Service Marketing Strategy
INTRODUCTION
Marketers have traditionally relied on technology(product), price (cost), promotion, and channels as the mix for a marketing strategy to gain a competitive edge in the market. Now marketers, especially those in the industrial sector, are realizing that the traditional approach to developing a marketing strategy may not be very effective for gaining the much needed edge over competition. Almost all markets are full of products with essentially the same features and benefits. Even in the fast-moving high technology markets, where the marketers tend to be almost overdependent on technology to pull themselves ahead of the competition, most of the products are based on the same microprocessors, same operating systems,and so on. It has become increasingly difficult, if not impossible, to have significantly different (and superior) products. Similarly, cost (price) differentials among the market leaders are either nonexistent or not significant. Many cases can be recounted where a marketer mistakenly assumed a cost advantage over the competitors and inadvertently started a price war with totally disastrous consequences for all. The traditional thinking of relating mass production to lower costs has also caused problems for marketers. The mind-set of “if you cannot compete, produce more to lower your cost” ultimately resulted in 20%-30% excess capacity throughout the industrial sector in the United States (and possibly all of the industrial world) by the mid- 1980s. Finally, the elements of promotion and channel, although of vital strategic significance, may not be effective tools for the market leaders to improve their positions. Market leaders usually have a reasonably optimum mix here. Once again, the old mind-set of “if you cannot sell what you have (overproduced by mass production), sell harder” had resulted in bloated sales and promotion expenses in most U.S. companies by the mid 1980s.
Continued improvements in technology and cost will be forthcoming. Such improvements will be necessary for market leaders to maintain their leadership positions.But, in general, these improvements may not allow them to gain significant advantages over each other. Where, then, can marketers turn to find other ingredients for their strategy? The element of service has become strategically important for marketers, and especially for those in the industrial sector. It is a natural outcome of the evolution of markets through various stages in which different factors assume dominant importance in customer-purchase decisions. In the first stage, technology is most crucial. The company with access to the right technology may be the only company to offer a product. The Xerox Corporation during the 1960s and 1970s is a classic example of a company in this stage. In the second stage many companies have access to the same technology, and the factor of cost becomes important. The company with a cost advantage will have a strategic advantage.In the third stage, quality emerges as the dominant factor, once the cost differentials disappear. The Japanese succeeded in carving out a significant portion of the U.S. automotive market by having a significant quality edge over domestic manufacturers.
In the fourth stage, when the market leaders can offer the same (similar) costs and quality, the issue of service emerges as the dominant factor affecting the purchase.Most of todayrsquo;s markets are in this stage now. We must note here that each of the four stages may not happen one at a time, or in the same sequence. In the final phase,
though, service tends to stand out as the most strategic issue in the marketing strategy.
1、SERVICE DEFINED
There is much discussion about service among todayrsquo;s marketers in the industrial sector. Just about all of them claim to be excellent providers of service. They are usually thinking of providing repairs and parts for their product when they refer to service. Service, in a true sense,is anything that increases the value of the product to its users, In this sense service is not limited to an interaction with the product itself. Company personnel can add value to the companyrsquo;s product by treating a customer with courtesy and respect.
Service, as defined here, can be affected by everyone in the organization. The product designers can affect the service levels. The I975 S-cylinder Mona from GM had such inaccessible spark plug locations that the engine literally had to be pulled off for a tune-up. Sloppiness and compromising management on the shop-floor, which ignores or circumvents quality standards, can cause headaches for the user of a defective product. The American automobile with numerous defects was usually referred to as a car made on a Monday morning. Imprecise or insufficient documentation in a manual for servicing a product can cause much frustration for a user. Poorly trained or poorly informed salespeople can waste much of the customerrsquo;s time. Less than courteous handling of an inquiry from a customer by a contact person can reduce the value of the product to that customer. Clerical mistakes in invoicing can aggravate the customer. Delayed shipments can cause production bottlenecks and business loss for a customer.
The marketers in the goods producing sector can borrow proven concepts and ideas to provide better service from marketers in the service sector. As an example, in service companies, the quality of service is translated into operational terms through the “moments of truth” or periods of service contacts. In a similar way, service quality in manufacturing or other goods producing companies can be measured through similar “moments of truth.” But the “moments of truth” in this new context are not limited to contacts with service personnel. These moments can be moments of direct contact with company personnel, as well as indirect contacts through the product or some other routine transac
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