Service marketing environment

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Information about Service marketing environment
Business & Mgmt

Published on March 5, 2014

Author: cshekhar8



This P.P.T explains the various service environmental factors.A service marketer have to understand about these service environmental factors before taking any major decision about marketing of service.

Service Marketing Environment All organizations operate within the marketing environment. The marketing environment is made up of two parts – • Macro environment • Micro environment

Macro Environment The macro environment represents all the outside influences which have impact on an organization’s marketing or business activity. It includes economic and political factors and socio-cultural trends, for example the external environment influences will effect all organizations within a sector to a greater or lesser degree. The internal environment relates to a particular organization and its publics.

Micro Environment The micro environment is the internal environment of the organization .The factors to be analyzed in the internal environment will include the following : • Company management structure • Customers • Suppliers • Channel members

• Competitors • Other publics which may include • Government and political bodies • Pressure groups • Financial institutions • Shareholders In effect any person or organization which can influence the company’s marketing activities and marketing success in way should be included here. The list is not absolutely comprehensive as individual organizations may need to consider special influences.

The political legal , economic , social and technological forces exert the same type of services as they do on products ; however certain environment features have a greater impact on service These environmental factors are :-• Political –legal environment • Economic environment • Socio-cultural environment • Technological environment

Political –Legal Environment There is considerable influence of the political – legal environment on service marketing . Service industries are often more closely regulated than most other forms of private enterprise. Many service firms are being subject to government regulations in addition to the usual taxes and legislation. Service providers must understand and recognize the impact of such regulation on their competitive strategies.

Regulation generally influences service business in four ways. • Regulation generally influences the range and type of competition. • Regulation reduces the marketer’s array of options and introduces certain rigidities into the marketing process. • Decision of the regulatory agencies being the binding part of the marketing decision –making process must be focused at understanding and predicting those agencies action • Pressure groups may be established to lobby and effect change or modify , the directions being taken by the regulatory bodies.

Economic Environment In economic environment changing life style , changing world ,changing economies and changing technological advances and changing consumer needs have contributed to increase spending on consumer services. Technological innovations have also helped to create a higher standard of living for a common man, who presently spends a larger portion of his or her increased disposable income of services.But the

role of technology has also aided in circumventing barriers to trade , especially in its role in designing and delivering services. The urbanization has widened the demand for personal and public services . The demographic shift towards an older population in some countries has resulted in new service demands such as better healthcare , convenience products etc. In the global environment , due to cross country cultural issues , trade barrier ( both tariff and non-tariff) tend to become more restrictive in marketing of services.

Socio-Cultural Environment Socio- cultural forces are set factors including life style , social values and beliefs that affect the marketing activities of an organization. These factors have significant impact on the marketing of services . The marketers have found the intensive use of consultants and counselors in their personal family and working lives. Health, Beauty, travel, culture, and higher education have partly replaced durable goods as status

symbols in the mind of many consumers . There had been an increasing trend in the services like security , insurance, legal, medical and investment. Globally , the cultural dimensions affect services in a more pronounced manner than do goods. Due to inseparability characteristic of services the firms may need to adapt their offerings to suit local taste and preferences . KFC and Mc’Donald’s had to adapt its products in India to suit local polates. Business negotiations are very much subject to local norms and local systems. Language is a major cultural influence

Technological Environment Technology has influenced our life styles, consumption pattern and our economic well being tremendously. Just think of internet , worldwide web (www) , E-commerce , video conferencing. World has become too small and boundary less. The service economies will be technologically driven soon. Instead of expecting service providers to improve results ; management must see what kind of organizational structure , incentives , technology and skills can improve overall productivity.

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