11.1 Classification of Services
3 min read•june 25, 2024
Services are intangible products that provide benefits without ownership. They're characterized by , , , and . These unique traits pose challenges for marketers in communicating value and managing customer experiences.
Understanding services is crucial for developing effective marketing strategies. Marketers must focus on building trust, managing interactions, maintaining quality, and optimizing capacity. The extends beyond the traditional 4Ps to address the complexities of service delivery.
Understanding Services in Marketing
Characteristics of services in marketing
Top images from around the web for Characteristics of services in marketing
Creating the Marketing Strategy | Principles of Marketing View original
Is this image relevant?
File:7 ps of services marketing.jpg - Wikimedia Commons View original
Is this image relevant?
Products and Marketing Mix | Principles of Marketing View original
Is this image relevant?
Creating the Marketing Strategy | Principles of Marketing View original
Is this image relevant?
File:7 ps of services marketing.jpg - Wikimedia Commons View original
Is this image relevant?
1 of 3
Top images from around the web for Characteristics of services in marketing
Creating the Marketing Strategy | Principles of Marketing View original
Is this image relevant?
File:7 ps of services marketing.jpg - Wikimedia Commons View original
Is this image relevant?
Products and Marketing Mix | Principles of Marketing View original
Is this image relevant?
Creating the Marketing Strategy | Principles of Marketing View original
Is this image relevant?
File:7 ps of services marketing.jpg - Wikimedia Commons View original
Is this image relevant?
1 of 3
- Services are intangible products that provide benefits to customers without resulting in ownership of anything tangible
- Examples include haircuts, legal advice, and entertainment experiences (concerts, movies)
- Intangibility: Services cannot be touched, seen, or felt before purchase making it challenging to evaluate quality and value
- Inseparability: Services are produced and consumed simultaneously requiring direct interaction between the service provider and customer
- Variability: The quality of services can vary depending on the provider and the specific circumstances leading to inconsistent customer experiences
- Perishability: Services cannot be stored, saved, or resold once they have been used resulting in lost revenue if demand fluctuates
Classification systems for services
- Degree of tangibility:
- Pure services (counseling, education) vs. services with tangible components (restaurants, car rentals)
- Level of :
- High-contact services (healthcare, personal training) vs. low-contact services (online banking, self-service kiosks)
- Level of :
- Standardized services (public transportation, fast food) vs. customized services (interior design, custom software development)
- Expertise and skills required:
- (legal advice, accounting) vs. (house cleaning, pet sitting)
- Ownership structure:
- (airlines, hotels) vs. (charities, museums)
- Target market:
- (consulting, industrial equipment maintenance) vs. business-to-consumer services (retail banking, fitness centers)
Impact of services on marketing strategies
- Intangible nature of services makes it challenging to communicate value to potential customers
- Service providers must focus on building trust and credibility through branding, customer testimonials, and
- Inseparability of production and consumption requires service providers to manage customer interactions effectively
- Training and empowering front-line employees is crucial for delivering high-quality service and handling customer complaints
- Variability in service quality can be managed through:
- Standardization of processes and procedures to ensure consistent service delivery
- Rigorous employee training and performance monitoring to maintain service standards
- Implementing quality control measures and customer feedback systems to identify and address issues promptly
- Perishability of services requires careful capacity planning and demand management
- Strategies such as dynamic pricing, , and offering complementary services can help optimize revenue and minimize unused capacity
- Consumer behavior in the context of services is influenced by:
- : Customers may be hesitant to purchase services due to the inability to evaluate quality beforehand leading to a greater reliance on reputation and word-of-mouth
- Emotional factors: The service experience can evoke strong emotions that impact customer satisfaction and loyalty making it essential to create positive emotional connections
- Word-of-mouth: Recommendations from trusted sources (friends, family, online reviews) play a significant role in service purchase decisions due to the intangible nature of services
Service Quality and Customer Experience
- helps identify discrepancies between customer expectations and perceptions of service delivery
- is a visual representation of the service process, highlighting customer actions, front-stage and back-stage activities
- refers to the physical environment where the service is delivered, influencing customer perceptions and behaviors
- is the moment of interaction between the customer and service provider, crucial for shaping overall satisfaction
- strategies are essential for addressing service failures and maintaining customer loyalty
- Service marketing mix extends the traditional 4Ps to include people, process, and physical evidence, reflecting the unique challenges of service marketing
Key Terms to Review (22)
Business-to-Business Services: Business-to-business (B2B) services refer to the provision of services by one organization to another, rather than directly to individual consumers. These services are specifically designed to support and enhance the operations and productivity of other businesses, rather than meeting the personal needs of end-users.
