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The American Marketing Association defines services as “activities, benefits or satisfactions which are offered for sale or provided with sale of goods to the customer .i.e. pre-sale and after-sales service”.
According to Peters and Watesmen “services are those separately identifiable, essentially intangible activities which provide want-satisfaction and are not necessarily tied to the sale of a product or another services”.
1. Perishability: As a marketable commodity, a service has a high degree of perishability. Time element assumes unique importance. If a service is not used, it is lost forever. It cannot be stored.
It cannot be carried forward. Unutilised services are economic losses.
A building unoccupied, a person unemployed, credit not utilised, a ship, a wagon or a warehouse loaded only to half its capacity, empty rooms in a few star hotel are illustrations representing perishable nature of services and business which is lost forever.
2. Changing Demand: The market for services has wide fluctuations. These fluctuations in demand may be seasonal or even by weeks, days or hours. During non-peak hours we need less transport. The use of public transport fluctuates greatly during the day.
During night we need less telephone services. Cricket fields are unused in the rainy season.
3. Intangibility: A physical product, e.g. a television set, a refrigerator, silk saree, idli-dossa, face cream, are visible and concrete products.
You can see them, feel them, taste them, smell them and even eat or enjoy their possession. It is not possible to see, feel, taste, and smell services before they are bought.
4. Inseparability: Personal services cannot be separated from the individual. Some services are created and supplied simultaneously. Dentist, musician, dancer and such other professionals create and offer service at the same time. Hence, due to inseparability, direct sale of many services is the only channel of distribution.
For instance, a travel agent, an insurance broker, a finance broker, may represent and sell the services supplied by a tourist organisations.
5. Heterogeneity: The quality of services offered by firms cannot be standardised. Even the quality of the output of services sold by one seller cannot be uniform or standardised. For instance, a technician cannot offer equal quality of services when he is repairing a number of television sets.
Price paid for a service may be too high or too low in relation to actual performance.
6. Pricing of services: Perishability, fluctuations in demand and inseparability in services involve significant implications in pricing. Quality of services cannot be fully standardised. There are many difficulties in pricing of services.
Example: Hotels- in hill station offer high discounts during winter season due to low demand.
Services can be classified according to the market to which they are offered.
1. Services sold in the consumer market.
2. Services sold in the business market.
Services common to both market e.g. financial, insurance, transport and communication services.
1. Consumer Services:
a. Food services: Restaurants, cafeterias, hotel are offering food services to numerous individuals and families who have firmly developed the habit of eating out.
b. Hotels and Motels: Lakhs of people every day use lodging and boarding services all over the country. A five star hotel is gully air-conditioned. It has air-conditioned rooms with four-channel music, complimentary cold drink, a fridge, a TV-set, a telephone in the bathroom, wall to wall carpet, luxurious beds, a 24 hour room services, 24 hour coffee shop, a swimming pool, a health club, comfortable shopping arcade, a beauty parlour, and so on.
c. Personal Care Services: Rising standards of living brought about development in the personal care services. These services are offered by health and fitness centres, cleaners, garment repair shops, shoe-repair shops and so on.
d. Car-service firms (Garages): Lakhs of car owners are dependent on car services organisation. Petrol pumps sell both goods and services.
e. Entertainment Services: Rising purchasing power and more leisure time are responsible for the steady growth of entertainment services. Movies, sports, amusement parks, circuses, car racing, cricket, billiards, music, dancing and drama.
f. Transport Services: Railways, buses, ships and aeroplanes provide transport services for moving people and goods.
g. Communication Services: Latest means of communication such as telephone, fax, telex, internet, mobile, phones, courier and postal services.
h. Insurance Services: Insurance gives protection against risk, e.g. accident, fire, death, theft, sickness, unemployment and so on.
i. Financial Services: Many consumers require the services of banks for financing their purchases of durable goods usually through instalment sales, bank loans, mortgage loans, etc.
