MARKETING OF SERVICES

Contents
Marketing of Services:......................................................................................................................2
Introduction:................................................................................................................................2
Objective of the Assignment:........................................................................................................2
Literature Review:........................................................................................................................3
Service:........................................................................................................................................3
Service marketing:......................................................................................................................3
International Service Marketing:..................................................................................................3
Three Major Service Marketing Tasks:..............................................................................................3
1. Managing Service Differentiation:......................................................................................3
2. Managing service Quality:.....................................................................................................4
3. Managing Service Productivity:..........................................................................................4
Procedures of marketing service......................................................................................................4
Nature and Characteristics of Service Marketing..........................................................................5
Marketing mix for the service:..........................................................................................................5
 Product.................................................................................................................................6
 Price......................................................................................................................................6
 Place.....................................................................................................................................6
 Promotion.............................................................................................................................6
People:.........................................................................................................................................6
Process:........................................................................................................................................6
Physical Evidence:.......................................................................................................................7
The Persuasion:...........................................................................................................................7
Performance/Productivity of quality:.........................................................................................7
Period:.........................................................................................................................................7
Practices/Strategies of Service Marketing........................................................................................7
1. Pricing:......................................................................................................................................8
2. Advertising:...............................................................................................................................8
3. Personal selling........................................................................................................................9
4. Institutional image:...................................................................................................................9
5. Productivity of Quality:.............................................................................................................9
6. Customer orientation:...............................................................................................................9

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MARKETING OF SERVICES

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MARKETING OF SERVICES

Marketing of
Services:
Introduction:
Marketing efforts once focused primarily on the selling of manufactured products such as
cars and aspirin. But today the service industries have grown more important to the economy
than the manufacturing sector. Services, unlike products, are intangible and involve a deed, a
performance, or an effort that cannot be physically possessed. Currently, more people are
employed in the provision of services than in the manufacture of products, and this area
shows every indication of expanding even further.
Services, like products, require marketing. Usually, service marketing parallels product
marketing with the exception of physical handling. Services must be planned and developed
carefully to meet consumer demand. For example, in the field of temporary personnel, a
service that continues to increase in monetary value, studies are made to determine the types
of employee skills needed in various geographical locations and fields of business. Because
services are more difficult to sell than physical products, promotional campaigns for services
must be even more aggressive than those for physical commodities.

Objective of the Assignment:

The objective of the paper is to analyze service, marketing of services, ways and process of
service marketing and problems faced by managers of service firms concerning the services
marketing and the marketing strategies they use to overcome them.

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Literature Review:

Service: Service means any activity or benefit that one party can offer to another that is
essentially intangible and does not result in the ownership of anything. Example: Banking,
Hotel, Retail, Airline, Tax preparation, Home repair services etc.

Service marketing: Services marketing is marketing based on relationship and value. It

may be used to market a service or a product. Service marketing means offering services
through different process, organization and ways. in other words, service marketing is a way
of satisfying demand by invisible actions, that are provided by one party to another party with
getting profit or not getting profit that’s are called service marketing.

International Service Marketing:

International service marketers face special challenges. First, they must figure out what
services to introduce and in
which countries. Then,
they must decide how
much to standardize or
adapt their services for
world markets.

Three Major
Service Marketing
Tasks:
1. Managing Service Differentiation:
In these days of intense price competition for
survival service marketers often have to
develop a differentiated offer, delivery and
image. The offer can include innovative
features that set one companies offer apart from
competitors‟ offers. They can also differentiate their images through symbols
and Branding.

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2. Managing service Quality:

One of the major ways a service firm can differentiate itself is by delivering
consistently higher quality than its competitors do. Top service companies are
customer obsessed and set high service quality standards. They do not settle
for merely good service, they aim for 100% defeat
free service.
3. Managing Service Productivity:
With their costs rising rapidly, service firms are
under great pressure to increase service
productivity. They can do so I several ways. The
service providers can train current employees better
or hire new ones who will work harder or more
skillfully. Or they can increase the quantity of their
service by giving up some quality. Finally the
service provider can harness the power of the
productivity.

Procedures
of Marketing
Services

Procedures of marketing service

1. Analyzing target marketing: In the initial stage of service marketing, organization must
have to analyze target market.
2. Planning and development of service: In this stage the marketing organization tries to
make well planned and make development.
3. Pricing of service: Pricing of services is a most important task for service organization.
4. Distribution of channel: Service distribution is the most effective way of service
marketing.
5. Promotion of service: Every organization offers promotions to draw the attention of mass
people.

