Principles of Service Marketing
The service industry makes up over 73% of the United States gross domestic national product. To remain competitive, an effective marketing campaign approach is essential. And while fundamental product marketing principles still apply, additional factors need to be considered. The service marketing mix puts a whole new spin on how to approach the customer.
Service marketing is the process of making an intangible product into an experience that the customer will value, or benefit from. The four fundamental principles of marketing are product, price, place and promotion. Because of the intangible aspect of services, an additional three principles---people, process, and physical evidence---have been added to the marketing mix. Selling the interpersonal exchange that takes place within the service is a key principle in service marketing.
A service offering is different from a product offering in that the customer can't take the service with them. This means the service and the place that provides it are inseparable. With a tangible product, the customer places a higher value and expectation in the product's performance. With a service offering, value and expectation are placed in the experience had when the service was delivered. This difference of customer focus accounts for the three additional marketing principles.
Marketing a service is, in effect, marketing an experience that the customer will perceive as valuable or necessary. The principles regarding people, process and physical evidence center around what is needed to provide a favorable customer experience. The people aspect has to do with providing the necessary employee training to ensure the proper delivery of the service. The way a company's employees interact with customers is an integral part of service marketing. The process principle involves the systems that are in place to deliver the service and requires developing procedures that match the service being provided. An example of this would be the scripts provided to customer service agents within call centers. A greeting, a series of questions, and a series of action steps are provided to ensure a quick, cordial, solution-based interaction between the caller and the service representative.
Service marketing campaigns put much of the focus on building relationships with the customers. How processes are structured, how employees interact with the customers, and how comfortable the customer feels at the point of service all affect the relationship between the business and the customer. Processes can be automated in such a way that the customer receives regular contact, be it in the form of newsletters, coupons, or reminders. With service industries, such as restaurants and airline companies, the customer becomes an integral part of the process. The customer's experience while the service is carried out becomes part of the marketing mix. Ensuring a quality service experience means maintaining a positive morale among employees and establishing effective lines of communication between employees and supervisors.
Integrating the principles of people, process and physical environment with the basic four---product, price, place and promotion---puts the customer experience at the center of the marketing message. Product marketing works to present the benefits and values of a product. Service marketing rather has to render these benefits and values within the context of the customer experience. In essence, the actual product in service marketing is a repeat customer, as the ultimate aim of a quality service for the customer to choose your business over another.