Services are those separately identifiable but intangible activities that

provide want satisfaction, and that are not, of necessity, tied to, or
inextricable from, the sale of a product or another service. To produce a
service may or may not require the use of tangible goods or assets.
However where such use is required, there is no transfer of title
(permanent ownership) to these tangible goods. (Donald Cowell, The
Marketing of Services). The major characteristics of services which make
them distinctive from the marketing of goods have been proposed, these
are; intangibility, inseparability, heterogeneity, perishability and
ownership. Services marketers face a number of distinct problems, and as
a consequence, the approach adopted must be varied and particular sorts
of marketing practices developed.

Intangibility refers to the lack of substance which is involved in service

delivery. Unlike a physical good, there is no substantial material or
physical aspects of a service-no taste, feel, visible presence and so on.
Clearly, this creates difficulties and can inhibit the propensity to consume
a service, since customers are not sure what they have. For example if a
tourist books for an overnight accommodation at a hotel, s/he will enjoy
the comfort of the room, air conditioning, and the services of the hotel
attendants, but when the morning finally comes the tourist will check out
with virtually nothing tangible but only good memories.

Services marketing professionals must determine how to effectively

communicate the services process, deliverables, and benefits in order to
build client confidence. Tangible signals that indicate services quality and
value come from personal interaction, trusted recommendations, clear
communications, equipment used or processes followed, pricing, and the
physical environment in which the business operates.

With promotions, a logo symbol can offer a sense of tangibility.

Testimonials and case studies can be used to build client confidence and
rapport. The communications material itself (paper, design, and content)
can convey quality, too.

Pricing can also be an indicator of quality: Premium pricing often suggests

higher quality, while prices that are too low may hint at the inexperience,
limited depth, or vague processes of the services producer.

But tangibility must extend beyond promotions and price. Because

positive personal interaction and "chemistry" is a gauge of quality to the
client, marketing as a discipline must be influential in the training of sales
and service associates. These individuals literally are the embodiment of
marketing for the organization. Their ability to deliver on the brand
promise affects business success.
Therefore, creating client relationships, setting appropriate expectations,
and learning to represent the company in an acceptable way (e.g.,
through appearance, attitude, and communications) should augment
standard knowledge and process training. Because it is critical to services
delivery, the success of client interactions should be quantified,
measured, and improved with regularity.

Closely to intangibility is inseparability. The production of the services

can't be separated from its consumption. For example, the production and
consumption of a medical exam happen together, as do many consulting
services and IT maintenance contracts.

This leads to two important factors. First, the client is, essentially, "in the
factory," watching production all along the way. It is very important for a
service provider or consultant to carefully manage the "production
process" as the client is able to observe it in action and make judgments
about quality and value.

Second, the client often expects the service to be provided in a specific

way or by a specific individual and that can pose challenges in assigning
staff, managing the process, and ensuring the frontline people display the
appropriate knowledge, attitude, and appearance when delivering the
service.

The interaction of the customer and the service provider is a crucial factor
in the determination of customer satisfaction with the service. It is during
this time that the customer will compare the promise and the reality.
Some marketers have dubbed the occasion as the ‘moment of truth’.
There are some important marketing implications of this particular feature
of services. The impossibility of the separation of the service from the
person or personality of the seller implies an increase in the importance of
instilling values of quality, reliability, and to generate a customer service
ethic in the personnel employed within the organization which can be
transferred to the service provision.

Services marketing professionals can encourage client participation during

the delivery process. As the client is engaged through interviews, strategy
sessions, regular communications, testing, and face-to-face updates at
major milestones, he gains confidence and builds commitment to the
engagement and relationship.

To manage distribution and pricing considerations in the face of

inseparability, the marketing professional can identify the level of
personalization that the client requires and the company can support. For
example, interactions can be managed through conference calls versus
on-site visits, or exchanges can be shifted from high-contact to low-
contact operations (e.g., personalized banking to ATM or online banking).
These changes should be carefully evaluated to ensure client acceptance
and positive brand impact.

