The marketing of services, has unique challenges. Services
unlike products are intangible, which means in most instances it
is a basic promise that is offered to consumers. For e.g. life
insurance, which is one of the most intangible forms of service
offerings. (You buy into a basic promise, which you hope is
John Akers CEO of IBM, puts service marketing in the correct
perspective by stating "I am sick and tired of visiting
production plants to hear nothing but great things about quality
and cycle time`85..and then to visit customers who tell me of
Service industries are quite varied. Professional services
such as auditing and legal, business services such as hotels,
airlines, banks, government services which relate to utilities,
hospitals and law enforcement and finally non-profit services as
charities and churches.
Kotler defines a service, as any act or performance that one
party can offer to another, that is essentially intangible and
does not result in the ownership of anything. Its production may
or may not be tied to a physical product.
It must be kept in mind that services are rendered; products
are possessed. Services cannot be possessed they can only be
experienced, created or participated in. Here-in lies the magic
and mystic of serving marketing.
Let us now move on and examine the specific characteristics
Characteristics of services
The major characteristics are: intangibility, inseparability,
variability and perishability.
(a) Intangibility - This is the most challenging and
difficult aspect to contend with, in the marketing of
services. Unlike physical products, services cannot be felt,
seen and purchased. This intangibility creates uncertainty and
consumer therefore look for signs or evidence of service
quality. As a service provider, you must be able to make
tangible the intangible, as much as possible.
(b) Inseparability - The production and consumption
of a service is carried out simultaneously. In the case of
physical products this is not so. For example in a restaurant,
the service is provided based on the customers needs and the
customer in turn consumes the service during the same service
encounter. The important aspect to note here is that the
client is present as the service is produced and therefore,
the interaction between the service provider and customer, is
a key feature.
(c) Variability - Services are highly variable,
because they are dependant on the provider of the service. For
example, when you visit a bank on different occasions, you may
be serviced by different staff members. As such, the service
that you receive is never the same. This is where the people
dimension comes in and becomes very critical for success.
In order to minimise the variability of service standards,
service providers should invest in people, through
professional selection and training. Customer satisfaction too
should be monitored, as a control mechanism. We will examine
the "people" aspect in greater detail during the later part of
(d) Perishability - Unfortunately, services cannot
be stored. For example, a legal officer will charge a client
for a missed appointment, because the opportunity missed is
gone for good. It just cannot be stored for consumption at a
later date. Hence, the important aspect is to produce a better
match between demand and supply, in service business.
Reasons for growth in services, and Service Marketing
Let us briefly examine the major reasons:
(a) Technology and its impact
The major technological breakthroughs achieved in recent
years have been one reason for the growth in services. The
production of more goods or products often leads indirectly to
an increased demand for services.
(b) Customer Sophistication
The customer of today is more knowledgeable, looks for
convenience and is very demanding. The need for convenience,
results in eating out, ready made garments and more leisure
(c) Increased Competition
This has resulted in the service element being highlighted,
in order to gain a competitive advantage. For example, banks
offer a range of value added services, financial service
organizations offer legal services etc.
The Seven Pís
Drawing on the concept of four Pís for product marketing, the
services marketing mix has been extended to 7 Pís. Included is
probably the most important element in services marketing,
Of all the controllable variables marketing personnel have at
their disposal, the people factor is perhaps the least they can
rely on in getting their marketing mix "right", and the most
important one they have to get right.
The difficulty is in the inseparability of the
production/consumption interface and therefore the satisfaction
of not only the recipient of the service (i.e. the customer) but
also the service provider (i.e. the companyís own personnel).
Service personnel are present at two levels within the
organization i.e. contact personnel and support personnel.
Contact personnel are those individuals whom the customer
interfaces with. For example in a hotel, waiters or
The value the customer attributes to the service provided,
depends a great deal on the conduct of the contact personnel.
Although customers very rarely meet support personnel, the
service provided by them is very important for contact
For example if a Chef does not provide quality meals on time,
the waiter will be found wanting in the eyes of the customer.
Both the Chef and waiter must support each other, in order to
satisfy the customer.
How can a company ensure that its personnel at both levels
will provide a quality service, leaving a favourable impression
on customers? The answer lies in "internal marketing", the
purpose of which is to have motivated and customer focussed
So how should a company, marketing services attract and
maintain, the type of employees who will provide outstanding
service to customers? Firstly, open and honest communication
within the organization is required. Secondly, employees who
have the right "people chemistry" should be employed, specially
at contact level.
Thirdly, employees whose personality fits in with the
organizations culture, should be employed. (Employer-employee
fit). Last but not the least, able employees should be
continuously trained and rewarded in customer care.
For service marketers, who care about both employees and
customers, the pay off is in terms of increased motivations and
This in turn will result in a fruitful services encounter,
where the customer will receive a higher level of service, which
exceeds their expectations. Hopefully, this will lead to
customer loyalty and increased levels of business activity.
A Service Marketing check list
(a) Do we strive to present a realistic picture of
our service to customers?
Do not promise, what you cannot deliver. It is much better
to under promise and over deliver.
(b) Is performing the service right the first time,
a top priority in our company?
Service encounters are unique. You do not get a second
chance. For example, a passenger checking into an airline
desk. This is a service encounter. The passenger will judge
the service standards of the airline, based on how the contact
staff handle the "service encounter". As John Carison of SAS
Airlines states, these service encounters are "moments of
truth". They can either make or break customer relationships.
(c) Do we communicate effectively with customers?
Open, honest and friendly communication is the hallmark of
excellent service. To be effective, communication must be
two-way and customers must be encouraged to provide feedback.
(d) Do we surprise customers during the service
This is referred to as "delighting customers" by exceeding
their expectations. For example, in a hotel, a guest would not
expect a basket of fruit to be provided in a room. However, by
providing this, a hotel can exceed the expectations of their
(e) Do our employees regard service problems as
opportunities to impress customers or as annoyances?
This requires a "service oriented mind set" where the
employees are trained to convert problems into fruitful
The marketing of services, is a specialised activity because
of the innate characteristics of services. Marketing planning is
more difficult and the dependency is high on the soft skills.
(People, physical evidence etc).
As such, special emphasis should be placed on internal
marketing, since it is a prerequisite for successful external
"There is no specific service businesses. Every organization
is in the business of providing service: Excellent service"