What are the key elements of service marketing? Discuss the differences between product and service.

Service_MarketingAnswer: Service marketing involves of marketing of something which is intangible and which is usually consume at the point of delivery. Booms and Bitner suggested three key elements for service marketing. These are discussed bellow:

Key element of service marketing:

  • People: Most services are provided by people, the selection, training and motivation of employees can make a huge difference in customer satisfaction. Ideally, employees should exhibit competence, a caring attitude, responsiveness, initiative, problem-solving ability, and good will. Service companies such as FedEx and Marriott empower their front-line personnel to spend up to $100 to resolve a customer problem.

  • Physical evidence: Companies also try to demonstrate their service quality through physical evidence and presentation. A hotel will develop a look and style of dealing with customers that realizes its intended customer value proposition, whether it is cleanliness, speed or some other benefit.

  • Delivery process: Service companies can choose among different processes to deliver their services. Restaurants have developed such different formats as cafeteria-style, fast-food, buffet, and candlelight service.

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Difference between product and services:
Much of initial the initial research into services sought to differentiate them from goods, focusing particularly on four generic differences—intangibility, heterogeneity (variability), perishability of output, and simultaneity of production and consumption. Although these characteristics are still commonly cited, they have been criticized as over generalizations and there is growing recognition that they are not universally applicable to all services. More practical insights are provided in the following list of eight generic differences which are helpful in distinguishing services marketing from goods marketing.

    • Nature of the product: Berry captures the distinction well when he describes a good as “an object, a device, a thing,” in contrast to a service which is “a deed, a performance, an effort”. Marketing a performance (which in the case of rental services may involve an object like a power tool a car) is very different from attempting to market the physical object itself. For instance, in automobile rentals, customers usually reserve a particular category of car, rather than a specific model, paying more attention to such elements as the location and appearance of pickup and delivery facilities; availability of inclusive insurance, cleaning and maintenance. Although services often include tangible elements—such as sitting in an airline seat, eating a meal, or getting damaged equipment repaired—the service performance itself is basically an intangible.

  • Greater involvement of customer in the production process: Performing a service involves assembling and delivering the output of a mix of physical facilities and mental or physical labor. Often customers are actively involved in helping to create the service product—either by serving themselves (as in a fast-food restaurant or Laundromat) by cooperating with service personnel in setting such as hair salons, hotels colleges, or hospitals.

  • People as part of the product: In-high contact services, customers not only come into contact with service personnel, they may also rub shoulders with other customers (literally so, if they ride a bus or sub way during the rush hour). The difference between two service businesses often lies in the quality of employees who deliver the service. Similarly, the type of customers who patronize a particular service business helps to define the nature of the service experience.

  • Greater difficulties in maintaining quality control of the standard: Manufactured goods can be checked for conformance with quality standards long before they reach the customer. But when services are consumed as they are produced, final “assembly” must take place under real-time conditions. As a result, mistakes and shortcomings are harder to conceal.

  • Harder for customer to evaluate:  Most physical goods tend to be relatively High in search qualities; these are attributes which a customer can determine prior to purchasing a product, such as color, style, shape, price, fit, feel, hardness, and smell. Other goods and some services, by contrast, many emphasize experience qualities which can only be discerned after purchase or during consumption; as with taste, wear ability, ease of handling, quietness and personal treatment. Finally, there are credence qualities—characteristics that customers find harder to evaluate even after consumption. Examples include surgery and technical repairs that are not readily visible.

  • Absence of inventory: Because a service is a deed or performance, rather than a tangible item that the customer keeps, it is “perishable” and cannot be inventoried. Of course, the necessary facilities, equipment and labor can be held in readiness to create the service. But these simply represent productive capacity, not the product itself. Having unused capacity in a service business is rather like running water into a sink without a stopper: The flow is wasted unless customers (or possessions requiring service) are present to receive it. When demand exceeds capacity, customer may be sent away disappointed, since no inventory is available for backup.

  • Relating importance of time factor: Many services are delivered in real time. Customers have to be physically present to receive service from organizations such as airlines, hospitals, haircutters, and restaurants. There are limits as to how long customers are willing to be kept waiting; further, service must be delivered expeditiously so that customers do not spend excessive time receiving service.

  • Structure and nature of distribution channel: Unlike manufacturers, which require physical distribution channels to move goods from factory to customers, many service businesses either use electronic channels (as in broadcasting or electronic funds transfer) or else combine the service factory, retail outlet, and point of consumption into one.

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