Components of Service Marketing

Service Marketing

The Service Sector

Characteristics of Services

The Service Mix

Management of Services

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 Service Sector – Employee Activities
• Financial Services – Banks, Building societies, accountants, stockbrokers, insurance
agents, actuaries.

• Professional Services – Estate agents, architects, designers, solicitors, lawyers,

consultants, surveyors, valuers, management, personnel.

• Marketing Services - Advertising agencies, marketing research, public relations, sales

agents.

• Catering – Hotels, hospitality, restaurants, fast food and take-aways.

• Leisure and recreation – sports clubs, theme parks, zoos and wildlife parks, national parks
and National Trust properties, tourism organisations, amusement centres, libraries,
museums, the arts, cinemas, theatres, musical entertainment.

• Other services – painting and decorating, cleaning, repairs, health and social services,
education and training, travel and transport, postal services, police, public utilities,
telecommunications, hairdressing.
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 Classification of Services
• Type of market, such as consumer (legal advice and repairs) or
industrial (consulting and installation services).

• Degree of labour intensiveness, whether labour based (education and

hairdressing) or equipment based (telecommunications and public
utilities).

• Level of customer contact, ranging from high (as in restaurants and air
travel) to low (postal services and estate agents).

• Skill of the service provider, which could be mainly professional

(lawyers and teachers) or non-professional (cleaners and public
transport).

• Goal of the service provider, at one end of the scale profit based
(banking and hotels) and at the other end non-profit orientated (police
and some leisure / recreations services).

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 Rapid Increase in importance of all the Activities -
REASONS
• General Economic prosperity and growth in various markets

• Lifestyle changes, e.g. Use of technology, women in the workforce, popularity of fitness
and leisure, need for wider experiences and avoidance of specialist tasks such as cleaning,
financial management and meal preparation

• Extended leisure time, leading to greater services opportunities and elimination of seasons

• Move to the private sector, for e.g. education, health and transport

• Demographic movements, such as a decrease in employment, early retirement and an

increasingly older population

• Increase in ownership of goods, leading to increase in the repair services and maintenance
sectors.

• Increase in consumer and business competition, leading to an increase in demand for

personnel and consultancy services, leasing and caretaking, marketing and advertising,
and so on

• Diversification into the services sector by retailers, for instance in the areas of optical,
travel and tourism, and financial services

• Other factors, such as the increase in commercial and industrial services as a result of
pressures for quality standards

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 Main Characteristics of Services
Characteristics Distinguishing Features
Intangibility Cannot be tested, seen, heard, touched or smelled before purchase.
Judgement therefore based on opinion, attitude, feeling, perception and
experience , e.g. education provision
Inseparability Production and consumption are inseparable, creation / performance /
consumption are often identical and distribution roles integrated. The product
cannot usually exist without the customer, e.g. restaurant services

Heterogeneity Standardization of output is generally difficult, units differ in price, quality and
conformity, and judgement is difficult in advance of purchase, e.g. tourism
products.
Perishability Services are perishable and cannot be stored, while short capacity is lost
forever with fluctuations in demand, e.g. in transport and travel.

Ownership Customers only have access to, or use of, a service, rather than ownership.
There are thus no ownership transfers, patents or inventories and payment is
for hire or temporary use, e.g. leisure facilities

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The Goods / Service Continuum

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 Dimensions of the Customer meal experience
Aspect Examples of Consumer Examples of Consumer
satisfaction Dissatisfaction
Physiological Correctly prepared steaks Overcooked food
Comfortable seats Static from nylon carpet
Social Enjoyable company Rowdy customers
Helpful table service Waiter language difficulties
Psychological Secure, intimate environment Understanding French menu or
Enhanced self - esteem wine list
Smoky atmosphere

Economic Good Value Food Unacceptable credit card

Restaurant accessibility High – priced entrees

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 Role of people in the service marketing mix

Contact Contact with client Non – Contact with client

Visibility
Waitress Cook in steak house
Visible to client
Service Engineer Computer operator
Telephone Operator Maintenance worker

Non – visible to client

Airline Accountant

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 Marketing Solutions to Service Constraints
Service / Characteristics Possible marketing solutions
Intangibility Increase tangibility and physical representation.
Focus on benefits / reputations / brand names / personalities, to
pinpoint the ‘product’.
Use physical evidence where applicable.
Develop internal / external research programme
Inseparability Emphasize service aspects.
Re-organize work schedules.
Train service providers.
Heterogeneity Careful personnel selection and training.
Monitoring of standards / quality control.
Prepacking of services.
Emphasize tailor-made features and units.
Perishability Better match between supply and demand.
Short-term, tactical policies – e.g. off-peak price reductions,
promotional campaigns, etc.
Ownership Stress Advantages of non-ownership, e.g. easier payment
systems, less risk, spontaneity and surprise. 10
 Service Marketing Strategies
Service Industry Outcome Technical possibilities Strategic possibilities
sought by
buyer
Higher education Educational Tutoring Staff Development Higher entrance demands
attainment Pre-entry courses

Hospitals Health Instruct patients to manage Market preventive medicine

problems and prevent others services, e.g. stress
reduction/weight loss

Banks Prosperity Money management courses Market financial expertise by

Small Business management industrial spsecialisation
assistance

Plumbing repairs Free – Provide consumers with Diversify, e.g. home water-
flowing pipes instructions and supplies to purification systems
prevent further blockages

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