Distinguishing features of services

Marketing Services and the Customer

Experience
Study unit 2
Four distinguishing features

• Intangibility
• Inseparability
• Variability (heterogeneity)
• Perishability

These four features have been identified by a variety of authors, but

Zeithaml, Parasuraman, and Berry (1985) provide an excellent review
of the features and a summary of their implications (you can cite
these authors, if you need to, when discussing the four features)
Intangibility
• Abstract experiences, activities, and
processes, so can’t be seen or touched
• Probably the most fundamental
characteristic
Implications of intangibility
• Difficult to evaluate, which increases buyer risk
• Difficult to promote/communicate
• Impossible to build up an inventory
Issues for marketing:
• Brand image
• Physical cues
• Price as a quality proxy
• Guarantees and endorsements
• Free trials
• WOM
Implications of intangibility

• The ease or difficulty of evaluating a

service depends on its attributes:
o Search attributes (attributes that can be
evaluated prior to purchase)
o Experience attributes (attributes that can
only be evaluated during/after
consumption)
o Credence attributes (attributes that can’t
be evaluated easily even after purchase)
Intangibility

Restaurant Computer
Meals Repair
Vacation Education
Haircut Legal Services
Entertainment Complex
High In High In
Surgery
Credence
Experien
ce Attribute
Attribute s
s
(Zeithaml, 1981)
Inseparability

• Customer consumption often simultaneous

with service production/delivery
• Customers interact with service provider
• Can include customer co-production
Implications of inseparability
• Service providers require different skill set
• Co-production can influence service outcome
• Other customers can be present
• Difficulty selling to geographically widespread
market
• Difficult to correct defective service
Issues for marketing:
• Employee and customer management
• Multi-site locations
• Opportunity for customization
Variability (Heterogeneity)
• No two service provisions are ever identical
• Affected by personnel delivering service, time of
day, other customers present, etc.
• Individual customer perceptions of service
delivery will vary
 Implications of variability
• Consistently perfect quality difficult to achieve
• Service delivered to the customer may not match
what was promoted or planned
• Implications for brand image
• Greater risk for customer
Issues for marketing:
• Training and/or technology to reduce variability
• Standardise wherever possible

However, customers of more ‘hedonic’ services expect a customized approach

(Ding and Keh, 2015)
Perishability
• Services are time-bound. Cannot be stored or
saved, and sold later
• Little or no inventory
Implications of perishability
• Lost revenue (excess capacity)
• Lost customers (excess demand)
Issues for marketing:
• Managing congestion during peak demand, and
unused capacity during low demand
Dispelling the myth?

Intangibility Services often have tangible

results
Inseparability Many services (or elements of a
service) are produced without the
customer present

Heterogeneity Many services are standardized

Perishability Many tangible products are

perishable and some aspects of
services can be inventoried
(Vargo and Lusch, 2004)
A Fifth (or the only?)
• Marketing transactions that do not involve a
transfer of ownership (Lovelock and Gummesson, 2004)
Extended marketing mix
• Booms and Bitner (1981) extended mix to 7 ‘Ps’.
The importance of each will vary according to the
particular service

People

Physical
Process
Evidence
Extended marketing mix
People
All human actors who play a part in service delivery
and influence a buyer’s perceptions
Physical Evidence
The environment in which the service is delivered
and any other tangible elements
Process
The procedures, mechanisms, and flow of activities
by which the service is delivered
References
• Booms, B. and Bitner, M.J. (1981) Marketing strategies and
organization structures for service firms. In Donnelly, J. and George,
W. eds. (1981) Marketing of Services. Chicago: AMA, pp. 51-67.
• Ding, Y. and Keh, H. (2015) A re-examination of service
standardization versus customization from the consumer’s
perspective. Journal of Services Marketing. 30 (1), 16-28.
• Lovelock, C. and Gummesson, E. (2004) Whither services
marketing: in search of a new paradigm and fresh perspectives.
Journal of Service Research. 7 (1), pp. 20-41.
• Vargo, S. and Lusch, R. (2004) The four service marketing myths.
Journal of Service Research. 6 (4) 324-335.
• Zeithaml, V. (1981) How consumer evaluation processes differ
between goods and services. In Donnelly, J. and George, W. eds.
(1981) Marketing of Services. Chicago: AMA, pp. 186-190.
• Zeithaml, V., Parasuraman, A., and Berry, L. (1985) Problems and
strategies in services marketing. Journal of Marketing. 49 (2), 33-46.