Services marketing is a sub field of marketing, which can be split into the two main

areas of goods marketing (which includes the marketing of fast moving consumer goods
(FMCG) and durables) and services marketing. Services marketing typically refers to
both business to consumer (B2C) and business to business (B2B) services, and includes
marketing of services like telecommunications services, financial services, all types of
hospitality services, car rental services, air travel, health care services and professional
services. The range of approaches and expressions of a marketing idea developed with
the hope that it be effective in conveying the ideas to the diverse population of people
who receive it.
Services are intangible economic activities offered by one party to another. Often timebased, performances bring about desired results to recipients, objects, or other assets
for which purchasers have responsibility. In exchange for money, time, and effort,
service customers expect value from access to goods, labor, professional skills,
facilities, networks, and systems; but they do not normally take ownership of any of the
physical elements involved.[1]
What is services marketing?
A service is the action of doing something for someone or something. It is largely
intangible (i.e. not material). You cannot touch it. You cannot see it. You cannot taste it.
You cannot hear it. You cannot feel it. So a service context creates its own series of
challenges for the marketing manager since he or she must communicate the benefits
of a service by drawing parallels with imagery and ideas that are more tangible.
10 Differences between products and services

These are the 10 factors which explain why managing a product business and a service
business is vastly different. See if you can figure out , for each of these 10 factors , how
they will impact the cost structure, the assets, the task of managing, the metric of
performance etc. However, you must note that there is nothing like a "pure product" or
a "pure service" in actual life; most of the time they come bundled together. When you
visit a restaurant, you look forward to the food (product) as well as ambiance and
experience (service).

1.
WHO COMES TO WHOM : Products come to customers whereas customers
come to services. Product benefits are embedded inside the product / package
and can be transported to their customers through distribution channels. Services
are location-based and the customers need to travel to theses service locations
or the service personnel has to come to the customer locatiton.
2.
STANDARDIZATION OR CUSTOMIZATION ? Customers like many of their
products to be standardized but they want most of their services to be
customized. This is also because a product can be pre-inspected whereas a
service cannot be. A service needs to be experienced and , when a customer is
being serviced, it is natural for him to want it customized based on his feedback.

3.
QUALITY DELIVERY : The quality expected from a product is mostly
embedded in the product itself at the time of its manufacture and depends in
turn on the quality of the materials used and the setting of the machines. Both
materials and machines, being inanimate, can be standardized. On the other
hand the qualities that people expect from service are different : customization
and variation is appreciated in service and this depends a lot on the experience,
skill and motivation of the service-giver on the spot.
4.
TANGIBILITY : The products are tangible and can be inspected / sampled
before buying. Service on the other hand is experiential and sometimes based on
a belief.
5.
SCALABILITY : The product business is scaled up by expanding the
manufacturing capacity , distribution and sales reach, and access to more
customers. On the other hand, the service business is not easy to scale up - it
needs a supply of trained service providers and this involving either poaching
people from the competitors or increased activity of recruitment, induction,
training and motivation. Attrition of trained manpower is a danger to service
business.
6.
OWNERSHIP : A product ( flat, car, machine) can be owned and can go into
your balance sheet as an asset and is re-salable and you can accumulate it to
build your wealth. A service ( degree, surgery, haircut) cannot be owned as is
always shown as an expense. It is not resalable and cannot be transferred to
someone else. Products begin as materials and machines work on those
materials to create improved / shaped / transformed materials which are called
products. Services begin from service givers and improve / shape / transform
objects (woodwork), bodies (surgery), minds (education).
7.
THE SOURCE OF VALUE : The customers buy "products" essentially for the
value they find inside the box - whether a soap or a TV . On the other hand, the
customers buy "services" for the value of they find in the "encounter" with the
service provider - whether doctor, waiter or a consultant. The quality of the
products depend essentially on how materials are chosen and converted. The
quality of the service depends on how the service providers are selected, trained
and motivated.
8.
THE ROLE OF SENIOR MANAGEMENT : In product business the managers
are the heroes. In service business the front line employees are the real heroes.
The process of creating a market-driven design in a product business involves
many months of work by expert manpower and managers before the product is
produced. These experts are involved in doing the marketing work - doing
situation analysis, formulated MVC, deciding specs of material, machines, men
and methods. A lot of expert work happens at the back end over a long period of
time before even a single product item is put into market. On the other hand, the
same process of creating a market driven design needs to happen in front of the
customer in few minutes in services. The front line - far away from the HO - and
without the luxury of experts and time is tasked with understanding the
customer and producing service to satisfy the customer.
9.
THE POSITION OF THE CUSTOMER : In the product business, the customer
is outside the manufacturing process and hence two processes need to be
created (1) The process of bringing the voice of the customer in the process of
product creation (2) The process of physically taking the products to market
where the customers are. In the service business the customer is inside the
business and cannot be ignored his requests and demands force your front line
service providers to understand and adapt to him. That is why, in service
business, it is worthwhile to treat the front line service givers as the customers
themselves.
10.
THE ROLE OF STANDARDIZATION AND MECHANIZATION : In the product
business, a company proactively anticipates what the customer wants, frequently
standardizes its products, makes them to stock off-line (when the customer is

