Service Marketing

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Lusch et al. (2007) describe as marketing emerged in the beginning of the 20th century, it embraced the goods-dominant (G-D) logic. The concept of the Four Ps of marketing mix – product, price, place and promotion became treated as the basic model at that time. (Grönroos, 1989) Today, this paradigm is beginning to lose its position. Service marketing is one leading new approach to marketing. Four main characteristics of services defined by Kotler et al. (2009) are intangible, perishable, variability and inseparability (see Appendix A). Thus, Booms and Bitner (1982) turn services marketing into 7Ps by adding people, physical evidence and process.

According to Vargo and Lusch (2004), a paradigm shift in the marketing
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Sheth et al. (1988) believe companies focus from transactional marketing to relationship marketing (RM). Sheth and Parvatiyar (2000) define RM is the process of engaging in cooperative and collaborative activities with customers to create or enhance mutual economic value at reduced cost.

One approach to relationship marketing is six markets model (see Appendix D). This model was developed by Christopher et al. (1991) as an instrument for the most comprehensive method to evaluate stakeholder relationships to develop potential successful strategies. (Payne and Holt, 2001) The customer markets are placed in the center of this model to emphasize the relationship with customers and other relevant stakeholders. (Payne et al., 2005)

According to six markets model, customer markets are the heart of the six markets model. Galbreath (2002) believes value creation begins with customers as they have true economic value. Bhote (1996) describes the costs of attracting new customers are up to seven times more than maintaining them. However, companies should recognize the cost factors to achieve customer lifetime value and invest the effort in locating and acquiring potentially loyal customers. Loyal customers can be less price sensitive and make market entry difficult for competitors by retaining customer.

Today, companies focus on
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