A service is defined as any activity or benefit that one party can offer to another which is essentially intangible and

does not result in the ownership of anything. The same general principles of marketing apply to both products and services, but services have characteristics that mean that instead of four P's, there are seven in a services marketing mix.

Physical goods tangible homogeneous Production and distribution are separated from consumption intangible heterogeneous

Services

Production, distribution and consumption are simultaneous processes

A thing
Core value processed in factory

An activity or process
Core value produced in the buyer-seller interaction Customers participate in production

Customers do not participate in the production process Can be kept in stock Transfer of ownership

Cannot be kept in stock No transfer of ownership

Most company offerings to customers contain an element of service and this is illustrated by the service continuum.

Figure 15.1 The tangibleintangible continuum for goods and services

Pure tangible goods toothpaste Tangible goods accompanied by one or more service computer and warranty Hybrid offer consists of equal parts of goods and services restaurants Service with accompanying minor goods air travel Pure service haircut

Intangibility Inseparability Variability Perishability Lack of ownership

Cannot be seen, tasted, felt, heard or smelt before they are bought. Service providers need to manage the evidence by providing evidence of the benefits.

Services produced and consumed simultaneously. Cannot be separated from providers, whether people or machines.

Customers are always involved

Quality may vary greatly depending on who provides the service, when and how. Staff need to know how to do something well. Staff must be well motivated to maintain high standards of service.

Services cannot be stored for later sale or use.

No physical product is exchanged and therefore nothing owned.

Service Marketing triangle shows three interlinked groups ( customer, provider and the company) that work together to develop, promote and deliver service to the satisfaction of the customer. Service marketing involves 3 types of marketing
1. External Marketing 2. Internal Marketing 3. Interactive Marketing

Company (management)
Internal marketing

External marketing

Employees

Market (customers, suppliers,etc)

External marketing efforts that a firm engages into set up its customers expectations Make promises to customers regarding what is to be delivered. Anything that communicates to the customer before service delivery, can be viewed. There are many factors that communicate beyond the traditional elements of advertising, special promotions, sales, and public relation.

For eg the firms personnel and the physical facilities.

Marketing to END-USERS.
Involves pricing strategy, promotional activities, and all communication with customers. Performed to capture the attention of the market, and arouse interest in the service.

Interactive marketing or real-time marketing Here the actual service takes place The firms employees interact directly with customers It is at this point that the promise is delivered or not delivered Having a positive link through external marketing and what is delivered through interactive marketing is critical.

External marketing in the world is useless if promises cannot be kept. Moment of Truth, Service Encounter This refers to the decisive moment of interaction between the front-office employees and customers, i.e. delivery of service.
This step is of utmost importance, because if the employee falters at this level, all prior efforts made towards establishing a relationship with the customer, would be wasted.

Internal marketing Refers to the activities the firm must carry on to train, motivate, and reward its employees. Unless service employees are able and willing to deliver on the promises made, the firm will not be successful in keeping its promises and the services marketing triangle will collapse. Hinges on the assumption that employee satisfaction and customer satisfaction are linked.

Marketing to EMPLOYEES.
Involves training, motivational, and teamwork programs, and all communication with employees. Performed to enable employees to perform the service effectively, and keep up the promise made to the customer.

Setting promise Enabling promise

Delivering service

A travel and tourism company listens to the customers and evolves/develops the travel/tour package and it communicates the attractiveness and the utility of that very tour package directly to the customers. Here it (the company) performs external marketing. The company makes promises to the customers.

They are a travel companys internal customers constituting employees and agents. The company does internal marketing with the providers educating and motivating them about the idea of the particular tour package which they can offer to their customers. This is done to enable the providers to effectively carry out the service transaction process. The providers make provisions for office space, accessibility and connectivity. The company enables promises to be kept by this infrastructural association.

For whom the company has designed the traveling and touring package as well as set up the infrastructural

facilities and spent money on employee development

programmes.

Here the providers are the only ones who interact with the customers, like the travel agents interact with the customers and not the company.

The agents perform interactive marketing which is

on-time, all-time, every-time. Those agents have the responsibility of keeping promises made and enabled by the company.

The providers (agents) are responsible for the

perceived quality level of the service transaction.

This underlines the uniqueness of service marketing.