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Marketing mix

Extracts from this document...

Introduction

Contents 1. Introduction 1 2. The Marketing Mix Paradigm 2 2.1. The 4Ps of the Marketing Mix 2 2.2. Emergence of Marketing Mix 5 2.3. The Nature of the Marketing Mix 5 3. What is Meant by Services? 6 3.1. Major Characteristics of Services 8 3.2. Goods and Services 9 3.3. Introduction to Services Marketing 10 3.4. Evolution of Services Marketing 11 3.5. The Breakthrough from Product Marketing 12 3.6. Paradigm Shift in Marketing 14 3.7. Model of Services Marketing - The 7Ps 15 3.8. Strengths and Weaknesses of 4Ps and 7Ps 20 3.9. Service Processes 20 3.10. Service Encounter 21 4. Relationship Approach as a Foundation of Marketing 21 5. Conclusion 23 6. References 25 List of Figures Figure 1 : Components Of Marketing Mix 3 Figure 2: Customers Perspective - 4 Cs 4 Figure 3: The Tangible-Intangible continuum for goods and services (Source: Shostack, 'Breaking Free from Product Marketing', Journal of Marketing, Vol. 41, No.2, April 1977). 7 Figure 4: The Marketing Mix for Services 17 List of Tables Table 1: Strengths and Weaknesses of 4Ps and 7Ps (Source: Rafiq and Ahmed (1995)) 20 Table 2: Transaction Marketing vs Relationship Marketing (Source: Payne (1993)) 22 1. INTRODUCTION The aim of this paper is to discuss the breakthrough from product marketing identified by Shostack (1977) and furthermore, introduce and analyze a new model of services marketing. The paper begins with the discussion on the nature of the traditional marketing paradigm, marketing mix, and how the modern research into industrial marketing, services marketing and customer relationship management influence the development of a new approach to marketing. It suggests that the simplicity of the marketing mix paradigm has become a blindly followed path rather than an awareness that marketing is a versatile social process. As a result, customers are the victims of this traditional marketing theory. Then the paper emphasizes on services, its characteristics and how they differ from goods. ...read more.

Middle

They aimed at making the service provider friendlier, and making the bank look warmer and attractive by changing its decor. This gave an initial advantage to early adopters of this approach but other banks quickly followed the same. With the arrival of 1990s some banks reassessed their customer service programmes and began to practice service quality, based on identification of service quality issues and service quality gaps using a variety of techniques, including service blueprinting. This was accompanied by a controlled approach to customer and market research. A new emphasis on marketing has emerged since last few years - relationship marketing. Relationship marketing draws heavily on the concepts of services marketing and also has applications to other sectors. 3.5. THE BREAK THROUGH FROM PRODUCT MARKETING 'Servitisation' is happening in almost all industries on a global scale. Companies are no longer making distinctions between goods and services and are involved to some extent in both. This is due the movement towards customer orientation and moving from old outdated focus on goods or services to the integrated bundles. The basic purpose of it is to place more emphasis on the service components in these bundles and less on the product. Swept up by the forces of deregulation, technology, globalization and fierce competitive pressure, both service companies and manufacturers are moving more dramatically into services. Manufacturers have of course always been in services, but nowhere near the extent to which they are involved in them today. Mainly, industrial companies provided 'servicing'. Now there is a trend to create specialist services around the product they make, sell their expertise, and set up special companies and units for these new service activities. Vandermerwe and Rada (1988) suggest that the servitisation of business has probably evolved in the following three overlapping stages: Stage 1: Goods OR Services In the old days the companies were being only goods oriented or service oriented. ...read more.

Conclusion

The evidence on the break in marketing within service sector is conflicting. On one hand it has been suggested that service dominant organizations are less market-oriented than manufacturing firms. On the other hand many service organizations have certainly been highly market oriented. It is unreasonable to suggest that all are ignorant of or opposed to marketing. Some extremely successful service organizations, like hire car companies, industrial cleaning service companies and hotel groups have used marketing practices. As consumers are the centre of the marketing process, companies divide the total market into smaller segments and select the segments it can best serve. Their success comes from quality, service, reliability or supplying higher-value products for specific market niches. It is obvious that companies are marketing driven, in that they provide superior service and quality. By doing that many companies have achieved success. The companies showed drastic improvement in their market share and their profitability, if they laid stress on selection and implementation of a good marketing strategy. As the paradigm of marketing shifted from goods based to services based, the outcome for the companies was positive. It also proved good from the consumer's perspective. The consumers were now the focus of the market. All the management decisions revolved around what would be best for the consumer. The break from highly matured goods market to a service oriented market has indeed been good from the consumer of the product (both goods and services) as well for the companies producing these products. While product and service quality is becoming the minimum requirements, the quality of relationship with individual customers is emerging as a proper measure of success. Trust and relationship commitment lead to customer satisfaction and loyalty. Relationship marketing characterized as a major directional change in marketing theory and a fundamental reshaping of the marketing function. As on today this is the most relevant aspect of the marketing theory practiced by many successful organizations. To conclude, service marketing and relationship with individual customers formed the basis of modern marketing concepts. ...read more.

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