StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Marketing of Services Process - Essay Example

Cite this document
Summary
The paper "Marketing of Services Process" states that regular innovation, proper market segmentation, usage of the right channel suitable to the product, companies marketing financial services can turn these challenges into opportunities to enhance customer relationships…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER93.2% of users find it useful
Marketing of Services Process
Read Text Preview

Extract of sample "Marketing of Services Process"

The World Marketing Association (WMA) s, ‘Marketing is the core business philosophy which directs the processes of identifying and fulfilling the needs of individuals and organizations through exchanges which create superior value for all parties’ (Chapman, 2003). This implies, be it marketing of products or services, that customer satisfaction is paramount. Nevertheless, due to competition, every industry market being totally customer-oriented, the marketing of products differs from marketing of services. Again, marketing financial services differs significantly from general marketing of products and services. The financial services sector would include banking, life assurance and pensions, investment management and asset servicing apart from general insurance, corporate finance, and broking services sectors. The factors that affect the financial services industry are the government regulation and deregulation from time to time, global competition, changing customer preference behavior. Availability of skilled staff is essential. Marketing financial services, irrespective whether it is face-to-face or through direct marketing channels, comes with a high cost. If human element is eliminated, the electronic set up costs is high. Marketing of services is a bigger challenge than marketing of products. Various reasons account for this and hence strategic marketing plans have to be devised for this. The most important differentiation is that products have well defined parameters and the customer can base his decision to some extent on that. Services on the other hand are intangible. In services marketing, it depends to a large extent on the customer. Two different people would react differently to a given situation. Marketing a product is on the premise that there is a market of millions. Hence, all related services like delivery, demonstration and after sales service can be built accordingly. As far as marketing financial services is concerned, each individual is a market in himself. Customer relationship management is essential here. Transactional analysis is important because it helps to derive customer knowledge to offer and improve the services. The service staff can also be trained based on this information. In marketing financial services, various factors have to be taken into account. Financial services come with a high element of risk attached to it. Marketing of products and general services require the four P’s (product, price, place and promotion) but in marketing of financial services two more P’s are important – people and process. Human interaction is important in services marketing which is not so essential in marketing products. Once a product is purchased, you may never see his face again. Selling services is an entirely different concept. The industry has to attract, motivate and retain skilled staff who can sell their products. Due to advanced Information Technology, processes like delivery of financial services have undergone dramatic change. In the banking industry, the expectations of customers would differ between branches and even between locations. Singh (2002) HSBC, India says that in marketing financial services, what matters is meeting consumer expectations. Of late, consumers and financial institutions found value in non-human delivery (Lee, 2002). The financial services sector has moved to direct selling in the form of phone, mail, or computer transactions but it depends upon the products as well as the location and the people. With the ageing population, human interaction is preferred to non-human delivery. In marketing of services like the travel trade, experience is sold to the consumer. If the expectations of the tourist are not raised too high and he gets more than he expected, he is sure to return to the same agent. In marketing a product, the relationship with customer is transaction based but in providing services, customer relationship management is essential. As far as airlines are concerned, the experience of waiting in the queue to purchase the ticket itself should be a pleasant experience to make him a repeat customer. FedEx, being in the service industry in which reliability and control is very important for customer satisfaction, purchased their own planes to offer better service. Even though they had product differentiation, they did not get hold of a market share of more than 21% even after four years of being in business. The possible reason could be lack of human interaction. A competitor can capture the market just by market analysis, understand the customer expectation and meeting them. Anybody who has the purchasing power can buy a product but marketing services requires proper segmentation. Demographic date is very essential for service providers. The basis for market segmentation becomes entirely different for the airlines industry. Airlines would target the business tourists and the holidaymakers separately. They even have price differentiation for the two segments. For instance, they can charge a higher price from the business who has to travel at short notice and on a particular date but the prices can be lower for a tourist who can be flexible on his travel dates. To market financial products, PEST analysis is essential. The target customers in financial services are the ageing population who wish to invest their pension. Government regulations play an important role. The ageing population makes up the bulk of the financial services market. Due to