Services Marketing

The service industry today grown tremendously especially because many new services have been
developed, Tangible product suppliers have found that they can get a competitive advantage and
higher profits by adding value to heir goods through the service element.

A service is any act or performance that one party can offer to another that is essentially
intangible and does not result in the ownership of anything. Its production may or may not be
tied to a physical product.

Characteristics of Services and Their Marketing Implications

One - Intangibility
Services are intangible. Unlike physical products, they cannot be seen, tasted, felt, heard, or
smelled before they are bought.

Marketing Implications
The customer will not have any idea of the level of satisfaction he would receive from from the
services at the time of buying the service. As a result the customer takes a big risk when he buys
the service. many customers aren’t willing to take this risk.

Marketing Response
To overcome this problem marketers can

1 – Tangibalizse the product

Eg –
1 – Sampling or demonstration of product where posoble ( make-up demo)
2 – Using catalogues or pictures ( hotels, airlines, tailors)
3 – Strong logo, brand name
4 Staff uniforms
5 – Display of certificates, awards

2 – Use references from satisfied customers

3 – Build “trust-relationship”

Two -Inseparability
Services are typically produced and consumed simultaneously, unlike physical goods, which are
manufactured, put into inventory, distributed through resellers, and consumed later.

There are two aspects to this

 The production of the service cannot be separated from the consumption. It happens
simulaneosly. Very often this happens in the presence of the customer.

 The skill of the service provider cannot be separated from him therefore you cannot pass on
ownership of the service.
Marketing Implication
The service must be delivered perfectly because consumption takes places immediately and
therefore it would be experienced immediately.

Customer feels that the service was a waste, because he owns nothing at the end of it.

Marketing responses

1 – getting the right person for the job – proper recruitment

Eg – Good personality and communication skills for front line staff
2 – Proper training : in house, on the job , through manuals and workbooks etc. The training
must be contious.
3 – Motivation : Good taiing itself a motivation. Also giving authority and responsibility
motivates people.
4 – Proper supervision
5 – Improve processes

Three- Perishability
Services cannot be stored; once an airplane takes off or a movie starts, any unsold seats cannot
be held for future sale. Perishability is not a problem when demand for a service is steady, but
fluctuating demand can cause problems.

Marketing implications
1 – high pressure on the marketer to make sure that the service is fully sold all the time
2 – The marketer cannot increase or reduce supply easily

Marketing responses
1 – Divert demand from times of excess to times of shortage
Eg- offpeak and peal rates
2 – Maintain a minimum service support structure eg – Minimum lvel of employees and
equipment. In situations of excess demand.

Four -Variability
Services with very high human presence cannot be reproduced at the same quality levels each
and every time. Because services depend on who provides them and when and where they are
provided, they are highly variable.
Eg- In restaurants the food quality varies

Marketing Implication

Quality variations increase the risk factor that the customer takes. His confidence is affected

Marketing response
 Proper recruitment, training and supervision of staff
  Improve the processes. As the processes improve the service, time becomes shorter and
overall quality improves. Therefore some variability may not be noticed.

MARKETING STRATEGIES FOR SERVICE FIRMS

In services marketing as a result of the difficulties encountered by the marketer arising from the
characteristics (intangibility), marketing writers suggest that specific strategies must be
developed in three additional areas, therefore instead of 4ps, a service marketing mix has 7ps.

People
This means all the people involved in he service company. Any one of them can make or break
the confidence relationship with customer. Proper recruitment, training and motivation is
essential

Processes
This involves all the stages involved in the delivery and consumption of product.

Eg-
 Ordering process
 Waiting process
 Packing process
 Payment process
 Service process

It is believed that making these processes shorter, more convenient and more efficient will
substantially increase customer satisfaction

Physical evidence
This tangibalize the service

Eg – office layout, interior décor, staff uniforms, equipment used, corporate name, logo, colours,
photographs, certificates, awards, corporate vehicles.

Managing Service Quality

Another way for a service firm to succeed is by delivering consistently higher-quality service
than that of its competitors and by exceeding customers’ expectations. These expectations are
formed by the firm’s past experiences, word of mouth, and advertising.

1 .Gap between consumer expectation and management perception: Management does not
always perceive correctly what customers want.
Eg-Hospital administrators may think that patients want better food, but patients may be more
concerned with nurse responsiveness.
2. Gap between management perception and service-quality specification: Management might
correctly perceive the customers’ wants but not set a specified performance standard.
Eg-Hospital administrators may tell the nurses to give “fast” service without specifying it
quantitatively.

3. Gap between service-quality specifications and service delivery: Service personnel might be
poorly trained, or incapable or unwilling to meet the standard. Or they may be held to conflicting
standards, such as taking time to listen to customers and serving them fast.

4. Gap between service delivery and external communications: Customer expectations are
affected by statements made by company representatives and ads.
Eg- If a hospital brochure shows an attractive, modern room, but the patient finds an older,
unappealing room, external communications will have distorted the customer’s expectations.

5. Gap between perceived service and expected service: This gap occurs when the consumer
misperceives the service quality.
Eg -The doctor may keep visiting the patient to show care, but the patient may interpret this as an
indication that something really is wrong.

For more marketing notes

http://ragulan.wordpress.com/2009/07/01/marketing-notes/