The marketing of services 603
may not be economic for the producer to cater
to. Service location decisions therefore involve
a trade-off between the needs of the producer
and the needs of the consumer. This is in
contrast to goods manufacturers who can man-
ufacture goods in one location where produc-
tion is most economic, then ship the goods to
where they are most needed.
Place decisions can involve physical loca-
tion decisions (as in deciding where to place a
hotel), decisions about which intermediaries to
use in making a service accessible to a con-
sumer (e.g. whether a tour operator uses travel
agents or sells its holidays direct to customers)
and non-locational decisions which are used to
make services available (e.g. the use of tele-
phone delivery systems). For pure services,
decisions about how to physically move a good
are of little strategic relevance. However, most
services involve movement of goods of some
form. These can either be materials necessary to
produce a service (such as travel brochures and
fast food packaging material) or the service can
have as its whole purpose the movement of
goods (e.g. road haulage, plant hire).
People
For most services, people are a vital element of
the marketing mix. It can be almost a clich ́e to
say that, for some businesses, the employees
are the business – if these are taken away, the
organization is left with very few assets with
which it can seek to gain competitive advan-
tage in meeting customers’ needs.
Where production can be separated from
consumption – as is the case with most manu-
factured goods – management can usually take
measures to reduce the direct effects of people
on the final output as received by customers.
Therefore, the buyer of a car is not concerned
whether a production worker dresses untidily,
uses bad language at work or turns up for work
late, so long as there are quality control meas-
ures which reject the results of lax behaviour
before they reach the customer. In service
industries, everybody is what Gummesson
(1999) has called a ‘part-time marketer’ in that
their actions have a much more direct effect on
the output received by customers.
While the importance attached to people
management in improving quality within
manufacturing companies is increasing (for
example, through the development of quality
circles), people planning assumes much greater
importance within the services sector. This is
especially true in those services where staff
have a high level of contact with customers. For
this reason, it is essential that services organiza-
tions clearly specify what is expected from
personnel in their interaction with customers.
To achieve the specified standard, methods of
recruiting, training, motivating and rewarding
staff cannot be regarded as purely personnel
decisions – they are important marketing mix
decisions.
People planning in its widest sense has
impacts on a firm’s service offer in three main
ways: Most service production processes require the
service organization’s own personnel to
provide significant inputs to the service
production process, both at the front-line
point of delivery and in those parts of the
production process which are relatively
removed from the final consumer. In the case
of many one-to-one personal services, the
service provider’s own personnel constitute by
far the most important element of the total
service offering.
Many service processes require the active
involvement of consumers of the service and
consumers therefore become involved as a
co-producer of the service. At its simplest, this
can involve the consumers in merely
presenting themselves or their objects to the
service provider in order for the service to be
provided – for example, a customer might
deliver their car to the garage rather than have
it collected by the garage. In the case of
services performed on the body or mind, the
consumer must necessarily be designed into
the production process.