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© Copy Right: Rai University
11.313 1
MARKETING OF SERVICES
UNIT IINTRODUCTION TOMARKETING OF SERVICES
LESSON 1:INTRODUCTION TO MARKETING
The Objective of this Lesson is to havean insight into
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Origin of service marketing
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Marketing Organisations
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Marketing environment
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Marketing todayLets look at the origin of service marketing…….Prior to the time of the Industrial Revolution, virtually all tradeand exchange processes involved some personal contactbetween suppliers and their custom-ers. This meant thatindividual producers could cater to the needs of their custom-ers, and most trade was very local in nature. The increase inoverseas trading and the advent of the industrial revolutionheralded the start of new types of trading practice, and theintroduction of some of the processes which are part of marketing today.Initially, producers and manufacturers were concerned mainlywith logistical issues - transporting and selling goods towidespread markets, often located far away from the point of production. The focus here was on production, with consump-tion and consumers being seen as the end result of aproduction and distribution chain. For as long as demandoutstripped supply, which was gener-ally the case as westerncountries started to go through periods of dramatic growth ineconomic activity and technological change, producers could allexist profitably simply by producing more efficiently and cuttingcosts. Little attention was given to the role of the consumer inexchange processes.In the early twentieth century the realization that marketing was,in itself, an important part of the business process led to thefounding of the American Marketing Association and thedevelopment of the earliest aspects of marketing theory andpractice. It was much later, however, that the need for amarketing orientation was recognized, with a clear focus on theneeds of the consumer. This chapter charts the progress of keydevelopments in marketing from these early stages to thepresent, providing the basis for understanding marketingwithin a services context.
Developments in Marketing Theory
The greatly increased production of goods which arose out of mechanization following the industrial revolution was matchedby increased levels of demand in the mass market. The problemfor producers lay in getting their products to the market.Manufacturers were investing heavily in premises and machineryin pursuit of better and cheaper production. They did not wantto be involved in the distribution of the product. A distribu-tion trade grew up to serve every industry.
First Generation Marketing:
Wholesalers opened warehousesin major cities and bought products in bulk from the manufac-turers. They stored the products and organised their distribu-tion to retailers and other smaller organizations throughoutmarkets. This was the development of channels of distribu-tion, still crucial to successful marketing today, and is recognizedas first generation market-ing. At this stage the main concernwas getting the product to market - selling all that was pro-duced.
Second Generation Marketing:
It was only during the secondhalf of the twen-tieth century that the focus began to shifttowards the notion that producers should look at whatconsumers actually wanted - produce what can be sold to themarket, rather than try to sell what is produced. This was thestart of second generation marketing. The early stages of thesecond generation saw the develop-ment of the idea that firmsshould take on a marketing orientation - marketing shouldbecome the integrated focus of their business policy. Firmsshould seek to satisfy their profit needs by identifying Andsatisfying consumer needs.New ideas in the 1960s also pressed the need for a broaderorientation with a focus on consumer needs and criticized .firmswhich were still too product orientated. By defining theirbusiness in terms of their products, firms could constrict theirown growth and development - even survival- as consumerneeds and technologies were changing rapidly. The essential task for firms was to analyze their business from the consumer’sperspective - to look at their market offerings in terms of theneeds satisfied, rather than the products offered. Thus theHollywood film industry, for example, needed to focus on itsbusiness as ‘entertainment’ rather than ‘making movies’ if itwas to enjoy continued profitability and success in the face of increasing competition from television.
Third Generation Marketing:
From the mid-1960s onwards,marketing thought grew and matured. There was increasingawareness of the role that marketing played, not only inbusiness but through its influence and impact on consumersand society as a whole. Marketing began to be seen as some-thing which was not only relevant to commercial organizations,actively seeking profits at the end of the day. Marketing could beequally important for organizations and services which were notnecessarily traditional, profit-led businesses. Schools,’ healthprogrammes, charities and other types of not-for-profitorganization could bene-fit from a marketing orientation. Evenpolitical parties could employ marketing programmes to winvoters. Marketing was viewed as being applicable across a verybroad spectrum of commercial and social activity.From this realization came the emergence of fired generationmarketing. This hinged on the idea of a broader application of marketing within society, across all types of organization, andfor greater benefit to society. Society’s needs should be consid-ered in line with those of consumers, and profits should not be
 
