Marketing of Services

RIZVI INSTITUTE OF MANAGEMENT STUDIES

Defining a service
Any activity or benefit that is essentially intangible and does not result in the ownership of anything. Its production may or may not be tied to a physical product (Kotler) Service clients are paying for the expertise, experience, advice, skills, knowledge and the benefits they bring. The benefits may last, but the service itself is of limited duration.

The core product

This is the core benefit the product brings. Insurance/ security provides peace of mind Hairdressers provide the core benefit of enabling people to look and feel good A football team provides us with emotions and enjoyment A car mechanic enables us to enjoy safe, reliable motoring.

Characteristics of services
INTANGIBLE: Lack of physical substance INSEPARABILITY: Cannot be separated from its provider. Does not exist until used. Production at the same time as delivery. HETEROGENEITY: Variability is inevitable because each service is unique. This means that it is harder to maintain quality than in manufacturing. PERISHABILITY: Cannot be stored INABILITY TO OWN: No transfer of property

Manufacturing v/s Service

Manufacturing Output Customer Contact Labour Content uniformity of input Tangible Low Low High Service Intangible High High Low

uniformity of output
Measurement of productivity Opportunity to correct quality problems

High
Easy High

Low
Difficult Low

Unique aspects of the marketing of services

The services cannot usually be effectively demonstrated (it does not exist before purchase) Direct contact is necessary Selling is a crucial part of the service Many aspects of quality are difficult to measure Services are difficult to automate

Location, location, location

Production, consumption and selling are often spatially united The provider rather than the product is transportable As a result, the site of the service, is important for customer contact This applies especially to personal services such as hairdressing although many financial services (Banking, insurance) are available online or via a telephone link. Location is of little importance in case of online and telephone services The service cannot normally be exported but the service delivery system can

Criteria for assessing service quality

Services are dependent upon human beings who in turn are not always consistent. Tangible Features: physical facilities, the personnel driving the service Reliability: the ability to perform the service dependably and accurately Responsiveness: willingness to help Assurance: Knowledge, courtesy and confidence of the staff providing the service Empathy: caring, individualized attention

Marketing Mix: The 7 Ps

For services it is more appropriate to refer to the 7 Ps of the marketing mix rather than the more normal 4 Ps Product/ Service Price Promotion Place Process People Physical evidence

People
The delivery of a service is reliant on people- so people are a key part of the marketing mix Good customer relations are particularly important The key qualities required are: Capability Efficiency Availabilty Effectiveness Customer Interaction Reliability Assurance Responsiveness Empathy

Physical evidence
This is the tangible element of a service The surrounding are an important part of the service Premises Equipment Peripheral products e.g shampoo for hairdressers Literature explaining the sevice

Process
This refers to the way the service is provided Waiting time The process of making payment Order processing Database management Queuing system Service delivery Customer Service

The rise of the service sector

Developed economies experience a rise in the importance of the service sector This includes both financial services (such as banking) and personal services (such as hairdressing) In the UK and other advanced countries it is common for the service sectorto account for two- thirds or more of employment and national income However, the distinction between products and services is not clear cut

A blurred distinction
Many products have a strong service element which maybe their competitive advantage. The service element is the augmented product (e.g. home installation of a P. C and tuning of TV) Many services have a peripheral product element- shampoo applied by the hairdresser There are no such things as service industries. There are only industries whose service components are greater or less than those of other industries. Everyone is in services (Theodore Levitt)