Challenges Services Marketing

Challenges in Service Marketing

Giving a feel for the product Managing Demand Fluctuations Maintaining Quality Cost Containment Attitudinal block in using proven marketing principles in service marketing

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Challenges -cont

Marketing management tasks in the service sector differ from those in the manufacturing sector
The eight common differences are:
1. 2. 3. 4.

5.
6. 7. 8.

Most service products cannot be inventoried Intangible elements usually dominate value creation Services are often difficult to visualize and understand Customers may be involved in co-production People may be part of the service experience Operational inputs and outputs tend to vary more widely The time factor often assumes great importance Distribution may take place through nonphysical channels
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Challenges for Services (contd.)

Coordinating marketing, operations, and human resource efforts

Setting prices Finding a balance between standardization versus personalization Ensuring the delivery of consistent quality 4

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Services cannot be:

Inventoried
Patented Readily displayed or communicated

Easily priced

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Differences, Implications, and Marketing-Related Tasks Difference Most service products

cannot be inventoried

Implications Customers may be

turned away

Marketing-Related Tasks Use pricing, promotion, and reservations to smooth

demand; work with ops to manage capacity

Intangible elements
usually dominate value creation

Harder to evaluate Greater risk and

service and distinguish from competitors

Emphasize physical clues, Educate customers on Develop user-friendly

employ metaphors and vivid images in advertising

Services are often

difficult to visualize and understand

uncertainty perceived

making good choices; offer guarantees

Customers may be
involved in coproduction

Interaction between

customer and provider; but poor task execution could affect satisfaction
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equipment, facilities, and systems; train customers, provide good support

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Differences, Implications, and Marketing-Related Tasks

Difference Implications
personnel and customers can affect satisfaction

Marketing-Related Tasks Recruit, train employees to reinforce service concept

People may be part of

service experience

Behavior of service

Shape customer behavior

failure proofing Institute good service recovery procedures

Operational inputs and

outputs tend to vary more widely

Hard to maintain quality,

consistency, reliability customers from failures

Redesign for simplicity and

Difficult to shield
Time is money;

Time factor often

assumes great importance

customers want service at convenient times

Find ways to compete on

speed of delivery; offer extended hours

Distribution may take

place through nonphysical channels
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Electronic channels or

voice telecommunications

Create user-friendly,

secure websites and free access by telephone

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The Opportunity for Ethical Misconduct in Services

Intangibility complicates the consumers ability to objectively evaluate the quality of service provided Heterogeneity reflects the difficulty in standardization and quality control

Inseparability reflects the human element involved in the service delivery process

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Factors Contributing to Consumer Vulnerability

Few search attributes Technical and specialized services

Time lapse between performance and evaluation

Sold without guarantees and warranties

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Factors Contributing to Consumer Vulnerability

Performed by boundary-spanning personnel Accepted variability in performance Outcome-based reward systems Consumer participation in production

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10

In services, the last experience remains uppermost in your mind. Therefore, it is not enough to be good, you have to be consistently good