absent) and brings them through the supply chain to where the customers are.
Mechanization is used extensively in the processes. The machinery is used to
process materials and machines. In product business the role of the machines is
primary and the role of the workers operating those machines is secondary. On
the other hand in the service business, a company is managed in a reactive
mode by asking customers on-line what they desire and then the company tries
to deliver it in an individualized manner in real time at the front line. Since the
value is created mainly through conversation, individualization and customization
, the role of employees is primary and the role of the machines is to assist the
employees

4 Is Of Services. - September 25th, 2010

4 Is Of Services.
Services have four major characteristics that greatly affect the marketing programs.
1. Intangibility:
Unlike products, services cannot be held, touched, or seen before the purchase decision
thus, they should be made tangible to a certain extent. Marketers should tangibilize
the intangible to communicate service nature and quality. This can be done through:
Environment
Uniforms
Paperwork
Brochures
Insurance is a guarantee against risk and neither the risk nor the guarantee is tangible.
Hence, insurance rightly come under services, which are intangible. Efforts have been
made by the insurance companies to make insurance tangible to some extent by
including letters and forms
2. Inconsistency:
Service quality is often inconsistent. This is because service personnel have different
capabilities, which vary in performance from day to day. This problem of inconsistency
in service quality can be reduced through standardization, training and mechanization.
In insurance sector, all agents should be trained to bring about consistency in providing
service or, the insurance process should be mechanized to a certain extent. Eg: the
customers can be reminded about the payment of premium through e-mails and sms
instead of agents.
3. Inseparability:
Services are produced and consumed simultaneously. Consumers cannot and do not

separate the deliverer of the service from the service itself. Interaction between
consumer and the service provider varies based on whether consumer must be
physically present to receive the service.
In insurance sector too, the service is produced when the agent convinces the
consumer to buy the policy and it is said to be consumed when the claim is settled and
the policyholder gets the money. In both the above cases, it is essential for the service
provider (agent) and the consumer (policy holder) to be present.

4. Inventory:
No inventory can be maintained for services. Inventory carrying costs are more
subjective and lead to idle production capacity. When the service is available but there
is no demand, cost rises as, cost of paying the people and overhead remains constant
even though the people are not required to provide services due to lack of demand.
In the insurance sector however, commission is paid to the agents on each policy that
they sell. Hence, not much inventory cost is wasted on idle inventory. As the cost of
agents is directly proportionate to the policy sold.

Distinctive Characteristics of Services

1. Simultaneity
2. Perishability
3. Intangibility
4. Variability
5. Inseparability

Simultaneity
Services are rendered and consumed during the same period of time. As soon
as the service consumer has requested the service (delivery), the particular
service must be generated from scratch without any delay and friction and the
service consumer instantaneously consumes the rendered benefits for
executing his upcoming activity or task.
Perishability

The service relevant resources, processes and systems are assigned for
service delivery during a definite period in time. If the designated or
scheduled service consumer does not request. An empty seat on a plane
never can be utilized and charged after departure.
4

When the service has been completely rendered to the requesting service
consumer, this particular service irreversibly vanishes as it has been
consumed by the service consumer. Example: the passenger has been
transported to the destination and cannot be transported again to this
location at this point in time.

Intangibility

Services are intangible and insubstantial: they cannot be touched,

gripped, handled, looked at, smelled, tasted or heard. Thus, there is
neither potential nor need for transport, storage or stocking of services.
Furthermore, a service cannot be (re)sold or owned by somebody, neither
can it be turned over from the service provider to the service consumer
nor returned from the service consumer to the service provider. Solely, the
service delivery can be commissioned to a service provider who must
generate and render the service at the distinct request of an authorized
service consumer.

Variability

Each service is unique. It is one-time generated, rendered and consumed and

can never be exactly repeated as the point in time, location, circumstances,
conditions, current configurations and/or assigned resources are different for the
next delivery, even if the same service consumer requests the same service.
Many services are regarded as heterogeneous or lacking homogeneity and are
typically modified for each service consumer or each new situation
(consumerised).
Example: The taxi service which transports the service consumer from his home
to the opera is different from the taxi service which transports the same service
consumer from the opera to his home another point in time, the other
direction, maybe another route, probably another taxi driver and cab.
Inseparability
The service provider is indispensable for service delivery as he must promptly
generate and render the service to the requesting service consumer. In many
cases the service delivery is executed automatically but the service provider
must preparatory assign resources and systems and actively keep up
appropriate service delivery readiness and capabilities.
Additionally, the service consumer is inseparable from service delivery because
he is involved in it from requesting it up to consuming the rendered benefits.
Examples: The service consumer must sit in the hair dresser's shop & chair or in
the plane & seat; correspondingly, the hair dresser or the pilot must be in the
same shop or plane, respectively, for delivering the service.

