Service Marketing

What makes Services Marketing more challenging and tough than product marketing? Discuss.

Definition: Service

Any act of performance that one party can offer 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. Dominant component is intangible.

US is the world’s first service economy. More than 75% of the workforce in the private sector is employed in the service industry. Accounts for more than $3bn in output and contribute 60% of GNP. 60% of services are consumed by the final consumer. The increase in the service sector is a result of long term growth in the US economy deriving demand for additional services like; Travel , Financial services, Entertainment, Personal care etc.

There are five characteristics to a service;

1. Lack of ownership: You cannot own and store a service like you can a product. Services are used or hired for a period of time. For example when buying a ticket to the USA the service lasts maybe 9 hours each way , but consumers want and expect excellent service for that time.

2. Intangibility: You cannot hold or touch a service unlike a product. In saying that although services are intangible the experience consumers obtain from the service has an impact on how they will perceive it.

3. Inseparability: Services cannot be separated from the service providers. A product when produced can be taken away from the producer. However a service is produced at or near the point of purchase. Take visiting a restaurant, you order your meal, the waiting and delivery of the meal, the service provided by the waiter/ress is all apart of the service production process and is inseparable, the staff in a restaurant are as apart of the process as well as the quality of