The early mentions of services were found in Adam Smith's book,
"Wealth of Nations", published in 1776. There it was termed as
"unproductive labour", i.e. "honourable...useful,
or....necessary", referring to something that perished at the time of
production and therefore, didn't contribute to wealth.
Do you think all services are perishable?
The Multiplier
Theory
If we look at the scenario today, services have proved to be contributing
towards the wealth of wealthy (developed) nations. Over the years, there has
been a complete transformation of the service sector. Important contributors to
this transformation are; changes in government policies, social changes,
changes in business trends, advances in information technology and
globalization. Due to all these advances and developments, there were more
products and product categories offered to customers, which resulted in more
competition. As competition increased, companies, in search for the
distinctiveness took the road of innovation, which further resulted in more
choice for the consumers.
Evolution of Services
Fisk, Brown and Bitner identify 4 distinct stages in the evolution of
services marketing and management.
The ‘Crawling Out’ Stage (Before 1980)
During this time specific areas of marketing theory were examined. It was
realised that the services marketing is different from goods marketing as
problems and constraints of insufficient or inappropriate in handling service
sector surfaced. Important contribution came from Theodore Levitt in the form of
Molecular Theory. During this while the distinctive characteristics of services
were examined.
The ‘Scurrying About’ Stage (Between 1980 and 1986)
Now the attention was focused heavily on the critical issue of managing
quality in service operations. Significant contributions came
from Zeithaml, Berry and Parasuraman in form of development of ‘Gaps
model’ of service operations. Also, Booms and Bitner added 3 more P’s to
the original marketing mix to make it suitable to services – People, Process
and Physical Evidence. The text books on Services Marketing were published,
establishing it more firmly as a legitimate field of academic study.
The ‘Walking Erect’ Stage (After 1986)
During this phase there was increased focus on specific marketing problems of
services. Specific topics like service encounters, service design,
perceived service quality and customer satisfaction, internal marketing and
relationship marketing were researched.
The ‘Galloping’ Stage (After 2000)
After 2000 there has been a tremendous increase in service jobs. World has
seen increasing contribution of Services to GDP.
Prezi Presentation
Reference: Services
Marketing: People, Technology, Strategy - Lovelock, Wirtz & Chatterjee
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