The marketing mix for services - Marketing Management

Characteristics of service products mean they must be marketed in a different way from other products. The three additional ‘Ps’ as ‘People’, ‘Process’ and ‘Physical Evidence’. We now expand these elements.

People

The characteristics of inseparability and variability associated with service products in particular mean that people are an extremely important element of the marketing mix in services marketing. The nature of services means that their production and consumption often must take place at the same time and in the same place, often on the supplier’s premises. This is the characteristic of ‘inseparability’. This almost inevitably means that service providers’ personnel and the customer come into direct contact during the provision and consumption of the service. It means that the service ‘product’ is potentially more variable than in physical product marketing. With a physical product, what the customer gets and experiences can be much more tightly planned and controlled than in services marketing. In services marketing, the product is affected by the people element of the service provider and is potentially much more variable. For example, in dealing with customers, some of the service provider’s staff might be feeling unwell, or have family problems, or simply be feeling argumentative and might not be attentive to customer needs on a particular day.

In services marketing, the customer participates in and potentially adds to or subtracts from the process of value creation. This adds to the potential for variability in the service product. For example if a customer arrives late at a restaurant for a pre-booked reservation this may end up detracting from the customer experience because the table originally booked is no longer available and the customer has to be allocated another less satisfactory one at which to eat their meal. Similarly, using the same example, a restaurant customer may detract from the overall service experience because they have had a bad day at the office and turn up determined to take this out on the restaurant by being rude to staff.

Person-to-person contact with provider and customer in services marketing means that the ‘people’ element of the exchange process becomes very important and is a key part of customer experience and levels of satisfaction or dissatisfaction with the service provider. In turn, this means the services marketer must pay particular attention to ensuring that the people element is planned and managed as an integral part of the marketing process. There are a number of key implications of this importance of the people element in services marketing:

Selection and training of customer contact employees

Effective selection and training of all types of staff is important to all marketing, but the interactive nature of service exchanges means that careful selection and training of staff who come into direct contact with customers is particularly important and entails a number of special considerations not encountered when considering the training of staff who do not have this direct contact with customers. Any staff customers come into contact with during the service provision process form an important part of customer perceptions and evaluation of the service experience and hence the perception and evaluation of the service provider itself.

With regard to the selection of such staff, the services marketer must ensure that as part of the selection process, care is taken to evaluate the extent to which customer contact employees have the necessary skills, characteristics and attitudes to interact with customers effectively. For example, service employees must be able to relate to, and empathise with, customers effectively. Aggressive or abrasive personalities are unlikely to function effectively in customer-facing functions. Service marketer personnel must want to deliver good service, be empathetic and above all be interested in, and open to, other people.

If selection is one part of the effective management of the people element in services marketing, another is training and development. Both new and existing services marketing personnel need to be effectively trained to perform their customer-facing functions. For example, staff should be trained in how to interact with customers. All customers are potentially different so dealing with them can be difficult. Services marketing staff need, for example, to learn how to identify and assess individual customer requirements. They also need to be able to deal with sometimes angry or rude customers.

They also need to be trained in company policies and procedures with respect to dealing with customers and the required levels of customer service and care. In services marketing in particular, it is vital that staff should be aware of the levels of customer service they are expected to meet. When staff are not fully trained, or are inadequately informed of these required levels of service, they may fail to deliver required service levels. Local improvisation will cause inconsistencies, and variations in the quality of service delivered to customers.

Compared to non-services marketing, services marketing staff need to have effective behavioural skills including for example: listening skills, the use of body language, dealing with conflict, and skills in co-operating with customers. In addition, the services marketer must anticipate and train service provision staff in coping with the variability of service products due to customer involvement and the co-creation of customer value

Overall, the inseparability of service products puts a premium on ‘interaction’ skills on the part of services marketing personnel. This is because perceived service quality and overall levels of customer satisfaction depend not only on the technical quality of the service delivery, e.g. quality of the equipment in a fitness centre, but also on the quality of the service delivery. In the case of a fitness centre, this would include the care and concern of the fitness training staff. Services marketers often refer to these interactions between customers and service provider staff as ‘moments of truth’.

