Marketing for a Business 3000 words

Service Marketing Essay:

QUESTION

You are a newly appointed service Marketing Manager. During one of your early conversations with your colleague who heads up human resources she suggests,” the 4Ps are all a marketing manager needs to create a marketing strategy for a service business.”

This worries you because you know that it is important she understands what is different about service marketing and in particular how closely your departments must work together.

Write an essay that argues against the HR manager’s statement using examples to illustrate your points. In making your case, you should outline what is so distinctive about service marketing that requires a special approach, set concepts, and body of knowledge. You should make reference to essential reading for the MODULE as well as other academic and suitable sources.

Introduction

This essay argues the inadequacy of the 4P framework of the marketing mix, which has increasingly come under academic attack for its failure in deal with the paradigms and complexities of service marketing. Thus it can be seen from this paper that the service-marketing context is inevitably more distinct and complicated to allow the confusion of “products” with “services” as a product might “sell” itself but the same is not true of a service. Services need their own special management, marketing and organization as they are not tangible and cannot be “seen” in the literal sense. The 4 P model was proposed by Mc McCarthy (1964), 1987) as a tool of implementation in the marketing strategy namely through the consideration of:

It has been proposed by Booms and Bitner (1981) that the same marketing mix made up of 4Ps should infact be extended to 7Ps, which add three, more elements to the above namely:

The theoretical journey of the original 4P concept and the subsequent proposed modifications by academics

Based on the above it is worth seeing how the 7Ps framework can actually be applied to consumer services more effectively. It should be remembered, however, that the marketing mix 7Ps are only one modification of the original concept of 4Ps, and that there have been other modifications of the same, for example by Mindak and Fine (1981) and Kotler (1986) whereas the most significant criticism has involved the failure of the same to cover the services sector (See also Kotler and Armstrong, 1989). In particular the 1981 extension of the same by Booms and Bitner (1981) meant that the 4Ps framework now included process, physical evidence and participants/people (and was therefore known as 7P later on). This extension is of course aimed at providing a holistic view of the marketing strategy where as the concept of a marketing mix itself calls for a preliminary examination of the rationale of utilizing a marketing mix.

The concept of the marketing mix has its origins in the seminal work of Cuillton in 1948 where the role of the business executive was seen as a mixture of many ingredients, which would affect the outcome of strategy in the end. Later on in 1965 Borden wrote about the marketing mix, but for him it simply consisted of important basic elements of a marketing program (Borden, 1965:389). However the concept of the marketing mix as we know it today was refined and set up by McCarthy (1964:35) who basically defined the same as the four factors which the manager should have at his disposal before embarking upon a marketing strategy for a target market. A more refined version of the same also emerged from the works of McCarthy and Perreault (1987) who basically defined the marketing mix as consisting of four distinct controllable variables which can basically be manipulated by the manager to ensure success for an organization. The concept of controllable variables was also endorsed and adopted by the definition given by Kotler (1989:45) which would basically mean that a firm would know when and how to manipulate a set of variables to a firm’s advantage in its marketing positioning and promotional activities. However the inadequacy of the concept of the 4P’s has been, more often than not, been highlighted through the “tool kit” approach which basically denotes that that quite a few controllable variables can exist here, which should considered by the marketing management as a part of the marketing strategy of a service or even a product. Such variables can be at the disposal of a marketing management team in order to influence consumers. For example, one of the tool kits can be discerned from the works of Borden who set out the following framework of coherent strategy when planning a marketing campaign:

While the factors above cannot be seen as a list of elements which is an exhaustive list of tools etc which can be set in sight for a marketing strategy.

Another framework which might actually be used here due to its logical division of the tools may be as follows and has been elucidated by Frey (1961) as: follows

Another suggested modification is as follows:

It can be said, however, that the most appropriate and explanation for Borden’s classification can be seen in the form of the succinct strategy as devised by McCarthy who managed to regroup these factors into the well known product mix or the promotion mix. In Kotler’s classification it is possible to see that “promotion” can be further split into personal selling, sales promotion, and publicity of the company and the service/product it provides. Despite the popularity of the concept of the 4Ps as a broader and more acceptable classification of what marketing is, it is possible to note that when it comes specifically to service marketing it is not possible to apply a generic list of concepts which might more suitable for tangible products. When it comes to services there is an element of personal selling involved which might of course not be the case with a physical product here. However when we look at the concept of product selling even there is always an effort to utilize strategies like celebrity endorsement or the use of spokespersons to ensure that a product is “sold” through personal efforts of the “people” involved. Arguably selling “services” has a similar dimension to it indeed, which involves the use of people to project the nature of the service. This argument would of course make the concept of the 4Ps as a framework, which would be essentially too simplistic. Of course two more elements to the initial list by Borden may also include “packaging” (Nickels and Jolson, 1976) and perhaps also public relations (ibid), which would entail that “power”, should also be incorporated as a concept here, which would make the concept of service marketing essentially a matter of projecting the power on behalf of the organization. Arguably, to add in the matter of people, process and consumer satisfaction/complaint management etc to services which require the use of relationship marketing. Also the use of people and the perceived power or image they might project might also be integral in enhancing differentiation in the product placement.

