Table of Contents
- Principles of Service Marketing vs. Product Marketing
- Differences Between Traditional Product Marketing and Service Marketing
- Link between Customer Satisfaction and Service Quality
- Importance of Strong Customer Relations in Product Sales vs Service Sales
- Related Free Business Essays
The following essay contains an in-depth analysis of Pepsi Co. focusing on its products and the after sales service that they offer at different stages of their sales. It also analyzes the use of service as an inducement strategy meant to boost sales at the company’s different outlets in the global arena. Additionally, it discusses the different principles of service and product marketing that the company uses in relation to customer satisfaction and service quality. Most of the company’s revenue is derived from North American Quaker foods, Latin American foods, European products, and American beverages. As a multinational company PepsiCo has expanded its growth and market share to different parts of the world. Unlike most companies, its target audience is young adults and teenagers who have a craving for the company’s products and services. Over the years, the company has continued to diversify its products and services leading to customer satisfaction and loyalty. This has enabled the company to gain a greater competitive advantage when compared to other companies within the same industry.
Principles of Service Marketing vs. Product Marketing
For any big company like Pepsi Co, the marketing of services quite differs from the marketing of products. This is due to the fact that services are not tangible. For this reason, companies must work towards projecting the value of their services and the ability to entice customers. Pepsi Co relies on customer testimonials and other forms of awards to support the value of their services when it comes to marketing (Burton, Parker & Lawley 2012). The company listens to all of its customers who perceive the value of the services differently. It invests in conducting research regarding the customer experiences related to their services and what needs to be done to promote the value required. Unlike products, services are difficult to promote for Pepsi Co and other known multinational companies because of their reliance on delivery commitments and reputation (Johnson & Auh 1998).
While product marketing concentrates on price, product, promotion and place, the service marketing considers all the four elements together with processes, people and physical evidence. In case of service marketing, people refer to the extension of individuals providing company services. In service marketing, the most important principle is the human resource factor. In this regard, Pepsi Co ensures that its employees have the required certification, knowledge and competence required for delivering services. Pepsi Co brands itself as one of the top service providers worldwide based on the expectations of their customers when it comes to consistency, personalization and high-quality experience. Customers evaluate the process based on efficiency and friendliness of company workers. Pepsi Co puts an emphasis on efficiency and personalization of services to meet the customer needs. In terms of physical evidence, Pepsi Co achieves this through the establishment of buildings and service centers to prove the quality of their services. Unlike products, services are inseparable from the providers. Successful service marketing therefore relies on consistent service delivery among others (Hederman 2008). In case of service marketing, there is a need to explain why the customer needs a specific product and why the company may be the best when it comes to delivering the service. Pepsi Co uses a number of strategies to market their services. Such include referrals, education of the customers, demonstrations and the use of social media. PepsiCo focuses its marketing strategies on young adults and teens hence there is a constant change in advertising strategies to meet the interests of the targets. In regard to the product marketing, the most common strategy used is the print, outdoor and broadcast advertisement (Baron 2010).
Differences Between Traditional Product Marketing and Service Marketing
Traditional product marketing is the most common form of marketing mix that revolves around the four Ps. It involves the use of billboards, broadcast and print advertising. In most cases, it is the most common mode of advertising for most companies. Print marketing entails the use of paper to advertise products. For PepsiCo, this is carried out in the form of magazines, newspapers and other forms of printed materials that are distributed to the target markets. For broadcasting, there are used radio and television advertisements that are scheduled at particular times (Baron 2010). PepsiCo employs these forms of marketing due to the different existing strategies. Being a multinational company, the most common form of traditional product marketing is television commercials and print sources. Most traditional product marketing strategies are meant to determine whether a company can produce adequate products that would meet the needs and demands of its customers. Here, the end goal of PepsiCo is reaching the young teens and adults who are its target audience while making profits and expanding growth at the same time. For PepsiCo, the product marketing here is used to meet the demographics of its consumers (Raab 2008).
Most companies like PepsiCo implement different marketing strategies of their products and services with an aim of attracting customers, remaining competitive and creating a powerful brand image. The most common difference between service and product marketing is cost. From the traditional perspective, the cost of the marketing strategy depends on the target market and the quality of the strategy presented. On a general basis, the cost also depends on the budget of the company. In this scenario, Pepsi Co invests heavily in their advertisements including the use of popular characters to reach the audience. This is a way to attract the young teens and adults who are engaged in the activities and lifestyles of the individuals used in advertisements. In such cases, product marketing involves the advertisement of the product in question, which in this case, the manufacturing company uses as the available media sources to familiarize their product to their customers for creating awareness and reminding the users of the existence of a given product. A product sale also targets a collective need of the entire market, whereas a service sale on the other hand targets specfic needs of an individual customer.
