Do you market a service the same way that you market a product? There are a number of similarities between marketing a service and a product; however, their differences are noteworthy.
Differences between Products and Services
Intangibility: Services are intangible. Unlike physical products, they cannot be seen, tasted, felt, heard or smelled before they are bought. To reduce uncertainty, buyers will look for signs or evidence of the service quality. Customers will draw inferences about the quality of the service from the place the service is delivered, such as the office environment. They will also measure the quality of service based on the people. This includes how they deliver the service and interact with the customers along with their appearance. Are they professional, dressed appropriately, neatly groomed, happy and eager?
Due to a service’s intangibility, service providers need to add tangible benefits to the services they provide. Product providers, on the other hand, offer tangible products and work to differentiate their product by promoting intangible benefits, i.e. excellent customer service, liberal return policies.
Inseparability: Services are typically produced and consumed at the same time. This is not true of physical goods that are manufactured, put into inventory, sold later, and consumed even later. If the service is rendered by a person, the person is part of the service. Since the client is also present as the service is being offered, provider-client interaction is a special feature of services marketing. Both the provider and the client affect the service outcome. For some services such as consulting and teaching, the person is the service.
Variability: Services are highly variable, as satisfaction depends on who’s delivering the service along with where services are provided. Service buyers are aware of this high variability and frequently speak with others before selecting a service provider. Continuous monitoring of customer satisfaction through suggestion and complaint systems, customer surveys, etc. will help you detect and correct potential problems.
Perishability: Services cannot be stored. The perishability of services is not a problem when demand is steady, because it is easy to staff the services in advance. When demand fluctuates, service firms have challenging problems. For example, public transportation companies must own much more equipment because of rush-hour demand than they would if demand were even throughout the day.
Service marketers frequently complain about the difficulty of differentiating their services from those of competitors. To combat this, the service company can add innovative features to distinguish its offers. One problem, however, is that most service innovations are easily copied, and few can sustain a competitive advantage for a substantial length of time. Still, the service company that regularly researches and develops service innovations will likely gain a succession of temporary advantages over its competitors and, through earning an innovative reputation, may retain customers who value these features.
Service companies can also differentiate themselves and their image, specifically through symbols and branding. The Royal Bank, for example, adopted a traditional lion symbol to convey an image of reliability.
Managing Service Quality
One of the best ways to differentiate your service firm from your competitors is to deliver a consistently higher quality service. The key is to meet or exceed your customers’ service quality expectations. Customers expectations are formed by their past experiences, word-of-mouth, and through advertising. Customers choose providers on this basis, and after receiving the service, they compare the perceived service with the expected service. If the perceived service falls below the expected service, customers lose interest in the provider. If the perceived service meets or exceeds their expectations, they are likely to use the provider again.
To succeed, service providers need to identify the level of service quality customers expect. Unfortunately, service quality is harder to define and judge than product quality. It is harder to get agreement on the quality of a haircut than on the quality of a hair dryer. Yet, customers will make judgements about service quality; and, service providers need to know customer expectations in order to design effective services.
According to marketing researchers, there are 10 major determinants of service quality. These are:
- Access: The service is accessible in convenient locations at convenient times within an acceptable period.
- Communication: The service description is understood by potential consumers.
- Competence: The service is delivered by employees who possess the required skills and knowledge.
- Courtesy: Employees are friendly, respectful and considerate.
- Credibility: The company and employees have a reputation for being trustworthy and customer service focused.
- Reliability: The service is performed with consistency and accuracy.
- Responsiveness: Employees respond to customers’ requests and problems in an acceptable time period and with acceptable resolutions.
- Security: The service is deemed safe. Customers are informed of any potential dangers.
- Tangibles: Service quality is determined by tangible benefits (new hair style, clean car)
- Understanding/knowing the customer: Employees understand the importance of meeting customers’ needs and providing individual attention.