Grasping the Uniqueness of Services Marketing Copyright

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Characteristics of Services • Intangibility - A service cannot be seen, touched, held, or put on a shelf. • Simultaneity/Inseparability – For most services, the production and consumption of the service performance occur simultaneously. • Heterogeneity – It is hard for a service organization to standardize the quality of its service performance. • Perishability – Most services cannot be produced or stored before consumption. They exist only at the time of their production. Copyright © Houghton Mifflin Company. All rights reserved. 3

Marketing of Services • Intangibility - The product is a process, a deed or a performance; therefore, • For the customer: Perceived risk is higher; harder to evaluate before (even during or after the service). • For the marketer: Harder to help customer visualize the product and differentiate from the competition. Copyright © Houghton Mifflin Company. All rights reserved. 4

Marketing of Services (cont’d) • Simultaneity/Inseparability - The provider and the customer are part of the product; production and consumption are simultaneous and inseparable; therefore, • For the customer: Some interaction with the service provider is necessary and sometimes product is shared with other customers. • For the marketer: Customers are coproducers, and their interaction and roles have to be managed. Copyright © Houghton Mifflin Company. All rights reserved. 5

Marketing of Services (cont’d) • Heterogeneity - The product varies across customer, provider, and for the same provider and customer from one consumption occasion to the next; therefore, • For the customer: Consistency of product quality is always suspect, and service provider relationship is critical. • For the marketer: Customization is an opportunity; and frontline operations and customer skills training is critical. Copyright © Houghton Mifflin Company. All rights reserved. 6

Marketing of Services (cont’d) • Perishability - The product cannot be stored and can be produced only after customer initiates; therefore, • For the customer: Product needs to be available and produced when necessary. • For the marketer: Supply must match demand; otherwise (revenue) opportunity to produce is lost; the task is to manage rather than build demand. Copyright © Houghton Mifflin Company. All rights reserved. 7

Classifications Based on Services Fields • Health Care Services • Financial Services • Professional Services • Educational and Research Services • Hospitality, Travel, and Tourism Services • Sports, Arts, and Entertainment Services Source: Fisk & Tansuhaj (1985) Copyright © Houghton Mifflin Company. All rights reserved. 8

Classifications Based on Services Fields (cont’d) • Telecommunication Services • Channel, Physical Distribution, Rental and Leasing Services • Personal and Repair and Maintenance Services • Governmental, Quasi-Governmental, and Non-Profit Services Copyright © Houghton Mifflin Company. All rights reserved. 9

Classifications Based on Services Customers • Consumer services – provided to customers who are purchasing for their own personal needs. • Prominently visible in any community. • Business to business services – provided to customers who are purchasing on behalf of their organizations. • Rarely seen by the general public. Copyright © Houghton Mifflin Company. All rights reserved. 10

Lovelock's Classification • Tangible acts on a person - Services such as health care, personal care, vacations, hotels, and airlines. • Intangible acts on a person - Services such as education, entertainment shows, and legal services. • Tangible acts on a thing - Services such as house cleaning, appliance repair, landscaping services, etc. • Intangible acts on a thing - Services such as financial and insurance services and tax preparation. Copyright © Houghton Mifflin Company. All rights reserved. 11