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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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In the contemporary world because of many technological developments taking place, there is an emergence in trade and commerce due to increased globalization. Globalization refers to the integration of different countries as the nations are coming close to each other on the basis of different grounds like trade, foreign exchange, international education, etc. Globalization has led to an increased commerce activities due to increased demands of humans in the modern world. Commerce refers to the economical activities like trade and service out of which service sector also known as tertiary sector refers to the providing of the services to the consumers to satisfy their demands. Service sector refers to the intangible product and not providing an actual product in the hand of the customer. The activities that are included in the service sector include retail, banks, hotels, real estate, education, health, computer services and many more. All these aims at fulfilling the respective demands of the consumers. In today's economy service sector is an integral part that lead to addition of money into the economy. One of the major examples of this can be noticed in Australia where in the year 2007 approximately around 85% of the people were employed in the service sector.

One of the major aims of service provider is to know the exact needs of the consumers that fulfill the demands and provide maximum possible satisfaction to them. Service sector is also regarded as knowledge economy because in order to gain a competitive edge the service providers keep up to date information regarding the demand of the market and make themselves capable providing the services to the maximum number of consumers to cover up a great share of the market.

The concept of service encounter:

Service encounters are the interactions based on the transactions that take place between the service provider and the consumer that takes up the service for the satisfaction of the wants. Service encounter is basically based on the interaction between the seller of the service and the buyer of the service in simple terms.

For example: A travel agent provides airline tickets to the person. Whole of this transactional process is known as service encounter.

Service encounters diary report 1

Date: 2 May 2017   Time: 7:30pm    Location: Hair saloon


Encounter: Services received regarding the maintenance of hair.

Factual details:  The services received were better as compared to the other saloons because the staff is very well versed and the manager is well trained to make the customers feel comfortable and tell the existing offers in a very delighted way.

Response: my reaction to the encounter is good because of a good interaction with the

manager and there is a feel of satisfaction at a level of 7.

Analysis: I will definitely go back to the same saloon for more services provided because of the good quality of services and the trained staff of the saloon added icing to the cake.

Service marketing: Nowadays in the modern era it is very important to focus on the streams like service marketing because service sector has become one of the most dominant sectors of the society. Moreover many of the people are employed in service sector that lead to the growth of the economy. Furthermore in the coming years there are certain fast growing trends that are projected which forms a base for an economy of any nation. There are major reasons for the transformation of the service sector and bringing up the boom in it. These causes are changing demands of the humans in response to the increasing technology. Change in business trends also leads to growth in the service sector. Furthermore, advance in IT sector and globalization has led to more demand of the services in any nation to meet the demands and bring a competitive edge in the society. Nowadays governments are also making policies that support service sector and in some of the nations governments even provide financial aids to gloom the service sector.

Marketing: Marketing refers to the selling of the products or the services to the probable buyers or inducing the possible people to buy any particular product or service. Whereas marketing mix refers to the number of factors that can be controlled by an organisation to influence the consumers to purchase its products. These also refer to the tactics adopted by a company to sell its product in a large quantity. The 4Ps consist majorly the typical marketing mix. These four Ps are price, product, promotion and a place. Price refers to the rate of the product at which it is sold to the customer by a buyer. Product refers the tangible commodity or an intangible service that is provided to the consumer to meet their demands of life. Promotion is a technique adopted by organisation to induce more people for their product. Place refers to the distribution of product from a source of manufacturing to the final consumers that also involves intermediaries sometimes.

The theory of 7Ps:

The 7 Ps are a set of tactics that are adopted by an organisation as a part of the marketing mix to induce the probable consumers to buy the product in a target market. The 7 Ps are controllable but are effected by the internal and external factors of an organisation. Controllable factors are the factors that are within the limit and scope of the organisation and the policies or the strategies framed within the organisation put effects on these factors adopted by a company to sell their product in the target market where the marketing managers have decided to sell their product by keeping the demand in mind. Internal factors refer to the factors that lie within the environment of the organisation whereas the external factors are the conditions that are outside the business environment. The combination of the different techniques to increase the sale of the product in the target market refers to the tactical marketing mix.

