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Business organizations are constantly seeking ways to enhance their performances in order to compete actively and aggressively in the market. In the marketplace, two different business organisations are present, this include the product industry and the service industry. In this regard, the context of service industry will be given attention. In addition, this paper will provide insights on the difference on managing and marketing service and marketing and product marketing.
As a company it is important that the corporation knows, how to handle its business properly since it is undeniable that there are many people who want to have a long lasting career in terms of business. In the business arena, the management of a certain organisation especially those in the service provider company must have the capability to handle every situation positive or negative that may come along their way. In fact, service industry must successfully responded to global competition by recognizing that survival in the business pitch is dependent upon reconstructing their operations to deliver better, faster and cheaper (Knod & Schonberger, 2001). According to Johnston & Clark (2001), product and service design involves translating customer needs into product and service requirements, formulating quality goals and cost target, documenting specifications, refining existing products and services, and developing new ones as well. With these, product and service design can affect or influence a large proportion of an organization’s functional area, especially the marketing and operations pitch.
There are many factors that must be considered when handling or managing a certain organization and one of which is the determination of the best services (Grönfeldt & Strother, 2006) to offer to meet and satisfy the needs of the target market. Customer satisfaction is a major issue in almost all sectors. This can basically determine the success and profitability of a company as a satisfied customer would most likely to ‘spread the good word’ or would have be happy to do business again with the firm. It is an important theoretical and practical issue for market researchers and consumer researchers (Meuter et al, 2000). With positive results in most research, the significance of customer satisfaction and customer retention in strategy development for a “market oriented’’ and “customer focused’’ firm cannot be underestimated (Watt, 2007).
Specifically, Froehle (2006) stated that customer service satisfaction and retention are critical for retail banks, because of their impact on the company’s profit. With this, there is the challenge for different service industries to deliver a satisfactory quality service. The other one is service quality but it can be said it is not purely intertwined with customer satisfaction as a customer can be satisfied even though the service is not of high quality (Palmer, 2005_. But then, customer satisfaction is considered a must for customer retention and loyalty, and undoubtedly helps in realizing economic goals like profitability, market share, return on investment and other corporate target (Hackl & Westlund, 2000).
It is in service operations management where the principles of service operation strategy are encompassed, and before-hand, it is in operations management where service operations management works its standards (Hollins & Shinkins 2006). These annotations suggest that the major undertakings involved in service management are analogous to those in operations management. However, the latter is broadly-focused on the operations of the whole organization, rather than specifically managing a service only (Johnston & Clarke, 2005). A basic understanding of what service is could fundamentally and significantly help in the process of crafting a service strategy when facing an odd situation. Service is intangible and this attribute makes it difficult to make an appropriate decision for such certain situation. As what was noted earlier, engineers make service designs based on the way how people, think, and behave. And the variability of these facets on every individual customer contributes to the complexity of this design.
Marketing Products vs. Marketing Services
Each industry is subject to marketing elements which influences the company’s function and performance as a whole. Accordingly, such elements are the one’s attributed in determining whether the company has met their organisation objective and if they are able to satisfy their clients (Oliver, 1997). In this regard, there are several approaches which can be considered so as to sustain competitive advantage within the marketing environment. It can be said that most of the marketing service stands out due to its difference from manufactured products. Products are basically the items that industries create, design, produce, and distribute to the consumers. These products may be based from current trends or from more objective marketing researches. In product development, several factors are to be considered. These include the nature, content, material, processes, packaging, and distribution means that will be used for its efficient marketing (Jobber & Fahy, 2006). Products come in various forms like food, drink, appliance, and accommodation. Thus, products are generally regarded as tangible items. In the past, the marketing efforts of most companies are concentrated mainly on the selling of these manufactured items.
However, at present, businesses and industries have learned to prioritize various economic goods other than those produced by the manufacturing sector. This is also known as services. Unlike products, services are generally intangible. Service involves performance, action, or effort that a customer cannot obtain physically. While both products and services are different in terms of tangibility aspects, these business terms also have similarities. For instance, both require effective marketing (Jobber & Fahy, 2006).
The only difference between the application of marketing to both products and service is that in service marketing, physical handling is not involved. Services must also be planned and created with care so as to meet consumers’ needs and demands (Lovelock, & Wright, 2002). The degree of marketing needs for products and services can be stressed through an example. Within temporary personnel field for instance, studies are conducted in order to identify the types of skills employees must have or possess. This is because appropriate skills must fit in to various fields and geographical locations of the business. This makes services difficult to sell in comparison to manufactured products. Thus, promotional campaigns to sell services should be more aggressive than when promoting physical goods (Palmer, 2005).
According to Wight (1999), the central attribute of marketing strategy of service organization is the interaction between the customers and the organization itself. Things such as high consumer contact, consumer participation in the process, labour intensiveness, intangibility of output, difficulty of measuring quality, difficulty of measuring productivity, and a site dictated by consumers’ location, are some of the extenuating characteristics of service operations. Thus, service quality must specify what sensual benefits, physical items, and psychological benefits the customer is to receive from the service (Watt, 2007).
