Services marketing is a specialized branch of marketing. Services marketing emerged as a separate field of study in the early 1980s, following the recognition that the unique characteristics of services required different strategies compared with the marketing of physical goods.
Service marketing Definition
Service marketing is marketing based on relationship and value. It may be used to market a service or a product. With the increasing prominence of services in the global economy, service marketing has become a subject that needs to be studied separately. Marketing services is different from marketing goods because of the unique characteristics of services namely, intangibility, heterogeneity, perishability and inseparability.
American Marketing Association, defines services as activities, benefits, or satisfactions that are offered for sale or provided with sale of goods to the customer, that is, pre-sale and after-sales services. Berry states, ‘while a product is an object, devise or physical thing, a service is a deed, performance, or an effort’.
In most countries, services add more economic value than agriculture, raw materials and manufacturing combined. In developed economies, employment is dominated by service jobs and most new job growth comes from services.
Nature/Characteristics of Services
The following are the Characteristics of Services
Services lack physical form; they do not interact with any our senses in a conventional way, they cannot be touched or held.Implications of intangibility: Ownership cannot be transferred, value derives from consumption or experience, quality is difficult to evaluate prior to consumption or purchase.
Personal services cannot be separated from the individual. Services are created and consumed simultaneously. The service is being produced at the same time that the client is receiving it; for example, during an online search or a legal consultation. Dentist, musicians, dancers, etc. create and offer services at the same time.
Service performances are ephemeral; unlike physical goods, services cannot be stored or inventoried.Implications of perishability: Demand is subject to wide fluctuations, no inventory to serve as a buffer between supply and demand; unused capacity cannot be reserved; high opportunity cost of idle capacity.
Variability (also known as heterogeneity):
Services involve processes delivered by service personnel and subject to human variation, customers often seek highly customized solutions, services are inherently variable in quality and substance.Implications of variability: Service quality is difficult to manage; fewer opportunities to standardize service delivery.
The demand for services has wide fluctuations and may be seasonal. Demand for tourism is seasonal, other services such as demand for public transport, cricket field and golf courses have fluctuations in demand.
Pricing of services:
Quality of services cannot be standardized. The pricing of services are usually determined on the basis of demand and competition. For example, room rents in tourist spots fluctuate as per demand and season and many of the service providers give off-season discounts.
Difference between Goods and Services
|A physical commodity||A process or activity|
|Production and distribution are separation from their consumption||Production, distribution and consumption are simultaneous processes|
|Can be stored||Cannot be stored|
|Transfer of ownership is possible||Transfer of ownership is not possible|