Selling the Invisible, Essay Example

Services Marketing

Services marketing differs significantly from goods marketing. While many businesses have found a relatively simple time in marketing physical items, marketing services poses a series of challenges. First, goods are typically sold in stores, so consumers who wish to locate a product that they need can do so easily. For example, if a food product is needed, they can simply visit the supermarket or order the product online. It is likely that these individuals return to the same store or area to purchase the product, and they are never left guessing where they should go in order to get it.

Services marketing, as a consequence, is challenging for two reasons. First, services are not always sold in store, which often requires the consumer to determine how to contact individuals that offer the services they desire (Lovelock & Gummesson, 2004). Second, some services are unique in that they are designed to make an individual’s life more convenient, but many people do not know that these services options exist. This is a particularly interesting challenge for new businesses, as it is challenging for the organization to make potential customers aware of their existence. A majority of industries cope with this problem by ensuring that they have a website or online marketing campaigns, but it is evident that they are not able to meet all interested customers in their area through these means (Beckwith, 1997).

Due to the related challenges and expenses that many such businesses face, many service organizations have elected to operate out of their homes and only have a presence online. As a consequence, they require their employees to travel to their homes of their clients to deliver the relevant service. In the tutoring industry, this is becoming an even greater reality. Even large corporations like Kaplan and Princeton Review are forgoing their tutoring centers and choosing instead to provide their clients with in home services. This is advantageous in some senses because it diminishes the monthly expenses of both organizations, but despite their popularity, it makes it challenging for potential customers to recognize their service offerings. In addition, this is even more challenging for small businesses to achieve. It is likely that small tutoring agencies that have not been able to make a name for themselves will be even less able to compete on the online market, as they are able to pay significantly less for pay per click advertising compared to these large companies. Therefore, this paper will focus on the relationship between services marketing and the tutoring industry, focusing on both small businesses and large corporations.

Background

Many different agencies offer tutoring services across the world for varying prices. Since many of these companies have tutors in multiple states that are able to travel to the homes of students, competition is very fierce. However, competition is primarily among the corporations that have claim to these areas. These companies are able to offer comprehensive tutoring packages in the form of either a class or one-on-one training for both academic preparation and standardized test prep. In addition to offering the class, they provide their students with customized learning materials for a majority of package options and some companies provide their studies with online resources to help them supplement this practice. Furthermore, these organizations claim that they are able to raise the scores of their students by a certain point level. As a consequence, many students aim to work with these organizations because of their trusted name, promises, and money back guarantees.

Independent tutoring agencies are often referred to as “boutique” companies and offer students similar perks as the corporations. However, these firms often operate in a small area and are advertised primarily through word of mouth. While they are not able to offer the same amount of resources as the corporations, many organizations have created personalized learning materials for their students. In some cases, the amount of products offered depends upon the price of each tutoring session. Some companies are able to provide more offerings to their students as a result of their high hourly price, while others prefer to make the sessions more affordable and forgo these products. Ultimately, these determination as to whether these products should be offered in addition to the services provided depends on the socioeconomic status of the student. Wealthier individuals are more likely to purchase a package that is considered to be all-inclusive, while individuals who are more concerned with money are likely to acquire the cheaper package.

Account of Service Encounter

I have worked with several tutoring agencies over time, and have found that I prefer to work with small tutoring agencies over the corporations. Unlike working with individuals in corporations, it is much simpler to understand the qualifications of the individuals that will be helping you study. Furthermore, these organizations, like corporations have many tutoring packages available in many different subject levels at what is often a more affordable price. It appears that because these companies have a lesser overhead cost, they are able to charge less for their services, which retain the same about of quality as these services that are provided by corporations.

In particular, I have worked with Kaplan’s SAT program prior to entering college in order to raise my test score. I entered into their class, which is considered a standard option, and worked through a majority of the problems. While the information they were presenting to me made sense, I felt that I needed extra practice on some question types, although it was difficult for me to identify what these were or what skills I would need to be successful with them in the future. Kaplan offers online learning tools to allow their students to cope with this problem, but I felt that I was still not able to understand all of the concepts that were presented to me. However, a one-on-one tutor wasn’t an option because I had already purchased the class and all of its materials, which were somewhat expensive. While I eventually resolved this conflict by studying on my own, this issue could have been resolved much more effectively by hiring an in-person tutor.

After this experience, I spoke to many of my friends about how they prepared for the SAT, and found that everyone’s approach to the test was different. Some reported that they studied on their own using books, but not all individuals that selected this method found their studying to be effective. Some took the Princeton Review course, and achieved results similar to me. On the other hand, some elected to take personalized test training through smaller online companies like Tutor Tango or Essay Queen Tutoring. Neither of these two small businesses offer their own products for sale, but it appears that the tutors work more closely with the students to identify the problem types that they need to work on, and focus studies around this content. Ultimately, it appears that even though small tutoring businesses are the better quality and affordability option, it continues to be difficult to identify how to find these businesses, which may be one of the reasons I didn’t use this option.

Analysis of Experience

Due to the less familiar nature of small businesses in this industry, there is a very high perceived risk (Dontigney, n.d.). Individuals are often worried that their tutor will not be a good fit for them that they will be able to afford the service if it proves to be a good fit, or that they will not have time to succeed in certain tutoring programs. To alleviate this stress, many large tutoring companies offer a money back guarantee, and many others offer a free first session or a discount of the first session in order to introduce themselves to their clients risk free. This is a risky practice for the company more than the client. Since they wish to appease the potential client’s worries, they are providing their service for free. However, this is only profitable if the client agrees to purchase tutoring sessions. If this is not the case, the company will lose money. As a consequence, small tutoring companies are often not able to offer the same promotional packages. While offering a discount to potential customers is acceptable, it is not possible for them to offer free deals to the same extent as large companies. Therefore, people feel that the risk in using these small tutoring companies is inherently greater than the risk of using corporations.

