The growth of the services sector is immense and many companies are facing a complicated task of managing service experiences effectively and efficiently. Products and services in the contemporary environments are increasingly market-focused, and it is essential to consider their responsiveness to the changing market needs (Hoffman & Bateson, 2011). Essentially, marketing is about achieving results, and in this case, it involves delivering value to customers and other stakeholders. Service marketing has unique features because services differ from tangible products. For example, services are heterogeneous and intangible. The fundamental elements of the marketing mix including people, physical presence, and process, therefore, become the unique features that differentiate services in the marketplace. This discussion will focus on the significance of people and the way businesses manage people for value creation.
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According to Fifield (1998), firms have various marketing objectives, and for each a marketing strategy is necessary. Further, strategy demands a consistent, logical, and cohesive marketing mix. Before firms try to satisfy customers, they have to understand what the customers want concerning the characteristics of the service offering. The most important thing to consider in service marketing is that customers are present during the service encounter (Fifield, 1998). People, therefore, are crucial in service marketing because they define the service. For example, in the hotel industry, the chef, service staff, cashiers, and even cleaners determine the overall service encounter. This implies that the behavior and attitude of people in the service experience is important to customer satisfaction. It seems that customers find the people they come into contact with and the actual service synonymous, and this is the reason organizations should strive to ensure their people deliver the best possible value. Excellent customer service keeps customers happy and it can be a crucial source of competitive advantage for an organization (Gilmore, 2003).
The other important significance of people in services is that the abilities and professionalism of individuals matter considerably. People lacking critical skills and abilities are likely to be inefficient in their work and potentially affect the quality of service delivery. Gilmore (2003) considers people as ‘the service,’ and so services delivered are mainly dependent on how they are produced. That is, employees require particular interpersonal skills, knowledge of the service, and the aptitude to perform adequately. For this reason, one of the ways of managing people for value creation is staff recruitment and selection. According to Strydom (2004), it is essential to put the right people in place, who will meet organizational requirements. Organizations often seek to recruit talented and qualified individuals who can provide value and meet current needs. It is with getting the right people that companies communicate a clear vision of service strategy, the actual service, and the expectations of customers. Beamish and Ashford (2007) point out that a robust internal marketing program is vital in communicating the roles and responsibilities of the staff. Internal marketing is about communication and motivating people to achieve goals and maximize their potential both for individual and organizational performance. This internal marketing is essential because of the inseparability of the service provider from production and consumption (Beamish & Ashford, 2007). This implies that training is also essential.
The importance of investing in training and development has to be emphasized not only because of the changing nature of business environments but also the fact that customers are increasingly demanding. Training is essential for service quality. Lancaster and Massingham (2011) note that the interactive nature of marketing requires careful training of individuals and various considerations are encountered when training frontline staff and other staff who do not have direct contact with customers. The reason for this is that customers perceive and evaluate their service experiences based on interactions. Frontline staff requires particular interpersonal skills (such as empathy), characteristics, behaviors, and attitudes that will enable them to interact with customers effectively and, therefore, abrasive personalities may be unsuitable for such roles (Lancaster & Massingham, 2011). Still, training is paramount for both new and existing staff on company policies and procedures of dealing with customers, behavioral skills, including the use of technology. Training employees on best practices of customer service enhances their performance and quality of service delivery.
The other crucial aspect organizations use for value creation is motivation. Motivation is a vital determinant of effort and performance, and so organizations often take various measures or incentives to get employees to provide the desired level and quality of customer service (Latham, 2012). People wish to be encouraged and rewarded for achieving goals or delivering excellent results, which is considered as good performance. Expectancy theory is often used to explain employees’ motivation in the workplace. According to the theory, motivation is influenced by the expectation that efforts will yield good performance, which will consequently lead to valued outcomes (Latham, 2012). That is, employees believe that their effort will lead to good appraisal, upon which rewards from the organization may lead to the satisfaction of one’s needs. The implication of this theory is that the higher the expectation levels and rewards are desirable, the higher the motivation. Firms motivate their staff through monetary rewards, promotions, professional development opportunities, or even simple recognition. Another crucial way of motivating employees is empowering them by giving them some autonomy to make decisions (Lancaster & Massingham, 2011). Some firms allow their staff some discretion to use their judgments and rational evaluations when handling customers and especially resolving complaints. For example, fast-food retail companies such as MacDonald’s empower their frontline staff to deal with issues such as refunds without necessarily consulting the manager.
Building and maintaining a healthy culture where individuals know instinctively how to do things and what is expected of them in the workplace is also important. In most cases, leaders have a role to play in building organizational culture. Culture entails a collection of beliefs, norms, and values shared in an organization, which in turn influences workplace behavior and shared assumptions (Wright & Race, 2004). In service marketing, creating a culture of commitment to quality, ethics, customer service, professionalism, dress code, flexibility, or even creativity and innovation can ensure that a company creates value to its customers and stakeholders. The management also needs to show commitment for quality and lead from the top. For example, most fast food retailers have prioritized speed of service and made it their culture thereby significantly transforming their profitability. The ‘drive-thru’ service adopted by many retailers provides a fast and convenient way of shopping for food, and it can be considered an improvement in service delivery. There are various ways in which organizations build and maintain a strong culture. The most important factor of consideration is that a strong culture begins with a clear definition of mission and vision, which guide an organization’s core values and aligns people (Strydom, 2004).
As seen in the service marketing mix, people are an essential element. The same case applies to the building of culture. Companies can cultivate a coherent culture as they get the right people who share their core values or demonstrate that they are willing and able to take in the values (Strydom, 2004). For example, some organizations carry out recruitment and staffing practices aimed at fitting new workers into the existing culture to promote it. This entails marketing the culture to prospective candidates who see themselves capable of integrating into the team. It appears that people are most likely to stay in environments with a culture they like, meaning that they are also expected to be satisfied and motivated to work (Latham, 2012). For this reason, a strong positive culture can translate to value creation in service marketing. Businesses also manage people through the way they structure their organizations. Mostly, the most convenient organizational structure of a company that deals with services is to provide flexibility so that workers can handle various tasks where roles are less distinct. The way work is structured to ensure effectiveness may have an impact on how people interact with clients and colleagues in the workplace.
In conclusion, the people element of the extended marketing mix for services is essential because services are inseparable from the provider and their interaction with people shapes customers’ perceptions. It seems that by leveraging people in creating value for customers, businesses succeed in their marketing strategy and achieve results. Beamish and Ashford (2007) note that it is unfortunate that the internet is reducing the number of people in delivering services while shifting towards processes.
References
Beamish, K. & Ashford, R. (2007). Marketing planning. Oxford: Elsevier.
Fifield, P. (1998). Marketing strategy. Oxford: Butterworth-Heinemann.
Gilmore, A. (2003). Services marketing and management. London: Sage Publications.
Hoffman, K. & Bateson, J. (2011). Services marketing: concepts, strategies, & cases (5th ed.). Boston: Cengage Learning.
Latham, G. (2012). Work motivation: history, theory, research, and practice (2nd ed.). Thousand Oaks: Sage Publications.
Lancaster, G. & Massingham, L. (2011). Essentials of marketing management. London: Routledge.
Strydom, J. (2004). Introduction to marketing (3rd ed.). Cape Town: Juta and Co. Ltd.
Wright, J.N. & Race, P. (2004). The management of service operations. London: Thomson Learning.
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