GENERAL DIFFERENCES OF SERVICES IN THEIR NATURE

INTRODUCTION

Kottler (2000) defines a service as any act or performance that one part can offer to another that is essentially intangible and does not result in the ownership of anything. The production of a service may or may not be tied to a physical product. Kottler (2000) also defines marketing management as the process of planning and executing conception pricing, promotion and distribution of goods, services and ideas to create exchanges with target groups that satisfy customer and organizational objectives. An understanding of service characteristics has greater impact on the formulation of marketing management framework. The marketing of services require an extra mile from the traditional marketing approach as it applies to physical products. Some services accompany tangible goods (grocery retail shops), equal contribution of goods and services (restaurant), other services with minor goods to support (airline passengers) or a pure service that consists of primarily a service like insurance. These categories determine whether the service is a high involving (HIP) or low involving (LIP).

GENERAL DIFFERENCES OF SERVICES IN THEIR NATURE

Services also vary as to whether they are equipment based (automated car washes, ATM) or people based (accounting services). People based then further vary as to whether they are provided by unskilled, skilled or proffessional workers. Some services require client’s presents (hairdresser) but car repairs does not. Services also differ as to whether they meet personal need or business need, for instance physicians price private patients differently from company employees. The understanding of all this help service marketers better manage the implications to successful service marketing.

CHARACTERISTICS OF SERVICES AND THEIR DISTINCTIVE IMPLICATIONS

1.     Intangibility.

Unlike physical products, services cannot be seen, tasted, felt or heard before they are bought. This induces a harming difficult in the evaluation of competing services (evaluating insurance services of ZIMNAT to that of Excellence insurance company). Customers perceive a high level of risk and can often use price as the basis for assessing service quality.

Marketing Management implications.

To reduce uncertainty, buyers look for signs (physical evidence) of the service quality. The service provider need to manage the evidence (tangibilise the intangible) rather than in physical goods that can be seen, felt or tasted. Physical product marketers are challenged to add abstract ideas whereas service marketers add imagery on their service offers, like “You deserve a better deal”- Dynamic Insurance Brokers motto. Positioning strategies should be used where the place should be well managed in terms of layout of desks, machines, traffic flow and management of queues. The equipment should induce confidence into the customer (computers, copying machines and other physical attributes). Service complexity need to be reduced, facilitate positive word of mouth and customization leads to successful service marketing. Normally goods are standardized and serve as enough evidence besides other tangible cues as required by the service. Staff uniforms can be necessary, though it may have a dangerous effect if one misbehaves even away from work. Branding strategy is another crucial implication of intangibility. While service marketers seek to add tangible evidence to their products, pure goods marketers often seek to augment their products by adding intangible elements (after sales service) and improved distribution.

2.     Inseparability

Producer and consumer must normally interact for the benefit of the service to be realized (both must meet at a time and place convenient in order that the producer can directly pass the service benefits). In the extreme case of personal care services-high involving, the customer must be present during the entire process (a doctor cannot provide a service without the involvement of the patient). This is not true for physical goods that are manufactured, put into inventory, distributed through multiple resellers and consumed still later (Kottler, 2000). The service of ATM can only be enjoyed if the producer and consumer interact.

Marketing Management implications.

Separating production and consumption has a greater weight in dealing with service inseparability. A hotel can do the production (cooking) in the kitchen then the facilitating medium will make the service available to the customers. It is also crucial to improve on service delivery systems- Electronic delivery and self service equipment like ATM that offers 24/7 service. Whereas goods are generally first produced, then offered for a sale and finally sold and consumed. Services are generally sold first then produced and consumed. Production processes need to be improved- high technology to separate production and consumption

Below is an illustration of how hotel service companies have dealt with separating production and consumption. Here there is no direct interaction of production and consumption where customers interact with the facilitating medium.

1.     Inconsistency.

Services are highly variable since they depend on who provides them and when or where they are provided. For services inconsistency impacts upon customers in terms not just of outcomes but also of process of production. Because customers are usually involved in the production process for a service at the same time they consume, it may be difficult to carryout monitoring and control to ensure consistence standards. The opportunity to pre-delivery inspection and rejection is open to physical goods and not normally possible with services- once you missed you messed and no chance for correction (hair dressing services)

Marketing Management implications.

For physical goods it is easy to incorporate  monitoring and quality control procedures into production processes in order to make sure that brands stands for a consistency of output. Service sectors attempts to reduce variability concentrating on the methods used to select, train, motivate and control personnel. Internal marketing also adds value to the service in terms of variability. Standardizing the service performance process throughout the organization help to maintain consistency- use of ATMs. Service quality implementation strategies need to be effected as well. This is helped by service blueprint which depicts the service events and processes in a flow chart, with objective of recognizing potential service fail points. It is also good to monitor and manage customer satisfaction through suggestion and complaint systems, customer surveys so that poor service can be detected and corrected.

Below is a flow chart of the service activities a street polisher can use to detect failures in the service production process. Here the main threats are wrong polish application and time spent during service due different shoe sizes or types. The aim is to improve service quality.

1.     Ininventorability.

The producer of cars who is unable to sell them in the current period can carry forward stocks to sell subsequent one. In contrast the producer of a service who cannot sell all its output produced in the current period has no chance to carry it forward for sale in a subsequent one. For instance an airline which offers seats on a 9:00am flight from Harare to London cannot sell any empty seats once the aircraft has left. The service offer disappears and spare seats cannot be stored to meet a surge in the demand which may occur at 10:00am. Ininventorability leads to just-in-time production (JIT) that will be affected by congestion at peak, irregular pattern of demand and often results in unused capacity at off peak.

Marketing Management implications.

Demand patterns need to be managed jealously and effectively to avoid service inconveniences. The following strategies are implemented;

Differential pricing- shift demand from peak to off peak periods (low prices off peak and higher prices during peak periods).

Complimentary services- alternative services provided on peak to manage demand like cocktail lounges to sit in while waiting for a table and automatic tellers in banks.

Reservation systems- properly manage demand level through reserve implementation (hotels, airlines and physicians).

Capacity management- match capacity either by booking extra space (in the case of a movie house), taking part time workers (college/restaurant) during peak periods or simply demarket the service to reduce demand.

Participation- where consumers are asked to fill their medical records or bag their groceries in the case of retail business.

CONCLUSION

Until recently, service firms lagged behind manufacturing firms in their use of marketing. Furthermore service businesses are more difficult to manage using traditional marketing approach. In tangible goods business, product is fairly standardized and sits on a shelf waiting for the customer to reach it, pay and leave. In service business there are more elements. Thus, for a proper marketing management of services, three tasks need to be implemented (competitive differentiation, service quality and their production.