Services and Service marketing

Before jumping into the marketing side of services, I believe we must have a clear understanding of what distinguishes a service and a product. 

A service can be classified as the action of doing something for someone or something. It is largely intangible. You cannot touch it. You cannot see it. You cannot taste it. You cannot hear it. You cannot feel it. So a service context creates its own series of challenges for the marketing manager since he or she must communicate the benefits of a service by drawing parallels with imagery and ideas that are more tangible.

A product on the other hand is tangible (i.e. material) since you can touch it or own it. A service tends to be an experience that is consumed at the point where it is purchased and cannot be owned since it quickly perishes. A person could go to a café one day and enjoy excellent service, and then return the next day and have a poor experience. Marketers talk about the nature of a service as being inseparable, intangible, perishable, homogeneous and variable.

A service and hence, its marketing has to have the following characteristics from the point of view of a marketer:

Inseparable, Intangible, Perishable, Homogeneous and Variable. Arguably, there could be more parameters involved depending upon the nature of the service provided. But by and large, any other parameters (which I would like to call customized fancy names for characteristics of a service by individual businesses) would end up falling into one of the five mentioned above as a perfect subset.

Inseparability

Inseparable - from the point where it is consumed, and from the provider of the service. For example, you cannot take a live performance from an opera house home to consume it. The consumer is actually involved in the production process that they are buying at the same time as it is being produced, for example a nose job or a makeover. One benefit would be that if you are unhappy with you makeover you can tell the beautician and that instant feedback means that the service quality is improved. You can't do that with a product. Another attribute is that services have to be close to the person consuming them i.e. goods can be made in a central manufacturing location which has the benefits of mass production. This localization means that consumption is inseparable from production.

Intangibility

Intangible - cannot have a real, physical presence as does a product. For example, insurance will provide you with a paper based proof of having bought it, but the financial service itself cannot be touched i.e. it is intangible. This makes it tricky to evaluate the quality of service prior to consuming it since there are fewer attributes of quality in comparison to a product. One way is to consider quality in terms of search, experience and credence.

Search quality is the perception in the mind of the consumer of the quality of the product prior to purchase through making a series of searches. So this is simple in relation to a tangible product because you might look at size or color for example. Therefore search quality relates more to products and services.

Experience quality is easier to assess. In terms of service you need to taste a burger or experience the service level. Therefore your experiences allow you to evaluate the level and nature of the service. You remember a great food time out because of the food or service, but by the same token you remember an awful time out because of the hopeless food or poor service.

Credence is based upon the credibility of the service that you undertake. This is down to the reputation of a practitioner of any sort. Credence is used where you have little knowledge of the topic and where you rely upon the professionalism of the expert.

Perish-ability

Perishable - in that once it has occurred it cannot be repeated in exactly the same way. For example, once a classical singer delivers a fantastic performance, it can be qualified as a perishable phenomenon. It might be that the performance is delivered somewhere else at some other point of time-but it will never be the same performance. You cannot put service in the warehouse, or store in your inventory. 

I came across this interesting argument about perish-ability goes like this, once a flight has taken off you cannot sell that seat again, hence the airline makes no profit on that seat. Therefore the airline has no choice but to price at peak when it sells a seat at busy times in order to make a profit.

So maybe that is why Mc'Donalds has happy hours for breakfast times (translates to quieter times), and it is the same for railway tickets and matinees in cinema halls during the middle of the week.

Variability

Variability- since the human involvement in service provision means that no two services will be completely identical, they are variable. For example, returning to the same service center time and time again for an update on your phone might see different levels of customer satisfaction, or speediness of work. If you watch your favorite band on DVD the experience will be the same every time you play it, although if you go to see them on tour when they are live no two performances will be identical for a whole variety of reasons. Even with the greatly standardized Mc'Donalds experience, there are slight changes in service, often through no fault of the business itself. Sometimes Saturday lunchtime will be extremely busy, on other days you may have to wait to go via the drive through. So services tend to vary from one user experience to another.

Homogeneity

Homogeneity is where services are largely the same (the opposite of variability above). We considered McDonald's above which is a largely homogeneous service, so now let's look at KFC and Pizza Hut. Both of these businesses provide a homogeneous service experience irrespective of the location. Consumers expect the same level of service and would not anticipate any huge deviation in their experience. Outside of the main brands you might expect a less homogeneous experience. If you visit your doctor he or she might give one interpretation, whereas another doctor might offer a different view. Your regular mechanic will suggest one thing whereas another would have something else to say altogether different. Therefore standardization is largely embodied by the large global brands which produce services.

Right of ownership is not taken to the service, since you merely experience it. For example, an engineer may service your air-conditioning, but you do not own the service, the engineer or his equipment. You cannot sell it on once it has been consumed, and do not take ownership of it.

So be very observant every next time you go visit Mc'Donalds, look closely at the way they greet you, the way they  talk with you and the way they position their offerings! Yes-before this blog you thought they were being nice (well some of them are being nice-genuinely) but now you know what they are trying to do-for the sake of both you and the brains behind the marketing strategist for the service. And yes-I have to admit, not once has an order taken more than 10 minutes in Mc'Donalds. Amazing again-not the service, but the way I just indirectly participated in marketing of Mc'Donalds services..