Service marketing on the other hand also depends on the budget and the type of service being marketed. Service marketing also involves the main characteristics of services that are heterogeneity, perishability and inseparability as well as lack of ownership. Service has the quality of intangibility, which means that one must associate it with the image of something physical. A service for instance must have a connection to a product the same an airplane has a direct connection to air travel services. For instance, for one to use an air travel service, one must have the image of an excellent airplane. A product on the other hand does not need another product to complete the marketing process. A product does not require an associate product unless it is a complementary product. A product might just need a logo to complete its marketing demand as the logo acts as the product identity. Service marketing has an aspect of inseparability so that the acquisition, provision and consumption of a service occur at the same time. This demonstrates the fact that the two aspects must work together to complete the process of service purchase and service delivery. Service marketing takes into account the short lifespan of the service in a way that a service is highly perishable as compared to a product. If for instance a tourist visits a particular place and demands hospitality services, this cannot be postponed since the tourist will have to find an alternative that would meet their current needs.
Link between Customer Satisfaction and Service Quality
Customer satisfaction is based on the feelings of disappointment and pleasure that result from the expectations and product comparison. The link between these two exists along with the fact that customer satisfaction aims at achieving customer satisfaction. With the good measure of service quality by PepsiCo, the company will be able to dictate how good or bad the services are with regard to meeting customer needs. Service quality comprises of processes, physical facilities, procedures, staff competence and professional judgment. Customer satisfaction on the other hand is measured by service quality, pricing, relationship between the company and customers and company positioning in the minds of the clients. From this, it is evident that service quality is a primary determinant of customer satisfaction. In most cases, service quality precedes customer satisfaction. Based on this aspect a customer determines the level of satisfaction they have received in relation to the service provided (Ryan & Jones 2009).
Most research studies show that customer satisfaction and service quality share similar components that are common when it comes to marketing. For instance, they both share similar perceptions when it comes to responsiveness, reliability and assurance; the relationship here exists due to the customer perceptions of customer satisfaction and service quality. This is explained by the reliability, responsiveness, and assurance, empathy and tangibility concepts. There is a direct relation between customer satisfaction and quality service and the reverse is true. One of the discoveries of Pepsi Co is the fact that poor service rendered equally amounts to poor customer satisfaction. Customer satisfaction is one of the parameters of determining the quality of service offered by service industries as well as product industries. The rate of customer return after a service is rendered is also another parameter of determining the quality of service rendered. A satisfied client will always come back for the same service to continue enjoying more benefits enjoyed earlier. Dissatisfied clients will hardly come back for the same poor service rendered earlier.
Service quality on the other hand revolves around the human resource concept of the seven P’s of marketing mix. In most cases, the service quality at Pepsi Co relies on the knowledge, expertise and competence of the employees when it comes to service delivery. Professionalism in service requires competent and well-trained service renders. In legal services, offered quality can be determined by the success achieved by the client in question whereas in health industry it hinges upon the restoration of the client’s health. In companies like PepsiCo, customer satisfaction has a direct bearing on the demand of the same service or product offered. Poor service results in customer dissatisfaction and lowered demand of the same service. Quality service on the other hand results in customer satisfaction and consequently increases the demand of the same service. Most industries that offer both products and services strive to incorporate professionalism in their services to ensure that clients get the best possible results from the services offered. Professionalism in service offered has a direct relation to the image of industry offering the service in question. A good image is always an advantage in the competitive market of the service industry (Hansal, Weigl & Bull 2010).
Additionally, customer satisfaction and service quality are related to the fact that the higher the product quality the higher the customer satisfaction. It is a lot more expensive to produce quality products as compared to the provision of substandard product. The components integrated in the manufacturing and production of quality products increases the overall cost of production and ultimately the product price. Clients believe in the notion that there is a value for money so that they will get the quality they need if they spend a lot more on a given product. Quality products attract customer satisfaction and this has an impact of increasing the overall sales of the product. A low quality product on the other hand leads to customer dissatisfaction, which also lowers the demand for the same substandard products.
