Marketing services is a specialized branch of marketing. The commercialization of services emerged as an independent field of study in the early 1980s, after the recognition that the unique characteristics of the services required different strategies compared to the marketing of physical goods.
The commercialization of services usually refers to business-to-consumer (B2C) and business-to-business (B2B) services, and includes the marketing of services such as telecommunication services, financial services, all types of hospitality, leisure and entertainment ,, Health care services and professional services and commercial services. Service sellers often use an expanded marketing mix consisting of the seven Ps: product, price, location, promotion, people, physical evidence and process. A contemporary approach, known as the logic of dominant service, argues that the demarcation between products and services that persisted throughout the twentieth century was artificial and has obscured the fact that everyone sells service. The S-D logic approach is changing the way marketers understand value creation and are changing the concepts of the role of the consumer in service delivery processes.
Challenges faced by the service industry
It is a difficult task to manage a service or a product industry. However, these challenges are different and unique to each industry. Some of the challenges facing the management, growth and profitability of a service industry are discussed below, but these factors are not easily applied to the product industry.
1. Services are intangible and customers can not view or retain them before purchasing them. Therefore, buyers are uncertain about the quality of service and feel they are taking a risk. The buyer is unable to conceptualize and evaluate a service beforehand. From the perspective of the seller, it is difficult to promote, control the quality and fix the price of the service it provides. Unlike products, the intangible nature of the service causes difficulties for both the customer and the company.
2. Defining and improving quality in the service industry is a major challenge. Unlike products, services are often produced and consumed simultaneously. As a result, quality management of services faces challenges that the product industry never gets to know. In the product industry the manufacturer has ample opportunity to test their products before they reach the market. In case of a quality problem the problem is taken care of during quality control and customer satisfaction is taken care of. However during the production of service the customer is right in front. Ensuring customer satisfaction in this scenario is a great challenge.
3. In the case of the service industry, the customer first needs to develop confidence in the organization of services before buying their services. The client often gives more importance to the amount of faith that he has in the service organization than the services being offered and his value proposition.
4. The service industry faces competition not only from the peer service industry, but also from their customers who often wonder whether or not they should hire a service at all!
5. Most product companies have dedicated sales personnel, while in the service industry service dealers often do the selling. Coordinating marketing, operations and human resources efforts is a tedious task.
6. The passion works for the service industry. The more the passion, the spirit and the desire among the service staff the more is the revenue generation and the success generated each day. There is a direct correlation between the passion of staff and financial success and likewise the lack of passion leads to failure in the service industry. Employees must be constantly motivated and must make efforts to sustain employee commitment.
7. While testing new services is a constant challenge communicating about these services simultaneously is not easy either.
8. Pricing is not easy for the service industry.
9. Standardization versus personalization is another important issue that the service industry has to face.