Services Marketing

What is a Product?
 Anything that can be offered to a
market for attention, acquisition, use,
or consumption and that might satisfy a
want or need.
Includes: Goods, services,
events, persons, places,
organizations, ideas, etc.
 What is a Service?
“A form of product that consists of activities,
benefits, or satisfactions offered for sale that
are essentially intangible and do not result in
the ownership of anything.”

“Services are deeds, processes, and

performances”.
- Valarie Zeithaml & Mary Jo Bitner
The Nature of A Service
 A service firm, unlike a
manufacturing firm
 It does not manufacture but rather
performs something for the
customer.
 It delivers an experience that is
intangible, variable, inseparable
and imperishable in nature
Characteristics of Services
s
 Intangibility:
Difficult to sample and to
evaluate
Cannot be seen ,tasted, smelled,
heard or felt
Implications of Intangibility

Services cannot be inventoried

Services cannot be patented
Services cannot be readily
displayed or communicated
Pricing is difficult
 Variability
 The quality of the service
depends on who provides them
them ,when
,when , where
, where and how.
and how.
 Strategies for Variability
 customer surveys and feedback
 training in interpersonal and technical
skills
 provide product knowledge
 use standardisation strategies
 franchising, scripts
 build quality into all processes
 Inseparable
 simultaneous production and
consumption
 the service provider is the product
the customer is involved
(partial employee)

other customers may be present

 Strategies for inseparability
 manage the service encounter
 scripts and roles
 front-line staff need both technical and
interpersonal skills (recruit & train)
 manage customer interactions
 manage the physical evidence
 develop customer service policies and service
recovery procedures
 Perishable
 services cannot be stored
 need to manage supply and
demand
Implications of Perishability

 It is difficult to synchronize
supply and demand with
services
 Services cannot be returned or
resold
 How can demand be
managed?
 accurate demand forecasting
 develop off-peak and on-peak
strategies
 use reservation systems and
differential pricing
 employ part-time staff
 extend hours of operation
 Provide self-service options (i.e.
ATMs, internet banking)
Services Marketing Mix
Traditional Marketing Mix

All elements within the control of the firm that

communicate the firm’s capabilities and image
to customers or that influence customer
satisfaction with the firm’s product and
services:
 Product
 Price
 Place
 Promotion
An expanded marketing mix for
services

Product
People (service)
Process

Place &
Place,
Time
Customers
Customer
Customers Price
Price
s

Promotion

Physical
evidence
Expanded Marketing Mix for
Services
People
 All human actors who play a part in
service delivery and thus influence
the buyer’s perceptions: namely, the
firm’s personnel, the customer, and
other customers in the service
environment.

customer
service employees
other customers
 Physical Evidence
 The environment in which the service
is delivered and where the firm and
customer interact, and any tangible
components that facilitate
performance or communication of the
service.

• atmosphere
decor, music etc.
• equipment
• facilities
• uniforms
Process
 The actual procedures, mechanisms,
and flow of activities by which the
service is delivered—the service
delivery and operating systems.

service delivery systems

• back stage
• front stage
procedures
policies
 Challenges for Services
 Defining and improving quality
 Communicating and testing new services
 Communicating and maintaining a consistent
image
 Motivating and sustaining employee
commitment
 Coordinating marketing, operations and
human resource efforts
 Setting prices
 Standardization versus personalization
 Three Types Of Service
Marketing
 Internal Marketing
 External Marketing
 Interactive Marketing
 The Services Marketing
Triangle
Company
(Management)

Internal External
Marketing Marketing

“enabling the “setting the

promise” promise”

Employees Interactive Marketing Customers

“delivering the promise”
 Ways to Use the
Services Marketing Triangle
Overall Strategic Specific Service
Assessment Implementation
What is being promoted
How is the service
and by whom?
organization doing on
all three sides of the How will it be delivered
and by whom?
triangle?
Where are the Are the supporting
systems in place to
weaknesses?
deliver the promised
What are the service?
strengths?
Challenges for Services Industry
 Defining and improving quality
 Communicating and testing new services
 Communicating and maintaining a consistent
image
 Motivating and sustaining employee
commitment
 Coordinating marketing, operations and
human resource efforts
 Setting prices
 Standardization versus personalization