2. Industrial Services: In the industrial market, many services are offered to facilitate the process of production, finance and marketing. Manufacture, wholesalers and retailers also sells some services along with the sale of goods. Industry wants the services of transport, storage, finance, insurance and communication services as these facilitate the business operation.
a. Financial Services: Banks, investment companies, accounting firms, financial institution offer numerous financial services to business concerns.
b. Insurance Services: Risk of loss in business inevitable. Business risks are numerous. They voluntarily assume the risk of loss due to fire, danger of the sea, dishonesty of employees or due to accidents in the factories.
c. Transport and Warehousing Services: Flow of goods in the process of marketing is facilitated through transport and warehousing services.
d. Engineering Services: There are specialised engineering firms to help businesses in the formulation and planning of new projects, designing and construction of plant and building, installation of special equipment and its maintenances.
e. Advertising and Promotion Services: Advertising agencies are specialised institutions for selling their services in all forms of marketing communications.
f. Office Services: Business firms can buy a variety of office services. Some concern are prepared to supply temporary office personnel, such as typists, filling clerks, stenographers and secretaries.
g. Management Consultancy Services: Consultancy service firms offer numerous services to business concerns. They offer expert advice to top management on all managerial problems of production, finance, marketing, personnel and office administration.
Services, as performance cannot be separated from the performers and the highlights the role of people in service transaction and their influence on the service quality very few services can be standardised and even standardised services need personal touch. They have feelings, which cannot be given to each customer to the some extent.
Example:
Telephone operator in a hotel may be qualified and trained, still hotel guests may differ regarding the quality of service. Perishable nature of services can lead to customer dissatisfactions.
There are four potential short falls within the service organisation that may lead to a gap between what customers expected and what they received
Example: Non-availability of hotel rooms or air ticket when the customer demands it.
There are many criteria that customers rely on while evaluating service quality and they include the following:
i.e., satisfaction = service received minus service expected.
The marketing mix consisting of Product, Price, Place and Promotion is more oriented to deal with goods marketing situations.
Services characteristics are different from goods and therefore, require a special mix as shown below:-
Product: Service core levels, additional services, branding
Price: Discounts, terms of payment
Place: Location, channels of distribution
Promotion: Advertising, promotion, publicity
People: Customer-services provider relationship, training, attitudes, skills
Physical evidence: Ambience, appearance, equipment, machines, buildings, physical facilities.
Process: Activity sequence, quality management, customer participation and delivering process.
People: Human resource forms the 5th element of marketing-mix since service as performance cannot be separated from the performer. A positive contact between customers and employees usually has a greater impact on customer loyalty.
Physical evidence: A pleasant atmosphere has the potential to influence one’s impression about the services offered by an organisation.
Example: A cinema theatre with central air-conditioners and comfortable……
Process: The way things are done and the steps taken to achieve the desired results are given considerable attention in services marketing.
Example: Ensuring that tourists have an enjoyable holidays would include many steps incorporating travel arrangements, hotel operation management, sight-seeing and high level of customer contact and services.
The Corporate hospital concept, selling “healthcare package” for a fixed price to fast growing health-conscious customers entered in India a few years ago particularly in big cities such as Chennai, Mumbai, Delhi, Bangalore and Hyderabad.
There is now keen competition even in the healthcare industry and it also shows great interest in adopting customer-centred marketing approach in the sales of hospitality (in hospitals) to their clients.
Several Private hospitals and private medical centres are assertively promoting and marketing the concept of packaged health care.
The marketing of healthcare is done through regular means of promotion including the word-of-mouth publicity, educational.
Many hospitals are holding frequent public lectures, seminars and workshops to spread awareness about health care.
To patients, health care services are marketed via preventive package, benefitting patients and hospitals.
The Master Health Check Up is most widespread.
Services too have a life-cycle just like products. Technological changes have changed the product forms.
Example: Cassette has changed to CD and Pen drive.
However, the consumer segment and their needs remain the same.
Completely new services like Barista and Coffee Day have changed the market environment and traditional tea shops are facing the competition.
Old Cinema halls have been demolished and modern multiplexes have come up in cities.
Basic services i.e. entertainment through big screen continues.
The need for services like electric power, hospitals, education has continued for a long period.
Credit cards and debit cards are newer products and other banking services such as saving bank, current accountant are very old.
ATM is replacing human teller in banking services.
There are cases where technology has drastically altered the pattern of services.
Examples:
Mobile phones versus pagers.
Internet services and use of postal cover and inland letter, telegrams.
However, telephone remain unaffected except for technology change.
While service pass through a life cycle similar to products, basic services would continue for years to come.
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