higher life expectancy, and decrease in birth rate, government encourages delay in the retirement age. Longer working lives delays the pensions. The economic factors that affect investment are the low annuity rates. This discourages individuals from investing in pension funds. Competition in this sector is growing but then competition helps to maintain high standards in services. On the social front, those with inadequate pension would like to borrow but the affluent and the sophisticated ones look beyond to invest in companies that have a global reach. Technology plays a major role in efficient marketing of services. More and more financial institutions offer internet based services but the over 60s find this difficult. While this may serve adequate purpose in buying a tangible product or even booking a hotel online, to make a financial investment, those in their sixties would prefer a face-to-face interaction. Channel plays a major role in marketing. For marketing products, distributors are appointed. Marketing of services too have intermediaries called agents. This works particularly well in sectors like the travel trade. Here the travel agents need to be serviced with good commissions. The hotels and airlines depended till lately on the agents. Recently, airlines have been marketing their products directly to consumers through the internet. E-ticket is in and the role of the travel agent has reduced largely. Airlines are asking the travel agents to charge a lump sum amount on the ticket value and sell to those who still wish to buy tickets through agents. The airlines, on their part, extend this price reduction to the customer due to the highly competitive market. Hotel industry follows the same pattern. Marketing of financial services, on the other hand can be direct or through channels depending upon the product. Credit cards can be sold through direct means but bank loans and mortgages would require human interaction. Investment products can be sold through direct means. Direct marketing helps in sending out different messages to different segments, which means costs are under control, there is no wastage of time, detailed message to each group can be targeted. The limitation here would be the reliability of segmentation. If products like insurance are sold through own channels, it helps in cost control and gives flexibility in policy changes at short notice. The disadvantages are that due to high costs own setup would be limited and may reduce the number of personal visits from prospective customers. Agents spread out over a vast area are easily accessible to more people than through own offices. It may be cheaper to offer them commissions than to maintain own office. The risk however remains that they may be promoting competition products and would push the product, which is financially more rewarding for them. Marketing of other services like airlines and hotels on the other hand, are moving towards direct selling. Communication and branding are important specially to reach the customers through direct means. In marketing a product, normal advertising would suffice but for marketing financial services, if electronic means is used as a channel of direct marketing, brand has to be built. Brands convey many levels of meaning to the customer, such as product attributes (expensive, exclusive, no frills), functional and emotional benefits (financial security, feelings of having “made it”), and the values and culture of your company (Southwest Airlines is “fun”), says Bachmann (2003). Communication through a well-designed website has a positive effect on the company’s brand. The websites of a bank or a mortgage company should provide explanation of their background, products on offer, rates and how to contact. The existing customers should have easy access to their account details. The screen should not be jammed with unrelated offers. Marketing of services like airlines, need to offer allied services like travel insurance along with the products. Risk management is unique to marketing of financial services. The non-financial risks include fraud, systems failure of breach of compliance with government regulations, the financial risks require effective credit management. Effective risk management can help safeguard against financial loss as well as damage to reputation (PWC, 2006). Thus, we can conclude that the difference in marketing financial services occurs due to rise in customer needs and expectations. Longer working lives, increased personal wealth, ageing population, accessibility to more financial products makes the market more competitive. Thus, companies have to reduce costs while maintaining the standards of service. Regular innovation, proper market segmentation, usage of the right channel suitable to the product, companies marketing financial services can turn these challenges into opportunities to enhance customer relationships. References: Bachmann J (2003), What You Need to Know About Online Branding of Financial Services, 30 April 2006 Chapman R (2003), A Marketing Definition in Six Words, 30 April 2006 Lee J (2002), A key to marketing financial services: the right mix of products, services, channels and customers, Journal of Services Marketing Volume 16 Number 3 2002 pp. 238-258, 30 April 2006 PWC (2006), Enterprise-wide risk management (ERM), 30 April 2006 Singh R (2002), Marketing of Services in the latest episode of Strategic Marketing Forum, 30 April 2006 Bibliography: Mind branch, Financial Services Marketing to the Over 60s - Market Assessment, 30 April 2006 Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Marketing Essay Example | Topics and Well Written Essays - 1500 words - 6”, n.d.)
Retrieved from https://studentshare.org/miscellaneous/1536717-marketing
(Marketing Essay Example | Topics and Well Written Essays - 1500 Words - 6)
https://studentshare.org/miscellaneous/1536717-marketing.
“Marketing Essay Example | Topics and Well Written Essays - 1500 Words - 6”, n.d. https://studentshare.org/miscellaneous/1536717-marketing.
  • Cited: 0 times