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© Copy Right: Rai University
MARKETING OF SERVICES
sought at an unacceptable cost to society. This has led to a callfor firms to engage in ethical marketing practices and, increas-ingly, to adopt environmentally sound, ‘green’ policies.In moving towards the development of a body of marketingtheory, much has been drawn from other academic disciplines.This is especially true of the behavioral sciences, economics andmanagement science. A debate exists as to how much actualmarketing theory has been established to date. What is gener-ally accepted, however, is that marketing is evolving as adiscipline with a wide base of knowledge, concepts andtechniques and areas of theory, which may ultimately cronetogether to provide an integrated base of marketing theory.One of the main reasons for this is the entrance into themarketing arena of a vast number of academics from otherdisciplines. Social psychologists, econo-mists and statisticians,for example, have all entered the field, together with practicingmarketers from a vyl10le range of specialists such as advertising,distribution and product management. Marketing is, in itself, acomplex subject covering a very wide area, rich in its diversity.This book looks at the develop-ment of marketing in relationto services and offers the reader insights from the extensiverange of concepts and techniques available.
Tutorials
In light of above, Give the comparative analysis of phase of development of Aggarwal Sweets vis-à-vis Mc. Donald’s
Marketing Organisations
What is meant by a marketing organisation? A marketingorganisation has marketing as its key focus. It is organisedaround marketing and is customer-led or market-led. Itanticipates and responds to the needs of the market in design-ing its current and future strategy. The idea of a marketingorientated organisation can be made clearer by comparing it withother organizational philosophies which have been identified.Firms which are production orientated focus on production asthe key to success. In their view, the ~market will always seek products which are both cheaper and widely available. Theorganization’s main task, therefore, is contin-ually to improveand refine production efficiency, thereby producing greaternumbers of goods at lower prices”‘ This approach does holdsome credibility, especially in situations where demand isrelatively high, and could increase with lower prices. This is thecase in areas such as home electronics where colour televisionsand CD players, for examp1e, have become far more popular assupply increased and prices fell!. In the extreme, however, itignores the customer viewpoint and will not succeed oncemarkets have become saturated.Some companies are product orientated, believing that consum-ers will seek products which are innovative or technologicallysuperior in the marketplace. They constantly strive to developnew products which stand out. This is a high risk approachwith significant chances of failure, as seen by the number of’flops’ in the market, such as Sinclair’s electric C5 personaltransportation vehicle. This ap-proach can work successfully butneeds to take into account consumer tastes and wants. Withoutdoing this, firms can fall into the trap of becoming toonarrowly constrained, by viewing their business is terms of ‘products’ rather than in terms of customer need satisfactions.Both Q. production and a product orientation could equallyapply to service providers, where there is too much attentionfocused on the service and the service provision, rather than onthe customers.A selling orientation is where the focus of the firm’s attention ison the ‘hard sell’; heavy promotion, advertising and sales tacticsto get rid of whatever is produced. This technique is evidenttoday, particularly in the area of unsought goods - goods whichdo not full specific consumer needs, but which are heavilypromoted, frequently with. deferred payment terms andpressurized sales tactics. A good example of this approach is inthe selling of timeshare holidays which usually employs all thetactics outlined above - and often leads to unhappy consumerswho claim they were pressurized or misled into signing a salesagreement. This approach can be lucrative in the short-term, butis unlikely to succeed in the long-term.An organisation which is marketing orientated, as indicatedpreviously, aims to achieve its organizational objectives byanticipating and satisfying the needs and wants of its consum-ers. Long-term customer satisfaction is a key goal, and theorganisation is committed to attracting arise retaining custom-ers. The business is defined in terms of need satisfaction ratherthan specific service or product areas, and as those needs change,this should be reflected in the organization’s activities. Addi-tionally, organisations may adhere to a societal marketingorientation, where attention is given to the long-term good of society, as well as consumers. This is becoming more and moreevident in today’s environmentally conscious marketplace.
Marketing Today
The previous sections have outlined the developments withinmarketing which have led to what we know as marketing today.Arguably, however, it is external factors in the political, socialand business world which have shaped the role and develop-ment of marketing. Some of the types of influences which havean impact on the development of marketing are as follows:
Political/legal
Changes in government policy towards business enterprise.The growth of global trade and the impact of trade barriers andcurrency agreements, for example.Privatization (of major importance in the UK).De-regulation of advertising for the professions.Legislation on environmental issues.Consumerism, and the power of consumer pressure groups.
Economic
 
