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Service Marketing: The power of goods and services integrated as one customer-oriented process.

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Service Marketing: The power of goods and services integrated as one customer-oriented process. This can be similarly called the synergy of the two processes. Before, goods-based manufacturing seems to solve profitability of companies, but as the demands change, so as the strategies that should be applied. Such changes occur when an idea becomes more or less obsolete and in effect does not promote further development. For a company to determine itself as a success, it must first determine what industry they are involved in then take steps in which approach should be use. Determining this will be able to be supported by facts that can create greater opportunities. Levitt (1975) argued, But the truth is, it seems to me, that the industry begins with the needs of customers for products. This involves products as goods, and products as services in order for an industry related company to satisfy them. In any case, service marketing is the more applicable approach and which will be discussed in this article. On the front line of the new economy, service — bold, fast, imaginative, and customized — is the ultimate strategic imperative (Hankoff 1994).

Vargo & Lusch (2004) stated, Service marketing has emerged to address much of this broadened perspective, but it is built on the same goods and manufacturing-based model. The influence of this model is evident in the prototypical characteristics that have been identified as distinguishing services from goods—intangibility, inseparability, heterogeneity, and perishability. Dixon (1990) argued that it is “the dissatisfaction with marketing theory that led to the services marketing literature,” or more generally, the creation of services marketing as a subdiscipline (p. 342). Gummesson (1995, p. 251) argues that “activities render services, things render services.” The argument focused on the question of which is better, goods or services? In reality this two should co-exist, suggestions have risen to distinguish the two from one another but the application can be more complex. Marketing scholars have different ideas, theories and applications and they all have been useful in the understanding of marketing. With arguments created, it is clear that there is something wrong about such topics. Service marketing, claimed to be more flexible than goods-based manufacturing process. Since service and goods should co-exist, Vargo & Lusch (2004) stated that instead of service marketing breaking free from goods marketing, it is all of marketing that needs to break free from the manufacturing-based model of the exchange of output. Vargo & Lusch (2004) added the fact that goods are appliances used in service provision, that is, goods and service have a nested relationship. This supported the theme of this paper, integrating service and marketing and recognizing them as a synergy for development. Focusing on goods-based alone is sufficient to achieve something different; service marketing must aid the process which involves directly with customers as a very important factor for success. Gummerson (1995) stated “Customers do not buy goods or services: they buy offerings which render services which create value. . . . The traditional division between goods and services is long outdated. It is now a matter of redefining services and seeing them from a customer perspective; activities render services, things render services. The shift in focus to services is a shift from the means and the producer perspective to the utilization and the customer perspective.” (p. 250). These customers are the ones who can really make great impact on the market. Vargo & Lusch stated “in using a product, the customer is continuing the marketing, consumption, and value-creation and delivery processes.”

Customers being said to be an important part of the service process, companies must find a way to tend to their needs. They buy goods along with the benefits that can be extracted from them; these goods are then considered as goods integrated with service marketing approach. Kotler (1977, p. 8) notes that the “importance of physical products lies not so much in owning them as in obtaining the services they render.” This statement is pushing the idea of what the consumers want. As for companies, “to continue growing, companies must ascertain and act on their customer’s needs and desires, not bank on the presumptive longevity of their products” (Levitt 1975). Another key to success is the understanding of the company’s goal in which they act as what they are aiming with addition to customer-oriented approach through service-based marketing. The organization must learn to think of itself not as producing goods or services but as buying customers, as doing the things that will make people want to do business with it (Levitt 1975). Same goes to the fact that customers need to be proactive and take part in the production process of what benefits they want to experience. Normann and Ramirez (1993, p. 69) state that “the key to creating value is to coproduce offerings that mobilize customers.” Oliver, Rust, and Varki (1998) echo and extend the idea of coproduction in their suggestion that marketing is headed toward a paradigm of “real-time” marketing, which integrates mass customization and relationship marketing by interactively designing evolving offerings that meet customers’ unique, changing needs. The fact that service-based marketing is directed to consumers, the complex relationship between companies and customers will more likely be made simpler. Consumers will develop relationships with organizations that can provide them with an entire host of related services over an extended period (Rifkin 2000).

The whole idea has emerged not long ago and companies can say that they are having a hard time distinguishing service from goods-based process. The marketing literature rarely mentioned “immaterial products” or “services,” and when it did, it mentioned them only as “aids to the production and marketing of goods” (Converse 1921, p. vi; see Fisk, Brown, and Bitner 1993). But in fulfilling this ideology, companies must also embrace the education for all their employees and everyone who are taking part in this great cause. Customer relationship is somewhat misunderstood as tending with their concerns only but they should be dealt with proper care and attention. The changing nature of customer relationships demands a new breed of service worker, folks who are empathetic, flexible, informed, articulate, inventive, and able to work with minimal levels of supervision (Henkoff 1994). Vargo & Lusch also stated “In a service-centered model, humans both are at the center and are active participants in the exchange process. What precedes and what follows the transaction as the firm engages in a relationship (short- or long-term) with customers is more important than the transaction itself.”