Leadership and motivation

In addition to selection and training, two more important areas of managing the people element in services marketing are leadership and motivation.

With regard to leadership, effective management of the people element of the services marketing mix needs to originate from, and be supported by, top echelons of management in the organization. In effect, they should lead the way for all levels of customer service staff in the organization and should lead by example. One practical way of doing this is by creating a culture of commitment to customer service in the organization. For example, expected standards of customer service should be enshrined in company mission and value statements which in turn should be translated into corporate policies, objectives, strategies and standards.

With regard to motivation, services marketing staff need to be motivated to provide desired levels of customer service. All too often there is little or no incentive for staff to provide good customer service. The services marketer must determine required levels of customer service, but also ensure that staff are encouraged, and preferably rewarded, for achieving these. Often, services marketing staff may perceive that the organization rewards other, perhaps short-term, goals and results, such as for example meeting a sales target, rather than rewarding the provision of a good customer service experience.

Another aspect of encouraging staff to take a more positive and proactive approach to improving the service product is allowing them more discretion to use their initiative and judgement in dealing with customers and especially customer complaints. For example, staff can be empowered to deal with minor customer complaints as they occur rather than having to refer them to a senior manager or head office before action is taken. Many companies encourage this by allowing their front-line personnel to refund customers where necessary or provide additional services.

The characteristics of inseparability and variability associated with service products in particular mean that the service provider’s staff, i.e. people, are an extremely important element of the marketing mix for services. As already indicated, this means that the selection and training of service staff is an important part of the overall marketing effort of the service provider, but in addition it is important that service staff interact positively with customers and are adequately motivated and rewarded. In particular front-line employees who have direct contact with customers should exhibit enthusiastic, positive and caring attitudes.

Many of the fast-food retailers such as Pizza Express and McDonald’s empower their restaurant staff to deal immediately with customers’ complaints. For example, if a customer is unhappy about the quality or even quantity of a meal, front-line staff have the discretion to offer either a full refund, a replacement meal or additional portions.

Internal marketing

The development of a marketing culture and, in particular, the training and motivation of all the individuals in an organization to achieve this is termed internal marketing. The importance and value of internal marketing in services marketing in particular has increasingly been recognized by organizations. All employees and not just those with a direct contact with customers need to be committed to delivering customer satisfaction. In turn, achieving this commitment requires senior management to communicate the need for all employees to adopt a customer orientation.

Internal marketing starts by identifying how customer orientation relates to the needs of all employees in an organization and how non-marketing employees can contribute to providing customer satisfaction. At its most basic, by helping meet customer needs an employee derives the benefit of helping the company to stay in business. Internal marketing goes further than this by convincing service company employees that by helping generate customer satisfaction, job satisfaction and motivation can be improved.

Another facet of internal marketing is the use of the tools of marketing within the organization such as segmentation and targeting. For example internal marketing recognize that different employee groups or functional areas of the business will have different needs and requirements, so when marketing internally, these should be identified. In addition, internal marketing is achieved through the application of an internal ‘marketing mix’ including, for example, the use of staff training; the provision of systems and technology to help employees provide customer satisfaction through their work activities; linking reward and remuneration structures to customer satisfaction and so on. Although internal marketing is important for all organizations, for the reasons discussed, it has proved particularly popular in services marketing organizations, for example banks, hotels, and so on, where a wide range of staff are in direct contact with customers and the people element is of paramount important.

Process

process relates to how the service is provided. The ‘inseparability’ and ‘intangibility’ characteristics of service products are important characteristics underpinning this ‘P’ of the service marketing mix, but the characteristic of ‘variability’ also underpins the importance and planning of process. The process element of the services marketing mix relates to procedures for dealing with service customers before, during, and after the process of service product consumption.

