Services Marketing

SERVICE MARKETING

Because of their diversity, services have traditionally been difficult to define. The way in which services are created and delivered to customers is often hard to grasp since many inputs and outputs are intangible. Most people have little difficulty defining manufacturing or agriculture, but defining service can elude them. Here are two approaches that capture the essence of the word.

* A service is an act or performance offered by one party to another. Although the process may be tied to a physical product, the performance is essentially intangible and does not normally result in ownership of any of the factors of production.

* Services are economic activities that create value and provide benefits for customers at specific times and places, as a result of bringing about a desired change in--or on behalf of---the recipient of the service.

Different between service and product:

1. Tangibility versus Intangibility

Products are tangible. You can buy pork as a tangible product. You buy it, you ship it and sell it. In the same way as you buy stamps, cigarettes and cars.

2. Transfer of ownership

In product after selling the ownership of the product belongs to the consumer ( like Car, tv, home etc) while in service the ownership belongs to the service organization the consumer can avail the service but cannot own the tangible product belong to it ( like Bus belong to its owner but transportation service is avail by the consumer)

3. Homogeneity vs. Heterogeneity. (Variability)

The product provide by a firm are always same in performance while the service may be vary. Because the service is related to people so there may be difference in performance. Ex: car or computer manufactured by a firm i.e. HCL and Ford always perform and give the same result either it purchased by north India or south India. While same cook can prepare same food differently in different day or time.

4. Perishability and unperishability:

Product can be store for further use such as the car can store in dealers shop and it can be sold in a month or two. But on the other hand service is useless after the time of delivery or use i.e. the empty seat in an aircraft or in cinema hall cannot be used in their next schedule

5. Inseparability

The production of the services can't be separated from its consumption. i.e. there must be an active service provider at the time when the customer is using the service.

There are some more different like the customer can use a product before purchase (like test drive of a car, or can see the performance of a product in friend's house or so). But he has to purchase service either it is good or bad.

Distinctive Characteristics and classification Of Services

Various proposals have been made for classifying services. Among the meaningful ways by which we can understand the characteristics of service and classified them are as follows

1. Degree of Tangibility or Intangibility of Service Processes

Tangibility or intangibility are the two characteristics by which the service can be classified. Does the service do something physical and tangible (like food services or dry cleaning), or do its processes involve a greater amount of intangibility (like teaching or telephoning)? Different levels of intangibility in service processes shape the nature of the service delivery system and also affect the role of employees and the experience of customers.

2. Direct Recipient of the Service Process

Some services, like haircutting or public transportation, are directed at customers themselves. Customers also seek services (like dry cleaning) to restore or improve objects that belong to them, but they remain uninvolved in the process of service delivery and do not consume the benefits until later. The characteristics of the service encounter between service suppliers and their customers varies widely according to the extent to which customers themselves are integrally involved in the service process.

3. Place and Time of Service Delivery

When designing delivery systems, service marketers must ask themselves whether customers need to visit the service organization at its own ( like haircut) or whether service should come to the customer (like the Internet weather information service and the pizza delivery to consumers apartment).

4. Customization versus Standardization

Services can be classified according to the degree of customization or standardization involved in service delivery. An important marketing decision is whether all customers should receive the same service or whether service features should be adapted to meet individual requirements. Ex: insurance policy is probably one of several standard options but bus service is standardized, with a fixed route and

5. Nature of the Relationship with Customers

Some services involve a formal relationship, in which each customer is known to the organization and all transactions are individually recorded and attributed (like bank). But in other services, unidentified customers undertake fleeting transactions and then disappear from the organization's sight (like customer uses the restaurant of refreshment centre and den flyaway ).

6. Extent to which Demand and Supply Are in Balance

Some service industries face steady demand for their services, whereas others encounter significant fluctuations. When the demand for service fluctuates widely over time, capacity must be adjusted to accommodate the level of demand or marketing strategies must be implemented to predict, manage, and smooth demand levels to bring them into balance with capacity. Some demand fluctuations are tied to events that marketers can't control. For example, over capacity of restaurant on weekends causes the long waiting time and shortage of empty tables.

Emergence Of Service Economy

The Service Economy is a relatively new coinage arising out of the popularity of the service sector. The service sector has gained a lot of importance in the world economy. Most of the developed countries are earning millions from the service sector alone. In US the service sector accounts for a greater percentage of GDP than it used to a couple of years back. The term Service Economy also known as Functional Economy is used to refer to the relative significance of service