SERVICES

MARKETIN
G
EDDA DIVAH N. DAYANDANTE

ATENEO DE NAGA UNIVERSITY

Tangible products may not

exist at all were it not for a
series of services
performed in order to
produce them and to make
them available to
consumers.

A person providing a service

was just as capable of giving
utility to the recipient as a
person producing a tangible
product.
- Alfred Marshall
Principles of Services Marketing
Adrian Palmer
6th Edition

SERVICES

The production of an essentially

intangible benefit, either in its own
right or as a significant element of
tangible product, which through
some form of exchange, satisfies
an identified need.

Service Sector has grown strongly

in recent years!!!

Growth of service-based economies

We need to hedge this with a few

caveats:
Some service activities previously classified as
manufacturing or agricultural now being classified as
service sector
Many service sectors do not fall neatly into one of the
classifications
Methods used to measure services differ between
countries
The intangible nature of services can make them
relatively difficult to measure

Becoming a service-based economies even

at the expense of the manufacturing sector
Growth in service sector reflects the prosperity of
manufacturing sector
Comparative cost advantage in production of services
needs to be examined closely
Over-reliance on the service sector could pose strategic
problems
Many newer service industries may destabilize local
economies because they cant be set up and closed
down easily

Distinguishing Features
of Services

Intangibility

A pure service cannot be

assessed using any of the
physical senses it is an
abstraction that cannot be
directly examined before
it is purchased.

Inseparability
The
consumption of
a service is said
to be
inseparable from
its means of
production.
Producer and consumer must interact in order for the benefits of the

Variability

Services are produced

Live
Often no chance to
correct
mistakes before
consumption

Leads
to

Often reliant on
fallible
human inputs
May be difficult to
blueprint service
process

VARIABIL
ITY
OF
SERVICE
S

Services are produced

Live
Often no chance to
correct
mistakes before
consumption

Leads
to

Often reliant on
follible
human inputs
May be difficult to
blueprint service
process

High level of
perceived risk for
buyers
VARIABIL
ITY
OF
SERVICE
S

Results
in

Difficulty in
presenting an image
of consistent quality

Difficulty in
developing strong
brands

Perishability

Services differ from goods in

that they cannot be stored.

Inability to store
services

Leads
to

Fluctuating
patterns of demand
Short-term supply
inelasticity

SERVICE
PERISHABI
LITY

Problems where
demand pattern is
difficult to predict

Inability to store
services

Leads
to

Fluctuating
patterns of demand

Short-term supply
inelasticity

SERVICE
PERISHABI
LITY

Results
in

Requirement for justin-time production of

services

If not managed
effectively,
congestion at peak
periods and unused
capacity at off-peak

Ownership
When the service is
performed, no
ownership is
transferred from
the seller to the
buyer.

The Service Offer

Core service is best understood in terms of the essential

benefit that a service provides.
The secondary service offer refers to the manner in which
the core service offer is actually delivered, covering issues
such as installation, delivery, credit availability and aftersales service.

SECONDARY
SERVICE

Features:
Branding:
period of
Importance of
policy,
companys
flexibility
reputation
benefits
Processes:
payable
Tangibles:
methods used
CORE
brochures,
to process
SERVICE
policy
policies and
Core Benefit:
documents
claims
Peace of
Packaging:
Other
benefits
included in
packaging
(e.g. advice
services

Mind
Quality:
level of
customer
satisfaction
sought with
respect to
outcomes and

Accessibility:
whether
available
direct or
through
insurance
brokers

SECONDARY
SERVICE
Features:
Branding:

Tangibles:

Processes:
CORE
SERVICE

Core Benefit:
Packaging:

Accessibility:
Quality:

Travel &
Tours

Classification of Services
Marketable vs marketable services
Business-to-business vs consumer
services
The significance of the service to the
buyer
Extent of customer involvement
The pattern of service delivery
People-based vs equipment-based
services
Process vs outcome-based services

 Marketable vs unmarketable services

Desirable
The benefits are essentially external
Culture
Commonly provided within household units

 Business-to-business vs consumer
services
For individuals, for own enjoyment or
benefit;
no further economic benefits results from
consumption
Brought by business in order that it can
produce something else of economic
benefit

 The significance of the service to the

buyer
Fast moving-consumer goods (fmcgs) are
purchased frequently, are of low value, are
consumed rapidly and are likely to be
purchased on impulse
Long lasting services may be purchased
infrequently, and when they are, the
decision-making process takes longer and
involve more people

 Extent of customer involvement

Involvement refers to the attachment that
the individual has with a product.
Involvement is associated with risk.
High and low involvement.
In service, involvement refers to the extent
to which customers personally interacts
with the production process.

 The pattern of service delivery

The marketing of a service is likely to be
affected by the manner in which it is typically
delivered:
Some services are supplied on a
continuous basis whereas other services
are only supplied when needed (fixed
phone line and repair of faulty phone)
Some services are provided on the basis of
an on-going relationship with the service
provider while other services are typically

 People-based vs equipment-based
services
Fortune-teller
Car park
While equipment can generally be
programmed to perform consistently,
personnel need to be recruited,
trained and monitored.
People-based services can usually allow
greater customization of services to meet

 Marketable vs marketable services

Business-to-business vs consumer
services
The significance of the service to the
buyer
Extent of customer involvement
The pattern of service delivery
People-based vs equipment-based
services
Process vs outcome-based services
High-knowledge vs low-knowledge
services
Multiple classification

 Process vs outcome-based services

High-knowledge vs low-knowledge
services
Multiple classification

Defining marketing in a
service context
Chartered Institute of Marketing
The management process which identifies,
anticipates and supplies customer requirements and
efficiently profitable.

Narver and Slater (1990)

Defines a firms marketing orientation in terms of three
principal components:
Customer orientation that an organization has a
sufficient understanding of its target buyers that allows it to
create superior value for them.
Competitor orientation defined as an organizations
understanding of the short-term strengths and weaknesses
and a long-term capabilities and strategies of current and
potential customers.
Interfunctional co-ordination refers to the manner in
which an organization uses its resources in creating superior

Areas of Service provision

where the role of marketing
is debatable:
Essential public services
The provision of services by nonfor-profit organizations
The debate about the
environmental impacts of market-

 Essential public services

Some have argued that vital public services
should not be left to decisions made by profitseeking companies whose individual objectives
may be contrary to the greater public interest.
In theory:
Markets would punish
companies that did not
serve public interest,
because they would lose
customers and eventually

In reality:
Markets may not be
efficient, or sufficiently
rapid, in punishing
companies that do not
satisfy the wider public

 Voluntary and not-for-profit sector

marketing

Why should you

need marketing to
promote a school

Role of Marketing
Essential public services
The provision of services by nonfor-profit organizations
The debate about the
environmental impacts of marketbased competition

 Marketing and ecological

responsibility
Oxford Universitys Environmental Change
Institute:
In 2015 aviation will be contributing up to twothirds if the governments total carbon dioxide
emission target if uncontrolled demand
continues to grow, even if technological and air
traffic management improvements are taken
into account.

Goods marketing and

Services marketing
differentiate