10 Trends identified in the Service Sector in 21st Century

At the beginning of 21st Century, special issues have developed in area of marketing due to drastic changes in business environment and intense competition that has compelled the marketers to change the way of doing business. Marketing is changing and that’s obvious. The focus of marketing has widened from the classic product, price, and place, promotion to incorporate the yield management, customer experience and customization that necessitates marketer to concentrate on issues such as processes, people and consumer insight. Escalating customer’s demands, development of technology, increasing competition, increasing consumerism all have been main causes that led strategic change in marketing.

Service sector in post industrial economies is facing unprecedented changes. Service marketing in 21st century is all about achieving return on investment (ROI) and relationship (ROR), retaining customer and increasing customer lifetime value. The changing role of marketing in service sector demands efficient and effective management of customers, channels, markets and profit in order to evade commoditization and low margins. Three core trends that have resulted in changing role of service marketing are: the increasing importance of technological mediation; changing consumer and professional role; and decreasing importance of relational factors in consumer decision making. These trends pose fundamental challenge to service marketers to design business strategies that integrates such dynamic changes in business environment.

10 Trends identified in the Service Sector in 21st Century

  1. Personalization: The new service marketers are designing marketing strategies that favors engagement of human in delivering a service in order to build relationship factor. However, with increasing use of technology the human factor is placed less importance. Marketers are promoting use of internet transaction like online banking, online check in that reduced human engagement and flavors standardization of service delivery process.
  2. Understanding of Customer Expectation: With increasing use of research on consumer behavior, marketers are able to measure customer expectation and try designing services that will fulfill consumer perceived value. Also, with increasing use of consumer database with tools like credits card, loyalty cards etc. Marketers are successfully able to analyse the buying behavior of consumers and are able to design targeted campaigns based on the behavioral study.
  3. Credibility: Marketers are emphasizing on positioning themselves as organisation that effectively deliver brand promise by focusing on creating Emotional selling proposition rather than Unique Selling proposition. Companies are employing combination of above the line and below the line techniques. It’s been observed that modern are favor branding and public relation opposed to pay advertising.
  4. Simplification: Trends towards decreasing consumer complexity and increasing consumer knowledge. New cyber channels are being used as info-mediaries to provide consumer with quick and convenient information and access to service provider. Most of the marketers are designing marketing tools like website highly interactive and engaging that allows the consumer to consume services in easy, comfortable and convenient way.
  5. Internationalization: Trend towards the dominance of global service brands operating in service sector. This is mainly because giant companies are able to invest in advancing technology to serve burgeoning customer needs. They are able employ advanced CRM tools that can help marketing and promoting their brands to consumers.
  6. Bundling: Trend towards aggregating a physical good or other service with basic service offering. This strategy is commonly being adopted in order to develop physical evidence. Also, it helps in reducing the impact of fundamental characteristic of intangibility in marketing services consumer.
  7. Rationing: Marketers are putting strong efforts to maximize per output in provision of service to meet the challenge of high return on investment. Marketers are challenged on presenting profit impact of marketing strategy (PIMS). The marketing function has become more analytical opposed to designing creative strategy.
  8. Virtual experience: Marketers are commonly using technological tools like virtual reality in provision of services or as a substitute for services. Marketers are also developing platforms like fan-clubs; forums in order share their experience to develop trust about the service offering.
  9. Market spaces: The new cyber market has been able to successfully get more and more number of service users for the companies. Currently, it is strongest channel of distribution used by service providers. For example, Hotels, Broadband Services, Airline Industry etc.
  10. Multi-dimensional competition: Marketers are trying to appear as non-traditional service providers in order to blur distinctions between markets. Marketers are adapting niche and focused marketing approach in order position their service as a customized package for the target market.

All the above trends are enforcing marketers to adapt to this change, customize their strategies based on market needs. Thus, marketers have been continuously taking interest in understanding the changing marketing environment and changing consumer behavior.

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