MSB
Distinguishing features of services
Marketing Services 2
Four distinguishing features
Intangibility
Inseparability
Variability (heterogeneity)
Perishability
These four features have been identified by a variety of authors, but Zeithaml, Parasuraman, and Berry (1985) provide an excellent review of the features and a summary of their implications (you can cite these authors, if you need to, when discussing the four features)
Intangibility
Abstract experiences, activities, and processes, so can’t be seen or touched
Probably the most fundamental characteristic
Implications of intangibility
Difficult to evaluate which increases buyer risk
Difficult to promote/communicate
Impossible to build up an inventory
Issues for marketing:
Brand image
Physical cues
Price as a quality proxy
Guarantees and endorsements
Free trials
WOM
Implications of intangibility
The ease or difficulty of evaluating a service depends on its attributes:
Search attributes (attributes that can be evaluated prior to purchase)
Experience attributes (attributes that can only be evaluated during/after consumption)
Credence attributes (attributes that can’t be evaluated easily even after purchase)
Intangibility
(Zeithaml, 1981)
Restaurant Meals
Vacation
Haircut
Entertainment
High In Experience
Attributes
Computer Repair
Education
Legal Services
Complex Surgery
High In Credence
Attributes
Inseparability
Customer consumption often simultaneous with service production/delivery
Customers interact with service provider
Can include customer co-production
Implications of inseparability
Service providers require different skill set
Co-production can influence service outcome
Other customers can be present
Difficulty selling to geographically widespread market
Difficult to correct defective service
Issues for marketing:
Employee and customer management
Multi-site locations
Opportunity for customization
Variability (Heterogeneity)
No two service provisions are ever identical
Affected by personnel delivering service, time of day, other customers present, etc.
Individual customer perceptions of service delivery will vary
Implications of variability
Consistently perfect quality difficult to achieve
Service delivered to the customer may not match what was promoted or planned
Implications for brand image
Greater risk for customer
Issues for marketing:
Training and/or technology to reduce variability
Standardise wherever possible
But remember,
customers of more ‘hedonic’ services expect a customized approach (Ding and Keh, 2015)
Perishability
Cannot be stored or saved, and sold later
Little or no inventory
Implications of perishability
Lost revenue (excess capacity)
Lost customers (excess demand)
Issues for marketing:
Managing congestion during peak demand, and unused capacity during low demand
A Fifth Characteristic?
Lack of ownership
Marketing transactions that do not involve a transfer of ownership (Lovelock and Gummesson, 2004)
The extended marketing mix
Booms and Bitner (1981) extended mix to 7 ‘Ps’. The importance of each will vary according to the particular service
Physical Evidence
Process
People
The extended marketing mix
People
All human actors who play a part in service delivery and influence a buyer’s perceptions
Physical Evidence
The environment in which the service is delivered and any other tangible elements
Process
The procedures, mechanisms, and flow of activities by which the service is delivered
References
Booms, B. and Bitner, M.J. (1981) Marketing strategies and organization structures for service firms. In Donnelly, J. and George, W. eds. (1981) Marketing of Services. Chicago: AMA, pp. 51-67.
Ding, Y. and Keh, H. (2015) A re-examination of service standardization versus customization from the consumer’s perspective. Journal of Services Marketing. 30 (1), 16-28.
Lovelock, C. and Gummesson, E. (2004) Whither services marketing: in search of a new paradigm and fresh perspectives. Journal of Service Research. 7 (1), pp. 20-41.
Zeithaml, V. (1981) How consumer evaluation processes differ between goods and services. In Donnelly, J. and George, W. eds. (1981) Marketing of Services. Chicago: AMA, pp. 186-190.
Zeithaml, V., Parasuraman, A., and Berry, L. (1985) Problems and strategies in services marketing. Journal of Marketing. 49 (2), 33-46.