Service Marketing

1. 2. 2018

Nowadays, it’s of great importance to have a deep understanding of customers’ needs, wants & desires due to increasing competition, so as long as the company follows the customer-oriented perspective; of course it’s a guarantee for success & sustainability. 

Nowadays, it’s of great importance to have a deep understanding of customers’ needs, wants & desires due to increasing competition, so as long as the company follows the customer-oriented perspective; of course it’s a guarantee for success & sustainability. Thus a smart company should transfer its concern to marketing activities & adapt itself as a service company to go beyond service oriented principles.  

Consequently, marketing is acting as a counterpart by arousing interest & taking care of customers, hence the interaction is becoming vital & necessary part of everyday marketing activities. Therefore, marketing is now being a primary cause for fulfillment of promises.

The paper demonstrates how we can understand & manage marketing from a service marketing perspective, & the main objective that the company should be aware of the significance of customer-oriented perspective, marketing activities & market orientation, to create a sustainable business & shareholders' value.

Key Concepts:

External Marketing, Interactive Marketing, Internal Marketing, Marketing Mix, Market-Oriented Management, Nordic School view, Service Marketing, Traditional marketing

1. Managing Marketing from a Service Perspective

1.1 What is Service Marketing?

The concept service marketing has a distinct perspective if compared to the traditional marketing perspective (the marketing mix view). Hence when we mention service marketing, of course, the main concern is the interaction instead of the transaction. Moreover, by natural service marketing engaged in relationships; therefore, interactions deliver services & sure relationships give back interactions. Consequently, the management of services is significant & it acts as the cornerstone of relationships, while relationships couldn’t attained without managing services. Indeed it's prevalent derived from the Nordic School view of service marketing. 

1.2 Nordic School View

What is so called “The Nordic School” of service marketing has a leading position from noticing & viewing that service marketing research achieved rapid advancement in Northern Europe. Moreover, when relating Nordic School view to marketing, indeed it implies that marketing research has developed & unspecified to traditional marketing. In addition, an inheritance, of service marketing in the Nordic School view, is one of the closest contacts when distinction theoretical research to practical.

Consequently, when demonstrating marketing management from a service perspective, as it has a leading position, so we should pay more attention, concern & great interest to the Nordic School's heritage. Besides, when we apply service concepts & notions to daily marketing activities, it isn’t restricted to pure service firms only, as observed by many marketing scholars. In particular in today’s business environment, as the marketing's domain is broaden to envelop the organization completely. Therefore according to the Nordic School view, we grasp & observe marketing from new outlook as market-oriented management, concentrating on long term relations of service management. Hence service marketing principles must pass beyond the traditional marketing beliefs & thoughts.

2. A Brief on Service Marketing Background

Service as a concept has been identified since the actual starting of theoretical thought. Though, services were widespread concept as supportive to the production & marketing of goods. Previously, it is very complicated to be extremely precise when, where & consequently why is the management of services becoming of intensive interest as a vital part of marketing taking into consideration?

Anyhow as competition increases, there’s emergence outlook, which advanced economies slowly transform to service economies. Whichever the reason behind service marketing development might be, while the Nordic School of service research reached the beginning during the 1970s & the “Crawling out” stage of service marketing is known in the pre-1980s.

In the 1970s the American Marketing Association gathered a committee to evaluate the “Effectiveness of research and development for marketing management”. In fact the research's results pointed out that marketing research has influence on enhancing the practice of marketing management. Consequently a growing interest in service marketing is emerged.

Actually, this view was peerless in the criteria that other contemporary service marketing articles prevalent concerned about how to discuss & resolve the physical differences among goods & services. Correspondingly, some authors don’t fall into the trap of supposing similar acceptance of goods characteristics, so characterized services due to aspects which goods defect. What is noticed that services state are distinguished to be intangible, unable to be separated, short-lived, & heterogonous.

However, what is obviously in illustrating services characteristics is their limitation for supporting the marketing strategy. Hence goods & services couldn't place separately, so diligent & smart organization must keep service marketing & goods marketing together; paying more attention & focus on fulfillment of customer promises & should follow a customer-oriented perspective as a guarantee for success & sustainability.

The service marketing management theory by Gummesson & Grönroos, later on internationally labeled the Nordic School by Berry & Parasuraman 1993. The Nordic School is recognized as a leading & powerful approach for service marketing, so it's of great importance to appreciate when managing marketing from a service perspective.  

What is prominent & eminent in the Nordic School is the belief that whenever the organization view itself as a service business, therefore its marketing activities & decisions should be united together & joined as a single entity which has a distinct existence as an individual unit. Nowadays diligent company should keep in mind that effective & influencing service, & customer focus, of course achieves an organization competitive advantage.

