Services - The intangible product

How does marketing of services differ from marketing of products?

Services are intangible, inseparable, heterogeneous, and perishable, which requires different strategies compared to tangible products

What is service-dominant logic?

It’s the view that products and services exist on a continuum; most offerings contain elements of both

What is the economic importance of services?

1) Production is cheaper in some countries.
2) High value is placed on convenience and leisure.
3) Household maintenance is more specialised

What are the four marketing elements that distinguish services from products?

Intangible, Inseparable, Heterogeneous, Perishable

What does intangible mean for services?

Services cannot be touched, tasted, or seen; firms use cues, atmosphere, and images to convey value

What does inseparable mean in services?

Production and consumption happen simultaneously; little opportunity to test before use; firms reduce risk with guarantees/warranties

What does heterogeneous mean for services?

Services vary in quality, especially when humans are involved. Firms can reduce variability with training or use micromarketing strategies

What does perishable mean in services?

Services cannot be stored for later use; firms must manage demand and supply (e.g., airline promotions in off-peak times)

Why is service recovery important?

Because service failures are inevitable; proper recovery can turn dissatisfied customers into loyal ones

What are the three components of service recovery?

1) Listen to the customer, 2) Respond quickly, 3) Find a fair solution

What is interactional justice in service recovery?

The customer’s perception of being treated fairly and with respect during the recovery process

Services- the intangible produc…

What is procedural justice in service recovery?

The fairness of the process used to resolve complaints (e.g., clear policies, timely resolution)

What is distributive justice in service recovery?

The perceived fairness of the outcome or compensation compared with the inconvenience experienced.

Why is listening to customers important in service recovery?

Customers may be emotional; they want acknowledgment. Listening shows empathy and involves them in finding solutions

What qualities should service employees demonstrate when listening?

Assertiveness, empathy, and credibility

What does procedural fairness require from companies?

Easy complaint procedures, clear policies, and timely resolution of problems

What does finding a fair solution involve?

Ensuring the benefits or compensation balance the inconvenience or costs caused by the service failure

Why can’t we separate firms into just service or just product sellers?

Because most offerings exist along a continuum of goods and services

What can companies do to recover from service failure?

Listen to customers, respond quickly, and provide fair solutions