Marketing Management Text and Cases

Marketing of Services

23 Chapter
Marketing of
Services

© SHH Kazmi, 2007

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 Marketing of Services

Defining Services
“A service is an activity or series of activities of more or less intangible nature
that normally, not necessarily, takes place in interactions between the customer
and service employees and/or physical resources or goods and/or system of the
service provider, which are provided as solutions to customer problems.”

© SHH Kazmi, 2007

23-2 Marketing Management Text and Cases, S H H Kazmi Excel Books

 Marketing of Services

Characteristics of Services
Typical characteristics of services include

1. Intangibility

2. Inseparability of production and consumption

3. Heterogeneity

4. Perishability

5. Client-based relationship

6. Customer contact.

© SHH Kazmi, 2007

23-3 Marketing Management Text and Cases, S H H Kazmi Excel Books

 Marketing of Services

Intangibility Difficult to evaluate, Marketer sells a promise, Difficult to

advertise, Difficult to justify prices, Goods augmented with
Service intangible services.
Characteristics Inseparability Activities of service production and consumption are
simultaneous, Consumers must participate in production.
Consumer does not take physical possession of service, Role of
service provider critical.
Heterogeneity Considerable variation in man-based service quality, Quality
control difficult, Difficult to standardise service delivery.

Perishability Services cannot be stored. Very difficult to balance supply and

demand, Unused capacity lost for ever, Considerable variation
in demand.
Client-Based Success depends on satisfied customers in the long-run,
Relationship Customer relationship maintenance is critical. Retaining a group
of satisfied customers essential.
Customer Service providers’ commitment critical to delivery, High-level of
Contact employee training and motivation essential to success, Service
marketers try to change high-contact services into low-contact
services without affecting customer satisfaction.
© SHH Kazmi, 2007

23-4 Marketing Management Text and Cases, S H H Kazmi Excel Books

 Marketing of Services

Classification of Services
Despite considerable diversity, services can also be classified on the basis of
different categories:
 Type of market.
 Degree of labour intensiveness.
 Degree of customer contact.
 Skill of service provider.
 Goal of service provider.

© SHH Kazmi, 2007

23-5 Marketing Management Text and Cases, S H H Kazmi Excel Books

 Marketing of Services

The
Service
Continuum

Education Ad Health Air Restaurant Retail Autos House Sugar

Agency Care Travel Store

Tangible Intangible
(Good-Dominant) (Service-Dominant)

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23-6 Marketing Management Text and Cases, S H H Kazmi Excel Books

 Marketing of Services

Developing Marketing Strategies for Services

Marketing mix for services is an extended one and includes 7Ps.

Three more Ps for service products marketing and include people, physical
evidence, and process.

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23-7 Marketing Management Text and Cases, S H H Kazmi Excel Books

 Marketing of Services

People of a service organisation involved in production and delivery of

services are a vital element of the marketing mix.

© SHH Kazmi, 2007

23-8 Marketing Management Text and Cases, S H H Kazmi Excel Books

 Marketing of Services

Physical evidence reduces the risk perception by customers by

offering tangible evidence of the promised service delivery.

© SHH Kazmi, 2007

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 Marketing of Services

Process is of critical importance to consumers in high-contact services.

Service marketers can choose among different processes to deliver their
services to consumers.

© SHH Kazmi, 2007

23-10 Marketing Management Text and Cases, S H H Kazmi Excel Books

 Marketing of Services

Services Involve
Three Types of Company
Marketing

Internal External
Marketing Marketing

Childcare Financial
Services Services

Air Travel
Services

Employees Consumers
Interactive
Marketing

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23-11 Marketing Management Text and Cases, S H H Kazmi Excel Books

 Marketing of Services

Service Quality and Differentiation

Service quality as the customers’ perception of how well a service meets or
exceeds their expectations.

Customer Satisfaction = Perceived Delivered Service ³ Expected Service

Service Quality Evaluation

© SHH Kazmi, 2007

23-12 Marketing Management Text and Cases, S H H Kazmi Excel Books

 Marketing of Services

Model of
Service- Word-of-Mouth Personal Needs Past Experience
Communications
Quality

Expected
Service
GAP
CONSUMER 5
Perceived Service

Service Delivery GAP External

MARKETER (including pre and 4 Communications
post-delivery contacts to Consumers
GAP
3
Translation of
GAP Perceptions into
1 Service-Quality (Source: Slightly modified from
Specifications A. Prasuraman, Valarie A.
GAP Zeithaml, and Leonard
L. Berry, “A Conceptual Model
2 of Service Quality and Its
Management's
Implications for Future
Perceptions
Research,” Journal of
of Consumer
Expectations Marketing, Fall 1985).
© SHH Kazmi, 2007

23-13 Marketing Management Text and Cases, S H H Kazmi Excel Books

 Marketing of Services

Monitoring Service Performance

Service companies can use several methods to monitor their
performance, such as ghost shopping, putting in place an efficient system
of receiving consumer complaints and suggestions, and conducting
surveys etc.

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