Notes on Service Strategy in Global Marketing
Characteristics of services
•
In general most products are accompanied by services whilst services tend to
have support products.
•
It would be difficult to find services on the market without the involvement of
some product.
•
Services usually have a number of characteristics: Intangibility, Inseparability,
Homogeneity, and Perishability
Implications of service features for marketing
•
The unique features of services, contrasted with products, result in a number of
implications or problems for marketing:
⎯
Intangibility - Services cannot be protected through patents.
⎯
Inseparability - Services cannot be readily displayed or communicated.
⎯
Heterogeneity - Prices are difficult to set. The consumer and others are
involved in production.
⎯
Perishability - Centralised mass production of services difficult.
Standardisation and quality control are difficult to achieve. Services
cannot be inventoried.
Global service life-cycle
•
A significant part of any marketing strategy is usually an analysis of service
life-cycles.
•
The overall strategy is to modify the portfolio of services to achieve maximum
growth.
•
In this situation a matrix technique examines market growth and market share
with four key service features: Wild Colt, Derby Winner, Stud, and Glue
Factory.
Criteria for standardisation
In the debate between standardisation and adaptation a series of criteria have been
developed to assist the marketer in decision-making:
⎯
Nature of the product.
⎯
Market conditions.
⎯
Market environment.
⎯
Market development.
⎯
Infrastructure systems.
⎯
Cost benefit analysis.
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Standardisation versus adaptation in global marketing
•
Standardisation means offering a common service on a worldwide basis, while
adaptation means making changes to the service to satisfy local needs.
•
This may involve modifying the service, its presentation, its price, or its
promotion.
•
Standardisation can mean that:
⎯
the product is 100% uniform
⎯
the product is uniform in essential key elements
⎯
the product is standardised around a standard core product even if there is
local customisation.
Standardising services
•
Hospitality companies may standardise in a number of ways:
⎯
Maintaining range and style of service throughout the world.
⎯
Adopting uniform facilities within rooms, restaurants, shops etc.
throughout the world.
⎯
Developing a standardised service package, for example, packaged
holidays.
⎯
Developing uniform architecture and decorations within all buildings.
⎯
Offering world-wide travel packages for business customers.
⎯
Offering consistent business links for services with associated companies
such as car-hire, sightseeing, or sports facilities.
⎯
Give intensive training for personnel and make elements of the services
offered as specific as possible, thereby reducing variation.
⎯
Customising the service by tailoring it to meet the needs of a specific
segment of customers, such as skiers, surfers, gourmets etc.
Communications strategies in foreign markets
•
Whichever strategy is used there is a very close relationship between the firm’s
communication strategy and its service strategy.
•
There are five possible variations of preserving (extending), or adapting both the
service and the communications:
⎯
Straight extension strategy.
⎯
Product adaptation of communication extension strategy.
⎯
Communications adaptation and extension strategy.
⎯
Product and communications adaptation strategy.
⎯
Product invention strategy.
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International communications
The methods include the following:
⎯
Advertising.
⎯
Sponsorship.
⎯
Public relations.
⎯
Packaging.
⎯
Sales promotion.
⎯
Direct marketing.
Competitive strategies for service marketing
•
Firms providing services may achieve success in the global market place
through the following strategic moves:
⎯
Customisation: given that services are heterogeneous, companies can
exploit this characteristic by customising their services.
⎯
Uniqueness: the more unique a service offering is, the more it will attract
global customers and the greater the potential for global success.
⎯
Offering superior quality: many firms can obtain and sustain their
competitive advantage by offering high quality services at competitive
prices.
⎯
Superior management system: This enables a firm to transfer a
standardised and high quality management system to a global market.
Criteria for effective global service marketing
•
Dahringer and Muehlbacher (1991) note four factors critical to achieving
success in global service marketing:
1.
Service companies can achieve success in the global market if they make
their services unique: the more this is the case the greater the potential of
the service.
2.
The firm should customise its services for particular consumer
requirements.
3.
The provision of a quality service will give the firm a competitive edge
over its rivals.
4.
An effective management system will enable the firm to be effective in
overseas markets.
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