DIFFERENCES BETWEEN MARKETING OF GOODS AND SERVICES

Introduction

The four most commonly cited characteristics – intangibility, heterogeneity, inseparability

and perishability – have been criticized as over-generalizations and there is growing
recognition that they are not universally applicable to all services. Due to their inadequacies,
Lovelock has provided more practical insights into services through the following list of eight
generic differences that are helpful in distinguishing services marketing from goods
marketing.

 Nature of the product

 Customer involvement in the production process
 People as part of the product
 Quality control problems
 Harder for customers to evaluate
 Absence of inventories
 Relative importance of the time factor
 Structure and nature of distribution channels

Key differences explained

1) Nature of the product

In his book, Service Marketing is Different, Leonard L. Berry captures the distinction
between a good (“an object, a device, a thing”) in contrast to a service (“a deed, a
performance, an effort”). The product could be a pure tangible good (toothpaste, salt),
services linked to a tangible good (delivery, installation and maintenance of office
equipment), tangible good linked to services (eating a meal in a restaurant) or a pure service
(psychotherapy, babysitting). Each of these products has to be marketed differently because
marketing a performance is very different from marketing the physical product itself.
Although services like accountancy, education, medical diagnosis and management
consultancy might have a tangible component, the service performance itself is basically
intangible.
 2) Customer involvement in the production process

The service output is a mix of physical facilities and mental or physical labor. Customer
participation is a major determinant in the production of the service. The degree of customer
involvement varies from service to service. For instance, in a massage parlor or at the
hairdresser, the customer has to be physically present during the service operation. Changing
the nature of the production process often affects the role that customers are asked to play in
that process. For instance, the new professor for ‘Principles of Management’ might prefer
teaching the subject through case discussions as against her predecessor who preferred to take
lectures packed with theory. The new professor might thus initiate greater class participation
from the students.

3) People as part of the product

In many services, people become part of the product, and managing the encounter between
the customers and service providers is a challenging task. As part of the product, customer
contact is not limited to service personnel only. They also come in close contact with other
customers. The types of customers who patronize a particular service business help to define
the nature of the service experience. For instance, passengers travelling in a bus would be
different from passengers in an airplane. Accordingly, the quality of service provided by the
bus conductor would differ from that provided by the airhostess.

4) Quality control problems

Manufactured goods can be checked for conformance with quality standards long before they
reach the customer. However, due to the inseparability factor of services, the final ‘assembly’
must take place in the presence of the consumer. As a result, mistakes and shortcomings are
difficult to conceal. In addition, as people are part of the product, every service experience is
unique. These factors make it hard for service organizations to control quality and offer a
consistent product. For instance, an airhostess cannot satisfy her customers equally due to the
variability of the service under real time conditions.

5) Harder for customers to evaluate

Most physical goods are relatively high in search qualities- attributes such as color, style,
shape, fit, feel, hardness and smell. A customer can determine these qualities prior to
purchasing a product. For instance, a blue Ferrari, and a Louis Philippe shirt are products that
possess search qualities. Some services, by contrast, may emphasize experience qualities –
attributes such as taste, wearability and personal treatment – which can only be discerned
after purchase or during consumption of the product. For instance, a hair conditioner, a
service in a restaurant, and a vacation package are products that can be evaluated through
experience. Finally, there are credence qualities – characteristics that customers find hard to
evaluate even after consumption. For instance, services like surgery cannot be readily judged.

Thus, the harder it is to evaluate a product before purchase and use, the greater are the risks
involved for the customer. These risks can be minimized by offering information to the
customers that would help them to evaluate alternatives before purchasing, and/or by offering
customers prompt after sales service.

6) Absence of inventories

Due to the perishability factor of services, they cannot be stored or inventoried and incase of
goods there will be inventories. This means that the physical facilities or mental and physical
labor have to behold in readiness for the ‘final assembly’ service operation. However, they
only represent the productive capacity.

7) Experience qualities

These are the attributes that can only be discerned after purchase or during consumption.
Experience qualities include taste and comfort. Goods and services such as vacations and
restaurant meals are high in experience qualities, because, until they are purchased and
consumed their attributes can’t be known or assessed (except by referring to other persons
who have experienced them). This kind of experience qualities are more present in services
marketing than goods marketing.

8) Credence qualities

These are the characteristics that the consumer may find impossible to evaluate even after the
purchase and consumption of the services. The technology involved in the production, or the
very nature of the service, makes it extremely difficult to evaluate. Offerings, which are high
in credence qualities, include surgical operations like kidney transplants, auto repairs, dental
services, etc. very few consumers possess sufficient knowledge or skills to evaluate whether
these services are necessary or whether they are performed properly. Credence qualities also
dominate many other services, especially those provided by professionals and specialists who
have experience in a specialized skill or have undergone training to provide such services. It
is very difficult for consumers to judge services performed by these people.

Conclusion

There few other minor differenceThe above discussed differences will vary according to
nature of services