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Marketing Services
Arild Aspelund
Associate Professor
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Outline
• What are services?
• The growth of services
• What differentiate service marketing from product marketing?
• Holistic marketing of services
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Defining services
Any act of performance that one
party can offer another 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.
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- Why services?
- A global trend!
2004
(A) Agriculture:
Value from
harvesting nature
(G) Goods:
Value from
making products
(S) Services:
Value from enhancing the
capabilities of things (customizing,
distributing, etc.) and interactions between things
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The largest labor force migration
in human history is underway,
driven by urbanization,
global communications,
low cost labor, business growth
and technology innovation.
Jim Spohrer (2005)
Service mix
Pure tangible good
Good w/ accompanying services
Hybrid
Service w/ accompanying goods
Pure service
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The Goods – Service Continuum
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Distinguishing Characteristics of Services
• Intangibility
– A service is not physical and you need to make some evidences
• Inseparability
– A service is normally produced, consumed and evaluated simultaneously
• Variability
– Services are heavily dependent on the person that provide them
• Perishability
– Services can not be stored
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Service Characteristics - Intangibility
• Intangibility
– “Manage the evidence” and “tangibilize the intangible”
– Create physical image of service offer and add physical evidence
• The tangibilization and evidence check list:
–
–
–
–
–
–
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Place
People
Equipment
Communication material
Symbols
Price
Service Characteristics - Inseparability
• Inseparability
– Typically produced, consumed and evaluated simultaneously
• If the availability of service-producers are constrained
– Use pricing to reduce demand
– Increase service efficiency
• Serving multiple customers simultaneously
• Increase speed of service providing
• Focus efforts on training of front staff for better service evaluation
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Service Characteristics - Variability
• Variability
– Service quality depends heavily on the person that provides them
• How to secure service quality
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–
–
–
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Good hiring and training procedures
Identify customer service evaluation criteria
Standardize the service – performance process
Monitor customer satisfaction
Service Characteristics - Perishability
•
Perishability
– Services cannot be stored
– Vulnerable to fluctuations in demand
Demand side
• Differential pricing
• Nonpeak demand
• Complementary services
• Reservation systems
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Supply side
• Part-time employees
• Peak-time efficiency
• Increased consumer
participation
• Shared services
• Facilities for future expansion
Holistic Marketing in Service Firms
• Holistic marketing
– Along the dimensions:
•
•
•
•
Internal marketing
Integrated marketing
Relationship marketing
Social responsibility marketing
• The special importance of internal marketing of services
– Since service marketing is so dependent of the provider, internal
marketing is especially important
– The service marketing department is at its most valuable when it makes
the rest of the organization better able to market the firm’s services
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Summary and Conclusions
• Summary
– To extract value from service sciences are one of the major managerial
challenges of the modern western economy
– Services are different from goods
•
•
•
•
Intangibility
Inseparability
Variability
Perishability
– These differences gives raise to certain differences in marketing priorities,
but basic marketing principles still apply!
• Continuation
– Product Strategy
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