Heterogeneity is another distinct feature of services. Many services face a

problem of maintaining consistency in the standard of output. Variability
of quality in the delivery is inevitable, because of the number of factors
which may influence it. Also, variability is why it can be risky to have one
person make the sale and establish the relationship, and another deliver
the service. The original contact person is the one who reduced risk for
the client; when someone else delivers the service, the client may become
agitated or wary.This may create problems of operations management.
For example it may difficult if not impossible to attain:

(a) Precise standardisation of the offered. The quality of the service

may heavily depend on who is it delivers the service, or exactly
when it takes place. Booking a holiday using standard procedures,
may well be quite different on a quiet afternoon and on hectic
spring weekend, and may well vary according to the person dealing
with the client;

(b) Influence or control over perceptions of what is good or bad. From

the customer’s point of view, it is, of course, very difficult to obtain
an idea of the quality of service in advance of
purchase/consumption.

This points up to need to constantly monitor customer reactions. A

common way of addressing this problem involves applying a system to
deliver a service which may be franchised to operations. The problem
remains however and almost the only way to address it is by constant
monitoring and response to problems.

An example to illustrate the problem of heterogeneity, is when a till

operator in a supermarket, will be fresh in the morning and give off the
service with a wide smiling face which will later disappear as fatigue starts
to built up by the progress of the day. So the same customer who buys
bread in the morning may not be able to get the same quality of service
when returning for another purchase of a Coke later in the afternoon.

Standardizing some service offerings enables the organization to be very

specific in noting service and quality deliverables, thus decreasing
variability and meeting client expectations simultaneously.

When this method is used, variability can become a point of differentiation

as it enables flexibility and services customization.
When promoting services, marketers can overcome client concern about
service consistency in two ways, through team introductions and through
positive referrals. The sales leader should make it clear that a qualified
team will work with the client, and schedule face-to-face introduction and
discovery sessions to smooth the next-phase transition process.

In addition, positive word-of-mouth referrals, written testimonials and case

studies, or reference-able accounts can dispel client concerns about
variability.

Because things can and do go wrong, the services producer should know
how to deliver a professional client response. How quickly the response is
delivered is critical. The objective is to maintain client trust; so shifting
blame, explaining it away, or ignoring it can further damage the
relationship. The services producer should provide an apology, fix the
problem or a situation quickly, makes up for the inconvenience with
additional free services or a token of appreciation, and identifies the
reason for the error and fixes it at the root, even if it means people or
process changes.

Service blue printing which is flowcharting the processes involved in the

service process is one panacea to variability. A service blue print shows
potential fail points and helps come up with solutions. A detailed service
flow chart shows time frames within which each service has to be
performed. It further shows relationships between the front and back
office. As a result, employees must then be trained and motivated to
perform their tasks within the established time frames in the sequence
laid down in the service blue print. This is in a move to try and improve
consistency in service provision. Furthermore, a service blue print is used
to measure process quality as it serves as a referral point of what is
supposed to be done, within what time frame.

Finally, research shows that employee satisfaction is the most important

factor in providing high quality service. Potential client interaction
problems can be minimized through adequate training, empowering
employees to make more customer-focused decisions, and rewarding
them for positive customer-oriented behaviour.

Also, establishing employee feedback mechanisms so that management

can hear and take action on issues of concern will strengthen employee
perceptions of the company, increase satisfaction, and result in better
client interactions.

Implementation of the above give rise to the importance of developing

clear and objective quality measures, standardising as much as possible
within the service and assume the Pareto principle (80% of difficulties
arise from 20% of events surrounding the provision of the service).
Therefore identify and respond most closely to these potential
‘troublespots’.

Services are innately perishable. You can't store services for future use.
When a client misses an appointment with his attorney, that time can
never be recaptured. When hotel rooms are empty and theatre tickets go
unsold, the inherent value vanishes.
Perishability also affects performance, as balancing supply and demand
can be difficult. Demand may be seasonal, time sensitive, or crisis driven.
When demand fluctuates, it can be a challenge to maintain high
performance levels. Unlike the other characteristics, perishability primarily
is a concern of the service producer, the client is aware of this factor only
when there is an insufficient supply and he has to wait for the service. For
the services marketing professional, perishability affects pricing and
distribution most distinctly.

