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Excerpt

Table of Content

Table of Figures

1. Introduction

2. Definitions
2.1. Service
2.2. Service Marketing
2.3. Marketing Instruments

3. Particularities in the marketing mix of service operations
3.1 Intangibility of services
3.2 Capability of the service provider
3.3 Integration of an external factor

4. Summary and Conclusions

Bibliography

Textbooks / Encyclopaedias

Journal Articles

Websites

Table of Figures

Figure 1: Dichotomy between physical goods and intangible assets

Figure 2: The 4P’s Framework: Product, Price, Place, Promotion

Figure 3: Expanded Marketing Mix for Service Operations

Figure 4: Interaction of the 7Ps framework and the characteristics of services

1. Introduction

Johnston and Clark (2001, p.3) point out, that everybody is everyday coming several times into contact with service operations. Following Bruhn (1993, p. 781), highly developed economies can be characterised by an over proportional and strong growth of the service sec- tor. Evidence to this statement can be given evidence looking at the statistics in different countries. For example: In 2005, 72% of all employees in the Federal Republic of Germany had been employed in the service sector, representing an increase of 13%-points compared to 1991 (Statistisches Bundesamt, 2007, p. 291).

The before mentioned development, as well as the dynamic of service sector in itself, has lead to an increasing interest in the special problems of service marketing (Rust and Chung, 2006, pp.560-561). The present essay will explore particularities regarding the marketing mix in service operations. Therefore, first of all the most important terms such as service, service marketing and marketing instruments will be defined. In the following, the 7P’s of the mar- keting mix for service operations under consideration of the characteristics of services will be examined. Finally, the most important findings and interactions will be summarised and con- clusions will be derived.

2. Definitions

2.1. Service

There are manifold possibilities to define the term service and in current literature there isn’t an all-embracing and overall scientifically accepted definition of the term.

The “world’s foremost expert on the strategic practice of marketing”, (http://www.wikipedia.org/wike/Philip_Kotler) P. Kotler, defines service as follows:

A service is any act or performance that one party can offer to another that is essentially in- tangible and does not result in the ownership of anything. Its production may or may not be tied to a physical product. (Kotler, Keller, 2006, p.402)

Basically, a service represents the non-material equivalent of a physical and touchable good (http://en.wikipedia.org/wiki/service). The dichotomy of the before mentioned definition, to- gether with some classifying examples is illustrated in the following figure.

illustration not visible in this excerpt

Figure 1: Dichotomy between physical goods and intangible assets

(own illustration following Kotler, Keller [2006, pp.403-404]))

Another possibility to define the term service is to point out the constitutive characteristics of services. The main characteristics of the majority of services following Meffert (1998, p. 1072-1074) are:

- Intangibility of services

It is important to recognise, that the input and the output factors of a service can either be material or immaterial. However, as the service itself depends on the ability of the service provider to perform well, a service is immaterial. The service of a dressmaker can be used as an example: Whereas the input (drapery) and the output (tailor-made suit) are material, the ability of a dressmaker to make a good suit is immaterial. In addition it can be derived from the immateriality of a service, that the service can neither be stored, nor transported, meanwhile the result of the service sometimes can.

- Capability of the service provider

Irrespective if a service is provided by a machine or persons, a service can’t be provided if there aren’t any specific capabilities such as know-how, physical or intellectual abilities existing.

- Integration of an external factor

The external factor can be seen as the object, at which the service is performed, or as the consumer of a service. Both factors are beyond the availability and/or control of the ser- vice provider. To come back to the before mentioned example, the dressmaker can nei- ther influence the figure and appearance of the customer wishing to buy the suit nor con- trol by 100% the quality of the material he receives from his distributors. Furthermore, the customer needs to be present for the necessary fittings. As a result of these character- istic, many services are described as being difficult to standardise and personnel- intensive.

2.2. Service Marketing

Following Malik (2007, p.56) there is only one way of management, namely effective and efficient management. He highlights that there are manifold ways of speaking English, play- ing golf or skiing the inaccurate or wrong way, whereas there is always only one way to do it correct and right (Malik, 2006, pp. 24-25).

Applying these analogy to marketing, it would indicate that there is also only one way of marketing, namely effective and efficient marketing. McDonald (2003, p.13) highlights that the central ideas of marketing are universal and that it makes no difference if a product or a service is marketed. Hence, also under consideration of the characteristics of services, the definition of marketing by the American Marketing Association would also be appropriate to define service marketing:

Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders. (American Marketing Association, 2007)

2.3. Marketing Instruments

Organisations have a large variety of instruments aimed to influence the buying behaviour of customers. Besides the difficulties in the adequate usage of the instruments, the main problem is the selection of the right instruments for a concrete case (Nieschlag et.al., 1971, p.319). The generally accepted generic term for marketing instruments is marketing mix. The latter term has been created by the Harvard professor Neil H. Borden in 1964, which identified 12 Mar- keting Mix elements (Borden, 1984, pp. 7-9). Later, McCarthy worked on that concept and developed the so-called 4P’s paradigm: product, price, place, promotion (McTier Anderson and Lesher Taylor, 1995, pp. 2-3). The general framework by McCarthy is presented in the following illustration:

illustration not visible in this excerpt

Figure 2: The 4P’s Framework: Product, Price, Place, Promotion (own illustration following McDonald [2002, pp.282-283]))

Attention has to be drawn to the fact, that since its creation the 4Ps framework has been criti- cised in many cases. This criticism mainly took place on theoretical levels. However, recent research has shown that the general model is still applicable (McTier Anderson and Lesher Taylor, 1995, p.7) and that the concept is even today superior to the existing alternatives (Constantinides, 2006, p.432).

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Details

Pages
18
Year
2007
ISBN (eBook)
9783640266951
ISBN (Book)
9783640266999
File size
974 KB
Language
English
Catalog Number
v122115
Institution / College
University of Pécs – International PhD Program
Grade
5 (excellent)
Tags
Marketing Mix Service Operations Shared Services Marketing Management

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Title: Particularities in the Marketing Mix for Service Operations