More often a service has been described as an act, a process and a performance. Examples of services include: tourism, banking, hospitality, hairdressing, transport and so many more. In other case services has been described as economic activities that create ‘added value’ and provides benefits for customer (consumers or organizations). Most commonly in all cases services have been considered intangible (immaterial). Their characteristics create a list of challenges for the marketing manager because he is forced to clearly communicate to the potential customers the benefits therein by drawing ideas and imagery that can be tangible.
The philosophy of reaching the customer more precisely has dictated marketing activity throughout its history. In the early part of the 20th century, trading in ‘common services’ was one form of services marketing. Indeed this notion was recognized by Reagan (1963) as the origin of services marketing when debating the ‘service revolution’ at that time.
Traditionally, marketing tended to focus on goods-centered manufacturing based model of economic exchange which was developed during the time of the Industrial Revolution. As time progressed marketing has taken a transformative approach and it has covered a wide area which has included the exchange of more than manufactured goods. Marketing has been further been subdivided to various sections which include service marketing but built on the same goods and manufacture based model. The traditional marketing method was based on a foundation of goods marketing which focused majorly on distribution and monetized exchange of manufactured output. The Industrial revolution saw the emergence of marketing from economic science which further saw models being developed to deal with various issues. The manufacturing output orientation resulted to substandard address of the service marketing discipline. Scholars have made great contribution distinguishing the two ways and types of marketing orientations. The distinction was majorly a process of identifying the range of services marketing by definition and delineation of the characteristic differences that exist between goods and services. After a careful consideration of these differences, normative strategies that must be applied by marketing managers are identified.
In this task I am going to focus in the tourism sector which is one the most occurring in our world. Services are everywhere as consumers we use services every day. The growth in the service industry is globally recognized and increasingly contributes to the economic development of many regions as it accounts for most of new job growth in developed countries. The tourism sector which am going to focus on in this study, contributes very heavily to developing economies. Services are very diverse are thus very difficult to define exhaustively.
The most common word in all definition of services is ‘activities’ or ‘processes’. This activity or process implies applying something and doing something for the benefit of some entity. Vargo and Lusch, 2004 therefore defined a service as the application of specialized competencies (skills and knowledge), though deeds processes, and performances for the benefit of another entity or the entity itself (self service). The tourism industry for example is an area dominated by large multinational companies and small independently and locally operating companies. It involves all that Vargo and Lusch defined. Tourism as a service includes provision of tangibles that is to say that that services are sometimes provided directly or indirectly. The provision of tangible goods e.g. food and bedding to tourists are distribution mechanisms for service provision. In this way it may seem like everything is a service. Realistically it is economic change is fundamentally about providing service. Viewed in this way service becomes an inclusive term.
Some scholars have tended to differ with some of the common characteristics making contributions that “activities render services, things render services”. Kotler (2007) made an observation that the “importance of physical products lies not so much in owning them as in obtaining the services they render”. Rust, (2009) stated that most goods businesses now view themselves primarily as services, with the good being an important part of the service. Hunt (2002) states that the beginning of resource based theory, viewed the company as a “collection of productive resources….it is never themselves that are inputs to the production process but only the services the resources can render”. Therefore from the above explanation, Hunt (2002) pointed out that resources can be termed as “bundles of potential services”.
For services marketing, the distinguishing features or characteristics of services are important in the design of an appropriate marketing mix. The identification of these characteristics was the concern of the tourism industry as it tries to achieve its goals and strategic objectives. These characteristics are sometimes seen as hurdles or negative qualities or series to be tackled. Lusch, R and Vargo S (2004), argue that intangibility, heterogeneity, inseparability and perishability features do not delineate services from goods adequately. The further argued that:
- The feature`s implications for marketing strategy are contradictory to a market and consumer orientation.
- Are not accurate and are misleading about the nature of what the market has to offer.
- Their effects should be inverted.
Thus, from these arguments they stated that service should and can be applicable to all exchange.
The core characteristics which Lusch and Vargo referred to as myths are as discussed below:
Because services are processes, deeds or acts, customers are involved in the production of a service. For most services both the seller and the buyer needs to be at the same place at the same time for the service to occur. Because centralized mass production is difficult, consumers often have to travel to the point of service production. As from our above example, is that presence during consumption is crucial here. The tourist cannot enjoy the holiday privileges he has paid for while in London, he has to travel to Mombasa, spend time there and this cannot transferred to the comfort of his home. The consumer takes part in the production process, as he consumes it is being produced.
Many times consumers are co-consumers, of a service with a small or large numbers of others. Thus the behaviour and attitude of the consumers may impact upon the nature and experience of a service. For example an over demand in customer can deflect service staff attention and impact on the quality of service delivery to other consumers. If in the tourism industry there is an influx of tourists to a certain hotel, the hotel staff may compromise quality due to the large numbers they are unable to handle.
The other observable attribute is that services need to be near to the person consuming them i.e. goods can be made in a central factory location which has the benefits of mass production. This localization means that consumption is inseparable from production.
Lovelock’s (1991) criteria of “people as part of the product” and “greater involvement of customers” implies that in offering services, the consumer and the producer must simultaneously interact in order for the service to be received, unlike goods. Lovelock (2000) termed inseparability “a dangerous oversimplification” and added that numerous offerings that are classified as services are partly or sometimes largely produced separate from the consumer. Tangible offerings cannot offer service (desired benefits) unless the consumer or to be user interacts with the goods. The benefits of goods are realized upon use. Thereby it is said that goods act as vehicles or channels for provision of services (Vargo and Lusch, 2004).