3. Today’s Service Marketing Organization

Nowadays, according to great numbers of competitors, diligent & smart organization must distinguish itself by powerful marketing strategy & planning how to position its services in a competitive market.

Today effective organization should grasp customer behavior, develop & manage customer relationships & be brilliant in handling customer complaint.  Furthermore should improve the service quality by training employees as first law of service quality & productivity: Do it right the first time; hence competing everyday to accomplish service excellence. Teach employees how to exceed customer expectation to attain customer satisfaction & build loyalty. Precisely, leading service organization should follow customer-oriented perspective & be a market oriented management as a promise for success.

How can we understand service? Is complicated situation to many economic decision makers today “Traditionally, in many manufacturing firms services were considered as add-ons to the core offering, usually a good of some sort. As a consequence, firms that were not considered to be in the manufacturing sector were distinguished as belonging to the service sector.” (Grönroos, 2000) When companies are divided into sectors due to their perceived line of business, it has influence on marketing strategy thought which is continual dominant today. However it's difficult that a lot of high-level officials still perceiving services as something provided by a certain type of organization. Consequently, companies often fail to realize the strategic significance of services, although many firms are gradually starting to understand the positive consequence of viewing service as strategic means to attain competitive advantage.

Given that the core offering meet industry standards, a competitive edge is accomplished only when all departments required achieving satisfied customers are integrated to constitute an extensive and consistent total offering. Accordingly, before such an offering can be made companies must realize that they are performing in a competitive market. “Everyone faces service competition. No one can escape from it” (Grönroos, 2000)

4. Service Marketing Implications

The supreme & essential quality differentiate service marketing from the traditional manufacturing was already stated by Rathmell in 1970s recognizing that the service consumption takes place simultaneously with the production of them; Thus, as opposed to traditional goods where consumption predominantly occurs when something is done with a pre-produced product, however service consumption is better introduced as a process among which consumption & production are united. Service fundamental characteristic has significant impact on marketing’s role.

Service marketing significant concern is customer focus, therefore the organization should be market oriented management & follow customer oriented perspective, consequently, interaction is fundamental & vital part of everyday marketing activities. Precisely, marketing is acting as a counterpart by arousing interest, taking care of customers & fulfilling customer promises to create a sustainable business & shareholders' value.

Traditional marketing perspective concern about transactions through marketing mix regardless of customer interest; therefore leading organization should perform, & manage business from a service perspective; Brilliant organization should realize the importance of customer focus & operating as market oriented management as a guarantee for success & sustainability.   

Consequently, “Interaction becomes a cornerstone in the service marketing premise. The area of marketing’s responsibility widens to include not only the making of promises but also the fulfillment of the promises made.”  (Grönroos, 2006)

Service Marketing Figure
Figure 1: Demonstrates the significance of a leading service organization

5. Practical Experience in a Service Company

5.1 Misr for Central Clearing, Depository & Registry (Egyptian Company)

When applying a service strategy, the clearing company can distinguish their services, hence create a competitive advantage. Which assures that management should have a thoroughly grasping & capturing of the services features & the nature of service competition.  

The clearing service company, marketing management activities suppose an interactive relationship as external & internal efficiency. Hence interactive process is the most fundamental & essential in service marketing. Consequently, internal activities act as motivator for customers & employees effectiveness.

Therefore the clearing company works on educating, training & motivating employees towards organizational objectives to carry out the strategy effectively. Moreover empowering & enabling employees by providing them with comprehensive information, & knowledge to attain successful implementation of internal activities.

Managing services becomes of strategic importance for the clearing company; it’s of paramount importance that management realizes the strategic value of internal marketing. As internal marketing is vital for advancing & effective services, moreover an intensive interest in customers by providing outstanding customer service, supreme handling of customer complains & attaining service excellence throughout the organization, consequently successful interactive external marketing;

Hence the clearing service company focus on enhancing employee satisfaction, as it's positively impacts on external service quality.  Therefore service marketing concepts & notions raise customer satisfaction & fulfill promises on a grass-root level. 

Author: Hassan Hend

6. Bibliography

6.1 Reference Books

1. Essentials of Services Marketing, 2nd E 2012

Christopher Lovelock, Jochen Wirtz, Patricia YP Chew 

2. Services Marketing: People, Technology, Strategy, 7th E 2011

Christopher H. Lovelock  Jochen Wirtz 

6.2 APA Citations

Gronroos, C. (2000) Service Management and Marketing: A Customer Relationship Management Approach. John Wiley and Sons, Ltd., Hoboken.

Gummesson, Christian Grönroos, (2012),"The emergence of the new service marketing: Nordic School perspectives", Journal of Service Management, Vol. 23 Iss: 4 pp. 479 - 497

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