Essay on Services Marketing Management

Introduction

The service industry requires a firm to incorporate several core concepts that can project them to improved operations in the market. There is a need to understand the significance of some ideas in the services marketing management. The report encompasses the service concept, understanding customer types, and to a large extent, the gaps model. In the research, much focus will be accorded to purpose, application and limitations of the concepts as it pertains to the success of a service providing organization.

The Service Concept

The service concept defines the need that the organization wants to satisfy among consumers in the market. The service concept encompasses perceptions that are held in the society or market regarding the services that an organization provides. It is critical to examine the role that the service concept plays in helping an organization achieve the set objectives.

Purpose of the Service Concept

The service concept plays a crucial role in the market for a firm that operates in the service industry. It helps determine the desired outcomes in the market ad value of the service provider. Understanding the scope of the service concept helps create a culture in the market that promotes the need for company services (Huotari and Hamari, 2017). When a company or organization understands perceptions that the consumers are having on the services, it can easily adjust its operations in favor of the consumer. With no or little knowledge about market notions, a firm might not be able to detect areas that are problematic in the industry. The service concept is essential in designing or re-designing services that have benefit and value to customers in the market. As such, the concept is widely applicable by companies to improve their services in a specific direction. For a firm to succeed in the service provision industry, there is a need to apply the approach for a better understanding of what roles should be prioritized to create value. Most service providing organizations have different options for what consumers can choose. Primarily, a firm applies the service concept to design and re-design existing services lines in the market.

Application

The service concept is widely applicable in many service-based organizations in the world (Huotari and Hamari, 2017). For instance, a firm can apply the concept to boost the loyalty that customers have for a specific service brand. The service concept is used to devise strategies that can see a company achieve its objectives while satisfying the needs of consumers. The management in a service providing firm must incorporate vital ideas that encompass the phenomenon of service concept for improved productivity. Customer loyalty is increased as the firm concentrates objectively on serving the needs within a population. The service concept can help a firm realize the direction that the firm is headed in terms of provision of services. Understanding the concept helps define the operations of the firm and outline how objectives set can be achieved. For instance, the marketing of services in a firm requires knowledge on the market and the existing opportunities. Understanding the phenomenon of service concept can help boost the marketing abilities of various organizations in the industry. The service concept outlines for a firm the way that services will be delivered, customers direct experience with the service, benefits of the service to the customer, and the value of the service weighed against the cost of receiving the service. As such, service concept is widely applicable in the designing of various marketing strategies, which are essential to the operations of the company.

Limitations

Application of the service concept has limitations that challenge successful running of a firm in the service industry. First, there is a challenge in linking the business strategy and service designing. Service provision is different and requires more complicated approaches to gain a competitive advantage in the market. Depending on the model a firm is using to market their products in the industry, a conflict of interest might arise between the designing of the services, which could be different from the outlined business strategy. The link between business strategy and designing of services forms a significant basis for the deficiency with the service concept. Second, the lack of consideration for measuring the performance of a service financially poses a problem to the application of the service concept (Costa, Patrício and Morelli, 2015). For some time now, most service industries do not consider the financial performance of a service in the market when applying the service concept. The fact has created a deficiency in the efficacy of the service concept to drive the organization to success.

Understanding Customer Types

There is a need to understand customer types in the market in a bid to satisfy their needs as far as service provision is concerned. It is vital to analyze the concept of understanding customer types, unravelling its purpose, application and limitations.

Purpose

There are four types of customers in a service-based market, namely loyal, impulse, discount, wandering clients and need-based customers. Understanding the types of consumers in the market helps a firm formulate strategies, which are productive to the operations of the organization (Xu, Wang, Li and Haghighi, 2017). For instance, a loyal customer might have different needs as compared to a wandering customer in the market. As such, all firms in the service industry must conduct an analysis of its consumer market to determine various behavioral characteristics. Such behavioral attributes can help design services that meet their exact needs within the market. Failure to understand customer behavior might have a dire consequence on the sales that the firm makes in a particular period. Therefore, a focus on the consumer and factors that affect their consumption can be helpful to a firm. Understanding consumer behavior ensures that a firm produces services that add value according to the needs of an individual in the market.

Application

The idea of understanding the types of customers for a firm is applied to many industries globally. Understanding consumer behavior helps answer questions that are vital for the organization to deliver reputable services to the public. For instance, it is through customer understanding that a firm can be able to know why consumers need a particular service such information is applicable in designing of appealing and value-creating services to all consumers in the market. Consumer behavior determines the approach that a firm can apply in the marketing of all services that are provided. For instance, the firm can know whether the individuals are purchasing for other people or for own consumption. Such information is crucial as it helps in determining the right message and promotion channel to use in marketing. Frequency of purchase for a specific service can act as a guide to service provision within an industry. To an extent, understanding customer behavior makes it easier to predict future demand trends for the same, which helps serve the needs of the market. Service providing firms are obliged to conduct a consumer behavioral analysis to determine needs that should be satisfied among clients.