Nature and Characteristics of Service Marketing.

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1. Intangibility: Intangibility the service cannot be touched or viewed, so it is difficult for

clients to tell in advance what they will be getting.
2. Inseparability: Inseparability of production and consumption the service is being produced
at the same time that the client is receiving it (e.g. during an online search, or a legal
consultation,
3. Heterogeneity: Heterogeneity (or variability) services involve people, and people are all
different. There is a strong possibility that the same enquiry would be answered slightly
differently by different people (or even by the same person at different times). It is important
to minimize the differences in performance (through training, standard-setting and quality
assurance).
4. Perishability: Perishability unused capacity cannot be stored for future use. For example,
spare seats on one aero plane cannot be transferred to the next flight, and query-free times at
the reference desk cannot be saved up until there is a busy period.
5. Irrevocability: Irrevocability feature of service depicts that once rendered, service can’t be
revoked.

Marketing mix for the service:

Marketing Mix is the set of controllable tactical marketing tools the firm blends to produce
the response it wants in the target market. The marketing mix consists of everything the firm
can do to influence the demand for its product. The many possibilities can be collected into
four groups of variables known as the “four Ps”: product, price, place, promotion. Figure
shows the particular marketing tools under each p.

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 Product
Product means the goods and services combination the company effect that offers to
the target market for attention, acquisition, use, or consumption that might satisfy a
want or need.

 Price
Price is the amount of money charged for a product or service, or the sum of the
values that consumers exchange for the benefits of having or using the product or
service.

 Place
Place includes company activities that make the product available to target
consumers.

 Promotion
Promotion means activities that communicate the merits of the product and persuade
target customer to buy it.
Some other extended marketing mixes also influence service marketing. They are included,

People:
An essential ingredient to any service provision is the use of appropriate staff and people.
Recruiting the right staff and training them appropriately in the delivery of their service is
essential if the organization wants to obtain a form of competitive advantage.

Process:
Refers to the systems used to assist the organization in delivering the service.

Physical Evidence:

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Where is the service being delivered? Physical Evidence is the element of the service mix
which allows the consumer again to make judgments on the organization.

The Persuasion: It’s important in service marketing to pursue customers about your
services precisely and correctly.

Performance/Productivity of quality: Continuous monitoring of the service standard

is another important element in service mix. A service provider must have idea whether
customers are satisfied with his/her services or not.

Period: This element emerges from the unique characteristics of service named
perishability. Time period when the service will be provided or required is vital in the service
decision making process because the demand for service fluctuates depending on time period
which is not an easy task to manage as the service can’t be stored.

Practices/Strategies of Service Marketing

Various business practices and strategies are used to overcome
problems associated with services across all firms and different types
of firms.

Advertising Personal institutional Productivity customer

Pricing
Selling image of Quality orientation

1. Pricing:
Pricing is one of the most important strategies of service marketing. The attractive and
competitive price easily attracts the customers. For this reason service providing companies

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try to be more strategic for setting prices. Average responses across all firms show that cost-
oriented pricing strategies are used more than competition and demand oriented pricing
strategies. Although service cost may be difficult to calculate (according to the previous
finding), service companies are apparently making estimates of costs to be sure that they are
covered. Competition-oriented pricing although seems to be simpler, may not assure covering
costs. It can be seen that cost based pricing is more popular in the service firms whose target
customer is other institutions. Surprisingly it was found that the international firms are less
interested in using the cost-oriented pricing. Probably these firms prefer to set their service
prices based more on competitive environment of the country they are operating. It is seen
that the use of cost-based pricing is more where the need for customer presence is less, e. g;
repairing and consultancy services. It means less customer presence and the nature of service
makes the firms to calculate their cost easily. Though the practice of demand-based pricing is
found less in the industry, it is seen that if the duration of service benefit is immediate, they
are mostly using this pricing method.
We think service firms (like hotels or hair cutting saloon) who are giving immediate benefit
charges according to what customer is willing to pay to create loyal customers who will come
back again to their service firms as the firm honored them by charging the price what they
(customers) wanted to pay.