The view that an industry is a customer-satisfying process, not a goods-producing process, is vital for all businesspeople to understand. An industry begins with the customer and his or her needs, not with a patent, a raw material, or a selling skill (Levitt 1975). In addition to that, differentiating selling from marketing is important. Levitt (1975) argued “The difference between marketing and selling is more than semantic. Selling focuses on the needs of the seller, marketing on the needs of the buyer. Selling is preoccupied with the seller’s need to convert the product into cash, marketing with the idea of satisfying the needs of the customer by means of the product and the whole cluster of things associated with creating, delivering, and finally consuming it.” In understanding the whole process, it must start with one’s self worth and knowing what they can do to provide it to customers. Customer-perceived quality is always the driving factor, and the willingness to accept a trade-off between standardization quality and customization quality, usually for a commensurate trade-off in price is actually a form of customization (Vargo & Lusch 2004).

This article aims to make it a point to managers and other professional practitioners that while goods-based manufacturing is important, service-based marketing can fill in the missing connections between companies and customers (Chased & Garvin 1989). Marketing and manufacturing personnel have to work closely together to both understand customers’ expectations and fulfil them (Chase & Garvin 1989). The way a company manages its marketing can become the most powerful form of differentiation. Indeed, they may be how some companies in the same industry differ most from the other (Levitt 1980).

Brand management and product management are marketing tools that have demonstrable advantages over catchall, functions modes of management (Levit 1980).

Economic conditions, business strategies, customer’s wishes, competitive conditions, and much more can determine what sensibly defines the product (Levit 1980).This is a workload for everybody and with proper discipline and application; they will be able to understand the significance of goods and services to the operation of an organization which recognizes the customer’s ability to promote greater success and industrial growth. This article will serve as an information base for future promoters of growth and development.Goods and services must not be distinguished from one another but instead, recognize them as a synergy, having nested relationship and must be customer-oriented. Let us remember the quite written by Levitt (n.d) CREATIVITY is thinking up new things. INNOVATION is doing new things.

Bibliography

• Chase, Richard B., Garvin David A. (1989), “The Service Factory,” Harvard Business Review, (July-August), 61-69.

• Fisk, Raymond P., Stephen W. Brown, and Mary Jo Bitner (1993), “Tracking the Evolution of the Services Marketing Literature,” Journal of Retailing, 69 (Spring), 61–103.

• Gummesson, Evert (1995), “Relationship Marketing: Its Role in the Service Economy,” in Understanding Services Management, William J. Glynn and James G. Barnes, eds. New York: John Wiley & Sons, 244–68.

• Henkoff, Ronald (1994), “Service is Everybody’s Business,” Fortune; Education Collection, (June), 1-6.

• Hollander, Stanley C. (1979), “Is There a Generic Demand for Services?” MSU Business Topics, 79 (Spring), 41–46.

• Kotler, Philip (1977), Marketing Management: Analysis, Planning, Implementation, and Control, 3d ed. Upper Saddle River, NJ: Prentice Hall.

• Levitt, Theodore (1975). “Marketing Myopia” Harvard Business Review, (September-October), 1-14

————- (1980), “Marketing Success Through Differentiation—of Anything,” Harvard Business Review, (January-February) , 2-9.

• Normann, Richard and Rafael Ramirez (1993), “From Value Chain to Value Constellation: Designing Interactive Strategy,” Harvard Business Review, 71 (July–August), 65–77.

• Oliver, Richard W., Roland T. Rust, and Sanjeev Varki (1998), “Real-Time Marketing,” Marketing Management, 7 (Fall), 28–37.

• Rifkin, Jeremy (2000), The Age of Access: The New Culture of Hypercapitalism, Where All of Life is a Paid-For Experience. New York: Putnam.

• Vargo, Stephen L. and Robert F. Lusch (2004), “Evolving to a NewDominant Logic for Marketing,” Journal of Marketing, 68 (January), 1-17.

————- (2004), “The Four Service Marketing Myths”, Journal of Service Research, Volume 6, No. 4, (May) 324-335. Doi: 10.1177/1094670503262946.

