Service Marketing: Meaning, Features and Characteristics

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.

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.

Jobs range from high-paid professionals and technicians to minimum-wage positions. Service organizations can be of any size from huge global corporations to local small businesses. Most activities by the government agencies and non-profit organizations involves services.

The 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’.

Features of Services

1. Intangibility

A physical product is visible and concrete. Services are intangible. The service cannot be touched or viewed, so it is difficult for clients to tell in advance what they will be get­ting. For example, banks promote the sale of credit cards by emphasizing the conveniences and advantages derived from possessing a credit card.

2. Inseparability

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.

3. Heterogeneity (or variability)

Services involve people, and people are all different. There is a strong possibility that the same enquiry would be answered slightly differently by different

people (or even by the same person at different times). It is important to minimize the differences in performance (through training, standard setting and quality assurance). The quality of services offered by firms can never be standardized.

4. Perishability

Services have a high degree of perishability. Unused capacity cannot be stored for future use. If services are not used today, it is lost forever. For example, spare seats in an aeroplane cannot be transferred to the next flight. Similarly, empty rooms in five-star hotels and credits not utilized are examples of services leading to economic losses. As services are activities performed for simultaneous consumption, they perish unless consumed.

5. Changing demand

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.

6. 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.

7. Direct channel

Usually, services are directly provided to the customer. The customer goes directly to the service provider to get services such as bank, hotel, doctor, and so on. A wider market is reached through franchising such as McDonald’s and Monginis.

Problems in Marketing Services

• A service cannot be demonstrated.
• Sale, production and consumption of services takes place simultaneously.
• A service cannot be stored. It cannot be produced in anticipation of demand.
• Services cannot be protected through patents.
• Services cannot be separated from the service provider.
• Services are not standardized and are inconsistent.
• Service providers appointing franchisees may face problems of quality of services.
• The customer perception of service quality is more directly linked to the morale, motivation and skill of the frontline staff of any service organization.

Characteristics of services

The following are the characteristics of services:

1. Intangibility

Services are intangible and therefore cannot be touched, handled, smelt or tasted (physical senses). This is because service itself is an activity. A service however, can be experienced. A service also gives a certain amount of satisfaction to the consumers. On account of the intangibility, there is no ownership created in case of services. A service can only be generated and used and can never be owned.

2. Perishability

A service has to be consumed simultaneously with its production. A service cannot be stored like a tangible commodity. Services are perishable in terms of delivery and time. An empty seat on a plane never can be utilized and charged after departure. Revenue once lost is lost forever.

When the service has been completely rendered to the requesting service consumer, this particular service irreversibly vanishes as it has been consumed by the service consumer. Example: after the passenger has been transported to the destination, he cannot be transported again to the previous location at the previous point of time.

3. Inseparability

Commodities once produced can be sold at a later point of time but in case of services it is not possible. Examples – In the cases of services of a doctor to his patient, teacher to his student, the simultaneous presence of both-the producer of the service and the consumer of the service at that point of time is absolutely necessary.

The service provider is indispensable for service delivery as he must promptly generate and render the service to the requesting service consumer. Therefore the service provider, the service itself and the service consumer are inseparable.

4. Simultaneity

Services are generated and consumed during the same period of time. As soon as the service consumer has requested the service (delivery), the particular service must be generated from scratch without any delay. The service consumer instantaneously consumes the rendered benefits to satisfy his wants. Therefore the production and consumption of services are always simultaneous.

5. Variability

Each service is unique. Services lack homogeneity. Example: A doctor treats two patients with similar ailments on the same day. The level of satisfaction in the minds of these patients after the treatment will never be the same. The difference is caused by factors such as the mood of the doctor, the fatigue level of the doctor, the way the service is perceived by the individual patient etc. There will a difference in the service even if the same doctor treats the same patient on two different occasions.

This is because the moods of the doctor and the patient do not remain the same on both the occasions. No two units of service are identical even if they are generated by the same person. Factors like quality control, standardization etc. which can be very successfully implemented in case of production of tangible goods cannot be applied in case of services. Services always vary with each other.

6. Ownership

No ownership is created in case of services. At the time of creating a service or delivering a service, the service provider does not own the service. He only owns the physical infrastructure necessary to create the service. Similarly at the time of consumption or after the consumption, the service consumer does not own the service. He only consumes the service.

After the consumption, the consumer has only the experience but the service itself would have become non-existent. A service cannot be owned by anybody because it is basically an intangible product.