Common marketing strategies adopted by businesses that offer services
Services represent an integral part of the human life in the modern-day world. It is referred to as the act, deed, or performance that one person offers to another. Service marketing can be broadly defined as the marketing which is based on the relationship and value.
With globalization of world economies, the services market has been commercialized. Moreover, the contribution of services to GDP and employment is also substantially high. All these factors collectively have given rise to service marketing as a specialized branch of marketing. Furthermore, owing to the unique characteristics of services such as intangibility, perishability, inseparability, simultaneity, and variability, the marketing strategies adopted by companies are different as compared to that of physical goods (Singh and Bansal, 2011).
In simple terms, it is the marketing strategies that focus on selling anything which is not a physical product. This can include personal services like the medical care and spa, to the rental of vehicles and spaces or education, transportation banking etc. Any method that is effective in communicating service appeal and benefits to the customers can be regarded as the valid approach (Sravana, 2015). This can include the organizations that provide services to individuals as well as the organizations that provide services to the other organizations. The strategies can include informational content, promotional deals or advertisements (Hilton, 2016). With the motive of creating a strong and sustained position in the market, the service providers use a variety of strategies.
Standardization of services as a marketing strategy
This form of service marketing strategy is most commonly used by food chains. One of the top food chains that uses this service marketing strategy is McDonald’s. A customer can walk into any of their outlets whether it is in India or anywhere in the world and will get a similar experience. This standardization comes in terms of their menu, method of food preparation, taste, packaging and presentation (Loukakou and Membe, 2012). The major advantages of service standardization are as follows:
- It helps the service provider to provide consumers the guarantee of service quality irrespective of the location.
- It helps the service providers in achieving the economy of scale in the purchase of their materials, inputs etc. Also helps in reduction of the procurement cost thus leading to substantial savings. This enables the companies to offer services at the competitive rates and yet earn profit.
- This kind of service standardization and the limited options menu enables the McDonald’s speedy preparation. Most of McDonald’s outlets will not take over 5 minutes to serve its customers while ensuring freshness.
Franchising as a strategy
The use of franchising in order to achieve service growth has come up as an effective service marketing strategy. Franchising is the service marketing strategy that helps businesses in creating an image in the minds of the current and future customers about how the offered services can genuinely help them. In simple terms it can be regarded as the strategic alliance between a group of the people who share specific roles and responsibilities and have a common goal to dominate the market. The most prominent users of this service marketing strategy include NIIT and APTECH, both the companies operate in the field of computer education. The following strategy has brought the bulk of rapid growth for these companies (Prof and Rosado-serrano, 2017). The major advantages of franchising are as follows.
- This strategy has helped businesses to achieve rapid geographic coverage. This in turn has led to the better recruitment potential.
- Wider geographic expansion has led to the rapid growth of service providers in terms of brand equity.
- Another major advantage is that businesses do not have to bear the cost of development and the risk of opening a branch in the foreign market. Thus, it helps firms to attain the global presence quickly at low cost and risk.
- Franchising provides firms with the standard system and procedure which they can follow to control the operations. This reduces the variance in delivery and service quality. This helps in maintaining the integrity of the franchise name.
- Furthermore, this enables businesses to adopt a centralized marketing plan which can include their pricing guidelines, site research and selection, national or local advertising. Also, the cost of the expertise needed for the system can be spread over the entire system.
Providing personalized services is one of the most effective service marketing strategies. One of the top brands using this marketing strategy is UrbanClap. It works towards providing personalized services to the consumer in terms of beauty, spa, decorating customers’ homes. Thus, the company provides consumers with a personalized experience and thus earn their loyalty. Amazon stands as another big name that uses personalized marketing strategy. Amazon offers its customers product recommendations that are generally in line with their preferences or their past purchases. Amazon do so by tracking the consumers browsing data and then make recommendations to consumers based on their needs ( Wadhwa et al., 2017). The main advantages of personalization are as follows.
- This service marketing strategy has majorly helped to stand out in a competitive environment.
- Helped them to gain better customers insights.
- Earn customers loyalty.
- Providing consumers with the personalized recommendations helps to boost the company sales.
Need of service marketing strategies
- Key differentiator: with the increasing homogeneity of the products, it is important that the service providers adopt certain service marketing strategies that help to develop a differentiating image in the mind of the consumers. For example, Domino’s and Pizza Hut offer similar products. It is their service quality and that promotes their products to attract customers and create a distinctive image (Vijaywargia, 2012).
- Building relationship: a good relationship with the customer serves as the major factor when it comes to marketing services. Since the products are intangible, the major part of the consumer buying decision will depend on how much a customer can remember their product. Thus, service marketing strategies that work on building a relationship with the consumers are crucial for business survival (Lovelock et al., 2016).
- Consumer retention: as the world is witnessing a highly competitive scenario where multiple service providers are vying for the limited pool of customers. It becomes highly important for service providers to retain existing customers by adopting new service marketing strategies (Karunakaran).
- Word of mouth or referral: This is one of the key features of the service marketing strategies. Experience of the other customers and their positive reviews can help service-based businesses to attract more revenue. Businesses can showcase these reviews not only to attract new customers but retain happy customers for recurring sales (Zeithaml, Bitner and Gremler, 2010).
Fostering competition through service marketing
Owing to the unique characteristics of services such as intangibility, perishability, inseparability, simultaneity, and variability, the marketing strategies adopted by companies are different as compared to that of physical goods. Service marketing strategies is all about building relationships with the customers, that helps the service businesses to attract and retain the customers. It also fosters a competitive environment for players in the service sector. It has become necessary to initiate the marketing strategies in the area of innovation, quality improvement and maintaining the customer relationships.
- Hilton, T. (2016) ‘Services marketing’, The Marketing Book: Seventh Edition, (March), pp. 469–493. doi: 10.4324/9781315890005.
- Karunakaran, K. (no date) ‘SERVICES MARKETING’.
- Loukakou, M. D. and Membe, N. B. (2012) ‘Product standardization and adaptation in International Marketing: A case of McDonalds’, University WEST, pp. i–48. doi: http://dx.doi.org/10.1016/S0211-5638(04)73099-0.
- Lovelock, C. et al. (2016) ‘Services marketing’, The Marketing Book: Seventh Edition, 2016(1027), pp. 469–493. doi: 10.4324/9781315890005.
- Prof, M. M. and Rosado-serrano, A. (2017) ‘Franchising Strategy’, (January). doi: 10.13140/RG.2.2.24342.86089.
- Singh, M. R. P. and Bansal, H. (2011) ‘Concept and Nature of Service’, pp. 1–204.
- Sravana, K. (2015) ‘SERVICE MARKETING’. [online]. Available at http://sdeuoc.ac.in/sites/default/files/sde_videos/SLM-MCom-SERVICE%20MARKETING.pdf Last accessed 19 Feb 2020.
- Zeithaml, V. A., Bitner, M. J. and Gremler, D. D. (2010) ‘Services Marketing Strategy’, Wiley International Encyclopedia of Marketing. doi: 10.1002/9781444316568.wiem01055.
- et al. (2017) ‘Business Model of Amazon India – a Case Study.’, International Journal of Advanced Research, 5(8), pp. 1426–1433. doi: 10.21474/ijar01/5200.