A Critical Review of the Ways in Which Marketing Thought Is Evolving in Response to Current Trends in the Services Marketing Environment.

A critical review of the ways in which marketing thought is evolving in response to current trends in the services marketing environment.

' There is a growing realization that services marketing management not only requires new theories and approaches but that these perspectives are changing the whole paradigm of marketing'.

Introduction:

Over the past three decades services marketing has emerged as a well established area in its own right. However, the original boundaries that existed to define it and distinguish it from the marketing of manufactured goods have become increasingly blurred as most of the products we buy today often include some element of service in them. The increasing commoditization of goods has meant that a point of differentiation for the manufacturer has been to bundle services (intangible benefits) with the purchase (tangible benefit), to the point that it is difficult to separate which is the essential element to the purchaser. Service marketing has similarly blurred its own boundaries by adding tangible products and cues to its offering in order to make the service encounter more memorable, this is exemplified through memorabilia and merchandise from theme parks, promotional �freebies’ from banks, branded goods from hotels etc. Services are increasingly indigenous to physical products and physical products are increasingly a key component of the service experience.

The definition of what constitutes a service is equally challenging. Berry (1980) states that pure services cannot be seen, tasted, touched or smelled before they are bought, they are intangible. Rather a service is a deed, performance or effort, not an object, device or thing. Gummesson (1987) refers to a service as �something which can be bought and sold but which you can not drop on your foot’. Alternatively, according to Palmer (1998) the definition of a service is �The production of an essentially intangible benefit, either in its own right or as a significant element of a tangible product, which through some form of exchange, satisfies an identified need’. The latter definition recognizes that most products are a combination of tangible (product) and intangible (service) benefits and is more reflective of today’s economic reality. The distinction can therefore be best understood as a matter of degree rather than in absolute terms, as a continuum of pure good and pure service, a combination of visible and invisible elements. Marketing literature has tended to reflect this continuum to the point that it has now arrived somewhere in the middle and the dilemma is where does it evolve from this point.

The development of services marketing:

The starting point in identifying any future developments in services marketing is to go back to the past and to review the key themes that have developed. Although this essay will not attempt to represent a complete review, it will attempt to identify key themes in its evolution, with particular reference to professional services.

Early services literature focused on borrowing metaphors from product marketing, from where it evolved, using factory terminology such as inputs, processes, outputs and productivity, deliberately drawing parallels between the production of a tangible good and the delivery of an intangible service. Consumers of services were placed in the factory metaphor as partners in the production process (Lovelock and Young, 1979), viewed as potential bottlenecks to be processed as quickly as possible (Chase, 1978). However, this terminology was soon found to be lacking as the innate characteristics of services, intangibility, inseparability, variability and perishability could not be catered for within this construct. Later literature recognized the unique aspects of the �people’ element, the physical evidence and the importance of processes.

The development of services marketing has been likened to human evolution (Fisk et al., 1993). From the initial crawlings out of the primeval swamp of mainstream marketing, to walking erect as a discrete disciplinary area contributing to mainstream marketing theory, the nature and parameters of service marketing have been in a constant state of change. There have been many factors contributing to this state of change, not least the development and maturity of service marketing theory itself, but also the impact of changes within the service marketing environment, most importantly deregulation, and technological developments.

Increasing competition within many of the service industries has prompted the need to enhance customer retention, reduce churn and to develop long term relationships with those customers that