Research Proposal

Service Marketing Strategy from the Marketing Mix Perspective

 

Introduction

With  the increased  rate of globalization there has also been a tremendous increase in the  demand for a wide range of services that are increasingly contributing to a large percentage of global gross domestic product thereby in order to achieve a competitive advantage within the spheres of international markets is mainly depended to a great extent on the involved aggressiveness towards marketing such services (Zeithaml and Bitner, 2000). Therefore, it is of crucial importance to ensure  a very effective marketing strategy is put in place which is vital in ensuring that the services  offered are able  to attain market competitiveness through strategic positioning in the market (Bardhan et al. 2010).

However, various previous researches in service marketing such as conducted by Fisk, Brown & Bitner (1993) and Beaven & Scotti (1990), emphasizes on the presence significant challenges when it comes to the service marketing, in comparison to marketing a products. This is mainly because the thing been sold is actually  intangible hence,  it is in real sense invisible.  Therefore, in the process of marketing  and selling a service customer experience cannot be compromised thus it is of  extreme significant importance in  ensuring a deal is closed as  well as effective marketing (Bateson, 1991; Berry & Parasuraman, 1993). Hence, the experience perceived by the client usually has  a great impact on the perceived value of the service.

Moreover, in the service marketing it is also hard for the  reputation to be established or  built through one client  since different people perceives  things  differently according to the research which was conducted by Solomon et al. (1985).  In addition, the  employees are also very crucial in the business of selling and performing the services since there way of handling and interaction with clients goes a long way in establishing the company’s reputation. However, there is also the challenge of the inability to put in place a damage control mechanism for the service companies meaning that they should always be on the safe side of the business as well as ensuring that there reputation remains pristine and untarnished (Bardhan et al. 2010).

Literature Review

Services marketing is one of the tremendously growing sectors of global economies and according to the study conducted by Beaven & Scotti (1990), it may involve both business to business (B2B) as well as business to consumer (B2C) services. Therefore, Smith (2000) research emphasizes on various services that are often marketed including telecommunications services, all types of hospitality services, financial services, car rental services, health care services air travel and professional services. However, the range of expressions and approaches of a marketing idea is usually developed with the aim of effectively conveying the service marketing ideas to a wide range of customers.

However, both Smith (2000) and Swartz, Bowen & Brown (1992) concurs in different researches that the situations involved in the service marketing can actually be attributed to the nature of the services since it is usually the act of doing something for another person and there are no goods exchanged. This therefore means  they are largely intangible, that is, not material compared to the products which are tangible since they can be touched and owned (Smith, 2000; Swartz, Bowen & Brown, 1992).  Thus, a service happens to be an experience that is usually utilized at the purchase point hence, can’t be owned due to it perishes quickly. Therefore, the consumers often encounter difficulty in comparing services between vendors since they cannot feel or touch the service but they just hopes that the service will be sufficiently performed. This very crucial since the service is nonreturnable once purchased hence, the customers experience is very crucial in the marketing strategy as it was noted in the study conducted by Dixon (1990).

Therefore, the service marketing becomes a very crucial aspect of ensuring that the company actually manages to achieve market competitiveness (Solomon et al. 1985). Hence, more needs to be done other than the traditional marketing involving the 4 Ps marketing mix. Thus, many previous studies in the service marketing notes that in addition to the normal 4 Ps price, place, price and promotion three more other crucial Ps components are added, that is,  people, physical evidence and process (Anderson, Fornell & Rust, 1997; Bateson, 1991).

Therefore, the people component involves the people indirectly or directly involved in the service consumption. This is mainly because the people can add significant value to the offered service since people usually sell as well as break or make the offered services marketing. Moreover, physical evidence is also necessary since it determines the way in which  the services are communicated, delivered and followed after (Smith, 2000; Swartz, Bowen & Brown, 1992). This is mainly because the experience created is intangible hence documentation and communication  becomes the only physical evidence that can be shared with the  customers. In  addition, the process which involves the procedure as well as flow of activities showing the consumption of the services is very essential to the service marketing strategy. Hence, all the things should be smoothly running in order to keep the trust of your consumers (Zeithaml and Bitner, 2000; Solomon et al. 1985).

Therefore, there is a gap in theoretical and managerial knowledge in this sphere. The aim of this research is to examine how effective marketing mix influences the overall performance of service industry businesses. There are two main objectives:

Firstly, to examine how the extended 7 P’s marketing mix can be effectively utilized in marketing and positioning the services in the market as well as attaining market competitiveness.

Secondly, to explore the relationship between chosen marketing strategy and the nature of a wide range of services.

Conceptual framework

The service marketing is usually different from the goods marketing goods hence,  the marketing practices and tools involved in the service marketing are unique depending on the market conditions. Hence, according to (Koller & Salzberger, 2009; Gronroos, 1994) the complexity involved in the service marketing requires that an  effective marketing mix strategy needs to be put in place to ensure that significant market competitiveness is achieved. Hence, an improved marketing mix consisting of 7 Ps is used in the service marketing.

