SERVICE MARKETING

Prepared By: Ms. Savita Mahendru

Department of Commerce

Hans Raj Mahila Maha Vidyalaya Jalandhar

Service Marketing

• Service Marketing is simply defined as a phenomenon wherein a service or an intangible commodity is promoted and marketed among the target audience.
• A novel kind of marketing, service marketing has become quite prominent in helping companies promote services around the world.
• Service Marketing reflects on the way a type of service is promoted in the market. Though service marketing is a unique concept, it calls out for an intangible representation of commodities (services).

​

• As opposed to Product Marketing that involves a physically visible product being promoted over various media, service marketing calls for the promotion of a service that is not physically available but is still sold out to the customers.
• Activities, benefits, or facilities, services are simply extended as a commodity to customers who choose from a varied nature of services. An example of service marketing can be- when a family arrives at a restaurant, they avail of the services (dining) while they are the restaurant.

Features of Service Marketing

1. Intangible Perforrmance

Service Marketing focuses on an intangible performance more than anything else. A service is a performance rather than a product that can be consumed. Moreover, it is an intangible commodity that the masses avail themselves of. Invisible and intangible, services are simply different than a product. This calls out for a different kind of marketing strategies that promote an unseen service yet through the lens of performance, marketers do that well.

Thus, service marketing is nothing more than a representation of an intangible performance that the common masses avail themselves of in their day-to-day lives.

2.No Ownership Involved

Unlike product marketing wherein the audience is subjected to product ownership, service marketing does not reflect on such promises. This is because a service can be consumed and not owned.

One can, for example, consume the dining experience at a restaurant as compared to a pencil that one can own in the case of product marketing. This characteristic in particular highlights the amount of hard work that service marketing officials have to put in order to attract the customers.

3.Perishable Products

Unlike products that last long, a service is prone to perish within a very short period of time that makes it to be termed as a perishable product. This is because as long as a customer is present at the venue, a service lasts for that amount of time.

After that, it simply becomes a memory that one can only think of! Since a service is an easily perishable product, many people from the audience are not convinced easily. Still, the service marketing features perishable products and promotes them in some way to call out for the target audience.

4.Inseparability

This is also a feature that complicates the task of professionals while marketing the services. The inseparability focuses on the fact that the services are not of separable nature. Generally, the services are created and supplied simultaneously. Like the dancers, musicians, dentists and other professionals create and offer services at the same time. In other words, the services and their providers are the same. Donald Cowell says, “Goods are produced, sold and then consumed whereas the services are sold and then produced and consumed.”

Goods are produced, sold and then consumed but the services are sold, produced and then used. The inseparability thus makes it essential that the service-providers are acting and behaving professionally so that the marketing processes are not to pave the avenues for a degeneration in the quality.

5.Heterogeneity

Another feature is heterogeneity which makes it difficult to establish standard. The quality of services can’t be standardised. The prices charged may be too high or too low. In the case of entertainment and sports, we find the same thing. The same type of services can’t be sold to all the customers even if they pay the same price.

​

The consumers rate the services in a different way. Of course, it is due to the difference in the perception of individuals at the levels of providers and users. The heterogeneity factor makes it difficult to market efficiently. The professionals by using their excellence bear the responsibility of minimising the problem.

6.Simultaneity

Services can’t be delivered to customers or users. Services don’t move through the channel of distribution. For availing the services, it is essential that the users are brought to the providers or the providers go to the users. It is right to say that the services have limited geographical areas.

Types of Service Marketing

There are broadly 3 types of service marketing:

​

1. B2C

This is the main customer service provided by companies to its end customers. These can be telecom, hospitality, financial services, repair provided by providers. The main focus of the company can be selling service. E.g. Vodafone provides telecom services to consumers and markets it as its core offering.

2. B2B

Many companies provide services to enterprises and organizations. These can be networks, finance, travel, technology services etc. The motive is to show business value to an organization through usage of their service. This forms the core part of the b2b service marketing.

​

E.g. Many technology services firms showcase their references and case studies where they derived value for similar organizations as the target customer. The value can be in terms of cost savings, revenue increase.

3. Post Purchase Service

This category if service marketing focuses on the add on and complementary services offered by companies in addition to the core product (or service in some cases). These can be warranty services, customer support, service request resolution, helpdesk, repairs etc. These services can be differentiating factor for customers when they buy the core offering. E.g. When a person buys a phone but gets 2 years of free warranty service and support. This can become a differentiator and forms part of the service marketing done by the phone manufacturer.

