What is Service Marketing? Definition, Types, Features, and Strategies

What is Service Marketing?

Service marketing is the process, practice, and strategy that promotes intangible offerings and benefits to the customers with the aim to build up customer satisfaction, relationship, and value. The service can be a firm’s single offering as well as additional benefits to tangible products.

In simple words, service marketing means doing the business of intangible products which do not have physical entity but have quality and ability to satisfy customers need and want. Such a product’s performance is not measured and touched but is felt and perceived by customers which gives quantitative value to them.

Sectors like repair and maintenance, medical, health care, tourism, hospitality, banking, insurance, consultancy, professional services, etc. are the sectors involved in service marketing.

To be more clear, service marketing is the opposite of product marketing. A service refers to any task performed by the company to another as the provision of any facility. The service may or may not be attached to the physical product. If the business firm’s main goal is to provide services to its markets instead of any physical products, then the main product of the firm becomes the service.

If the firm’s main goal is to offer products to its customers instead of services, then the physical product becomes the main product of the firm and the service becomes supplementary to the physical products. Supplementary service is that can be offered in addition to the actual products.

For example, in the sale of a physical product – television set to a customer the facility regarding warranty services becomes the part of the television i.e. warranty services are provided to the customer when he purchases a television set. Here, services become supplementary products.

Today in modern days, although the customers are satisfied with the physical products they need some additional services along with the actual products. The rate of this partial satisfaction is increasing rapidly – which promotes the importance of service marketing in today’s business era.

Services Vs. Products

To better understand what is a product and what is a service – let’s differentiate between product and service as follows:

• Product is tangible in nature whereas service is intangible in nature.
• Products are homogeneous in nature whereas services are heterogeneous in nature.
• Products are created in the factory whereas services are created in buyer-seller interaction.
• Production, distribution, consumption are separate and independent functions in products whereas production, distribution, consumption takes place simultaneously in the case of services.
• Consumers do not participate in the production of goods whereas consumers are co-producers in service.
• Products can be stored whereas services can not be stored.
• For products transfer of ownership is possible whereas for services transfer of ownership is not feasible.

Classification of Service Products

So in marketing – what are the types of service products? There is a number of service products in the market, however, they can be classified into main four categories.

Pure Product

Pure products are the tangible products offered to the customers such as medicine, shampoo, toothpaste, and salt. Along with these products, no additional offers are provided however they provide service to the customers. For example, medicine provides cures to health problems, shampoo may clean hair and protects from hair fall, toothpaste may help to keep fresh and shining teeth, and salt gives taste to the food.

Core Products with Associated Services

Here, the offer consists of primary core products, and along with core products additional facilities or provisions are added to enhance its utility. For example, along with the television set, or an automobile – a manual, a warranty service, or maintenance instructions are accompanied.

Core Service with Adjunct Products or Services

In this type of service products marketing, the offer consists of core service along with some additional services or supporting products are also offered. For example, Airline travels. Airlines passengers primarily buy transportation services. They arrive at their destinations without any tangible products. However, the trip includes some tangible products such as airline magazines, food, drinks, a plane ticket, etc.

Pure Service

In pure service, the offer consists of core services and possibly some adjunct services. For example, insurance services, doctor’s services, lawyer’s services, teachers, etc.

After understanding the types of service products, now move on to its features.

Features of Service Marketing

The distinct characteristics of service marketing can be mentioned as below:

Intangible. The primary feature of service marketing is that its offerings are intangible in nature. Such offerings one can not see, touch, taste, or smell. This is what makes services unique from physical products. Before buying services the consumers can not handle, examine, or try out but they can experience its performance after its use.

Perishable. Services are perishable in nature i.e. once the service is experienced it vanishes. Since we can store the physical products after buying and consuming them to some extent but the non-physical products are not storable – they have no store value. For example, if a dentist’s customer fails to make an appointment, a half-hour or a particular time of the dentist is gone forever.

Variable in Quality. Variable in quality means the heterogeneous nature of services. Physical products have fixed sizes and weights, and whenever a marketer offers to his buyers, he can offer the same amount of products. But in service marketing, the marketer can not offer the same amount of services to all the buyers. The variability in quality can be attributed to the varying skills of providers of services. Moreover, even a single service provider may provide different quality services to different customers.

Non-Measurability. The physical products can be measured since they have physical evidence – shape, weight, design, length, etc. But service products do not have any shape, weight, design, length, color, etc. as such, the service products can not be measured like physical ones.

No-Ownership Transfer. In service marketing, the service is given to the users but not the ownership. Prodcut ownership can be transferred in the product marketing but in service, there is not. For example, a taxi user may pay a certain price to the taxi driver but this does not mean he gets the ownership of that taxi just by paying a certain amount. Thus, here service charges are paid.

People Involvement. In service marketing, there is the involvement of people. For example, to provide taxi service – the taxi driver is required, to serve food in a restaurant the waiter is required, for teaching the teacher is necessary, and so on.

Types of Service Marketing

Generally, service marketings are of three types – internal, external, and interactive. They are explained as below:

Internal Service Marketing. Internal service marketing means promoting services within the organization i.e. between the company and its employees. It focuses on developing and training employees to increase service productivity. It believes the employees are the core elements to promotes service activities, they should be treated well and should be trained how to manage customers well.

External Services Marketing. It is also called business-to-consumer (B2C) service marketing. Here the business promotes its offerings to the target markets. The business can use various marketing tools to attract customers and deliver its offering to provide satisfaction and generate value. The business should focus on improving its offering as such the competition goes on increasing.

Interactive Service Marketing. It simply means the combination of internal and external service marketing. It focuses on building good interaction with customers by the employees while serving them. The employees should interact and treat well to the customers, deliver promises, get customer satisfaction and value, and ultimately add to company objectives.

Service Marketing Strategies

The company involved in service marketing should deliver services desired by the target customers. A company can apply the following marketing strategies while promoting and delivering its service products to the target market.

• Service profit chain
• Managing service differentiation
• Managing service quality
• Managing service productivity
• Management of people, physical evidence, and processes

The Service Profit Chain (SPC). The SPC model states that for successful service marketing activities there should be good linking between employees and customers. It assumes the internal quality of the organization drives employee satisfaction, loyalty, productivity – and employee productivity drives value, customer satisfaction, loyalty, and ultimately profit to the firm.

Managing Service Differentiation. Making different service offerings is key to stand ahead of competitors. The service differentiation can be achieved in terms of making product ordering easy, quick delivery service, installation service, customer counseling, training, and customer support in maintenance and repair.

Managing Service Quality. The quality of service can be determined by comparing the expectations of the customers with the service performance. The greater the service performance than expectations the more loyal customers will have the organization and loyal customers are the great survival gifts to the company. The quality of service can be achieved by making it tangible, reliable, responsive, assurance, and empathetic.

Managing Service Productivity. Service productivity means how efficiently the inputs are processed to transform the outputs in the form of services. It believes on the change in production resources and production patterns do affect the perceived quality of services.

Management of People, Physical Evidence, and Processes. Today, people, physical evidence, and processes are the additional (supporting) elements of the marketing mix. These are the service mix components. The firm based on the service sector needs to integrate and manage these components properly to make the marketing programs more effective.