What is service marketing and where is it heading

Marketing is a constantly changing field where service marketing is becoming more and more common. When marketing services it is essential to acknowledge how service marketing differs from marketing products and why. This article focuses on highlighting the most essential aspects of service marketing by relying on research based information about the subject. A practical point of view is given by taking a close look on how a cloud computing service should be marketed according to theory. Since the industry is so changing, also some trends are given thought to that seem to be relevant for marketing in the future.

Authors: Julia Backman and Riku Nummikoski

Service marketing by utilizing technology

There is a fundamental difference in marketing between products and services. When marketing products a marketer can rely on the products being tangible. When services are in question, the marketer has to promote commodities that are intangible. (Isohookana 2011, 65.) Creating a marketing and communications plan for a service has to focus on finding the right target audience by choosing the right channels for marketing. The content of marketing should also be in the interest of that target audience. (Todor 2016, 1-6).

Digital marketing is a modern tool for marketing goods and services using digital technologies (Todor 2016, 1-6). The different digital channels are much used in the modern world and they enable an effective way of marketing intangible commodities. (Kotler, Kartajaya & Setiawan 2010.) When marketing services, the environment where the service can be presented to the customer needs to be chosen carefully. Social media is a mainstay in the modern communications and should therefore be utilized for finding the right target audience. (Chaffey 2018.)

A model for marketing planning called the SOSTAC model consists of six different aspects which are situation, objectives, strategy, tactics, action and control. The SOSTAC® Planning framework is created by PR Smith (2019) and it makes the marketer create a marketing plan that starts from considering the current situation of the company. It defines the objectives for the company and how their commodities should be offered. When the objectives are determined the plan for carrying them out in practice needs to be considered. When it is time for action the marketer has a clear plan in mind how the different operations will be done. After doing different marketing activities the success of the activities should be monitored. The last part of the model is the control part where the results of marketing is analyzed and measured. (Chaffey 2018, Smith 2019.)

Image 1. The essential parts to consider in service marketing (Backman 2019)

Marketing plan: From plan to action

A thesis called Marketing- and communications plan for a cloud computing service Riihi DMA, CASE Riihisoft was done that concerns this topic closely. In the beginning of the study it was crucial to note the difference between marketing products and services. Soon only the digital channels for marketing were chosen for the study. The current situation for the company was analyzed by following the steps of the SOSTAC model by doing a micro and macro analysis. The micro analysis pointed out the target audience for the company, which was middle- and large-sized companies. (Backman 2019.)

The micro analysis soon lead to a competitor analysis where the other operators on the field were discovered and analyzed with SWOT analysis. One important aspect to find out was which digital channels they are using and if those channels seem to be support their marketing. The information received led to choosing those channels for marketing that the case company already was using frequently and focus on them. It also turned out that a new channel, a blog, should be opened and invested with time and thought. (Backman 2019.)

The 5s’s pointed out how to determine objectives. At this stage of the study the competitive advantage for the service Riihi DMA was discovered. The scalability and a turnkey solution that this service offered are aspects that the marketing plan would definitely highlight when defining what the marketing content should consist of. It became an objective to clearly send this information to the target audience and make all the marketing channels to support this endeavor. By choosing the right channels and by maintaining a systematic grip on marketing, good results might be expected in the future. (Backman 2019.)

Some key findings

A good starting point for creating a working marketing plan was a deep understanding of the company’s current situation. The objectives set for the plan right from the start gave a framework which to follow and in the end to check the results. Along the way of making the plan the planning model brought out many important aspects to highlight in the marketing content. The competitive advantage can be discovered especially when conducting a competitor analysis. The marketing planning overall is a whole that consists of multiple different activities that all should have clear objectives that support each other. The  constructed plan never seems to be all-inclusive since it has to be updated from time to time. This is no wonder since the field itself is changing all the time.

The way forward

Marketing is already utilizing a lot of data. In the future it is presumable, that the amount of data received will grow. The issue will be finding the right information from the information flow. Marketers should create better ways of collecting the right data to being able to create marketing campaigns for their customers that actually work. The second area the marketers should focus on is creating such content that they can target an even larger audience for creating engagement and new customers. The content has to provide the potential customer an experience that they value and what makes them choose one company out of another. The marketeer should keep in mind that people value authenticity in content. (Gruhler 2018.)

