How do you market a service organisation?
The service sector is the largest and most rapidly growing part of the modern economy.
Even in the manufacturing sector most of the new jobs are ‘service’ jobs – research and development, marketing, information technology etc. rather than ‘making things’. The basic principle of marketing all apply in the service sector, but managers have to note the differences in emphasis. These arise from the distinctive character of services – intangibility, inseparability, variability, perishability and the lack of ownership.
These characteristics create four special problems for managers in the service sector: managing quality, achieving high productivity, internal marketing and building a differentiated offer. Especially for those organisations with high contact services, marketing strategy must place much greater attention on integrating with an effective operating strategy. Marketing and operations cannot be separated in the way found in the product sector. The key issue is building a positioning strategy that jointly leverages high value for customers with a manageable cost structure and breakeven point.
A very large portion of the service sector consists of publicly owned and private nonprofit organisations. While everyone recognises that these are an essential part of society, the way that most are run is much criticised. Most such non-business organisations tend to be inefficient and unresponsive to their customers. The sources of these problems lie in the lack of profit measurement, the lack of competition and the disconnection of their funding from the market. Non-business organisations can be made to perform requires managers, not administrators. The task of management in these organisations is to develop an agreed mission, set the objectives and strategies and establish performance measures that focus on customer satisfaction and outputs.