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.
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• 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.
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• Oliver, Richard W., Roland T. Rust, and Sanjeev Varki (1998), “Real-Time Marketing,” Marketing Management, 7 (Fall), 28–37.
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————- (2004), “The Four Service Marketing Myths”, Journal of Service Research, Volume 6, No. 4, (May) 324-335. Doi: 10.1177/1094670503262946.
In marketing, we face a very important question; “can service-based operation be more effective than a goods-based manufacturing model”? 40 – 50 years ago, marketing concentrated on goods-based manufacturing model and its perspective is to satisfy the demands of consumers by offering them tangible products. But in our modern time, a service-based operation should be more dominant for it involves the whole process of satisfying the consumers and at the same time they proactively contribute to the development of the whole structure of a more effective and efficient marketing approach. Goods are also services, what consumers buy is the long term benefits from tangible or intangible goods and services.
Let me break down the reasons. According to Stephen Vargo and Robert Lusch, there are four myths in service marketing that divides goods from services and they are; Intangibility, Heterogeneity, Inseparability, Perishability. It is said that when we talk about Intangibility, services lack the tactile quality of goods but in reality services often have tangible results because in a customer’s perspective they buy activities that render services and things also render services. The function of a good is to serve as a supply for a service to materialize. The idea is that a thing will remain useless unless it offers a valuable service and function to the consumer.
The other myth is about heterogeneity where it is said that services cannot be standardized. But really, who will layout the judgement, is it the manufacturer or the consumers? The standards are perceived by the consumers given the fact that goods are homogenous by nature; consumers will be the ones who will judge it according to how they will be satisfied because what they are looking for is the service rendered by that determinate good. Even though marketers offer homogenous or standardized things to consumers, not every one of them will have the same perception therefore these things or goods are services in because consumers have different perceptions on how they think they will be satisfied – each individual have unique judgement. There are similarities between the myths heterogeneity and inseparability. The way that I understand inseparability, consumers are always involved in the process and production of what-should-be value of tangible goods. If consumers interact with the tangible goods, they will be able to perceive its value and to the extent that how that determinate thing will render service from them. We must put this in our mind, “the goal of service marketing is to maximize consumer involvement”. Examples of which are their feedbacks and cooperation to fully experience what has been offered. When there is an involvement goods or services will be further innovated.
The last myth is about perishability. It is true that tangible goods are perishable, fruits rot, cars rust and will lose its manufactured value but not in service marketing for it gives long-term benefits to consumers. The idea in this myth is said to be that services cannot be produced ahead of time and be inventoried. The truth is that both tangible and intangible goods can be inventoried and for service it is measured again by the long-term benefits from the rendered service itself. Who would want to put tangible products in an inventory anyway? That only means there is an unbalanced distribution in the logistic cycle of the operation. In addition to this myth, tangible products have no value when manufactured, it is only created when it come in contact with consumers. Again consumer involvement is much needed because the focus is not on the products but on the customer’s value creating processes.
Everything is about service marketing, may it be tangible or intangible. Physical goods only become an element in rendering services. I think it is time that we need to embrace service marketing and declare goods-based manufacturing model as an outdated strategy in marketing. What it can do is to help future marketing people to choose the right steps in satisfying the demands of the customers. Remember this: benefits from goods are obtained by use of these goods—goods are merely the distribution vehicle or channel for service provision; they are appliances (Vargo and Lusch 2004). Keep in mind that even if goods and services differ in some ways, the synergy of these two will lead to the success of a company’s goals.