Part of the marketing approach of the service industries is their adherence to the context of service quality. In general, the context of service quality is perceived as the result of the of the service delivery system, specifically in the case of service industries (Ghobadian, Speller & Jones, 1994)). Furthermore, service quality is associated with the satisfaction of the customers. Even if there is no consensus in the previous studies about the direction of causality that relates quality and satisfaction, the most usual assumption is that service quality results to satisfied clients (Anderson & Fornell, 1994). For instance, a client who leaves the service industry like restaurants or hotels, are asked on whether the service provider satisfied their needs. If the customers answer “no,” service industries intend to presume that their service delivery is was poor. Hence, those people who are directly involved in the service provision may also note that the best service efforts are sometimes being criticised because the perceptions of the clients are clouded by being in a bad mood of the client even before they arrived at the service industry. Hence, service providers recognize that in their service delivery approach, the influence of service quality on the satisfaction of the clients is affected by other aspects, one of which is the customer behavior (Duffy & Ketchand, 1998).
According to Duffy and Ketchand (2002) intangibles are the physical facilities, equipment, and appearance of the employees providing the services. Reliability is the ability to perform the specific service requested by the customers with the promise of being dependable and accurate in delivering the services. Responsiveness entails the willingness to assist the clients immediately and as they deem demand. Assurance is the ability of the people from the service provider company to imply their knowledge and courtesy of helping the customers in order to gain trust and confidence in providing the requested services while empathy is the attention accorded by the staff on the concerns and situation of the clients in need of their services.
It can be said that service industries manage and market their operations and services differently from manufacturing products. It can be said that providing excellent and quality customer service is a crucial differentiator in an intrinsic competent market environment between the product and service industries. Most services industries which provide clients what they need and satisfied those helps the company to enhance its market share, definitely gain more profit and enjoy higher revenue.
Without the customers, the service industry will not be able to achieve their organisational objectives. In this kind of industries the customers play a vital role as they serve as the major source of revenue for the enhanced organisational performance. In addition, the clients are involved directly in the service operations, and they are accountable for providing assessment on the quality of the service that is given to them. This judgment is important in evaluating the capacity of the service industry as quality service providers. It can be concluded that the service industry is very different from manufactured products in terms of management and marketing approach, as the former considers not only the mere act of providing and distributing physical item like products, but it considers the utilisation of inter use of interpersonal skills which enhances the value and experience of customers.
In general, the underlying principle of service design and strategy aims to determine the needs of the customers and how to meet them in the most effective yet least costly manner. In providing a service, it is also important to take note to have a single, unifying theme. Service strategy specifications should define or determine the facilities needed to continue the planned service and make sure that the system has the capability to manage any unpredictability in service requirements. Generally, implementation should see to it that the service would be steadfast and will provide consistently high quality.
- Anderson, E. W. and C. Fornell (1994) “A customer satisfaction research prospectus.” In Service Quality: New Directions in Theory and Practice. Eds R. T. Rust and R. L. Oliver (pp. 241-268). Thousand Oaks, CA: Sage Publications.
- Duffy, JA & Ketchund, AA 2002, “Examining the Role of Service Quality in Overall Service Satisfaction”, Journal of Managerial Issues, vol. 10, no. 2, pp. 240+.
- Froehle, C. (2006) “Service personnel, Technology and their Interaction in Influencing Customer Satisfaction” Decision Sciences, 37, 1: 5-38
- Ghobadian, A, Speller, S. and Jones, M. (1994). Service Quality: Concepts and Models. International Journal of Quality & Reliability Management, 11(9): 43-66.
- Grönfeldt, S. and Strother, J. (2006) Service Leadership: The Quest for Competitive Advantage.
- Hackl, P. and Westlund, A.H. (2000). On structural equation modelling for customer satisfaction measurement. Total Quality Management,11(4/5/6): S820-S825.
- Hollins, B. and Shinkins, S. (2006). Managing Service Operations: Design and Implementation.
- Jobber, D. and Fahy, J. (2006). Foundations of Marketing. (2nd ed).
- Johnston, R. & Clark, G. (2001). Service Operation Management. 1st Edition. London: Prentice Hall.
- Johnston, R. And Clarke, G (2005) Service Operations Management. Chapters 1, 2,3
- Knod, E. & Schonberger, R. (2001). Operations Management: Meeting Customers’ Demands. 7th Edition. Boston, MA: McGraw-Hill Irwin.
- Lovelock, C. and Wright, L. (2002) Service Marketing and Management.
- Meuter, M.L, Ostrom, A.L., Roundtree, R.I. & Bitner, M.J. (2000), “Self-service technologies: understanding customer satisfaction with technology-based service encounters’’, Journal of Marketing,. 64(3): 50-64.
- Palmer, A. (2005). Principles of Services Marketing. Chapter 12.
- Watt, P. (2007) “I Need People that are Happy, Always Smiling: Guest Interaction and Emotional Labour in a Canadian Downtown Hotel” Just Labour, Vol 10, Spring: 45-59 (http://www.justlabour.yorku.ca/volume10/pdfs/04WattPress.pdf)
- Wight, J. N. (1999). The Management of Service Operations. London: Cassell Publication.
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