Services 1
Services Marketing
- Any activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything.
Service as a Product
- Examples: hotels, telecommunication, banking, consulting, healthcare, software services
Customer Service
- Examples: taking requests, answering customer questions, responding to complaints
Service as Value-Added for Manufactured Products
- Examples: Training, installation, repair services connected with a physical product
Why Focus on Services?
- Services frequently provide higher profit margins than products.
- Customer satisfaction and loyalty are driven by service excellence.
- Services can be used as a differentiation strategy in competitive markets.
- All businesses are becoming service businesses.
Product/Services Continuum
- Goods are tangible dominant
- Search attributes
- Services are intangible dominant
- Experience attributes
- Credence attributes
- Adding service aspects to a product often transforms the product from a commodity into a compelling experience
Product/Services Continuum Examples
- Good-dominant products (tangible): sugar, house, automobile, custom-made clothes
- Service-dominant products (intangible): restaurant dining experience, air travel, health care, ad agency services, education
Unique Differences between Goods and Services
- Intangibility
- Variability
- Inseparability
- Perishability
Intangibility
- Intangibility is the primary source from which the other three characteristics emerge.
- Services cannot be seen, felt, tasted, or touched in the same manner that goods can be sensed.
- Difficult to evaluate even after consuming the service.
Variability
- Variability is the difference in consistency from one service transaction to the next.
- It makes it impossible for a service operation to achieve 100 percent perfect quality on an ongoing basis.
Inseparability
- Inseparability is the simultaneous production and consumption of the service.
- Service consumer has to be there at the same time as the service provider to experience the optimal service (even self-service technologies).
Perishability
- Perishability means that a service cannot be saved, its unused capacity cannot be reserved, and it cannot be inventoried.
- “Use it or lose it”
- Anything with capacity; if unsold, lost revenue.