Services Marketing

Services Marketing

Introduction

• Services are intangible activities, benefits, or satisfactions offered for sale that do not result in the ownership of anything but fulfill customer needs.
• Example: healthcare, education, banking, tourism, insurance, hospitality.
• Nature:
• Services are intangible (cannot be touched, stored, or owned).
• They involve simultaneous production and consumption (produced and consumed at the same time).
• Services are heterogeneous (quality varies depending on provider, time, and situation).
• They are perishable (cannot be stored or inventoried).
• They require human involvement (in many cases, human skills and interaction are central).
• Scope:
• Personal Services – e.g., healthcare, beauty, education, legal services.
• Business Services – e.g., banking, insurance, advertising, consultancy.
• Public Services – e.g., transportation, postal services, electricity, telecom.
• Non-profit Services – e.g., NGOs, charities, religious services.
• Services cover domestic and international trade, contributing to GDP and employment.

Features and Classification of Services

Features

1. Intangibility – Cannot be touched, displayed, or tested before purchase. Customers rely on cues like brand image, word of mouth, and past experience.
2. Inseparability – Production and consumption occur together. Service providers and customers interact in real-time.
3. Perishability – Services cannot be stored; unutilized service capacity is lost (e.g., an empty airline seat).
4. Heterogeneity – Service quality depends on human performance, leading to variability.
5. Ownership – Services cannot be owned, only experienced.
6. Customer Participation – Customers are often directly involved in the delivery process.
7. Quality Evaluation Difficulty – Hard to assess service quality before purchase.

Classification

1. Based on Ownership:
• Rented-goods services (car rentals, hotel rooms).
• Owned-goods services (repair, maintenance of personal goods).
• Non-goods services (consulting, education).
2. Based on Market Sector:
• Consumer services (tourism, healthcare, entertainment).
• Industrial services (consultancy, transport, maintenance).
3. Based on Degree of Tangibility:
• High tangible (restaurants, transport).
• Low tangible (insurance, education).
4. Based on Skills of Service Provider:
• Professional services (doctors, lawyers).
• Non-professional services (salon, housekeeping).

Marketing Concepts in Service Marketing

1. Customer Orientation – Focus on understanding customer expectations and delivering satisfaction.
2. Service Quality – Quality becomes the primary differentiator in competitive markets.
3. Relationship Marketing – Building long-term customer relationships through loyalty programs, personalized service, and trust.
4. Internal Marketing – Training, motivating, and retaining employees since they directly interact with customers.
5. Service Differentiation – Creating uniqueness via brand image, service delivery speed, customer experience, or added features.
6. Technology Adoption – Using IT, AI, and digital platforms to deliver efficient and convenient services.

Problems in Service Organization

1. Intangibility Issue – Hard to display and promote, requires reliance on branding and reputation.
2. Demand Fluctuations – Seasonal or time-based demand leads to under/over capacity.
3. Inconsistent Quality – Service delivery varies with employees, mood, workload.
4. High Customer Involvement – Negative customer behavior can impact service outcome.
5. Perishability – Cannot stock services; idle resources mean financial loss.
6. Measurement of Performance – Difficult to assess productivity compared to manufacturing.
7. Dependency on Human Resources – Staff turnover, skill gaps, and lack of training affect quality.
8. Pricing Difficulties – Customers perceive value differently; hard to set standardized pricing.
9. Competition and Globalization – Pressure to maintain quality at low cost in a global market.

Marketing Mix for Services (7Ps Model)

1. Product (Service Product) – Core service (banking, education) + supplementary services (ATM, counseling, after-sales support).
2. Price – Pricing strategies based on perceived value, competition, and demand; includes discounts, bundling, premium pricing.
3. Place (Distribution) – Delivered directly to customers via physical locations, online platforms, or franchise systems.
4. Promotion – Advertising, sales promotion, PR, personal selling, digital marketing to create awareness and build trust.
5. People – Employees and customers who are part of service delivery; training, motivation, and behavior shape service quality.
6. Process – Standardized procedures for delivering services efficiently and consistently (e.g., hospital admission system, airline check-in).
7. Physical Evidence – Tangible cues that influence perception (ambience, brochures, uniforms, digital apps, website design).

Improving Service Quality

• Customer-Centric Approach: Focus on understanding and meeting customer needs and expectations.
• Gap Model of Service Quality (Parasuraman, Zeithaml, Berry): Address gaps between expected and delivered service.
• Employee Training & Empowerment: Skilled, motivated employees deliver consistent service.
• Technology Integration: Use of AI chatbots, CRM, online booking, self-service kiosks.
• Standardization: Creating SOPs (Standard Operating Procedures) to reduce variability.
• Service Recovery Strategies: Quick redressal of complaints to build customer trust.
• Feedback Systems: Customer surveys, online reviews, complaint tracking for improvement.
• Continuous Innovation: Upgrading services to meet changing expectations (e.g., telemedicine, digital banking).
• Quality Certifications: ISO, NABH (for hospitals), and other quality standards to ensure reliability.

Video Description

·        Don’t forget to do these things if you get benefitted from this article

·        Visit our Let’s contribute page https://keedainformation.blogspot.com/p/lets-contribute.html

·        Follow our page

·        Like & comment on our post

·