Reason for Growth of Service Marketing (Service Marketing 20.04.2021)

Reason for Growth of Service Marketing

Since 1960, services marketing has grown in importance and popularity not only in developed economies but also in developing economies. Numerous varieties of services are provided today by service organisations.

There are many reasons or causes for the phenomenal growth in the services marketing.

 

The main reasons are:

(1) The consumers have more and more disposable income, i.e., more money to spend on services.

 

(2) The consumers are willing to buy services which they are unable to perform or they are unwilling to perform.

 

(3) The desire of the people to get more time for leisure is also responsible for their buying services in the services market.

 

(4) Many business firms are willing to buy specialised services from service organisations instead of employing specialised service personnel in their firms. For instance, many business firms, instead of employing maintenance workers, are using the maintenance services offered by professional maintenance companies.

 

Similarly, many business firms, instead of employing professional experts in their firms, want to buy the services of professional experts like the management consultants, auditors, tax experts, lawyers, valuation experts, etc. This has contributed to the growth of many service firms.

 

(5) Today, many services needed by consumers and business firms have become sophisticated and complex. The sophistication and complexity of present- day services have led to the need for the development of specialised service institutions offering specialised services.

 

(6) Increasing affluence is one of the factors responsible for the growth of service industries, such as interior decoration, laundry, care of household products, care of gardens, etc.

 

(7) Increasing affluence combined with increasing insecurity has led to the emergence of issue of credit cards by banks and other institutions.

 

(8) Increasing number of products and complexity of products is responsible for the emergence of specialists to provide maintenance services for complex products like air-conditioners, cars, computers, etc.

 

(9) Desire of the people to live longer is responsible for the growth of nursing home and health care services.

 

(10) Higher percentage of women in the labour force (working women) is responsible for the growth of services like baby-sitting, household domestic help, etc.

 

(11) Resource scarcity is responsible for the growth of leasing services, time sharing services, etc.

 

Problems in Marketing of Services

1. A service cannot be demonstrated.

2. Sale, production and consumption of services takes place simultaneously.

3. A service cannot be stored. It cannot be produced in anticipation of demand.

4. Services cannot be protected through patents.

5. Services cannot be separated from the service provider.

6. Services are not standardized and are inconsistent.

7. Service providers appointing franchisees may face problems of quality of services.

8. The customer perception of service quality is more directly linked to the morale, motivation and skill of the frontline staff of any service organization.