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MARKETING OF SERVICES
World economic trends.Levels of consumer affluence, spending power. The impositionor relaxation of price controls. Inflation levels.Attitudes to, and increases in, consumer borrowing: Theimportance of the service economy.The opening of the single European market.
Socio-cultural
Increased numbers of women in the workplace.Cross cultural issues in international marketing. -.Increased leisure tile, and the wide scale pursuit of leisureinterests. Higher levels of education, and increased participation.Growth in consumer travel and tourism.
Technological
The impact of technology on business processes; the use of scanning systems (EPOS) in retailing and the use of automaticcash dispensers (A TMs) in banking, for example.Technological developments in consumer products.Telecommunications impacts on business and society throughdevelopments such as telesales, telemarketing, teleworking.Awareness and use of technology in the home.The above lists are examples of the factors which have impactedon the develop-ment of marketing today. New modes of marketing have come about because of social and technologicalchanges, such as the dramatic growth of direct market-ing whichcan be very finely tuned to customer wants through the use of sophisticated databases. Tele shopping via dedicated satellite TVchannels is another new concept. Marketing education isincreasing, and the recognition of marketing as a profession isgrowing, underpinned by the award of Chartered status to theInstitute of Marketing, for example. The role and influence of marketing in almost every sphere of society today should notbe underestimated. The final section of this chapter looks atone key development which perhaps typifies the way in whichmarketing responds to changes in society - green marketing.
Green Marketing
The advent of so-called ‘green’, or environmentally conscious,marketing is almost wholly due to pressure from consumers.Although some organisations, particularly in manufacturing,may have started to clean up their act because of legislationagainst pollution, for example, it is consumers who have madethe greatest impact through their demand for greener products.Retailers and fast-moving consumer goods producers were, notsurprisingly, the first to respond to these demands. Continuedpressure, however, has meant that firms throughout the supplychain have also had to develop green marketing practices.Perhaps the most obvious developments have taken place inthe household goods area. Supermarkets now stock a wholerange of’ environmentally friendly’ products ranging frompump action sprays for anything from hairspray to air freshen-ers, toilet tissue made from recycled paper, detergents andwashing powders without harmful chemicals and recyclablepackaging for many items. Service providers have also entered”this race to satisfy the new green consumer by a number of tactics. Fast food restaurants have promoted recycled andrecyclable packaging; hotels ask their clients not to waste energy,urging them to switch unnecessary lights off, and to indicatewhether towels need to be laun-dered or may be used again;road transport providers ensure that vehicle emissions aremonitored as part of regular maintenance.Although it can be more difficult to envisage appropriate greenmarketing strategies within a service organisation, as opposedto retailing or manufactur-ing, there are steps firms can take toensure that their operations, at least, are environmentallyfriendly. A green audit can be undertaken which should coverseveral aspects, including:
Activity Audits
These involve a study of activities undertaken, especiallyactivities which may impact on many areas of business, such asstorage and distribution.
Compliance Audits
Undertaken to ensure that companies meet legal requirementsin all areas from pollution to packaging and labelling.These aspects seem most relevant to services marketing,although there are many more ways in which organisations canundertake an environmental audit, some appropriate to aparticular industry or sector.Looked at in this light, it is fairly easy to see how many serviceorganisations can develop business strategies which are basedon green thinking, and which may impact on marketingprogrammes. A busy hospital, for example, under-takingactivity and site audits may find many ways of becoming moreenergy- efficient and of reducing waste. If this were achieved, itcould feature in publicity and other material presented topatients and the public, enhancing the hospital’s image andpotentially saving money for re-investment into the service.Banks and insurance offices can encourage the introduction of the paper-free office through the use of electronic mail andtelecommunications, and organize collection of waste paper forrecycling where appropriate. They can undertake ethical invest-ment, investing their clients’ funds only in businesses which arethemselves run on environmentally sound lines. Leisureproviders in the public sector can focus on conservation andnature in parks, for example, and promote projects to protectthe environment in green belt areas and land reclamationschemes.However it is undertaken, it is clear that green marketing is hereto stay, and environmental performance may become animportant measure of an organization’s success and standing inthe future. Service organisations need to think ‘green’ in all areasof activity - especially in services marketing.
Tutorials
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Discuss the origin of marketing of services
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Now at this point, with your understanding ,try to discussthe significance of Marketing organizations.
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Marketing of services in today’s environment”. Discuss
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Service Marketing Mix
Case Study on Marketing Environment
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Sujoy Paul

its a detailed material....

reply03 / 23 / 2012
kushagrakul

i like it very muchhhhhhhhhhhhhhhh.

reply11 / 12 / 2010
navneet_nba

its good for those who are enroled in this course

reply09 / 01 / 2009
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