Five Powerfull Forces Contributing to Services Marketing

INTRODUCTION

Services dominate the expanding world economy as never before, and nothing stands

still. Technology continues to evolve in dramatic ways. Established industries and their

often famous and old companies decline and may even disappear as new business mod-

els and industries emerge. Competitive activity is fierce, with firms often employing

new strategies and tactics in response to customers’ ever-changing needs, expectations,

and behaviors. Clearly, the skills in marketing and managing services have never been

more important!

A type of economic activity that is intangible is not stored and does not result in ownership. A service is consumed at the point of sale. Services are one of the two key components of economics, the other being goods. Examples of services include the transfer of goods, such as the postal service delivering mail, and the use of expertise or experience, such as a person visiting a doctor.

(A)    GOVERNMENT POLICIES:

1.      Changes in regulations : Traditionally, many service industries were highly regulated. The government regulated the price levels, placed geographic constraints on distribution strategies and in some cases even defined the product attributes. In the last few years there has been a complete or partial deregulation in several major service industries. Reduced government regulations has already eliminated or minimized many constraints on industries like airlines, banking, insurance, healthcare, tourism and telecommunications.

Barriers to entry by new firms have been dropped in many instances, geographic restrictions and service delivery has been reduced, there is more freedom to compete on price and the existing firms have been able to expand into new markets and new lines of business.

2.      Privatisation and economic liberalization : Another important action taken by the government of many countries, has been privatization of what were once government owned services. The term privatization was...