2. Advertising:
Advertising was found somewhat important for all the firms for their promotional activities.
Surprisingly it was found that the service firms whose customers are institutional have posed
their maximum support in favor of advertising which was found comparatively low for the
firms serving individual customers. Probable reason of this deviation may be that the
individual customer server concentrates more on sales promotion than advertising.
Advertising increases with the duration of benefit. Firms whose service benefit is immediate
(e. g; hair cut saloon) use less advertising campaign as their service will be perished
immediately. On the other hand the firms providing short (e. g; consultation) benefit and the
firms providing longer benefit (e. g; education provider) concentrate more on advertising
campaign because they have to remind the customers time to time about their services.
Customers are also looking for information in choosing firms who will be providing short or
long term benefits and those firms prefer advertising as the appropriate tool. Encouraging the
existing customers to tell others about the services was found the most preferred advertising
type among different types of advertising. We think this is a cost effective and trustworthy
way to promote the services to others because traditional advertisement may provide over-
estimated information about the services of the organization to the customers. But if that is
done by the existing customers, the future customers will find that more trustworthy. For
example, Building Ideas and Technologies consultancy firm advertise by saying, “Our clients
speak for us”.
It was found that the newspaper is in the second popular way to advertise by the service
firms. This is mainly due to the wide coverage and less expensive advantage of this media.
TV advertisement has got a lower response because the services are intangible in nature and
most of the time they can’t be shown in TV only the physical infrastructures may be shown
which may not be that much convincible. It was also found that the firms serving the
individual customers prefer encouraging their existing customers to tell about their services
compared to newspaper ad and TV ad. We think they are using their existing customers as
opinion leader because it saves their advertisement budget a lot and moreover this is the

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fastest way to get new customers. Though overall direct mail has got the least favorable as
advertising media, it has got the maximum acceptability to the firms serving institutions.

3. Personal selling:
Personal selling is another important strategy for service marketing. It receives maximum
response from the customers. Higher average scores in all personal selling related factors
showing particular emphasize in this area. Overall, respondent firms appear to concentrate
more on training their personnel to interact well with customers and carefully choosing them.
Firms that sell to institutional customers report greater care in choosing personnel than firm
selling to individual customers perhaps because there is frequently more riding on each sale
to institutional customers. But training employees to interact well has got almost equal
preference to both the firms serving individuals (mean = 3.58) and institutions. Surprisingly it
was found that the firms serving institutional customers are highly careful about contacting
customers after selling a service to them. This is mainly to keep the relation long lasting with
the institutions who are buying services from them (e. g; shipping lines). It was also found
that all the personal selling factors are more important for the firms serving institutions
compared to the firms serving individual customers (in all cases mean scores of institutional
server is higher). Higher service requirements of the foreigners and a good source of profit
encourage the multinationals to concentrate more on after sales contact.

4. Institutional image:
Institutional Image is a significant issue that attracts new customer trustworthily. As service
is a sensitive matter so people generally depend on those companies which institutional
image is good like Unilever, APEX, ACI, GRAMEENPHONE etc? Overall, firms appear to
emphasize gearing much of their marketing to projecting a specific company image compared
to dress codes of the service employees. As might be expected, service firms which
emphasize specific company image through facilities design most are those the consumer
visits: firms whose customer group is individual customers (e. g; travel agency), whose
geographic scope is local (hair cutting saloon), whose benefits are immediate (child care
center) and whose need for customers presence is high (health spas).

5. Productivity of Quality:
Quality control has got a high preference to the service firms. Surprisingly firms serving
institutions have rated maximum concentration on formal quality control system. These firms
are very much aware about quality controlling due to a chance of losing institutional
customers for low quality service delivery. Side by side that system is also supported by firms
serving individual customers. It was also found that regional firms are more careful about
quality compared to national and firms serving internationally. This regional firm’s narrow
market coverage induces them to maintain a certain high quality service delivery to their
small customer base. So productivity of quality is most significant issue for any service
providing company.

6. Customer orientation:
Customer orientation is another wise technique that leads a service providing company to
high success ensuring maximum satisfaction of customers. However, lower scores obtained
on item like producing customer designed services, reveals less sensitivity to customer needs.
Local firms, perhaps due to ease of collecting information from the customers, seem more
inclined to research customers need than non-local firms. But it may be opposite in many
cases due to the greater resource bases of the non-local firms. Institutional firms seem more

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inclined to do customer research than consumer firms. This is mainly to maintain a long term
relationship by taking the opinions of the institutional buyers about their service
requirements. In many cases both the firms work as partner where flow of customer
information is greater too. Same behavior was also found in case where institutional service
provider rated high to the strategy entitled „marketing activities are based on knowledge
about customers‟ for the above mentioned reasons. These strategies are practiced by most
service providing companies in order to promote customers. Moreover some specific service
providing companies use more specific marketing strategy.

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