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Services Marketing Previous Chapter Chapter 3 : Consumer Behavior Differences Between Characteristics Of Goods and Services Search Qualities Experience Qualities Credence Qualities Consumer Decision-Making Process Need Perception Search for Information and Perceived Risk Evaluation of Alternatives Purchase Behavior Post-Purchase Evaluation External Factors Influencing Consumer Behavior Implications For Service Providers Chapter Summary The intangibility property of services makes it difficult for customers to search for information, make a purchase decision, or even evaluate the service experience. This is due to the presence of more experience and credence qualities than search qualities in services. Hence, service providers need to deliver value added services to their customers to provide them a superior service experience. Decision-making is involved in every purchase decision, whether it is to purchase a product or a service. The decision making process in the purchase of a service involves various steps such as need perception, search for information

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and the perceived risk, evaluation of the generated alternatives, the purchase decision and the post-purchase evaluation. Further, the decision making process of the customer is influenced by external factors like his family, culture, subculture, reference groups and the social class to which he belongs. Marketers are innovating several ways to make service experiences memorable for the customer. They are also trying to retain old customers since this is more profitable to the company than attracting new customers. Observing buyer behavior patterns helps marketers to target customers in a better way. The technological advances and globalization of economy make it possible for service providers to design new ways of providing their services. Next Chapter

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The objective of this lesson is to have an insight into: Special characteristics of service marketing Service Marketing Mix Service Marketing triangleLets understand the special characteristics of services . SPECIAL CHARACTERISTICS OF SERVICES Services are said to have four key characteristics which impact on marketing programmes.These are:

Intangibility Inseparability H eterogeneity variability Perish ability (simultaneous production/consumption) It is helpful to consider each of these characteristics briefly: Intangibility Services are said to be intangible - they cannot be seen or tasted, for example. This can causelack of confidence on the part of the consumer As was apparent earlier, in considering pricingand services marketing, it is often difficult for the consumer to measure service value andquality. To overcome this, consumers tend to look for evidence of quality and other attributes, for example in the decor and surroundings of the beauty salon, or from thequalifications and professional standing of the consultant. Inseparability Services are produced and consumed at the same time, unlike goods which may bemanufactured, then stored for later distribution. This means that the service provider becomesan integral part of the service itself. The waitress in the restaurant, or the cashier in the bank,is an inseparable part of the service offering. The client also participates to some extent in theservice, and can affect the outcome of the service. People can be part of the service itself, andthis can be an advantage for services marketers. Heterogeneity Invariability LESSON 2SPECIAL CHARACTERISTICS OF SERVICES The objective of this lesson is to have an insight into: Special characteristics of service marketing Service Marketing Mix Service Marketing triangleLets understand the special characteristics of services . SPECIAL CHARACTERISTICS OF SERVICES Services are said to have four key characteristics which impact on marketing programmes.These are: Intangibility Inseparability H eterogeneity variability Perish ability (simultaneous production/consumption) It is helpful to consider each of these characteristics briefly: Intangibility Services are said to be intangible - they cannot be seen or tasted, for example. This can causelack of confidence on the part of the consumer As was apparent earlier, in considering pricingand services marketing, it is often difficult for the consumer to measure service value andquality. To overcome this, consumers tend to look for evidence of quality and other attributes, for

example in the decor and surroundings of the beauty salon, or from thequalifications and professional standing of the consultant. Inseparability Services are produced and consumed at the same time, unlike goods which may bemanufactured, then stored for later distribution. This means that the service provider becomesan integral part of the service itself. The waitress in the restaurant, or the cashier in the bank,is an inseparable part of the service offering. The client also participates to some extent in theservice, and can affect the outcome of the service. People can be part of the service itself, andthis can be an advantage for services marketers. Heterogeneity Invariability Because a service is produced and consumed simultaneously, and because individual peoplemake up part of the service offering, it can be argued that a service is always unique; it onlyexists once, and is never exactly repeated. This can give rise to concern about service qualityand uniformity issues. Personnel training and careful monitoring of customer satisfaction andfeedback can help to maintain high standards. Perishability Services are perishable; they cannot be stored. Therefore an empty seat on a plane, for example, is a lost opportunity forever. Restaurants are now charging for reservations whichare not kept, charges may be made for missed appointments at the dental clinic. Perishabilitydoes not pose too much of a problem when demand for a service is steady, but in times of unusually high or low demand service organisations can have severe difficulties.The above characteristics are generally referred to in many texts as being what makesservices marketing so different. However, this assumption should be queried on a number of grounds. Like all sweeping generalizations, generalizations concerning services marketing donot always represent the full picture. Consider the question of tangibility. In the main,services can be broken down into three main classifications:Rented goods servicesConsumer-owned goods services Non-goods servicesSome of these categories involve goods which are physical, and which contribute in someway to the service offering. This gives rise to questions about the degree to which servicescan be classed as intangible.Another way of classifying services is to consider the distinction between equipmentbasedservices and people-based services. Examples of equipment-based services would include:Vending machines Car and tool hire AirlinesPeoplebased services would include: Nursery infant careArchitects Legal servicesYet another distinction can be made between consumed services, which are offered on a personal basis, and business-to-business or industrial services. Some service providers mayoperate in both these market sectors:Franchised child care services may offer local services to parents, and operate in-companyschemes. Hotels may cater for the tourist and the business or conference market. Privatehealth care programmes generally

offer personal and corporate rates. On the other hand, someservices such as industry-specific consultancy services or marine salvage operate in quiteclosely defined market sectors. 4. THE NATURE OF THE SERVICE PRODUCT Whichever means of classifying services is used, and whether or not there is agreement thatthe unique characteristics of services really represent unique distinctions, ultimately both physical goods and services provide benefits and satisfactions - both goods and services are 'products' or offerings. Consider the following breakdown of service offerings: Utilities: gas, power, water Transport and communications Recreation and leisure Insurance, banking and finance Business, professional and scientific For most of these categories it is easy to think of 'products' associated with them; insurance policies, heating and light, package holidays and so on. This has implications for servicesmarketing management.As in traditional marketing concerned with-'tangible products, the services marketingmanager needs to look closely at marketing strategy, including such aspects as:The service element of the augmented product - the characteristics which help distinguish a product from its competitors - is now a key factor in long-term success. Rapid developmentsin technology which mean that firms can no longer sustain a leading edge position in themarketplace by technological superiority alone has led to the development of service as amarketing tool for competitive advantage. The impact on profitability can be two-fold: profitability can increase.not only through superior competitive positioning, but many service divisions now represent profit centres in their own right.Another important area which is receiving increasing attention from marketers is thenot-for-profit service "sector. Not-for-profit organisations engage in a broad sphere of activityranging from cultural, educational and political interests to social and leisure activities. Thesize of these organisations ranges from very small, local concerns to large, multi-national