Elements of process differ according to, for example, the particular service product, the needs and wants of customers and competitor and cost considerations. Process decisions involve determining the processes and procedures to be used in service product delivery, including systems and technologies which will be used to support these.

For example, in a fast-food outlet, process elements of the marketing mix might include:

  • ordering systems;
  • customer queuing systems;
  • food delivery systems;
  • food and table clearing systems;
  • booking and reservation systems;
  • complaints systems.

The process element should be planned and run to ensure consistency in service delivery in line with pre-determined levels of customer service. Again, the reduction of service quality variability is a key objective, but this must be balanced against the flexibility and potential advantage of being responsive to individual customer needs and requirements. In planning the process elements of service it is important to consider the whole chain of interrelated elements of the service product delivery and these should be planned, managed and controlled as a total integrated system. For example, improvements in the ordering part of the system may lead to problems of production and delivery.Increasingly, technology is being used in designing, administering and controlling the process elements of services marketing. Microsoft have recently introduced the ‘Microsoft Surface’, an interactive table top which allows customers in restaurants and cafes to view the products available from the table and the screen incorporated into the table top and then place the order direct with the kitchen.

The services marketer often has to balance the advantages of standardizing the processes of preparing and delivering their products, such as speed of production and lower costs, against the merits of meeting the different tastes and preference of individual customers. The highly successful sandwich retailer Subway have a standard menu but within this, individual customers can to some extent personalize their sandwich by being able to select from a choice of fillings at the ‘production’ stage.

The process element of the service mix is a major way of differentiating the service provider from its competition. Successful process systems and services markets are frequently easy to copy which means that services marketers must constantly search for new service process innovations.

Physical evidence

This element of the marketing mix for services includes decisions regarding those marketing tools that pertain to the physical attributes of the service marketer’s offer. With non-service product the customer can feel, touch, see and sometimes smell the product in evaluating whether or not it will meet their needs. However, owing to the ‘intangiblity’ characteristic of many service products, this physical evaluation of the product itself is not possible.

Particularly with a new service product or with a customer who has not used the service provider before, the customer will use other physical signals as ‘evidence’ in evaluating the service provider’s offering. For example, say we were new to a town and wanted to register with a dentist, we might use ‘evidence’ of the appearance and facilities of the dentist’s surgery waiting room to decide whether or not the services of the dentist would be likely come up to our expectations. Banks, building societies, hairdressers, airlines, hotels and management consultants are examples of service marketers who make use of the mix elements of physical evidence. Examples of tools in this area of the mix include:

  • building facilities: office/shop frontage, reception and waiting areas;
  • production facilities/areas;
  • staff appearance/uniforms;
  • company livery, vehicles and logos.

Primarily because of the intangible nature of services, it can often be difficult for consumers to evaluate service offerings, particularly aspects such as quality and value for money, prior to purchase. In the same way, this intangibility can also make it difficult for the marketer to position new service product offerings. Because of this, the marketer often needs to ‘tangibilize’ the service offering by managing the ‘physical evidence’ that accompanies service examples listed above.

Most service marketers are aware of the importance of physical evidence and the use by the potential customer of such evidence to gauge elements like service quality. Many service marketers place great emphasis on the appearance of their employees, often spending large amounts of their marketing budgets on aspects such as staff grooming and uniforms. In addition, the service marketer must pay particular attention to achieving consistency throughout the promotional mix with regard to things like the use of company colours and logos.

Airlines in particular appreciate the importance of physical evidence when it comes to a customer choosing an airline. This is reflected in the attention given to the appearance and demeanour of cabin staff. Airlines insist on certain standards of personal grooming for their cabin staff and require staff to wear uniforms. In this market we also find that the appearance of the staff and the style of uniforms selected are designed to reflect the overall corporate image and positioning the airline wishes to portray to its target customers.


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