pen

Promotional mix
In marketing, the promotional mix describes a blend of promotional variables
chosen by marketers to help a firm reach its goals . It has been identified as a
subset of the marketing mix. It is believed that there is an optimal way of
allocating budgets for the different elements within the promotional mix to
achieve best marketing results, and the challenge for marketers is to find the
right mix of them. Activities identified as elements of the promotional mix vary,
but typically include the following:

Advertising is the paid presentation and promotion of ideas, goods, or

services by an identified sponsor in a mass medium. Examples include
print ads, radio, television, billboard, direct mail, brochures and catalogs,
signs, in-store displays, posters, mobile apps, motion pictures, web pages,
banner ads, emails.

Personal selling is the process of helping and persuading one or more

prospects to purchase a good or service or to act on any idea through the
use of an oral presentation, often in a face-to-face manner or by
telephone. Examples include sales presentations, sales meetings, sales
training and incentive programs for intermediary salespeople, samples,
and telemarketing.

Sales Promotion is media and non-media marketing communication used

for a pre-determined limited time to increase consumer demand,
stimulate market demand or improve product availability. Examples
include coupons, sweepstakes, contests, product samples, rebates, tie-ins,
self-liquidating premiums, trade shows, trade-ins, and exhibitions.

Public relations or publicity is information about a firm's products and

services carried by a third party in an indirect way. This includes free
publicity as well as paid efforts to stimulate discussion and interest. It can
be accomplished by planting a significant news story indirectly in the
media, or presenting it favorably through press releases or corporate
anniversary parties. Examples include newspaper and magazine articles,
TVs and radio presentations, charitable contributions, speeches, issue
advertising, seminars.

Direct Marketing is a channel-agnostic form of advertising that allows

businesses and nonprofits to communicate directly to the customer, with
methods such as mobile messaging, email, interactive consumer
websites, online display ads, fliers, catalog distribution, promotional
letters, and outdoor advertising

Corporate image campaigns have been considered as part of the

promotional mix

Sponsorship of an event or contest or race is a way to generate further

positive publicity.

Guerrilla marketing tactics are unconventional ways to bring attention to

an idea or product or service, such as by using graffiti, sticker bombing,
posting flyers, using flash mobs, doing viral marketing campaigns, or
other methods using the Internet in unexpected ways.
6

Product placement is paying a movie studio or television show to include

a product or service prominently in the show.

characteristics of service
are; Perishability, Intangibility, Variability, Inseparably and Non-ownership

Perishability
Perhaps of all the suggested special characteristics of service products, this is one of the most difficult
to appreciate. Why? Services are highly perishable compared to physical products. But how could, for
example, the services of say, an airline be considered to be more perishable than, say, fresh food and
vegetable products?
The reason is that unlike most physical products, many services cannot be stored. For instance, if an
airline does not sell all the seats on a particular flight, then those seats or rather the sales revenue of
filling of them would have carried, has immediately and irreversibly gone.

Intangibility
Physical products in the store are widely displayed for customers to see, feel, touch, weigh or sniff at
before deciding whether or not to buy.
Comparing this with the choice of the service of say, an insurance policy. You cannot touch, see or
smell the products before choosing, although clearly you can make some assessment based on past
experience, word of mouth, or even the location and decor of the insurance office. The intangible
nature of most services gives rise to special problems both for suppliers and consumers.

Variability
In the production and marketing of physical products, companies have increasingly paid special
attention to ensuring consistency in quality, feature, packaging, and so on. More often than not all
customers can be sure that every bottle of Coke he/she buys, even in a life-time of purchases, will not
vary. The provision of services, however, invariably includes a large measure of the human element
Indeed, with many services, we are purchasing nothing else but the skills of the suppliers. Because of
this, it is often very difficult for both supplier and consumer to ensure a consistent product or quality
of service.

Inseparability
A key distinguishing feature of service marketing is that the service provision and provider are
inseparable from the service consumption and consumer. For example, we cannot take a hotel room
home for consumption; we must consume this service at the point of provision. Similarly, the
hairdresser needs to be physically present for this service to be consumed.
This has implications both for channels of distribution and scale of operations.

Non-ownership
The final distinguishing feature of a service is that, unlike a physical product, the consumer does not
secure ownership of the service. Rather the customer pays only to secure access to or use of the
service. Again the hotel room is a good example. Similarly, with banking services, although the
customer may be given a Cheque book, credit cards, etc, they serve only to allow the customer to
make use of what he or she is actually buying, namely, bank services.