(e) service marketing triangle

Service Marketing

Dr. Muhammad Jaber Hossain Associate Professor

Dept. of Information Science and Library Management

University of Dhaka

What is Service?

Service is the action of doing something for

someone or something. It is largely intangible

A service tends to be an experience that is

consumed at the point where it is purchased, and

cannot be owned since is quickly perishes.

One of the first to define services was the

American Marketing Association, which, as early

as in1960, defined services as activities, benefits,

or satisfactions which are offered for sale, or

provided in connection with the sale of goods.

What is Service?

Lehtinen, in 1983, defined services as an activity or

a series of activities which take place in

interactions with a contact person or a physical

machine and which provides consumer

satisfaction.

Kotler and Bloom, in 1984, defined services as any

activity or benefit that one party can offer to

another that is essentially intangible and does not

result in the ownership of anything. Its production

may or may not be tied to a physical product.

What is Service?

According to Gronross, a service is an activity or

series of activities of more or less intangible nature

that normally, not necessarily, take place in

interactions between the customer and service

employees and/or physical resources or goods

and/or system of the service provider, which

are provided as solution to customer problems.

This definition takes into account the following important

features of services:

Features of service?

1. Services are by and large activities or they are

series of activities rather than things.

2. As a result services are intangible.

3. They take place in the interaction between the

customer and the service provider, which means

that services are produced and consumed

simultaneously.

4. Customer has a role to play in the production

process as the services are provided in

response to the problems of customers as solution.

Characteristics of service?

Intangibility means that unlike goods, services canít be seen,

touched and felt, tasted or smelledor even heard before

they are purchased.

Inseparability suggests that services are produced,

distributed, and consumed simultaneously.

Heterogeneity means that services delivered generally vary

in quality, time consumed in delivery, and the extent of

service provided. Since people deliver most services, they

are variable.

Perishability means that services can not be stored.

Service Marketing?

Services marketing is marketing based on

relationship and value. It may be used to market a

service or a product.

Activity or benefit that one party can offer to

another that is essentially intangible and does not

result in the ownership of anything. Its production

may or may not be tied to a physical product.

Service Marketing Triangle

To understand the complex role of

marketing in service companies Christian

Gronroos (2000) used a model, which also

referred by many other authors like Philip

Kotler (2005) and Valerie A. Zeithaml

(1996). This model is prominently known

as service marketing triangle .

Service Marketing Triangle

Company

(Library)

Service

Marketing

Provider

(Employee) Customer

(User)

Internal marketing

E abli g pro ises

External marketing

Maki g pro ises

Interactive marketing

Deliveri g pro ises

1. External Marketing

Anything that communicates to the customers/users

before service delivery can be viewed as part of this

external marketing functions.

(Zeithaml and Bitner, 1996)

According to service marketing triangle external marketing

takes place between library and its users. This form of

marketing considers market research and product

development for an effective strategy making.

(Ahrnell and Nicou, 1989)

Customers /

Users

Company /

Library

External Marketing (cont.)

Making promises

1. U dersta di g usto ers eeds

2. Managing expectations

3. Maintaining marketing communications

Sales and promotion

Advertising

Internet and web site communication

I a ser i e orga izatio if you are ot ser i g the usto er, you had etter e ser i g so eo e ho is.

- Jan Carlzon

2. Internal Marketing

According to Grönroos (2001) the meaning of internal

marketing is that, the management in a hierarchical

organization has to develop motivated and customer-

conscious employees.

It refers to all those planned and unplanned activities the

library carries out to train, motivate and reward its

employees so that they are able and willing to deliver the

promise which the external marketing function

communicates to the users.

(Zeithaml and Bitner, 1996)

Providers /

Employees

Company /

Library

Internal Marketing (cont.)

Enabling promises

1. Hiring the right people

2. Training and developing people to deliver service

3. Empowering employees

4. Developing support systems

5. Applying appropriate technology and equipment

6. Rewarding employees

It has been claimed that, Custo ers are attracted by the promises, but

retained through satisfaction, which is possible to deliver by the whole

company not by the marketing department o ly

_ (Philip Kotler, 1995)


Co ti ued…

The standpoint of internal marketing is that, employees of an

organization are its first market. Hence, the concept of internal

marketing is based on the idea of employee as customer. Among the

first, who advocated that idea were Sasser and Arbeit. In their opinion,

internal marketing holds that, personnel are the first market of a

service organization (Sasser & Arbeit, 1976).

Berry, L. L. (1981) states that, the view of IM is, ie s e ployees jobs as

internal products, and the workforce as internal customers to each other .

The concept of internal marketing is not limited to the fro t-li e

customer service staff alone (De Bussy et al., 2003). Even the

employees who do not interact directly with customers may impact

upon perceived service quality because they directly influence the

service providers (George, 1990 in De Bussy et al., 2003). If all

employees perform their jobs well they are a value-added component

of the service and product offering.