Limitations

Understanding customer types and their needs is useful for firms to design desirable services that meet their needs. The first challenge in the application of consumer theory in service-providing industries is market uncertainty (Durugbo and Erkoyuncu, 2016). Uncertainties in the market pose a challenge to the understanding of various concepts that encompass consumer behavior. Service provision industries operate in a relatively dynamic environment, which makes it a challenge to keep the firm updated. Such changes in the market result in uncertainties that make it difficult to predict the future direction of the industry. Second, misleading myths on consumer behavior serves as a significant challenge to the understanding of the concept. Managers and leaders in firms have wrong notions about consumers that mislead their decision-making process.

The Gap Model

Purpose

The model was designed in the year 1985 to explain consumer expectations and gaps that should be considered by firms in the provision of services. The model primarily addresses the gaps that are vital in luring a customer to purchase a specific service. The first is the knowledge gap. The model asserts that knowledge gap sometimes exists as a result of expectations versus the provisions of the company. The discrepancy arises when management lacks a clue on what the customers want (Abu-El Samen, Akroush and Abu-Lail, 2013). The policy gap, the delivery gap, communication gap and the customer gap form a basis for the gap model in tapping existing potential. The firm can take advantage of the existing gaps to gain a competitive advantage in service provision. The purpose of the model is to identify existing gaps in consumer expectations and the actual services that the firm produces for the market. With a detailed view of consumer expectations, a firm can try to reduce the gaps for improved service provision to consumers. For instance, reducing the gap between expectations and provision s of the service can prove helpful in improving sales. It is the role of organizations to apply the gap model in a bid to solve issues on customer expectations and satisfaction.

Application

The concept of the gap model is widely applicable in many organizations with a view of reducing the gap between the actual service provided and the expectations among consumers. The theory can be applied to improve the quality of service that a firm can provide to customers. For instance, when management understands the gap that exists in the market regarding its products and satisfaction, it is easier to make improvements without a clue, a firm might repeat the same mistakes that widen the gap between expectations and actual services provided. As such, the gap model is advantageous to the firm that applies its concepts in approaching market issues. Also, the concept of the gap model can be used to determine areas in the organizational strategy that need adjustments for sustainable service provision (Amiri and Faghani, 2012). As such, the model is essential to the management of firms that operate in the service industry. Understanding consumer expectations and perceptions is the firm’s step towards the provision of quality services sustainably.

Limitations

Conducting a gap analysis is an essential strategy, though lack of actionable steps that the model provides proves to be a limitation. Most organizations that use the model have failed to incorporate actions in their implementation of the guidelines. The model can only be useful if the guidelines listed are supported by actions for the organization to realize an effect. Policy on paper can make sense if implemented using the right strategy and procedure (Hafiz and Alam, 2016). Seasonal fluctuations in the market act as a limitation to the application of the model in the service industry. For instance, change in tastes and preferences within the market can lead to fluctuations, which limit the use of the concept in an organization. The framework of the model fails to address issues of fluctuation as a challenge to its application. Increased competition in an industry can limit a firm’s ability to tap existing potential in the market. The gap model analysis should be conducted in a specific industry, say service provision, which makes it difficult for other firms to do one. Also, a gap analysis does not encompass the actions of competitor firms. Instead, firms should concentrate on analyzing markets where competitors are establishing to have a glimpse of current trends. Such limitations have challenged the validity of the model in services marketing management.

Conclusion

In conclusion, the concepts discussed are crucial to the establishment of a sustainable services marketing management strategy. For instance, the service concept helps firm familiarize with the needs of the market and how they can create value. Critics of the service concept believe it is ineffective since it fails to capture the price of the service in its framework. Equally, understanding consumer behavioral traits can help an organization design its services to meet the needs in the market. The concept of the gaps model is applicable in the service industry as it provides an insight into the existing potential that should be tapped. Knowledge in the market is crucial in decision making by different players. As such, there is a need to analyze the market and establish existing gaps that can provide the potential for the firm to do better.

References

Abu-El Samen, A.A., Akroush, M.N. and Abu-Lail, B.N., 2013. Mobile SERVQUAL: A comparative analysis of customers’ and managers’ perceptions. International Journal of Quality & Reliability Management, 30(4), pp.403-425.

AMIRI, A.S. and Faghani, F., 2012. Mobile banking service quality and customer satisfaction (application of SERVQUAL model).

Costa, N., Patrício, L. and Morelli, N., 2015. Designing integrated product-service system solutions in manufacturing industries. In The 14th International Research Symposium on Service Excellence in Management (QUIS 14) (pp. 790-799).

Durugbo, C. and Erkoyuncu, J.A., 2016. Mitigating uncertainty for industrial service operations: a multi case study. International Journal of Operations & Production Management, 36(5), pp.532-571.

Hafiz, N. and Alam, A.F., 2016. Applying SERVQUAL Model to Measure Online Customer Satisfaction in Package Delivery Services. JOURNAL STUDIA UNIVERSITATIS BABES-BOLYAI NEGOTIA.

Huotari, K. and Hamari, J., 2017. A definition for gamification: anchoring gamification in the service marketing literature. Electronic Markets, 27(1), pp.21-31.

Xu, X., Wang, X., Li, Y. and Haghighi, M., 2017. Business intelligence in online customer textual reviews: Understanding consumer perceptions and influential factors. International Journal of information management, 37(6), pp.673-683.