The case for 7P’s and beyond

How then, one might ask, can we make the case of the modification or enhancement of a modern 4P concept into something that looks more like 7P or even 12P as compared to the original model especially when it is fitted to the services industry which would involved air travel, banking or even fashion? Consumer marketing involving services is indeed a complex paradigm and its process itself means that the entire chain of production or management would lead to a high degree of interdependence between the buyers and sellers. Arguably then in every transaction whether in the sale of product or a service the buyer is dependant upon the seller where as it is two separate parties to a transaction pursuing two different goals which will bind both together with in the pursuit of their corporate goals in the producer/consumer relationship. Therefore the simplicity of the 4Ps would suit the entire selling process adequately because such a relationship is more about communication, negotiation and basically how it would be possible to approach the market in line with what the consumer might desire at a certain price. If we then take up the issue and see it through the lens of Webster (1984) it is possible to see then that the service seller should seek to build long term bonds with the buyer rather than seek to manipulate it in a strategic way. However this notion would not cover mass marketing where the seller of the product or services might want to send a signal or a message to a larger part of the market. One might ask then if brand loyalty and the need including the need to build solid seller-buyer relationships through the employees of the transaction may be more important. This problem occurs in insurance, banking and land sales where the element of trust or previous business dealings becomes more important indeed. Therefore once again it can be concluded that 4P model might be more suitable to product selling but when it comes selling services and relationship based services, there is a need for something more coherent and focused on the “people/personal” touch (Miller and Foust, 2003). The sale of a service is different from a product because it is interdependent on other organizational processes and is inherently intangible and heterogeneous. This is of course what led Booms and Bitner to conclude the need for three more extensions to initial 4Ps in addition to what McCarthy might have suggested or focused upon back in 1964.If we revisit the table above showing the more than seven ingredients required for a good marketing strategy it becomes obvious that even Borden had not envisaged that this model cannot cater to unique needs of service marketing as it focused more upon the manufacturing stage of goods rather that the sale of services in the tertiary sector.

Other modifications like the concept of viewing the 4P’s as 4C’s(Brunner, 1989) namely the consideration of the costs, communications, channels and concept itself becomes important here whereas the concept of channels and communications might be more suited to the services industry. In addition to the above, Brunner’s attempt at using the 4C’s might indicate some serious rethinking of the 7P concept itself especially as far as the idea of using controllable variables is concerned being used to influence the consumer in terms of costs, transportation and communication channels which will need to be manipulated to send the right message to consumer.

One example of the same can be how banking companies use the internet and offline relationship marketing simultaneously regardless of the costs involved in order to ensure that their services are sold extensively while at the same time ensuring that long term relationships are forged along the way. In addition to the above marketing research is essentially used by most of the major corporations to ensure that the demographic details of consumers are included in the formulation of any such strategy thus varying from one segment of the consumer base to another. Such activities are thus centered focally on manipulating how a consumer might perceive a banking or insurance service through the use of people and advertisements involving people, giving a reliable impression for a product or service.

Also it is worth noting that until now, of all the modifications discussed above, academic opinion is in the favor of 7P’s as a better and more sensible elucidation of the service aspect of marketing, as opposed to the original 4-P concept (Shostack, 1977, 1979). The inclusion of participants, physical evidence and process helps the adoption of the model to service marketing strategy much better, as this model is more focused on the “human” aspect of the service transaction. Now when we look at services in the hospitality sector and transport sector, consumer satisfaction and retention basically relies upon “high contact” strategies where the product and consumption of a service is happening at once and it is an ongoing process. Therefore since the stress remains on quality of the service being provided “on the spot” and not just how it has been marketed before to ensure returning consumers, the 7P model ensures that processes become a matter integral consideration to the consumer.

In addition to the above, it becomes more than important to pay particular attention to the quality of the people involved in distributing a service and to continuously monitor their performance for the level of service they are offering because this is a continuing process of human interaction. When we apply this example to the model of managing service quality in the travel and hospitality industry, it might explain for one thing, the use of good looking, and well groomed people as waiters/waitresses, managers, and hosts and hostesses. Perhaps the paradigm of image projection and creation is of primary importance to idea of service marketing strategy because a face needs to be put on an intangible good or service to ensure that the consumer can be convinced to buy the same, again and again (Miller and Foust, 2003). The same holds true for relationship marketing schemes on behalf of retail stores and banks through loyalty cards and schemes where as the presence of priority and discounts effectively sell the service to the consumer.

Conclusion

In conclusion, the author believes that while the 7P’s would paint a less hazy picture than the 4P’s as to how a service is perceived, it is important to pay particular attention to employee quality and how a potential or current consumer may perceive a service. Moreover, the service industry is not homogeneous. For example, different air hostesses might be delivering a variable quality of service as a part of their duty, which makes each employee or service delivery unit unique. As long as the service delivery remains unique and not disproportionately variable, it is possible to see that the service marketing industry also relies heavily on the participants, which can make or break the atmosphere or surrounding where many people are enjoying the service. Finally the 7P concept also denotes a better approach to the management of the service seller /consumer paradigm as well as the extraneous effects of other products or services. Also the notion of physical evidence here denotes that since services cannot be put inside a “package” like tangible product and thus something exceptional needs to be done to ensure that some tangible goods facilitating the performance and communication of the same come forward. These factors may of course include the appearance information technology interfaces (websites etc) to the impression given by the immediate physical location of the bricks and mortar aspects of the service.

On a final note, it is of course important to note that products and services cannot be marketed or positioned the same way and this needs a revised framework with in the business and academic thought to reflect the increasingly technical and competitive face of service marketing in the tertiary sector. To show this the author has in the paragraphs above discussed the merits of using the 7P’s as opposed to the 4P’s in abundance and detail.

References

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