Elements of IM (Rafiq, 2000)

Rafiq (2000) identified five main elements of IM:

1. E ployees oti atio a d satisfa tio

2. Customer-orie tatio a d usto ers satisfa tio

3. Inter-functional coordination and integration

4. A marketing approach

5. Implementation of general marketing strategies

Rafiq (2000) defines IM as: a planned effort using a market like

approach to overcome orga izatio s resistance to change and to align,

motivate and inter-functionally co-ordinate and integrate employees

towards an effective implementation of corporate and functional

strategies in order to deliver customer satisfaction through the process

of creating motivated and customer-oriented e ployees

Co ti ued…


In conjunction with this definition, Rafiq (2000) stresses that

there are three phases that are crucial for the successful

development and evolution of the IM concept:

Phase 1: E ployees motivation and satisfaction

Employees are responsible for inconsistent service delivery,

internal marketing places the focus on them. Therefore, it can

be said that, organizations which strive to deliver consistent

quality service to their customers need to emphasis

e ployees motivation and satisfaction.

Organization should view their employees as internal customers and

their job offerings to employees as products and services. Therefore, to

motivate employees and encourage job satisfaction, organizations

should devote the same care over job offerings to employees as over

the products and services offered to external customers.

Co ti ued…


Phase 2: Customer consciousness

Customer-employee interaction provides organizations with

quality marketing opportunities. Therefore, organizations,

which want to take advantage a positive buyer-seller

interaction, must use internal marketing as a tool to develop

customer conscious employees (Rafiq, 2000). Moreover,

effective service to customers depends on the effective

coordination of job performances between frontline employees

and backroom support employees.

Gronroos in 1985 stated that, uses of marketing like activities is the

best method of motivating employees towards customer

consciousness. George in 1990 also suggested that, employees are

best motivated for service-minded attitudes and customer

consciousness behaviour by an active approach, where marketing

activities are used internally.

Co ti ued…


Phase 3: Strategy implementation and change management

Rafiq in 2000 stated that, IM plays an integral part in the

managing of the orga izatio s human resources. In 1992,

Glassmann and McAfee emphasized this by suggesting that, IM

integrates the role of marketing and human resources to the

extent that employees across all the boundaries of the

organization become resources of the marketing function.

Therefore, internal marketing can be used as a tool for successful

implementation of organizational strategies, to overcome inter-

functional conflict, achieve better internal communication, reduce

departmental isolation, and overcome resistance to change.

(Rafiq, 2000)

Co ti ued…

Objectives of Internal Marketing

Co ti ued…

1. The duty of IM is to develop employee awareness of their roles

and help them to commit to active participation in the marketing

or exchange process, i.e. to make the corporation more

marketing-oriented (Varey, 2001; p. 214).

2. The main objective of the internal marketing function is to obtain

motivated and customer conscious personnel at every level, since

the internal marketing concept holds that the orga izatio s

personnel are the first market of a company (Ewing and Caruana,

1999; p. 18).

3. The purpose of IM is to motivate employees toward service-

mindedness and customer-oriented performance by an active

marketing-like approach, where a variety of activities are used

internally in an active and coordinated way (Grönroos, 1990 in

Dunne and Barnes, 2000).

Objectives of Internal Marketing (cont.)

Co ti ued…

4. The objectives of IM initiatives (Compton et al., 1987 in Dunne

and Barnes, 2000) are:

To help employees understand and accept the importance of the

interactions with the customer and their responsibility for the total

quality and the interactive marketing performance of the firm;

To help employees understand and accept the mission, strategies, goals,

services, systems and external campaigns of the firm;

To continually motivate the employees and inform them about new

concepts, goods, services and external campaigns, as well as economic

results; and

To attract and keep good employees.

Objectives of Internal Marketing (cont.)

Co ti ued…

6. Furguson and Brown (1991) proposed two objectives of internal

marketing:

To recruit and keep the best people;

To motivate employees to do the best possible job applying the philosophies

and practice of marketing to employees .

5. Two primary focuses of IM (MacStravic, 1985 in Dunne and

Barnes, 2000) are:

To complement external strategic marketing efforts through the facilitation

of personal interaction between staff and internal clients. These interactions

are instruments for encouraging customer attraction and satisfaction;

To develop and maintain motivated and satisfied work force that contributes

to the organizations external and strategic marketing objectives, as well as

to quality, productivity and efficiency.


Activities/ Functions/ Elements of IM/

Factors influencing successful IM

Co ti ued…

Training

employees

Welcoming

environment

Knowing

e ployee s eeds Offering a vision

[Empowering

employees

Rewarding on

performance

Activities of

Internal Marketing

Valui g e ployee s knowledge

Employee

motivation

Internal

communication

3. Interactive Marketing

Service quality depends heavily on the quality of the employee-

user interactions during the service encounter. Interactive

marketing takes place where the service functions are executed

and the employees are in contact with the users all the time.

The concept is overlapping with the theory of Relationship

marketing.

The core idea of this type of marketing is face-to-face contact

between users and employees and the aim of building networks

of relations for maintaining and creating possible future

assignments.

Customers /

Users

Employees /

Staff

Interactive Marketing (cont.)

Delivering or Keeping promises

1. Service delivery

2. Face-to-face, telephone & online interactions

3. The Customer Experience

4. Customer interactions with service providers

5. The o e t of truth *

* A moment of truth occurs, when employee and customer have contact

THE END