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The majority of the differences between the marketing of goods and service marketing have
been primarily attributed to four unique characteristics intangibility, inseparability,
heterogeneity and Perishability.
Figure7.14: Nature and characteristics/features of service
Nature and characteristics/features of Service


1.1Intangibility: Services cannot be seen, felt, tasted or touched in the same manner as
physical goods can be sensed. Services are experiences that cannot be displayed like
products on exhibition by sellers or marketers. Services can simply be experienced. For
example, teachers provide a service that is intangible. You can't feel, touch, or taste the
service of teaching as shown in. However, it is possible to give tangible proof for the
quality of service, such as through state test scores.

1.2Inseparability: The inseparability of services reflects the interconnection among the

service provider, the customer involved in receiving the service, and other customers
sharing the same experience. Service providers are often in constant contact with their
customers and must construct their service operations with the customers physical
presence in mind. For example, a barber is a part of the haircut service that he delivers
to his customer. A haircut is delivered to and consumed by a customer simultaneously.
1.3Heterogeneity: This term describes the uniqueness of service offerings. Many services
regarded as heterogeneous are typically modified for each consumer or situation. Since
services are performances, frequently produced by human beings, no two services will
be precisely alike. Heterogeneity concerns the variation in consistency from one service
transaction or encounter to the next. For example, new bank clerk who encashes cheque
may not be as efficient as the previous one and may have to spend more time for the
same activity.

1.4Perishability: Perishability refers to the fact that services cannot be saved, their
unused capacity cannot be reserved, and they cannot be inventoried. When the service
has been completely rendered, this particular service irreversibly vanishes as it has been
consumed by the consumer. Services that are not sold when they become available
cease to exist. For example, hotel rooms that go unoccupied for the evening cannot be
stored and used the next night.


The marketing triangle describes the relationship among the companys management, its
customers and its employees. A company sets a promise to customers through external

marketing and fulfills this promise with the assistance of its employees through internal
marketing. The employees, in turn, deliver the promise to the customers through interactive
marketing. A business needs to assess how it will carry out each type of marketing, identify
the specific challenges and barriers among the three points of the triangle and implement a
plan to balance out these points.

Figure7.15: The Service marketing triangle


Internal marketing


Interactive marketing

External marketing


2.1Internal marketing: It is Enabling the promise. In an internal marketing, marketers

try to interact with their employees in order to know about the strengths and
weaknesses of their organization. The owner of the company tries to involve all of his
employees in general discussion, training, motivation and reward on best performance,
believe on teamwork. Teamwork helps to involve employees in their assigned tasks and
generate output quickly.

Internal marketing includes:

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

2.2External marketing: It is setting the promise. External marketing goes from company
out to customers and prospective customers. This is the traditional form of business
marketing, showing customers how the services provided by company benefit them. In
an external marketing, marketers set the pricing policies and create awareness about the
products and design promotional strategies and techniques that help to attract the
customers towards their products and services.

External marketing includes:

Setting the promise
Marketing to end-users
Performed to capture the attention of the market, and interest in the service
Involves pricing strategy, promotional activities and all communication with customers.

2.3Interactive marketing: It is delivering the promise. The side of the triangle between
employees and customers is called interactive marketing. Interactive marketing involves

in the delivery of products or service to the customers and frontoffice employees of the
company. The goal is to have highly satisfied customers who become long-term, repeat

Interactive marketing includes:

Delivering promise
Interaction between the front-office employees and customers
It is utmost important because if the employee falters at this level, all prior efforts made
towards establishing a relationship with the customer, would be wasted.


Because services differ from tangible products, they often require additional marketing
approaches. In service business, the customer and front-line service employee interact to
create the services. Thus, service providers must interact effectively with customers to
create superior value during service encounter. For effective service marketing, following
strategies are considered: service profit chain, service differentiation, service quality, and
service productivity.
Figure7.16: Service marketing strategies
Service profit chain
Service marketing strategies

Service differentiation
Service quality
Service productivity

3.1Service profit chain: The service-profit chain is a powerful phenomenon that stresses
the importance of people both employees and customers and how linking them can
leverage corporate performance. The service-profit chain is an equation that establishes
the relationship between corporate policies, employee satisfaction, value creation,
customer loyalty, and profitability.
In order for customer service to drive profits, every link in your service-profit chain
Internal service quality, satisfied and productive employees, greater service, satisfied
and loyal customers, and healthy service profit and growth must be strong.

