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Strategic Marketing for Service Organizations

Learn how service organizations develop marketing strategies by scanning the environment, planning strategies, and positioning services for competitive advantage.

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Strategic Marketing for Service Organizations

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  1. Chapter 13 DevelopingMarketingStrategies for Services

  2. Objectives • To provide an overview of marketing strategy in service organizations • To describe the process of scanning the service environment and examine how the external environment affects the service sector • To explain the process of planning a service’s marketing strategy

  3. Objectives (cont’d) • To examine the tasks of positioning and segmentation for the service organization • To present the unique strategy challenges facing service organizations • To convey the importance of service strategies for competitive advantage

  4. Outline • Introduction • Overview of Marketing Strategy in Service Organizations • Scanning the Environment • Planning the Services Marketing Strategy • Positioning and Service Segmentation

  5. Outline (cont’d) • Marketing Mix Strategy • Strategic Challenges for Services • Service Strategies for Competitive Advantage • Summary and Conclusion

  6. Overview of MarketingStrategy in Service Organizations • Marketing strategy is the process of adjusting controllable marketing factors to cope with or exploit uncontrollable environmental forces.

  7. Overview of MarketingStrategy in Service Organizations(cont’d)

  8. Scanning the Environment • Environmental scanning is the process of carefully monitoring external environments for changes that pose threats or opportunities to the service organization.

  9. Scanning the Environment (cont’d)

  10. Scanning the Environment (cont’d)

  11. Scanning the Environment (cont’d) • Reactive strategy is a slow response to environmental changes. • Proactive strategy is a rapid response to environmental changes. • Hyperactive strategy is a hasty response to environmental changes. • Defensive strategies are rapid responses used to protect the organization from environmental threats. • Offensive strategies are rapid responses employed to capture opportunities.

  12. Scanning the Environment (cont’d) • Economic and competitive environment • Rapid growth of the service economy is a major source of progress in most countries • Ethical and legal environment • Ethics concern personal and professional codes of values • Laws vary greatly across service industries and countries

  13. Scanning the Environment (cont’d) • Social, cultural, and demographic environment • Service industries have often been slow to respond to changing customer tastes and preferences • Technology environment • Technology is arguably the strongest force shaping the external environment of services

  14. Planning the ServicesMarketing Strategy • Planning the strategy – Determination of the service's objectives and manner in which they will be accomplished • Designing the strategy – Careful specification of what it is that the organization hopes to accomplish • Implementing the strategy – Developing a detailed timetable and itemized budget • Controlling the strategy - Continuous assessment and modification of the success of strategies

  15. Positioning andService Segmentation • Positioning is how marketers attempt to create favorable customer perceptions of their product in relation to all other products. • Market segmentation is the division of a heterogeneous market into homogeneous segments.

  16. Marketing Mix Strategy

  17. Strategic Challenges for Services • Leadership – The strongest service organizations are those where the top management has established a core set of service values and carefully cultivated and protected those values through conversations with employees and customers. • Employees – Recruiting, training, compensating, and motivating employees are essential strategic factors for services

  18. Strategic Challengesfor Services (cont’d) • Customers – Because most service organizations have more direct contact (than manufacturers) with customers, they must be very sensitive to customer needs • Performance – Service performances must be carefully planned with such techniques as blueprinting, scripting, and dramatization • Demand – Services must develop very flexible systems to make their service supply meet the demand

  19. Strategic Challengesfor Services (cont’d) • Setting – The setting is often the only tangible representation of the service organization's quality • Service Quality – Numerous techniques are available to measure and improve service quality

  20. Strategic Challengesfor Services (cont’d) • The upside-down organization inverts the typical organizational chart by putting frontline personnel at the top, middle management in the middle, and the CEO at the bottom.

  21. Service Strategies forCompetitive Advantage • Surpass Your Competition – The term sur/ petition was coined by Edward de Bono (1992) to describe his concept of surpassing the normal kinds of competition by surpassing competitors. • Dramatize Your Performance – The most effective service organizations learn to stage their performances. • Build Relationships – Strong customer relationships can lead to customer loyalty.

  22. Service Strategies forCompetitive Advantage (cont’d) • Harness Technology – Modern communication and transportation technologies allow service organizations to operate in multiple countries but maintain close contact with employees and customers. • Jazz Your Delivery – Like great jazz musicians, great service organizations are great improvisers.

  23. Web Sites • Forbes (http://www.forbes.com), p 191 • IBM (http://www.ibm.com), p. 192 • Starbucks (http://www.starbucks.com), p. 193 • iTunes (http://www.apple.com/itunes/), p. 194 • McDonald’s (http://www.mcdonalds.com), p. 194 • A&P Grocery Store (http://www.aptea.com), p. 195

  24. Web Sites (cont’d) • Sears (http://www.sears.com), p. 196 • Wal-Mart (http://www.walmart.com), p. 196 • Microsoft (http://www.microsoft.com), p. 197 • FedEx (http://www.fedex.com), p. 197 • CNN (http://www.cnn.com), p. 197 • Hard Rock Cafe (http://www.hardrock.com), p. 197

  25. Web Sites (cont’d) • Furniture.com (http://www.furniture.com), p. 197 • IBM’s CityOne Video (http://www.youtube.com/watch?v=Tmf0ugQrDF), p. 200 • Disney World (http://www.disney.com), p. 202 • Seaworld (http://www.seaworld.com), p. 202 • Ritz-Carlton Hotels (http://www.ritzcarlton.com), p. 206

  26. Web Sites (cont’d) • Facebook (http://www.facebook.com), p. 206 • Wikipedia (http://www.wikipedia.org), p. 206 • Amazon.com (http://www.amazon.com), p. 206 • Planet Hollywood (http://www.planethollywood.com), p. 207 • IKEA (http://www.ikea.com), p. 207

  27. Web Sites (cont’d) • Frugal Fannie’s (http://www.frugalfannies.com), p. 207 • Southwest Airlines (http://www.southwest.com), p. 208 • Harley-Davidson (http://www.harley-davidson.com), p. 209 • Nordstrom (http://www.nordstrom.com), p. 210

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