The intangibles nature of services makes them impossible to store, warehouse or re-use. A tourist staying at a local or overseas resort cannot store part of his days remaining to spend them at a later time. It is hard to make each service experience identical. In the same way if a tourist is being served by a particular way for the first time it would change the second time he visits because of changed less or more experienced staff.
This feature is closely associated with tangibility and is meant to denote that since services are intangible they cannot be produced at one point in time, stored and sold at a later time when needed. Gummeson (2000) noted that “the claimant services cannot be stored is nonsense” his argument was that services are store in systems, machines, knowledge and people. For example a tourist resort is a store of rooms and villas which visitors can book for a period of time prior to “production” while away but not necessarily physically present. The visitor or tourist can then enjoy their stay at the resort or if not possible for that particular moment they can also postpone if this option is available in most cases.
The intangible nature of services means that standardization and quality are difficult to control. Since people are involved in providing the actual services in most sectors and that people are unlikely to operate as reliably and constantly as machines it is often not easy to control and measure quality. Customers may not be able to evaluate quality and for employers too it may be difficult. Evaluations rely majorly on attitude, opinions and expectations of customers and potential customers. Mostly systems and procedures are put into position to make ensure the service provided is consistent throughout, training in service organisations is essential for this, though in saying this there will always be some differences in service delivery.
In this case the focus is standardization. The idea being that because humans take part in the provision of services, it is difficult to standardize them like for goods. Since human input is the constraining factor, then services are more homogeneous than goods. Human involvement is a common feature in the provision of both services and tangible output. From time to time production of goods has been characterized as heterogeneous. Standardization came about is as a result of the mass production but it was not an inherent feature of tangible output but it has not been fully achieved as it remains to be a goal not yet a reality. Numerous service providers of late have become standardized for example in the tourism industry which involves a lot of players, hotels have been standardized and given “stars” this acts as a benchmark for prospective clients or customers to know exactly what service to expect. Kotler P(1977) states that majorly standardization is about with quality but the relationship between homogeneity and quality is new and its mostly viewed to be a manufacturer centered association, promoted by the merits in efficiency brought by standardization in the advancement to mass production in the industrial revolution period.
Homogeneity in production most of the times leads to in heterogeneous judgments of quality by consumers, if not by the entire market. Service marketing scholars have on the other hand have accepted that services have demerits as compared to goods because its a complicated effort standardizing them. Hence the prescription that service providers ought to work harder to device ways to increase and improve standardization (Gummeson E,1995).
A service cannot be literally held unlike a product. It cannot have real physical presence as for products. Although services are intangiable some scholars have argued that, from them consumers obtain an experience which has an impact on how they perceive it. Again this presents a challenge in evaluating quality of service before consuming as there are fewer features of quality as compared to a product (Vargo and Lusch, 2006). A way that quality can be considered can be in terms of search, credence and experience. The perception in the mind of the consumer about the quality of the product prior to buying it by making a series of searches is referred to as search quality. On the other hand there is experience quality which is a bit easier to assess. A tourist needs to be at a particular resort to enjoy the facilities that are on offer for him to evaluate on the service quality level and nature of the service. Credence quality is solely based on the credibility of the service that is undertaken. This relies on reputation for example of the numerous tourist vacation destinations. This type of quality used where there is have little knowledge of the destinations of choice and where you base your decisions upon the professionalism of the experts (Vargo and Lusch, 2004b).
This feature does not hold up and at best it has little or no relevance. Shostack 1977; Swartz, Bowen and Brown 1992 noted that by the intangibility method there are no pure services or goods. This argument relies on observation that essentially all goods constitute a service component and that all services have a form of tangible representation. Iabobucci (1992) looked into the perceived goods versus services and their said tangibility of a number of offerings and discovered that “while goods are indeed perceived to be relatively more tangible than services all these stimuli are taken to be rather tangible in an absolute sense”. He made a conclusion that “the tangibility ratings are an example of where the data were not closely aligned with theoretical expectations” (pp. 33, 49).
Bateson (1991) wrote that customers buy symbolic meanings, satisfaction and present anticipated service provision: they buy benefits. They do not boy goods or services: they buy offerings which render services which in turn create value (Gummesson, 1995). We have seen the traditional division between goods and services get outdated. The issue is now redefining services and seeing them from a consumer perspective; things render services, activities render services. This transformation to services is a step from the means and the producer perspective to the utilization and consumer perspective (Gummesson, 1995).
As human involvement in service provision is relevant here, no two services can be completely identical, hence they are variable. For example, returning to the same resort over and over again for vacation you might experience different levels of satisfaction. This may be due to the seasons when you visited e.g. if you visit during the peak season you might receive completely different experience as compared to when you visit during the peak season. So, services tend to be variable from one user experience to another.
- Lack of ownership.
A person cannot own or store a service as he can do for a product. Services are hired or consumed for a period of time. A best example is: if a tourist from London chooses Mombasa as his holiday destination and goes ahead and books a room or villa, he must be personally present on consumption of the service and if he fails his booking will be cancelled or in most cases lose what he had paid for the booking. He cannot apportion ownership for the room or villa beyond the time he had booked it. Right of ownership is not taken to the service, since you merely experience it (Vargo S. L, 2007a)
Western economies have seen deterioration in their traditional manufacturing industries, and a growth in their service economies. Therefore the marketing mix has seen extended and adapted to create the services marketing mix, also known as the 7P’s or the extended marketing mix – physical evidence, process and people.
As discussed, these conceptualizations do not apply only to what have traditionally been classified as services; they apply to entire marketing in general. These conceptualizations have been an crucial first step toward freeing marketing from a manufacturing and goods-based model of exchange and replacing it with a more general and generalizable service-dominant model (Vargo and Lusch, 2004a).
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