Services & Products Marketing
Assumption: When I say ‘Products’, I mean physical products and not software (intangible) products. For practical purposes of defining the difference between Services & Products Marketing.
Though services were offered to consumers from time immemorial, marketers lapped up services as a concept only in the second half of the previous century. Transportation as a service, I would tend to believe was the first to touch the lives of millions of commoners. Starting with private transportation companies (railroads in specific) in the late 19th & early 20th century, to the millions of services offered to the billions of consumers worldwide today. From the invention of telephones in the 1870’s by Alexander Graham Bell, which proves to be one of the largest among the services industry, to lawyers (who helped Alexander Graham Bell win rights to patent the telephone as his invention) to the now famous ‘tiffinwalas’ of Mumbai.
Getting to the point. From what I have read and experienced, products marketing has always been based on a feature / trait of the product being sold. For instance, when Henry Ford sold his first car, he was not selling transportation, but he was selling a motor powered automobile pitted fiercely against the horse drawn carriages of those times. One would still remember the line “You can have any colour you want, as long as it is black”. Every refrigerator in town was having Poly-Urethane Foam, but when Godrej announced it and made noise about it calling it PUF, things changed a lot in the refrigerator market in India. PUF became the buzzword and it took a concerted effort from competition to beat it. It took a long time for the competition and must have cost them a bomb to break that jinx that Godrej created to leave the rest of the competition far behind and thus gaining significant advantage.
Services on the other hand have always played up on the emotional front. Pick an ad / communication from any insurance company / telecom company at random. Chances are you will find that they will be talking about how they stand with you or how they are walking along with you every step of your life. The services marketer typically tends to touch and play around with the deepest string of your emotions and in the process make a few millions!
But, the distinction is now blurring. The earliest example I can think of is Volvo. Volvo stopped selling automobiles quite some time back. They only sell safety. They are not in the business of making automobiles. They are in the business of selling safe transportation. LG in India did exactly that! Who thought that a consumer white goods company would be selling health in the process of selling physical tangible products like TV, refrigerator, microwave ovens & air-conditioners? Goldstar in its first stint in India was a miserable failure and Koreans anyway at that point of time were not known for their technological prowess! When they re-entered the Indian market they took a different name. Well, actually, not so different. Lucky Goldstar was their choice, which got pruned down to LG because their Agency (Lintas) did not want them to remind the consumer about their previous stint! Prudence prevailed and LG took the health platform. The problem solution route coupled with simple communication has now ensured that the company is a name to reckon with in the consumer goods market. Products using the emotional platform aided by obscure terms created by a pot smoking creative resource in the agency have now become a commonplace.
Technology companies are not far behind. Infosys for instance is releasing ads regularly in the ‘Opportunities’ & ‘Ascent’ selling itself as the best place to work for. I heard a jingle the other day from e-Serve proclaiming itself to be the best organisation to pursue a career. Reason? One can apparently get to do his / her MBA from a premier institute while working for them.
The norms are changing. The consumer outlook is changing. Marketing as a concept still seems to be adapting itself to cater to the consumers’ needs & demands in conjunction with time.
I remember an anecdote from Philip Kotler’s millennium edition of ‘Marketing Management’. He claimed to have refused signing a copy of his first edition of the book during the year 1999. The reason as he quotes is: “Marketing concepts as in the 1960’s are not valid anymore”.
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