What are the factors posing threat to service marketing?

What are the factors posing threat to service marketing?

Ans.    Managing, growing, and profiting in the service business is a challenging task. Below are some of the most common and difficult challenges that pose a threat to service management

1.      Intangibility : the challenge to build trust- service intangibility can make services difficult to promote, control quality, and set price. It is difficult to establish trust in the mind of the consumer since he cannot touch, smell or taste the service. Some level of trust in the service organization and its people must be established before clients will engage services. The provider has to rely on other tangible attributes to influence the customers choice. For e.g.: using brand arnbassadors (ICICI uses Amitabh Bachchan), Dominos advertises delivery of pizza in thirty minutes.

2.      Simultaneity : Unlike Products that can be tested before reaching the customer. Service production happens with the customer present, thereby creating a very challenging selling environment. Also, since services cannot move through channels of distribution, concept of time achieves greater importance. For e.g.: Maruti promotes its service centers to be present even in the remotest rural areas.

3.      Competition – From Local to Global : World has come closer and national and international players are operating in the same markets. With the availability of easy and quick transport and communication methods, liberalized trade policies etc more service providers are making their presence felt in more than one market thereby leading to increased competition.

4.      Effective Marketing – implementing the right strategy : Service industry is about marketing who you are and what your service is about. A brand management plan is as important as the service itself to build the right perception in the mind of the consumer. The sales process is a blend of sales, marketing, professional, and management functions.

          For example, the hospitality sector faces the following challenges:

1.      Global uncertainty : Terror attacks are the most direct example of global uncertainty, along with other areas of concern such as geopolitical relations, governmental travel restrictions and currency exchange rates.

2.      HR issues : Increasing demand requires increased staffing levels and hiring of specialists

3.      Branding issue : An explosion of brands and branded hotels worldwide is making forming of a “USP’ a challenge

4.      Changes in customer expectations : Customer expectations are changing as consumers become more sophisticated and better educated and hence constantly demand better services