Assignment 2- Intangible Markets and Customer Relationships
After our Pecha Kuchas each student was given different "themes" in service marketing to research and dissect. Since services are intangible companies have to take a different approach to marketing and maintaing them. They are selling selling experiences not physic  products. Customers have to understand and trust the service even though its not physically in front of them. This creates a few strategic marking hurdles. Based off of these ideas my "theme" went as so...:  Â
"Understanding consumer behavior lies at the heart marketing. How can service providers attract retain and grow the right customers?" This question can be answered by looking at the coffee industry. Coffee beans and Lattes are sold and marketed two completely different ways even though they are both essentially ⌠coffee. Savannah College of Art and Design graduate student Lindsay Vetell explains it through her graph, as seen above.
"This table explains that commodities are the most basic materials on the market- this example illustrates raw coffee beans. Because commodities are generally interchangeable and compete solely on price, additional value can be addedâand charged forâthrough some sort of processing to make the consumerâs life easier. In the coffee example, this could be through roasting and grinding the raw coffee beans to eliminate this step for the consumer. Moving further up the competitive value chain is service delivery. This stage involves the delivery of processed goods; in the example of coffee, it might be a gas station serving coffee by the cupâthis is where most retail currently falls. Lastly, by providing an experience for the consumer, a company is able to provide the most differentiated product from its competitorsâand the price reflects that. Think Starbucks. At a gas station you might pay $1.50 for a large coffee, whereas at Starbucks you are paying for the brand experience at $3.75." In a nutshell-and redirected back to the "theme"- by understanding the schedule/behaviors of average Americans, companies such as Starbucks were able to take coffee beans, the commodity, and create a time saving, delicious, coveted "experience" (buying a Latte). After creating the initial service Starbucks has been able to retain customers but constantly bringing new promotional items, loyalty programs, and additional experiences such as in-house charity and musical programs. Â