The 7 Ps in the theory are as follows:

• Product: Product refers to the commodity or the service that is sold or provided to the buyer or the consumer to satisfy their different needs. Nowadays every organisation which is successful in meeting the customer needs gains a competitive edge in the market whereas the companies which fail to understand the needs of the consumers fade away from the competition. The major difference between the product or a service is tangibility. Product is a tangible commodity that can be touched or felt whereas service is intangible that can be provided by the service provider to satisfy the human needs. Every company must evaluate the demand of a particular product or a service to become successful in the market because supplying non demands goods can lead to wastage and losses for the organisation.

• Price: price refers to the rate at which product or a service is sold to the buyer. It includes the pricing strategy adopted by the organisation. Every company first critically evaluate the demand of the product produced and should seek that how much the potential buyers are ready to pay according to which price of the product and service is decided. Any mistake committed in pricing strategy will lead to huge losses because price plays an immense important role in today's world. Moreover behaviour of the competitors in the market also plays a role in deciding the price for a particular product.

• Promotion: There are many promotional activities that are undertaken by the organisations to induce potential buyers to buy their products or service. Promotion includes many activities like advertisements and direct selling that puts effect over the mind of the customer and also makes the consumer aware about the availability of a particular product or service in the market. Nowadays due to increasing competition, promotion plays a great role in the marketing.

• Place: Place is considered as a location where products are manufactured or made. It is very important that the products manufactured by the companies reach the final consumers. The important function of this factor is to make the product available to the final buyer of the product. Sometimes there are many intermediaries at different levels between the movements of product from the factory outlet to the consumer. These intermediaries are wholesalers or the retailers that play a key role in making the product available to the consumer.

• People: Resources are the acquisitions of the organisation that add to the overall worth of an organisation. Out of all the resources human resources are the most eminent because human resources make all other resources into actual working. The other resources for any organisation are physical resources, financial resources, etc. Without human resources all other resources are mere wastage. People refer to the staff or the workforce working in any organisation. It is very important that human resources are motivated with high morale which leads to more efficiency and effectiveness in the overall output of an organisation.

• Process: Process refers to different steps involved in delivering the product or the service to the final consumer. A good laid and integrated processes lead to uninterrupted delivery of goods, and saves time and cost of the organisation which leads to more efficiency in the organisation. Sometimes in big organisation the structure is so complex that there are number of processes involved. A good communication system with well defined inter relationships leads to better processes otherwise disruptions are faced.

• Physical evidence:  Physical evidence refers to the things seen by the consumers while interacting with any organisation. It includes physical environment where the product or service is provided which is also known as market where buyer and sellers interact with each other where buyer buys a particular product or a service and sellers sells the same product or service to the buyer. Other factors are layout, packaging or the branding.

Three stage model of consumer decision making:

The three stages in the three stage model are as follows:

• Pre purchase stage

• Service encounter stage

• Post purchase stage.

Pre purchase stage: This stage is referred to the stage before actual buying of any product or service. In this stage consumers of any particular product or service need awareness. To make the better decision regarding the purchases consumer needs to search information on the possible products or the service that has capacity to fulfill his or her demand. Moreover many other factors like perceived risks which are functional, financial, physical, psychological, social or sensory and capability of product or service to meet the expectations come under the evaluation of different alternatives that are available in the market. Moreover in this stage after critically evaluating each and every aspect of the product or the service buyer needs to make a purchasing decision according to his demands.

Service encounter stage refers to the stage in which level of interaction between the buyer of the service and the service provided is evaluated. Service encounters range from high to low contact on the basis of the type of service, the terms of service, and many other factors affecting it. High contact services are the services when customer visit and remain throughout the service delivery and it refers to the active contact between consumers and service providers whereas low contact services are the services where little or no contact is there between the buyer of the service and service provider. The interaction between the two parties takes place through electronic media or physical distribution channels.

Post purchase stage: It is a stage where customer satisfaction is the main aim because every organisation works to provide satisfaction to the human wants where satisfaction is defined as an attitude of holding positive felling towards the consumption of any product or service. Every consumer expects something form the company and these expectations must be fulfilled by the organisation by providing a better quality in the market.


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