CHECK THESE SAMPLES OF Marketing of Services Process

Services marketing

marketing of services needs a lot of other contributing factor.... There is no uniformity when it comes to service marketing as there are different types of services available.... Service marketing is the marketing of service or performances of the service seller.... 478), the service industry has got a value chain that it needs to follow through in the process of marketing.... The reason behind the distinction between that of the product marketing and service marketing is because of the fact that services are more heterogeneous in nature....
11 Pages (2750 words) Essay

Marketing of Services Industry

Failures are identified by Shostack as emanating from the uninformed treatment of services as products.... Brown insists on the extended mix which incorporates such elements as process, people, physical evidence, time, and resource.... process relates to the fact that services are performed and consumed concurrently.... Rather, service is an experience and, therefore, the core of the process is to handle the... services Marketing Name: Instructor: Course: Date: Marketing is considered a holistic field which encompasses both the concepts of service and product marketing in equal measure....
8 Pages (2000 words) Essay

Services Marketing

This paper "Services Marketing" focuses on the fact that marketing of services is quite a distinct process from the marketing of tangible goods due to peculiar characteristics of services.... nbsp;… It is widely accepted in the academic circles that at operational levels, in particular in organizations processing services, such as hotels, hospitals, beauticians, transportation, retail banking, the marketing of services is different and more widespread across institutionally than the marketing of physical products....
9 Pages (2250 words) Essay

Internal Marketing: Improving Internal Processes, and Quality of Products

This is different from stage one as it requires that the employees are not only satisfied with their job and wanting to perform better but that they should be mindful of customers and aware of how to serve their needs through excellent provision of services.... It was argued that internal marketing was embedded in the concept of providing good services to The second stage which a saw a growth in the term internal marketing included the consideration that the employees that are hired should have a disposition that they can interact effectively with the customers....
11 Pages (2750 words) Essay

Service Marketing

The organization has effectively gain believes and trust of the customers through their effective positioning strategy of services.... In terms of services, market performance is computable implementing the behavioural objectives and deemed to be implementable and appropriate for banking services.... The strategy and effective service process will be discussed later in the study.... trong positive connections between loyalty and image have been reported broadly in the area of service marketing....
4 Pages (1000 words) Research Paper

Holiday Inn Hotel Service Marketing Mix

In this case, Holiday inn Hotel has to make adjustment of the traditional 4Ps marketing mix that entails product, price, promotion, and place and adopt more Ps, which include process, physical evidence, and people to achieve its marketing objectives.... The aim of most companies is to establish a mix of products or services, which will ensure consumer satisfaction of needs and wants.... The marketing mix should… Therefore, firms struggle to create marketing strategies through utilization of the marketing mix, which will develop a justifiable competitive advantage thus leading to profitability and growth in the end....
11 Pages (2750 words) Essay

A Service Marketing Mix: Holiday Inn

The service marketing mix entails an adjustment of the traditional 4Ps of product, price, promotion, and place to compensate for the same factors by adding three more Ps namely, process, physical experience, and people.... he selected business strategy guides the use of the process component of marketing mix.... The marketing process applied by the hotel justifies its quest to remain competitive in the industry and business.... The process of marketing Holiday Inn starts with a decision defining the position of the hotel would be products, and services that would go on sale (Jerome 21)....
9 Pages (2250 words) Essay

International Marketing of Products and Services

This coursework "International Marketing of Products and Services" analysis to what extent do the challenges facing international marketers of services differ from those facing marketers of international products.... hellip; In some cases, it is the image of the product which is more important than the actual features and in others, it is the associated services that become more important.... However, the physical features and the presence of a product brings its own challenges as compared to the services sector where things such as wealth management services or other financial services may be difficult to differentiate based on the image alone....
14 Pages (3500 words) Coursework
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us