The product involves creating of a service concept which therefore offers the target customers value for their money thereby satisfying their needs more effectively in comparison to their competing alternatives (Bardhan et al. 2010). Therefore, the service require to effectively respond to the primary need of the customer than any other.

H1a: Good services offers value to the target customers leading to their satisfaction.

In addition, the place and timing are critical in offering the customers the customers the distribution channels choices  which ensures accessibility convenience which saves money and time (Bateson, 1991; Berry & Parasuraman, 1993).

H1b: The most  convenient place increases the customers loyalty to the services offered.

Pricing also plays a very critical role in determining whether a service is worth its value. Hence, the set targets should coincide  with what the target customers are willing offer after taking into account all the assesses and monitory considerations (Solomon et al. 1985). Therefore, the most competitive pricing is likely to attract more customers.

H1c: Affordable pricing ensures market competitive advantage against the rival competitors.

 

Promotion in services marketing is mandatory preferably to the new customers since it involves educating the customers on the benefits on the service as well as where band when to get such services (Anderson, Fornell & Rust, 1997).

H1d: Promotion is very crucial in ensuring that customers gets aware of the services and the new developments done on them.

 

The process involved in the delivery of the service is mostly very important since it involves a  consideration of both the operational outputs and inputs that are likely to widely vary. Hence, careful designing of the processes of customer service as well  as implementation of the service quality management process reduces the variability (Fisk, Brown & Bitner, 1993; Beaven & Scotti, 1990).

H1e: Precise and accurate process of the services delivery ensures that they are available to customers at the required time.

 

However, the physical environment involves the condition of facilities in that  are utilized in the service delivery thereby giving out a clue of the service quality  as well as guiding customers through the process of service delivery (Smith, 2000; Swartz, Bowen & Brown, 1992). This is a very crucial aspect having a profound impact on the service productivity and customer satisfaction.

H1f: Excellent combination of the of the service physical environment and marketing are crucial for achieving market competitiveness.

 

People who involves the firm’s human capital and mostly the employees are very vital in service marketing (Smith, 2000; Swartz, Bowen & Brown, 1992). Hence, they are supposed to posses the necessary technical skills, positive attitudes and good interpersonal skills in order to be a key competitive advantage for the firm.

H1g: Effective and competent employees  ensures increased efficiency in service marketing.

 

In addition, considering the second objective it  was observed by Matthing,  Sandén & Edvardsson, (2004) that the relationship between the marketing mix and service marketing is crucial thereby ensuring that a clear understanding of the nature of the services is crucial.

H2a: An explicit understanding of the nature of the services ensures effective marketing strategy is used.

 

Moreover, effective monitoring of the experiences of the customers is very critical since it ensures of the changes immediately after they appear. Therefore, seeking for consistent feedback from the customers is very crucial in determining how to effectively integrate the marketing mix (Wind & Rangaswamy, 2000). However,  an effective feedback  channel ensures that the changes in needs  and  preferences of the customers are constantly monitored thereby making sure an action is timely  take  to address  the issues that need immediate attention.

H2b: Monitoring of the customers experiences on the services will ensure adequate adaptation to market changes.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Figure 1

Conceptual Framework

 

 

Diagram adopted from: http://endeavoreg.wordpress.com/2010/08/08/a-business-plan-is-not-a-luxury/

 

 

 

Research Methodology

To accomplish the objectives of this research different service firms will be examined. Therefore, the research sample will involve both top level and middle  level managers in 10-12 companies offering different services upon which the effect of marketing mix will be considered and how they influence market positioning of the service and performance (Solomon et al. 1985). The method of the research will be a survey via Internet. Given the possibility of developing specific and directional hypotheses based on the literature, purely qualitative work does not appear to be warranted (Wind & Rangaswamy, 2000). Therefore, a quantitative methodology will be employed to test the hypotheses.

Data collection and analysis

However, a preliminary research will be conducted through 10-12 open-ended deep interviews with top and middle level marketing managers in the service firms. Moreover, this will be followed by a more in-depth closed-ended questionnaires that will be administered to the same companies used in the first interview.

In order to test hypotheses following methods of data analysis will be applied:

• Factor analysis to analyze the marketing dimensions and all measures used
• Cluster analysis to reveal groups of companies
• Regression analysis, the X-square method to examine the existence of relationship between variables (marketing mix and marketing strategy, performance, and so on).

SPSS and LISPEL software will be used.

 

 

Theoretical importance of the research

Cross-firms research provides an opportunity to compare as well as reveal differences between companies which therefore deepens the level of analysis thereby making the results more applicable to varied environments (Fisk, Brown & Bitner, 1993; Beaven & Scotti, 1990).

However, the present study conceptualizes on the service firms’ orientation towards marketing planning and pays significant attention to the marketing mix dimensions. This research has two crucial implications for marketing theory. Firstly, the theoretical concept of service marketing mix will be developed thereby adding more information to the empirical studies in this field (Solomon et al. 1985). Secondly, the theoretical model indicates that marketing mix components can be integrated to give an opportunity for a deeper understanding of the relationship between the marketing mix and the performance (Smith, 2000; Swartz, Bowen & Brown, 1992).