Image 2. The fast changing nature of technology globally (Backman 2019)

Artificial Intelligence is also arising and already used as a tool in marketing. The further knowhow and use of that advanced technology can be a gamechanger for a company. The marketing environment changes constantly and so does the marketing activities. The marketeer should still utilize the basic interests people have towards enjoying good stories and experiences, especially those that outweigh their expectations. The companies need to give a great thought on how to deliver that to the customers in the form of their value proposition now and in the future. (Gruhler 2018.)

References

Backman, J. 2019. Marketing and Communication Plan, CASE: Riihisoft Oy, RIIHI DMA. Bachelor’s thesis.  Lahti University of Applied Sciences, Degree Programme in International Business. Lahti. [Cited 20 May 2019]. Available at: http://urn.fi/URN:NBN:fi:amk-201903273910

Chaffey, D. 2018. Setting goals for your digital marketing. Smart Insights [Cited 4 Dec 2018]. Available at: https://www.smartinsights.com/goal-setting-evaluation/goals-kpis/goals-for-your-digital-marketing/

Gruhler, T. 2018. Five Trends Shaping The Future Of Marketing. Forbes. [Cited 20 May 2019]. Available at: https://www.forbes.com/sites/forbesagencycouncil/2018/04/18/five-trends-shaping-the-future-of-marketing/#2e27166b4d36

Isohookana, H. 2011. Yrityksen markkinointiviestintä. Suomi: Sanoma Pro Oy.

Kotler, P. Kartajaya, H. & Setiawan, I. 2010. Marketing 3.0: From Products to Customers to the Human Spirit. Hoboken, New Jersey: John Wiley & Sons.

Smith, PR. 2019. PR Smith’s SOSTAC® Planning System. [Cited 8 Apr 2019]. Available at: https://www.sostac.org/

Todor, D. 2016. Blending traditional and digital marketing. Bulletin of the Transilvania University of Braşov Series V: Economic Sciences. No. 1/2016 [Cited 24 Oct 2018]. Available at: http://webbut.unitbv.ro/BU2015/Series%20V/2016/BULETIN%20I%20PDF/06_Todor%20R.pdf

Authors

Riku Nummikoski works as a Senior Lecturer at the Faculty of Business and Hospitality Management, Lahti University of Applied Sciences.

Julia Backman is a student in Lahti University of Applied Sciences and a soon to be Bachelor of International Business.

Cover image: https://pxhere.com/en/photo/1452891 (CC0)

Published: 3.4.2019

Reference to this publication

Backman, J. & Nummikoski, R. 2019. What is service marketing and where is it heading. LAMK Pro. [Cited and date of citation]. Available at: http://www.lamkpub.fi/2019/04/03/what-is-service-marketing-and-where-is-it-heading/

2 thoughts on “What is service marketing and where is it heading

  1. Please note SOSTAC® Planning is a framework created by me, PR Smith in the 1990s. it took me 10 years of research. See http://www.SOSTAC.org or visit http://www.PRSmith.org for

    Please, can you refer to it as PR Smith’s SOSTAC® PLanning framework (just like Ansoff’s matrix or BCG Matrix or Porter’s Competitive Advantage).

    Meanwhile, here are 7 SOSTAC® Planning resources which might be of use to you and your readers

    1. SOSTAC® Video (4 mins from PR Smith) http://www.SOSTAC.org

    2. SOSTAC® Blog (from PR Smith): http://www.PRSmith.org/blog

    3. SOSTAC® Groups are also on Facebook & Linkedin

    4. SOSTAC® Instagram https://www.instagram.com/sostac_planning/

    5. SOSTAC® Guide to your Perfect Digital Marketing Plan (book) http://tinyurl.com/qe79473

    6. SOSTAC® Course (60 mins videos from PR Smith) – online Udemy course https://www.udemy.com/_sostac_plan/

    7. SOSTAC® Certified Planner (20 hours) – online course http://www.SOSTAC.org

    Best wishes
    PR Smith

    1. Thank you for your feedback. The authors of the article have done the revisions requested. We apologize for the inconvenience.

      Kind regards,

      LAMKpub Editorial Board

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