Service Marketing Management and Metrics
Service marketing management oversees the implementation of marketing programs, while metrics measure their effectiveness and performance.
LEARNING OBJECTIVE
Explain how marketing management and metrics allow service organizations to implement and measure their marketing strategy
KEY TAKEAWAYS
Key Points
- To create an effective, cost-efficient marketing management strategy, firms must possess a detailed, objective understanding of their own business and the market in which they operate.
- After the firm’s strategic objectives have been identified, the target market selected, and the desired positioning for the company, product, service or brand has been determined, marketing managers focus on how to best implement the chosen strategy.
- Marketing management often makes use of various organizational control systems to ensure marketing programs achieve desired objectives, and do so in a cost effective manner.
- It is the responsibility of marketing managers to ensure that the execution of marketing programs achieves the desired objectives in a cost-efficient manner.
- Common service marketing metrics include net sales billed, number of product or design registrations, brand surveys to measure brand awareness, return on the investment, and website hits.
Key Terms
Marketing Management: Marketing management is a business discipline which is focused on the practical application of marketing techniques and the management of a firm’s marketing resources and activities
value-chain: The value chain categorizes the generic value-adding activities of an organization.
marketing strategy: a process that can allow an organization to concentrate its resources on the optimal opportunities with the goals of increasing sales and achieving a sustainable competitive advantage
Service Marketing Management & Metrics
Marketing management is a business discipline which is focused on the practical application of marketing techniques and the management of a firm’s marketing resources and activities. Rapid globalization has led service providers to market beyond the borders of their home countries, making marketing management and metrics and integral part of implementing and measuring an effective marketing strategy.
Service Marketing Management
To create an effective, cost-efficient marketing management strategy, firms must possess a detailed, objective understanding of their own business and the market in which they operate. In analyzing these issues, the discipline of marketing management often overlaps with the related discipline of strategic planning.
After the firm’s strategic objectives have been identified, the target market selected, and the desired positioning for the company, product, service or brand has been determined, marketing managers focus on how to best implement the chosen strategy. Traditionally, this has involved implementation planning across the “4 Ps” of marketing: product (or service) management, pricing , place and Promotion. A new P has been added making it a total of five P’s. The fifth P is politics, which affects service marketing in a significant way.
Part of a service marketing manager’s job is analyzing external influences and current marketing conditions that are directly or indirectly impacting the business. Tasks for marketing management may include conducting a competitor and value chain analysis, putting together a brand audit, and assembling qualitative and quantitative research. This research, along with an assessment of the business’ own strengths and weaknesses, go into a marketing plan used to launch future marketing programs and initiatives. Overseeing the successful development and execution of the marketing plan falls under service marketing management roles.
Marketing Performance Metrics
Marketing management employs a variety of metrics to measure progress against objectives. It is the responsibility of marketing managers–in the marketing department or elsewhere–to ensure that the execution of marketing programs achieves the desired objectives in a cost-efficient manner. Marketing management therefore often makes use of various organizational control systems, such as sales forecasts, sales force and seller incentive programs, sales force management systems, and customer relationship management tools (CRM).
The marketing metrics continuum, shown here , provides a good framework for categorizing metrics. Metrics enable marketing professionals to justify budgets based on returns and to drive organizational growth and innovation. Some common metrics used to measure performance include lead to conversion rate, click-through rate and number of new opportunities (i.e., new business deals). Other elements of measurement include net sales billed, number of product or design registrations, brand surveys to measure brand awareness, the return on the investment, and website hits. Numeric data for these metrics can come from a variety of sources such as the service provider’s website, and industry trade show, or word-of-mouth marketing. Marketers use these metrics and performance measurement as way to prove value and demonstrate the contribution of marketing to the organization.
Marketing Metrics Continuum: The Marketing Metrics Continuum provides a framework for categorizing metrics from tactical to strategic.
The Marketing Metrics Continuum categorizes metrics (activity-based, operational, outcome-based, leading indicators, and predictive) and looks at counting, efficiency, business outcome, and likelihood of outcome.
New Service Development
The new service development process involves recognizing chances and opportunities in a fast changing technological environment.
LEARNING OBJECTIVE
Discuss the activities involved in developing new service opportunities
KEY TAKEAWAYS
Key Points
- New service development concerns all the activities involved in realizing new service opportunities, including product or service design, business model design, and marketing.
- Service development is mostly seen as growing an enterprise through a number of marketing techniques. The two main questions necessary to this approach are: How do we find, reach, and approach customers? How do we keep these customers satisfied with new possible services?
- Innovative technology provides important opportunities for new service development. For a company to stay competitive, it is important to keep services and processes up to date.
Key Term
Contingency Theory: Contingency theory is a class of behavioral theory that claims that there is no best way to organize a corporation, to lead a company, or to make decisions. Instead, the optimal course of action is contingent upon the internal and external situation.
New service development concerns all the activities involved in realizing new service opportunities, including product or service design, business model design, and marketing.
When splitting service development into two parts, we have “service” and “development. ” The first things that come into mind when looking at service are: economics, finance, managerial activities, competition, prices, and marketing. All of these keywords are related to risk and entrepreneurship and clearly indicate the primary scope of the term “service development. ”
Development is very abstract and can be linked with some of the following keywords: technological improvement, cost reduction, general welfare, improved relations, and movement in a positive direction. Service development is mostly seen as growing an enterprise through a number of techniques. The mentioned techniques differ, but in fact all of them are about traditional marketing. The two main questions necessary to this approach are: How do we find, reach, and approach customers? How do we keep these customers satisfied with new possible services?
When supplying a solution, it is important to focus on the total offering you give instead of only focusing on the product or service. An offering is a package consisting of different proportions of a physical product, service, advice, delivery, and the costs.
Drawing on contingency theory, an idea central to new service development is that different service, market, and technology combinations can require different marketing strategies and business models to make them a success. To chart the factors that are involved and create synergy between them, new service development draws heavily upon the fields of technology and business networks. The new service development process involves recognizing chances and opportunities in a fast changing technological environment. For example, car manufacturers should recognize that rising gas prices are an opportunity to create fuel efficient cars.
Economical Transportation: As gas prices increase, we see less cars on the road. People turn to alternate modes of transportation including taxis, public transportation, and bikes.
Economical Transportation
Innovative technology provides important opportunities for new service development. For a company to stay competitive, it is important to keep services and processes up to date. Continuous investment in innovation for both services and processes makes it more difficult for others to gain a large technological functionality advantage. Technological development can occur through making decisions about acquiring, exploiting, and managing technologies. These decisions should be made by involving the research and development staff, purchasing staff, and marketers.