The perishability of services results in greater attention having to be paid

to the management of demand by evening out peaks and troughs in
demand and in scheduling service production to follow this pattern as far
as possible. This presents specific marketing problems. Meeting
consumer needs in these operations depends on staff being available as
and when they are needed. This must be balance against the need for a
firm to minimise unnecessary expenditure on staff wages. Anticipating
and responding to levels of demand is, therefore, a key planning priority.
The risks are:

(a) Inadequate level of demand is accompanied by substantial variable

and fixed costs;

(b)Excess demand may result in loss of custom through inadequate

service provision

The marketing implications are that policies must seek to smooth

supply/demand relationship by:

(a) Price variations which encourage off-peak demand, this is common

in the communications industry where lower rates are used during
weekends and in the evening, airline tickets and seasonal
vacations;

(b) Promotions to stimulate off-peak demand, for example a transport

operator may give customers a chance to win a big prize if they
travel during an off-peak period;
 (c) Making waiting time acceptable and enjoyable, if peak users have to
wait, they can, for example, be given comfortable seats or
complimentary refreshments;

(d)Use of reservation systems. The result is demand is managed to

control the peaks and encourage acceptable substitution at other
times.

Alternatively a marketer can temporarily increase the firm’s supply during

the peak period in the following ways:

(a) Use of part time employees;

(b)Increasing consumer participation. An example is when players in

the hotel business offering their clients access to the kitchen for
them to do their own catering. Customers actually accept it as a
more customized service.

(c) Rescheduling of work. Staff only perform only essential tasks during
the peak period and push the administrative tasks to off-peak times.

(d) Increasing supply is addressed through use of multiple locations.

Lack of Ownership is a basic difference between a good and service.

Service doesn’t result in transfer of property. The purchase of a service
only confers on the customer on the access to or rights to use a facility-
not ownership. Payment is the use of, access to or the hire of particular
items. Often there are no constraints on the length of time in such usage.
In the case of purchasing a product, there is transfer of title and control
over the use of an item. This may very well lessen the perceived customer
value of a service, and consequently make for unfavorable comparisons
with tangible alternatives.

The marketer should promote the advantages of non-ownership. This can

be done by emphasizing, in promotion, the benefits for paid-for
maintenance, and periodic upgrading of the product.

The marketer should also make available a tangible symbol or

representation of ownership (certificate, membership of an association).
This can come to embody the benefits enjoyed

Finally the service provider can counter the implications of lack of

ownership by increasing the opportunity of ownership (e.g. time-shares,
shares in the organization for the regular customers).
In general for a services organization the following are very important
areas of concern: personal selling, place and frequency of availability and
people.

Personal selling is more important because it is easier to sell products

than services due to great perceived risk involved, and greater
uncertainty about quality and reliability. The reputation of the supplier
may be of great importance, and there is a perception on the part of the
customer of the need for greater reliance on the honesty, sincerity (etc) of
the individual salesperson. When customers seek reassurance, personal
contact with a competent, effective representative may provide
confidence.

The place of availability and the frequency of availability are key service
variables, while planning to deal with capacity, and making sure that
levels of productivity for the assets to be used are optimized, are essential
for efficient and profitable operation. The level, and also the quality of
service which is available to the customer is especially sensitive to the
efficient organization of the processes by which services are delivered.

People, the personnel of the service provider, are uniquely important in

the service marketing process. In the case of some services, the physical
presence of people who are actually performing the service is a vital
aspect of customer satisfaction. The staff involved are performing or
producing a service, selling a service and also liaising with the customer
to promote the service, gather information and respond to customer
needs.

All levels of staff must be involved in customer service. To achieve this

end, it is vital for senior management consciously to promulgate values of
customer service constantly in order to create and build a culture of
customer service within the company.

What's right for a services organization? How can a company strengthen

client relationships and improve its competitive position? “Understanding
the characteristics of services can provide a unique opportunity for
services producers to improve business success by rethinking their pricing
models and packaging options, improving production processes and client
participation, enhancing customer focus, and building employee
relationship skills”.

Bibliography

Philip Kotler, Marketing management, Millenium edition, 10th Edition 2001.

S M Adrian, Palmer A, Principles of Services Marketing 2005.
www.marketingprofs.com Accessed on 17 December 2009.