Business-to-Consumer (B2C) Services: Business-to-consumer (B2C) services refer to the provision of services directly to individual consumers or end-users, rather than to other businesses. These services are designed to meet the personal, lifestyle, or household needs of consumers, as opposed to the commercial or operational needs of other organizations.
Customer Contact: Customer contact refers to the interactions and touchpoints between a business and its customers throughout the customer journey. It encompasses all the ways a customer can engage with and experience a company, from initial awareness to post-purchase support.
Customization: Customization is the process of modifying or tailoring a product, service, or experience to meet the specific needs, preferences, or requirements of an individual or a particular group of customers. It involves adapting and personalizing offerings to cater to the unique needs and desires of the target audience.
For-Profit Services: For-profit services refer to the provision of services by organizations or entities that are primarily driven by the goal of generating revenue and profits, rather than solely focusing on public service or social welfare. These services are typically offered in a commercial market environment, where the primary objective is to earn a financial return on the investment made in delivering the service.
Inseparability: Inseparability is a key characteristic of services that describes the simultaneous production and consumption of a service. Unlike physical goods, services are produced and consumed at the same time, with the customer often playing an active role in the service delivery process.
Intangibility: Intangibility is a fundamental characteristic of services that distinguishes them from physical goods. It refers to the inability to physically touch, see, feel, hear, or smell a service before it is purchased and experienced.
Non-Professional Services: Non-professional services refer to services that are provided by individuals or organizations that do not require specialized education, training, or certification to perform. These services are typically less complex and do not involve the application of specialized knowledge or skills that are characteristic of professional services.
Non-Profit Services: Non-profit services refer to the provision of various goods and services by organizations that are not primarily driven by the goal of generating profit. These organizations are typically focused on addressing social, charitable, or public welfare needs within a community or society.
Perceived Risk: Perceived risk refers to the degree of uncertainty or potential for loss that a consumer associates with the purchase or use of a particular product or service. It is a subjective assessment of the potential negative outcomes that may arise from a decision or action, which can influence consumer behavior and decision-making.
Perishability: Perishability refers to the tendency of certain goods and services to deteriorate or lose value over time, often due to factors such as expiration, spoilage, or obsolescence. This characteristic is particularly relevant in the context of service classification, as it can impact the way services are delivered, marketed, and managed.
Professional Services: Professional services refer to specialized, knowledge-based activities performed by highly skilled and educated individuals or firms to provide expert advice, consulting, or solutions to clients. These services are typically offered in industries such as accounting, law, engineering, architecture, management consulting, and healthcare.
Service Blueprint: A service blueprint is a visual representation of a service process that maps out all the elements involved in delivering a service, including customer actions, front-line employee actions, and behind-the-scenes organizational support processes. It provides a detailed understanding of the service experience from the customer's perspective.
Service Encounter: A service encounter refers to the interaction between a customer and a service provider during the delivery of a service. It encompasses the entire experience a customer has with a service organization, from the initial contact to the final resolution of their needs.
Service Guarantees: Service guarantees are promises made by a service provider to their customers, ensuring a certain level of service quality or offering compensation if the promised service is not delivered. These guarantees are a strategic tool used by service organizations to build trust, enhance customer satisfaction, and differentiate themselves in the marketplace.
Service Marketing Mix: The service marketing mix is a framework that outlines the key elements businesses must consider when marketing and delivering services. It builds upon the traditional 4Ps of marketing (product, price, place, promotion) by adding three additional elements specific to the service industry: people, process, and physical evidence.
Service Quality Gap Model: The Service Quality Gap Model is a framework that identifies the gaps between customer expectations and the actual service delivered, helping organizations understand where service quality can be improved. This model highlights five distinct gaps: the knowledge gap, the policy gap, the delivery gap, the communication gap, and the perception gap. By addressing these gaps, businesses can enhance customer satisfaction and loyalty.
Service Recovery: Service recovery refers to the actions and processes that organizations undertake to address and resolve customer issues or complaints that arise during the delivery of a service. It is a crucial aspect of service management, as it aims to regain customer satisfaction and trust when a service failure occurs.
Servicescape: Servicescape refers to the physical environment and surroundings in which a service is delivered. It encompasses the tangible and intangible elements that create the overall ambiance and influence the customer's experience and perception of the service provider.
Tangibility Spectrum: The tangibility spectrum refers to the degree of physical presence or intangibility of a service offering. It represents a continuum ranging from highly tangible, physical goods to completely intangible, pure services, with many services falling somewhere in between.
Variability: Variability refers to the degree of deviation or dispersion within a set of data or observations. It is a fundamental concept in the context of service classification, as it reflects the extent to which a service offering can vary or differ from one instance to another.
Yield Management: Yield management is a strategic pricing and inventory control approach used in the service industry to maximize revenue. It involves adjusting prices and availability of services based on supply, demand, and other market factors to optimize profitability.