Blog entry #15 from www.mba-marketing.co.uk

When I set up MBA, it may not surprise you to know that I gave some thought as to which potential clients to target, what they might need, and what they might be prepared to pay me for.

One area I considered was service businesses and organisations, which have been poorly served by marketing for many years. Marketing for services businesses and organisations is fundamentally different to the traditional marketing thinking still employed by many agencies, consultants and practitioners. Yet even in today's service economy, service businesses are still expected to learn from marketing thinking rooted in the consumer goods boom of post-war America.

1950's America was an era of increasing consumer prosperity and expanding industrial output. The balance of power had shifted. Selling was not enough. By 1960, the 'marketing concept' was accepted by most consumer goods companies. This was often in the form of a 'marketing mix', whereby a combination of product, price, place and promotion could be manipulated to direct a mass consumer market to mass produced consumer goods via mass market a vertising.

This approach made economic sense at the time. However, marketing practice was slow to adapt to business and consumer change, and the 'mud at the wall' approach inherent in mass marketing became increasingly ineffective.
All of this meant that 'marketing' and 'marketers' were treated with increasing scepticism in the nineties: for example, a McKinsey report described marketing as a 'millstone around the neck' of a business, while some Cranfield research saw marketing directors described as 'unaccountable, untouchable, slippery and expensive' by their colleagues!

The mass marketing approach was never suited to service businesses. This is because service businesses are fundamentally different to manufacturing businesses. What they sell is not a standardised physical object, but something which is intangible, inconsistent, and created on the spot by frontline staff and customers. That’s if they ‘sell’ anything at all - think of the public and voluntary sectors.

For service businesses, ‘marketing’ is not about arms-length communications or superficial branding techniques. Neither is it the sole concern of a specialist marketing department. Instead, marketing is about an organisation-wide commitment to service quality, customer experiences and customer relationships. And because marketing is integral to the way the entire business thinks and acts, it may not even be called ‘marketing’ at all! Which is good news for the business, but not for career marketers!

So what are the central concerns of marketing for service businesses and organisations?
- Organisation-wide market and customer orientation. Marketing – in the form of a customer and market orientation – must be central to business strategy, operation, culture and process.
- Internal marketing; Co-ordination, collaboration and communication with staff, partners and intermediaries.
- Customer experience management and service quality. All points of customer contact and service must be identified, evaluated and optimised, from the customer point of view.
- Customer relationship management. This looks at the customer experience from a business perspective, analysing ‘relationship economics’ and customer data to plan marketing activity. It is not simply about IT expenditure, although this may well help!

Of course, the traditional marketing approach has also become increasingly inappropriate and outmoded for most manufacturing businesses. In a world where major product brands may not even own a single factory, service and relationships are increasingly important for most ‘manufacturing’ businesses. In other words, the difference between service and manufacturing businesses is, at best, one of degree. What's more, the principles behind the services marketing approach have become widely accepted and enshrined within such 'new' concepts as relationship marketing, CRM, new marketing, one-to-one marketing...the list goes on.

So, in the end I decided not to target! And on this basis, MBA is now open for business. Come one, come all!