Evolution of Marketing Philosophy: From Goods to Services

Introduction

This blog discusses the historical shift from goods-dominant logic to service-dominant logic in marketing, highlighting the impact of modern technology and the environmental implications. It also explores the importance of service segmentation, determinant attributes, and market positioning in the movie exhibition industry.

Evolution of Marketing Philosophy

• Historically, marketing focused mainly on goods due to the post-World War II economic boom. The emphasis was on producing more goods for expanding consumption, leading to segmentation, targeting, and positioning concepts.

• The traditional view was that services differed from goods based on four criteria: intangibility, heterogeneity, inseparability, and perishability. Services were considered intangible, with the same service potentially yielding different satisfaction levels among customers.

• The concept of inseparability suggested that the provider and consumer were present in the same time and space during service delivery. Additionally, perishability implied that once a service was provided, it could not be offered again.

• However, modern technology has challenged these traditional concepts. Services can now be stored and accessed at different times and places. This has led to a shift in marketing philosophy from goods-dominant logic to service-dominant logic.

• Today, the focus is on how services drive the entire marketing process, while goods are viewed as vehicles for delivering services. The emphasis is no longer solely on the exchange of ownership, but rather on creating solutions together through various mechanisms such as leasing and renting.

The Shift from Ownership to Service Dominant Logic

• Technology has revolutionized the way we access and consume entertainment, with a shift from ownership to on-demand services.

• The traditional model of buying DVDs to own a movie has been replaced by the convenience of worldwide storage and on-demand streaming services.

• This shift from ownership to service dominant logic is not just limited to entertainment, but it also has significant implications for the environment.

• The traditional focus on increasing goods production has led to environmental challenges due to excessive consumption and waste generation.

• Service dominant logic promotes a solution-oriented approach, emphasizing renting, leasing, and using products to minimize resource consumption and waste.

• The principles of positioning services in competitive markets involve understanding the value proposition, target customers, brand perception, and marketing position strength.

• Differentiating a service based on easily replicable factors is not sustainable, and aligning with core competence is crucial for a distinctive market position.

Understanding Service Segmentation and Determinant Attributes

• Service segmentation is crucial for businesses in the movie exhibition industry, as it helps to identify the specific market focus and service offerings for different segments of customers across the nation.

• Determinant attributes play a significant role in service differentiation, as they are the key service characteristics that are important for purchasers and create differentiation in the market.

• The timing of use and the target customer segment are important considerations for determining the right service concept and identifying the determinant attributes. For example, coffee cafes focus on group activities, but also cater to individuals with amenities like free internet.

• Service level determination is essential, considering both the customer’s perspective and the provider’s cost perspective. It involves quantifiable elements like seat size and meal options, as well as qualitative factors such as noise level and temperature setting during the flight.

• The service level needs to be calibrated based on the target segment, as different customer groups may prioritize different service level components. For instance, business class travelers may value a noise-free ambiance and individual temperature control, while leisure travelers may have different preferences.

Key Points for Market Segmentation and Positioning

• Market segmentation involves determining your target market based on size, composition, location, and trends.

• Matching your competencies, resources, and reputation with the market segment helps in identifying the exact segment you are best positioned to serve.

• Differentiating your offering is crucial, whether you aim to be a low-cost airline or a luxury airline focusing on business customers.

• Quality of service is about calibrating customer expectations and perceptions, aiming for a positive difference between pre-consumption expectations and post-consumption perceptions.

• Positioning maps can be used to visualize your market position and create segmentation, targeting, and positioning strategies based on service level, price level, and geographical position.

Conclusion

The evolution of marketing philosophy reflects the significant shift from goods to services, driven by modern technology and environmental awareness. Understanding service segmentation, determinant attributes, and effective market positioning is crucial for businesses to thrive in the service-dominant market landscape.

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