KEY

Tangible elements Intangible elements Marketing Positioning

Rule 4: Demand Analysis

To Reduce the waiting time

Alternative Queuing Configurations

Single line, single server, single stage

Single line, single servers at sequential stages

Parallel lines to multiple servers Designated lines to designated servers

Single line to multiple servers (snake)

Take a number (single or multiple servers)
28 30 31 26 32

29
25

21 20 24

27
23

Rule 5: Quality Control

Gap Analysis
Word-of-mouth communications Consumer Personal needs Expected service Gap 5 Perceived service Service delivery (including pre- and post-contacts) Gap 3 External communiGap 4 cations to consumers Past experience

Gap 1 Marketer

Translation of perceptions to service-quality specifications Gap 2 Management perceptions of consumer expectations

Seven Gaps Leading to Customer Dissatisfaction

Customer needs and expectations

CUSTOMER

1. Knowledge Gap
Management definition of these needs

MANAGEMENT

2. Standards Gap
Translation into design/delivery specs

3. Delivery Gap 4. Execution of design/delivery specs I.C.Gap

4. Internal Communications Gap

Sales Communication

5. Perceptions Gap
Customer perceptions of product execution

6. Interpretation Gap
Customer interpretation of communications

7. Service Gap
Customer experience relative to expectations

Service Guarantees
service

guarantees work for companies who are already customer-focused effective guarantees can be BIG deals - they put the company at risk in the eyes of the customer customers should be involved in the design of service guarantees the guarantee should be so stunning that it comes as a surprise -- a WOW!! factor its the icing on the cake, not the cake

Why a Good Guarantee Works

forces sets

company to focus on customers

clear standards
feedback

generates forces builds

company to understand why it failed marketing muscle

Objectives: Service Recovery

Illustrate the importance of recovery from service failures in building loyalty Discuss the nature of consumer complaints and why people do and do not complain Provide evidence of what customers expect and the kind of responses they want when they complain Provide strategies for effective service recovery Discuss service guarantees

Rule 6
Close interaction among marketing, operations & human resources and Soliciting feedback from employees

Interdependence of Marketing, Operations & Human Resources

Operations
Customers

Management

Marketing Management

Human Resources management Eg, Dominos, Alberger, Retreat House, GBS,

Defining 3 Functional Imperatives

Marketing imperative
Target right customers and build relationships Offer solutions that meet their needs Define quality package with competitive advantage

Defining 3 Functional Imperatives

Operations imperative
Create, deliver specified service to target customers Adhere to consistent quality standards Achieve high productivity to ensure acceptable costs

Defining 3 Functional Imperatives

Human resource imperative
Recruit and retain the best employees for each job Train, motivate them to work well together Achieve both productivity and customer satisfaction

Cycle of Failure
High customer turnover Repeat emphasis on attracting new customers

Failure to develop customer loyalty

Low profit margins

High employee turnover; poor service quality No continuity in relationship for Employee dissatisfaction; customer poor service attitude

Narrow design of jobs to accommodate low skill level

Use of technology Emphasis on to control quality rules rather than service Payment of low wages

Customer dissatisfaction

Employees become bored

Employees cant respond to customer problems

Minimization of selection effort Minimization of training

Source: Schlesinger and Heskett

Cycle of Success
Low customer turnover Repeat emphasis on customer loyalty and retention

Customer loyalty

Higher profit margins Broadened job designs

Lowered turnover, high service quality Continuity in relationship with customer Employee satisfaction, positive service attitude

Train, empower frontline personnel to control quality

High customer satisfaction

Extensive training

Above average wages Intensified selection effort

Source: Schlesinger and Heskett

Rule 7: Integrate Technology

COMPANY

TECHN OLOGY

EMPLOYEES

CUSTOMER

Pyramid Model
(eg: Indmark trade mark Group) Source : A.Parsuraman, Augmented Marketing, Business Today, Jan 7-21, 1997

Rule 8
Organizational support and Top Management Commitment

Leadership for Change Management involves 8 Stages

Create Put

sense of urgency to develop impetus for change together strong team to direct process

Create

appropriate vision of where organization must

new vision broadly

go
Communicate

Empower
Produce

employees to act on vision

sufficient short term results to create credibility

Build

momentum to tackle tougher problems

new behaviors in the organizational culture
Source: John Kotter

Anchor

Leadership Qualities Needed in Service Organizations

Vision, Ability

charisma, persistence, high expectations, expertise, empathy, persuasiveness, integrity to visualize quality of service as foundation for competing in people who work for the firm, make good communications a priority a natural enthusiasm for the business, teach it to others, pass on nuances, secrets, crafts of operating leadership qualities of others in organization values to navigate firms through difficult times

Believe

Possess

Cultivate Use

Rule 9: The General Approach

Business customers and individuals demand flexible response from the service provider therefore Capturing and using customer data
And Soliciting feedback from customers

i.e., Understand the market for your services

Rule 10: Innovate

Understand the market for your services and Innovate: Indmark Trademark Group

New service development

New services are required to replace services whose sales are declining Very few genuinely new services Distinguish between:

style changes service improvements service line extensions new services major innovations

Approaches to Extending Current Service offerings

New Access Channels Revitalizing People New Services Co-Branding New Features & Technology

Strategies of Market Leadership

Welcomgroup
80s- 3 properties 2010- Over 100 Properties at 80 Destinations in 4 categories Vision 2015: 140-150 properties

Strategies of Market Leadership

Lessons from Fed-Ex
1970- Overnight mail service provider 1980- Commodity package transportation 2000- Integrated Package Logistics services partner

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