​

7 P’s For Services

• Product
• Price
• Place
• Promotion
• People
• Process
• Physical Evidence

• Product: In case of services, the ‘product’ is intangible, heterogeneous and perishable. Moreover, its production and consumption are inseparable. Hence, there is scope for customizing the offering as per customer requirements and the actual customer encounter therefore assumes particular significance. However, too much customization would compromise the standard delivery of the service and adversely affect its quality. Hence particular care has to be taken in designing the service offering.

• Pricing: Pricing of services is tougher than pricing of goods. While the latter can be priced easily by taking into account the raw material costs, in case of services attendant costs - such as labor and overhead costs - also need to be factored in. Thus a restaurant not only has to charge for the cost of the food served but also has to calculate a price for the ambience provided. The final price for the service is then arrived at by including a mark up for an adequate profit margin.

• Place: Since service delivery is concurrent with its production and cannot be stored or transported, the location of the service product assumes importance. Service providers have to give special thought to where the service would be provided. Thus, a fine dine restaurant is better located in a busy, upscale market as against on the outskirts of a city. Similarly, a holiday resort is better situated in the countryside away from the rush and noise of a city.
• Promotion: Since a service offering can be easily replicated promotion becomes crucial in differentiating a service offering in the mind of the consumer. Thus, service providers offering identical services such as airlines or banks and insurance companies invest heavily in advertising their services. This is crucial in attracting customers in a segment where the services providers have nearly identical offerings.

​

• People: People are a defining factor in a service delivery process, since a service is inseparable from the person providing it. Thus, a restaurant is known as much for its food as for the service provided by its staff. The same is true of banks and department stores. Consequently, customer service training for staff has become a top priority for many organizations today.
• Process: The process of service delivery is crucial since it ensures that the same standard of service is repeatedly delivered to the customers. Therefore, most companies have a service blue print which provides the details of the service delivery process, often going down to even defining the service script and the greeting phrases to be used by the service staff.

• Physical Evidence: Since services are intangible in nature most service providers strive to incorporate certain tangible elements into their offering to enhance customer experience. Thus, there are hair salons that have well designed waiting areas often with magazines and plush sofas for patrons to read and relax while they await their turn. Similarly, restaurants invest heavily in their interior design and decorations to offer a tangible and unique experience to their guests.

• Create Awareness:Service marketing deals with marketing of intangible products. It creates awareness about economic services offered by the business. Customers get full information about services through marketing activities of the business. It provides full details to customers and motivates them to avail different services offered by a business.

​

• Boosts Sale And Increase Revenue:Marketing of services helps businesses in attracting more and more customers. Marketing strategies are designed according to the needs of people and these strategies directly affect the mindset of people. Customers are induced to avail the services offered by the business. Once these customers are satisfied and happy with these services, they will promote these services by word of mouth publicity. This will eventually increase the sale of these services thereby raising the revenue for the business.

• Raises Standard Of Living:Through the marketing of services, people become aware of different economic services available in the market. These services are availed by different people when they came in contact with these promotional activities. People are able to use continuously this better service available thereby providing them more satisfaction. By availing these services standard of living of people is raised.
• Provide Employment:Marketing activities provide employment to a large number of people. Implementation of marketing strategies designed by business requires large no. of people. There are different peoples that act an intermediary in providing full information regarding services offered by the business to its different customers. Customers clear all their doubts and acquire full detail through the people engaged in marketing activities of a business. This way a large portion of the population gets employment through marketing programmes.

• Source Of New Ideas: Business acquires information about new ideas and concepts through their marketing programmes. They got to know about market trends and technological changes in the market. The information acquired through these marketing programmes is implemented in their production processes to deliver the services as per market trends.
• Basis For Decision Making: Decision regarding what to produce and what to deliver to its customers is always a tough decision before every business. Through marketing strategies business interacts with its customers and understands their need and demand. Once their requirements are known it can be used in decision making regarding production processes. This will help in serving the customer in a better way.

Types Of Service Marketing

• Internal Marketing

Marketing that takes place in between company and their employee is termed as Internal Marketing. This marketing aims at motivating and boosting the confidence of people working within the organization. Employees are crucial part of business for increasing their customer’s base and maintaining better relations with them. Internal marketing is the means through which business train their customers how to interact and provide better service to customers.

• Interactive Marketing

This is a marketing that happens in between the customers and employees of a company. Interactive marketing is one where customers come in touch or interacts with employees. It is efficient means to influence people and guide them in their buying decision. Personal selling, interacting with customers on social media and servicing customers are various form of interactive marketing.

• External Marketing

Externalmarketing is marketing between business and customers. It is the most common type of marketing and a means through which companies interacts with their customers. This marketing enables business in promoting their products and inducing people’s to buy them. Different types of external marketing are advertising, direct marketing, sales promotion, public relations etc.