The marketing mix for services is also a complicated one for this particular industry. In the past, individuals knew about tutoring companies primarily from word of mouth, which is how large corporations advertise. They have a large enough name recognition that marketing is not as challenging. However, these companies want to ensure that they are able to outcompete small businesses, so they complement this phenomenon with both online and physical marketing. Online, they target viewers who have recently searched for terms related to test prep or tutoring, and these advertisements will show up not only on search engine searches, but also through other unrelated websites. In addition, these companies directly target schools to offer test prep classes so that schools will advertise on their behalf. Last, these companies occasionally use television commercials, billboards, and other expensive sources of advertising in order to remind potential clients of their services.

Small businesses are not able to accomplish such diverse or intensive marketing plans due to a limitation of funds. As a consequence, it is difficult for these companies to get their names to potential clients. Many of these companies resort to the use of online marketing deals, such as Groupon in order to promote themselves. Furthermore, these companies often utilize the pay per click features of Google and Bing to reach a broader audience. Ultimately, however, the marketing for these companies are achieved by the desire of customers to pass on their knowledge of these services to others, as this is the least expensive yet most effective form of advertising for these agencies.

Service as theater is primarily applicable to this field with regards to corporations, but not independently owned tutoring companies. Because corporations are concerned about delivering consistent quality in their products and services, they have essentially scripted their test prep classes and prepared their teachers with a distinct set of answers that will allow them to help their students. While this has been an effective method for the company, this decreases the level of personalization that small businesses are able to achieve. Some small businesses use this scripted form so their tutors are aware of the format that they should follow for each student, ensuring that all relevant content is covered. However, the programs created by small businesses allow for a greater extent of flexibility, and the tutor is able to spend extra time on topics that he or she feels may help the student the best.

Despite the differences between corporations and small businesses, the service blueprint for this service industry is similar (Wilson et al., 2008). The blueprint for this industry is as follows:

• Customer Actions: Customers must contact the tutoring agency to determine whether there is a tutor available for their choice academic subjects at a time in which they are available
• Actions: The tutor will visit the home of the client on a weekly or biweekly basis for 1 -2 hours
• Backstage (Invisible Contact Employee) Actions: Tutors create the personalized learning programs for their students, have their clients email them about any questions, tutors receive training from the company
• Support Processes: Billing, HR, marketing staff
• Physical Evidence: Increase in grades or test scores

Recommendations

It would be beneficial for small tutoring businesses to enhance competition against large businesses by continuing to offer high quality services, but also by conducting ground marketing in their areas. Therefore, these individuals should leave their business cards at local establishments and form connections with business owners in the area so that they could work together to promote their business. While it is challenging for these individuals to market themselves online due to the budgets they have available compared to what corporations are able to use, it is important for them to create an online presence through social media. Kaplan and Princeton Review have generally avoided these marketing tactics because they have found that they don’t need to focus on these aspects to become successful. However, it is important for small businesses to find the marketing niches that are available to them and to take advantage of these opportunities.

Furthermore, small businesses should offer promotional discounts to their customers for their first session. This allows clients to try these services risk free and to establish a greater level of trust in the individual that they are intending to hire. A free session would be considered too expensive for many of these businesses, so it is preferable for these companies to stick to a marketing hook that will generate business but not cost money.

Overall, both organizations would be able to perpetuate business through word of mouth. Examples of this could be offering existing customers a discount for recruiting friends. This provides incentive for them to tell their friends about the business. Furthermore, this practice could be supplemented by asking people for reviews online on systems such as Yelp or Google Plus. People regularly check the internet to determine what people have thought of a particular business before using it, and allowing small businesses to establish themselves on this form of media is an effective way to ensure that this will be possible.

Despite the amount of challenges that small tutoring businesses face compared to the large corporations that are in existence, there are many tactics that are available to them alone. Since these businesses are integrated into the communities that they serve, it is easier for people to generate a sense of loyalty to these organizations than corporations. Often, clients who hire tutors from small businesses have interacted with the owner of the company, which generates a feeling of community. Therefore, many individuals will continue to choose small businesses for their tutoring needs. This principle applies to other services as well; while it is harder for small businesses to advertise their services compared to corporations, it can be done effectively if these companies take maximum advantage of their available resources.

In conclusion, services marketing is more challenging than product marketing due to the lack of a physical product, and often store, to demonstrate the product in. Despite these challenges, companies have overcome these problems by implementing a mixture of internet and physical marketing strategies. Both strategies create a sense of branding for the organization, which help clients learn about the organization through word of mouth. It is important for small businesses to maximize their word of mouth potential so that they are able to remain competitive on a local scale.

References

Beckwith, Harry. (1997). Selling The Invisible: A Field Guide To Modern Marketing. Warner Books.

Dontigney E. (n.d.). Types of Perceived Risk. Retrieved from http://smallbusiness.chron.com/types-perceived-risk-71594.html

Lovelock C, Gummesson E. (2004). Whither Services Marketing?: In Search of a New Paradigm and Fresh Perspectives. Journal of Service Research, 7 (1):20-41.

Wilson A, Zeithaml VA, Bitner MJ, Gremler DD. (2008). Services Marketing: Integrating Customers Focus Across the Firm. Glasglow.