Customer satisfaction has a direct bearing on the demand for the products or services offered by PepsiCo and other food and beverage companies. Poor service results in customer dissatisfaction and lowered demand for the same service. Quality service on the other hand results in customer satisfaction and consequently increases the demand for the same service. Service industries have to strive to incorporate professionalism in their services to ensure that clients get the best possible results from the services offered. Professionalism in service offered is directly related to the image of the industry offering the service in question. A good image is always an advantage in the competitive market terrain in the service industry.
Importance of Strong Customer Relations in Product Sales vs Service Sales
Good customer relationship management is beneficial to both the product industry and the service industry. Relationship management in both capacities enables the firm offering the product or the service to get their clients’ response regarding the product or service offered. This response enables the business to adjust its products or service appropriately to remain relevant in the market. These relations also create a good rapport between a firm and its clients. A good rapport between clients and the business firm improves the image of the firm in the public domain. It also demonstrates that the firm cares not only for profits but also for the welfare of the clients. It also averts a crisis as the firm keeps in touch with its clients and provides a ready audience with the concerns and complaints of the clients (Agbor 2011).
It is also worth noting that customer satisfaction depends largely on the quality of the service offered or product produced as proved by PepsiCo. A high quality service provided by the company’s personnel leads to customer satisfaction, which also boosts sales and establishes customer loyalty. The customer loyalty over the years has provided PepsiCo with product and service stability even in the face of stiff competition both locally and internationally. This has seen the constant number of young adults and teens as customers when it comes to PepsiCo’s products and services. Customer loyalty also reduces promotional costs since a loyal customer does not require further persuasion through advertisements to buy the product. It is worth noting that even though the product industry has several competitive advantages over the service industry; both product and the service industries face a series of challenges that require high level and competent management to drive them to success. Both industries rely on a good image to survive and a workable customer relation management comes handy.
A product has label upon which further promotional activities can take place; this is a disadvantageous factor of the service industry. Offering a service to customer induces more customers towards a product and it is the best way of promoting the sales of a product. A service can be used to promote a product but it is not economical to use a product to promote a service. In both contexts, customer relations in product sales and service sales enable companies to develop, acquire and retain customer relations that are long lasting and profitable for PepsiCo. In product sales, good customer relations result to higher demand and purchase of the company’s products. The same applies to service sales. In a similar way, both segments end up attracting customers of different levels who in this case are the young adults and teens that prefer most of PepsiCo products and services.
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Good customer relations in service and product sales result in the establishment of strong customer loyalty. This is one of the key strategies of PepsiCo. Despite the existence of multiple generations, the most loyal customers of the company belong to a particular age group, which turns out to be beneficial for them. Here, the company is able to work on specific procedures and methodologies involved in promoting loyalty, satisfaction and quality. Customer loyalty that results from customer relations provides a competitive advantage for PepsiCo over other beverage and food manufacturers. In this regard, the company is not scared of losing its customers to its competitors but plans on how it will continue to maintain the relationships (Sharma 2008).
For most international companies, the concepts of service and product marketing are the key success determinants that see such companies thrive in different regions. Additionally, it is important for multinational companies to invest proper advertising strategies whether traditional or service oriented. Based on their different characteristics, the methodologies used in marketing will allow proper penetration into different market segments (Lawley 2007).
In conclusion, all the sections discussed above are important when it comes to the marketing of products and services for most multinational companies. PepsiCo as a company in question invests greatly in service quality and customer satisfaction. According to the company’s annual report, the customers are the most important elements of the company’s existence. With this in mind, PepsiCo invests greatly in ensuring the services it offers are of great quality and satisfy customers. The paper has also proven the existing relationship between service quality and customer satisfaction. In much simpler terms, they are all dependent on one another. The other important finding of the paper is the principle of product marketing and service marketing. This is evident in addition to the seven P’s that emphasize people, processes and physical evidence. From the discussions above, it is clear to any marketing student that services and products of any company today aim at meeting the P’s mentioned in the discussion. Without these, it is impossible for PepsiCo to achieve the goals of meeting the audience needs and requirements as well as achieving customer satisfaction. Based on all the concepts discussed, when it comes to product sales and service sales, customer relations are another important segment. Without customer relations, there is no customer loyalty and increased market share.
PepsiCo has managed to achieve this by offering quality services provided by its employees and leading to customer satisfaction. This has turned out to be beneficial for the company as it gives it a competitive advantage over other companies within the same industry. The company has managed to promote this in all its major markets both locally and internationally hence having a large customer base. Finally, companies like PepsiCo have proved that service is more important than products. Continuous offering of quality services by a company determines the level and frequency of product purchase in most industries.