StratMArk 2009: “What’s Hot? Whats Cool?” Reaction

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This year’s Strategic Marketing talked about the power of the cyber world, meaning the internet as a good source of opportunities for marketers and other alternatives where students can get good opportunities like sports casting. There are lots of opportunities out there that are undiscovered by most of us though some tried and triumphed in their fields, others might just take it for granted so the speakers told their story and how they managed to be on the top of their careers. For marketing and advertising, TVC, Print, Radio are one of the most effective media to air an advertisement, but since the age of the internet has risen dramatically, advertisers and marketing professionals used the internet as one of their advertising media. Social Networking sits prove to be a good way to start advertising since people of all ages love to share their life in the internet with friends and build networks around the world.

The president of Microventures, Bam Aquino and the Vice-President of PLDT talked about What’s Cool? What’s Hot? as the theme of this year’s strategic marketing. Butch Jimenez talked about rising to the top and being recognized through positive attitude and practices. Standing out among all competitors is important so that consumers will notice it and maybe be the brand inside the consumer’s heads. Being the icon that first pops in the consumer’s head means that a brand successfully managed to penetrate the market be become respected and widely used terms in the industry.

There are lots of cool jobs out there waiting for the marketing students just like what Executive Director of Asia Pacific Film Institute and Executive Director for Talent Development of Business Processing Association told the students and listeners in the Stratmark 2009 and also mentioning the opportunities in the Business Process Outsourcing. BPO, is a form of outsourcing that involves contracting an operation and responsibilities to third-party service providers.

Clickthecity.com’s Business Development Director Edward David, Friendster Country Manager Narciso Reyes and Community Manager of Yahoo Philippines Jonas Renejo delos Reyes talked about the advertising and marketing opportunities through the internet and how successful can it be with the target markets being reached properly. New Media are the new technologies developed to provide people to have an easy life and marketing professionals also use this to make their companies compete in a very innovative world. Being the new trend in the Marketing Industry, more and more companies and marketing professionals learn to embrace the fact that they should use this for advertising like posting ads, rich media and being the no.1 most searched term in the internet to produce a very good increase in sales and popularity. Internet users are consumers as well so this is a good chance for companies to keep up with the consumers. But one thing that I can’t forget is that, one of the speakers told that though internet proves to be a good way to market and advertise, we should not forget the power of TVC, print radios or the local media because certain people can only be accessible by those mentioned.

As for my personal experience, I can proudly say that I’ve been using internet to earn some cash by just being a blogger who advertises products and review them so that people can have a good idea about it just by searching the internet. Being a blogger can be hard sometimes, but as long as I enjoy writing there will always be a reason to make it worth it. Another thing, the topics I post should always be visible and accessible to others so that readers can see it clearly when my post is redirected from search engines. One technique to make sure that the topics I post will be seen by others is by Search Engine Optimization which means that choosing the right keywords can earn you the right spot in search engines such as Google, Yahoo and so on. I am glad that I became part of this year’s Strategic Marketing because I have proven what I am practicing for a year now and I also learned a lot of things just by listening to the speakers. Thanks to Philippine Junior Marketing Association, many marketing students from different colleges and universities  learned a lot about what is hotter and what is cooler in our industry.

Nature and Aims of Business Part II: Three Kinds of Business

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1.  Commerce

–     Latin name of “commercium, is a combination of two root words; com means together and mercies mean wares.

–     Commerce defines as an exchange of wares, goods, or merchandise

–     This is primarily concerned with trading for profit

–     Commerce have two subcategories, retail trading and wholesale trading

Retail Trading

Retailer does not keep large stock of goods for he usually has not enough capital to buy in bulk.

Wholesale Trading

While retailer buys small stocks of goods, the wholesaler usually buys large stocks of goods or bulk purchase from the producer. In return for its bulk purchase, a producer gives discounts to wholesalers.

Retailers and wholesalers are coexistent. Wholesalers buy from the producer, and sell and distribute to retailers while retailers, who are not directly purchasing from a producer, buys goods from producers.  Again, this is not always the case, capital should still be considered, a retailer with higher capital can become wholesalers which is directly purchasing goods from the producers.

2. Industry

–    Considered as the producers, manufacturers

–    They make products from raw materials and convert them to something useful and is needed by consumers and then distributes them through commerce naming, the retailers and the wholesalers.

–     An economic activity that produces:

a. consumer goods

– intended for use by final consumers.

b. industrial goods

– for use by other industries.

–     Industry is dependent yet interdependent to other industries. This is because some factors of production are only made available through other industries which become a supplier for them.

3. Business Services

–     This category specializes in rendering useful services. i.e. insurance, banks, telephone, amusement houses.

–     Business services rely mostly, but not solely on the expertise of workers. They usually train them which results in the specialization to their particular field to help them offer a quality service.

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