Managerial importance of the research

In a globalizing environment managers consider service companies consider marketing their services as a crucial tool for corporate growth, financial performance improvement, as well as strengthening competitive advantage thereby ensuring company survival. Hence, the service company managers are required to effectively blend the aspect of marketing mix to ensure strategic positioning of their services in the market (Bateson, 1991; Berry & Parasuraman, 1993).

The study will enable the researcher to provide broader guidelines for managers how to improve their service marketing activity (Vargo & Lusch, 2004). More particularly answers to the various marketing questions will be sought such as how to develop the most suitable service marketing strategy and how to effectively interact with the customers.

 

References

Anderson, E.W., Fornell, C. & Rust, R.T. 1997, €˜Customer Satisfaction, Productivity, and Profitability: Differences between Goods and Services,’ Marketing Science, 16, 2, pp. 129-45.

 

Anderson, J.C. & Narus, J.A. 1998, €˜Business marketing: understand what customers value’, Harvard Business Review, 76, 6, pp. 53-65.

 

Bateson, J. E. G. 1991, Managing Services Marketing. Fort Worth, TX: Dryden.

 

Beaven, M. H. & Scotti, D.J. 1990, €˜Service-Oriented Thinking and Its Implications for the Marketing Mix,’ Journal of Services Marketing, 4, pp. 5-19.

 

Bardhan, I., Demirkan, H., Kannan, P., Kauffman, R., & Sougstad, R. 2010, €˜An Interdisciplinary Perspective on IT Services Management and Service Science’, Journal of Management Information Systems, 26, 4, pp. 13-64.

 

Berry, L.L. & Parasuraman, A. 1993, €˜Building a New Academic Field-The Case of Services Marketing,’ Journal of Retailing, 69, 1, pp. 13-59.

 

Dixon, D. F. 1990, €˜Marketing as Production: The Development of a Concept,’ Journal of the Academy of Marketing Science, 18, 4, pp. 337-43.

 

Fisk, R. P., Brown, S.W. & Bitner, M.J. 1993, €˜Tracking the Evolution of the Services Marketing Literature,’ Journal of Retailing, 69, 1, pp. 61-103.

 

Gronroos, C. 1994, €˜From Marketing Mix to Relationship Marketing: Towards a Paradigm Shift in Marketing’, Asia-Australian Marketing Journal, 2, 1, pp. 9-29.

 

Kaleka, A. 2011, €˜When Exporting Manufacturers Compete on the Basis of Service: Resources and Marketing Capabilities Driving Service Advantage and Performance’, Journal of International Marketing, 19, 1, pp. 40-58.

 

Koller, M., & Salzberger, T. 2009, €˜Benchmarking in service marketing €“ a longitudinal analysis of the customer’, Benchmarking, 16,3, pp. 401-414.

 

Levitt, T. 1960, €˜Marketing Myopia,’ Harvard Business Review, 38 (July-August), 26-44, 173-81.

 

Lovelock, C. 1991, Services Marketing. Englewood Cliffs, NJ: Prentice Hall.

 

Matthing, J., Sandén, B. & Edvardsson, B. 2004, €˜New service development: learning from and with customers’, International Journal of Service Industry Management, 15, 5, pp. 479-98.

 

SkÃ¥lén, P. 2009, €˜Service marketing and subjectivity: the shaping of customer-oriented employees’, Journal of Marketing Management, 25, 7/8, pp. 795-809.

 

Schlesinger, L. A. & Heskett, J.L. 1992, €˜The Service-Driven Company,’ Harvard Business Review, 69 (September-October), pp. 71-81.

 

Shostack, G. L. 1977, €˜Breaking Free from Product Marketing,’ Journal of Marketing, 41, pp. 73-80.

 

Smith, A.M. 2000, €˜Using consumer benchmarking criteria to improve service sector competitiveness’, Benchmarking: An International Journal, 7, 5, pp. 373-88.

 

Solomon, M.R., Surprenant, C., Czepiel, J.A. & Gutman, E.G. 1985, €˜A Role Theory Perspective on Dynamic Interactions: The Service Encounter,’ Journal of Marketing, 41, 1, pp. 99-111.

 

Swartz, T.A., Bowen, D.E. & Brown, S.W. 1992, €˜Fifteen Years After Breaking Free: Services Then, Now and Beyond,’ Advances in Services Marketing and Management, 1, pp. 1-21.

 

Vargo, S.L. & Lusch, R.F. 2004, €˜Evolving to a New Dominant Logic for Marketing,’ Journal of Marketing, 68 (January), pp. 1-17.

 

Wind, J. & Rangaswamy, A. 2000, €˜Customerization: The Next Revolution in Mass Customization,’ MSl Report No. 00-108, Marketing Science Institute, Cambridge, MA.

 

Zeithaml, V.A. and Bitner, M.J. 2000, Services Marketing: Integrating Customer Focus across the Firm, 2nd ed. Boston: McGraw-Hill.

 

Zoetmulder, E. 2010, A business plan is not a luxury. Retrieved on July 4, 2011 from: http://endeavoreg.wordpress.com/2010/08/08/a-business-plan-is-not-a-luxury/