The task of developing a total marketing program in a service industry is often uniquely challenging thus, the following elements are crucial:
1. Market Analysis
Market analysis is, essentially, the same whether a firm sells products or services. Therefore, marketers of services should understand the components of population and income in relation to the market of their services. Also, they must carefully analyses the rationale behind customers’ demand for their services.
2. Planning and Developing the Services
Product planning and development has its counterpart in the marketing program of a service industry. Management can use a systematic procedure to determine:
i) What services will be offered
ii) What will be the length and breathe of the services mix offered
iii) What needs to be done- in terms of service attributes, such as branding or packaging?
The nature of services (in terms of perishability and fluctuating demand) makes product planning, critically, important to marketers.
However, a service industry can expand or contract its ‘product mix’, after existing services and trade. So, the company may want to increase total volume; reduce seasonal fluctuations in volume etc.
Thus, product planning is much easier for service-products than physical products we consume; for example, packaging, color, labeling are non-existent in service marketing.
However, branding and standardization of quality are considered greater issues.
Branding, for instance, is considered difficult, because consistency of quality is hard to maintain and the brand cannot be physically attached to service products.
3. Pricing of Services
Pricing of services are considered critical, this is because they are extremely perishable, difficult to store for long time, and the demand often fluctuates, considerably. In addition, consumers may postpone purchase or even perform some services themselves (e.g., domestic repairs).
Most pricing policies such as trade discounts, cash discounts, quantity discounts, etc., are applicable to service marketing. Quantity discounts, for example, are used by car rental agencies.
Cash discounts are offered when insurance premiums are paid annually, instead of quarterly. For example, doctors and management consultants can use a variable price policy.
Notwithstanding, service-marketing providers should endeavor to be sensitive to consumers’ income, needs and demand in relation to prices adopted.
4. Channel of Distribution for Services
Traditionally, services have been sold, directly, from producers to consumers or from producers to industrial users. No middlemen are used when the service cannot be separated from the seller or when the service is created and marketed, simultaneously.
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For example, public utilities (as handled by NEPA, Water Board etc.), medical care and repair services are, typically, sold without middlemen.
Note, excluding middlemen does limit the geographical markets that service sellers can reach or captured. However, it enables service providers to personalize their services; and then, it helps to get customers’ response quickly. In modern management, especially in service industry, strategies have been designed to enlarge distribution system.
For example, in the banking industry, ATM, and e-banking services have to be provided to facilitate quick and un-interrupted services.
5. Promoting Services
Management’s task is much difficult when the company must build its promotional program around intangible service-benefits. It is much easier to promote products that can be seen, felt, and easily demonstrated.
Thus, in service-marketing, personal selling, advertising, and other forms of promotions are, collectively, used to achieve organizational goals.
However, personal selling is essential while developing relationship between buyers and sellers. Many service firms, especially in recreational management/entertainment field, benefit considerably from free publicity, sport coverage, using newspapers, radio and television.
As an indirect means of promotion, doctors, lawyers, insurance agents and banks do engage in community services as a way of promoting their services; for example, First Bank and Zenith Bank etc., built class rooms for some higher institutions in Nigeria.
In addition, doctors and lawyers do provide free medical and legal services to the community where they operate.
In conclusion, services are ‘intangible products’ rendered to end users of such services. Due to its special nature, it calls for strategic management. Most of the products we consume are services. Hence, the industry is more competitive than before.
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