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What Are the Unique Challenges of Working in a Service Industry?

The marketing of services requires a different approach than the marketing of goods. The University of Texas at Tyler’s online Master of Business Administration (MBA) with a Concentration in Marketing program can help you learn how to overcome service marketing challenges you and your team face. Service marketing uses a strategic approach to differentiate your company’s service from competitors that offer a similar one.

What to Expect in a Service Industry

Trying to sell the intangible, which a customer cannot see, is one of the unique factors that impact the service industry. Your service is invisible and cannot be touched, which makes it difficult to determine value and quality. And, when it comes to service marketing, you want to create an effective campaign to increase sales and foot traffic. Knowing how to separate your business from the competition is a challenge. Additionally, understanding how consumers behave further complicates the service industry landscape.

Do not be tempted to rely on low prices alone — the competition will likely match your prices, potentially causing a price war. Instead, business administration students should consider the following three types of business strategies, known widely as Porter’s Generic Strategies:

  • Cost Leadership strategies concentrate on efficiency, scale and cost-minimization.
  • Differentiation strategies distinguish a unique product or service from others on the market.
  • Focus strategies identify and target a niche market and audience.

These are helpful to keep in mind for service marketing and product marketing. You may not be able to compete on price, but there are other strategies to stay competitive. Ultimately, building up your clients’ confidence in your service is the goal.

For example, localized healthcare marketing falls into the Focus category, targeting a specific regional audience. Yet a healthcare provider’s unique reputation for quality of care and their particular medical expertise or specialization will set that provider and their service aside from the competition, involving Differentiation.

Efficient cost management, of course, is an essential component of healthcare administration and marketing. But expertise with a specific healthcare service is necessary in many medical situations, often overruling cost. In addition, smaller, localized medical practices may be unable to take advantage of economies of scale. So, in this instance, Cost Leadership may not prove the best overarching strategy.

How Is Marketing in a Service Industry Different Than Working on Goods Marketing?

Remember that service marketing differs from product marketing. Services are essentially intangible, whereas product marketing focuses on a tangible thing with physical characteristics, such as an object customers can touch. Other differences include the following:

  • Customers cannot return a service.
  • A business cannot stock or keep an inventory of services.
  • Services are performed, not produced or manufactured.
  • Dissatisfied customers may believe their time has been wasted.
  • If services do not meet expectations, customers may tell others and harm a brand’s reputation.

Learn Advanced Service Marketing

The UT Tyler online MBA with a Concentration in Marketing program can help prepare you for a career in service marketing by exploring challenges faced by service industry businesses and marketing strategies and solutions that support the delivery of quality service. Specifically, you will closely study services’ production, consumption and marketing, discovering the steps to service marketing success.

Learn more about the UT Tyler online MBA with a Concentration in Marketing program.

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