Internal service quality

Satisfied and productive service employees

Healthy service profit and growth

Greater service value

Satisfied and loyal customers

The chain consists of five links:

a) Internal service quality: Superior employee selection and training, a quality work
environment, and strong support for those dealing with customers.
b) Satisfied and productive service employees: more satisfied, loyal, and hardworking
c) Greater service value: more effective and efficient customer value creation and
service delivery.
d) Satisfied and loyal customers: satisfied customers who remain loyal, repeat
purchase, and refer other customer.
e) Healthy service profits and growth: superior service firm performance.
3.2Service differentiation: Creating differentiation in ones own product and services is a
better way to avoid competition. One can offer a number of possible options in products
to the customers.
The solution to price competition is to develop a differentiated offer, delivery, and image.
a) Offer: The offer can include innovative features that set one company's offer apart from
competitors' offers. Some hotels offer car rental, banking, and business center services
in their lobbies. Airlines introduced innovations such as in-flight movies, advance seating,
and frequent flyer award programs to differentiate their offers.
b) Delivery: Service companies can differentiate their service delivery by having more able
and reliable customer-contact people, by developing a superior physical environment in
which the service product is delivered, or by designing a superior delivery process. For
example, many banks offer their customers Internet banking as a better way to access
banking services than having to drive, park, and wait in line.
c) Image: Service companies also can work on differentiating their images through
symbols and branding. The Harris Bank of Chicago adopted the lion as its symbol on its
stationery, in its advertising, and even as stuffed animals offered to new depositors. The
well-known Harris lion confers an image of strength on the bank.
3.3Service quality: Service quality is a comparison of expectations with performance. In
general, Customers compare perceived service with expected service in which if the
former falls short of the latter the customers are disappointed.
Successful companies add benefits to their offering that not only satisfy the customers
but also surprise and delight them. Delighting customers is a matter of exceeding their
Service quality is an assessment of how well a delivered service conforms to the clients
expectations. Service business operates often assess the service quality provided to their
customers in order to improve their service, to quickly identify problems, and to better
assess client satisfaction.
Every company owner wants to get loyal customers which add to repeating purchases
and of cause increasing their maximum revenue. But to get there they need to know
about the 5 Service Quality Dimensions. Each of the 5 Service Quality Dimensions makes
an extra addition to the level and quality of service which the company offers their
Figur: 5 Service Quality Dimension
5 Service Quality Dimension



Tangible: It refers to the appearance of the physical surroundings and facilities,

equipment, personnel and the way of communication. A company should want all their
customers to get a unique positive and never forgetting first hand impression, this would
make them more likely to return in the future.
Modern equipment
Employees who have a neat, professional appearance
Visually appealing materials associated with the service

b) Reliability: It refers to how the company are performing and completing their promised

service, quality and accuracy within the given set requirements between the company
and the customer. Reliability is just as important as a goof first hand impression, because
every customer want to know if their supplier is reliable and fulfill the set requirements
with satisfaction.
Providing service as promised
Dependability in handling customers service problems
Performing services right the first time

c) Responsiveness: It refers to the willingness of the company to help its customers in

providing them with a good, quality and fast service. This is also a very important
dimension, because every customer feels more valued if they get the best possible
quality in the service.
Keeping customers informed as to when services will be performed
Willingness to help customers
Readiness to respond to customers requests
d) Assurance: It refers to the company's employees. Are the employees skilled workers
which are able to gain the trust and confidence of the customers? If the customers are
not comfortable with the employees, there are a rather large chance that the customers
will not return to do further business with the company.
Employees who instill confidence in customers
Making customers feel safe in their transactions
Employees who have the knowledge to answer customer questions
e) Empathy: It refers to how the company cares and gives individualized attention to their
customers, to make the customers feeling extra valued and special. If the customers feel
they get individualized and quality attention there is a very big chance that they will
return to the company and do business there again.
Giving customers individual attention
Employees who deal with customers in a caring fashion
Convenient business hours
3.4Service productivity: To increase service productivity, 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. The provider can
"industrialize the service" by adding equipment and standardizing production. Finally, the
service provider can harness the power of technology. Although we often think of
technology's power to save time and costs in manufacturing companies, it also has great
and often untappedpotential to make service workers more productive.