The nature and distinctive characteristics of services warrant their own marketing and management framework. Discuss

 Palmer (1994 ) defines services as “activities or benefits that one party can offer to another that are essentially intangible and does not result in ownership of anything. Its production may or may not be tied to a physical product.”  Kottler (2000) 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 strategies. The marketing of services require an extra mile from the traditional marketing approach as it applies to physical products.

Services have four main characteristics that make them different from physical goods. It is the understanding of these characteristics that make the effective implementation of marketing strategies. The characteristics of services are intangibility, inseparatability, inconsistency and ininventorability. These are discussed below and their implications in the marketing of services.

Intangibility

“A pure service cannot be assessed using any of the physical senses- it is an abstraction which can not be directly examined before it is purchased.” Palmer (1994 page 3). Therefore, services do not have tangible properties which can be used by consumers to verify advertising claims before purchasing is done, for example, medical services, insurance policies and many other services.

Marketing Management implications.

To reduce uncertainty, buyers look for signs physical evidence of the service quality.  Physical goods can be seen, felt and tasted whereas services cannot be felt, touched and tasted, therefore the onus is upon the marketer to tangibilise the intangible. Positioning strategies should be used to ensure that the place is well managed in terms of layout of desks, machines, traffic flow and management of queues. The layout of the environment should induce confidence into the customer. To reduce uncertainty, buyers will look for signs or evidence of the service quality.

They will draw inferences about quality from the place, people, equipment, communication

material, symbols, and price that they see. Therefore, the service provider’s task is to “manage the evidence,” to “tangibilize the intangible.”

 Whereas product marketers are challenged to add abstract ideas, service marketers are challenged to add physical evidence and imagery to abstract offers. Kottler (2000). Service complexity need to be reduced, there is need to facilitate positive word of mouth and customization which 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 such as after sales services and improved distribution.

 Inseparability

According to Kottler (2000) services are typically produced and consumed simultaneously, unlike physical goods, which are manufactured, put into inventory, distributed through resellers, and consumed later. If a person renders the service, then the provider is part of the service. Inseparatebility refers to the simultaneous production and consumption of the service. Basically, it is impossible to separate the two. However, due to this factor, services are first sold and then produced and consumed at the same time. In such cases, the customer is both a co-producer and co-consumer as in the case of getting a hairdo. Therefore, the production process is critical to the customer’s enjoyment of the service. The producer and consumer have to interact in order for benefits of the service to be realized.

Marketing Strategies

Because the client is also present as the service is produced, provider-client interaction is a special feature of services marketing—both provider and client affect the outcome. Often, buyers of services have strong provider preferences. Several strategies exist for getting around this limitation. One is higher pricing in line with the provider’s limited time. Another is having the provider work with larger groups or work faster. A third alternative is to train more service providers and build up client confidence, as this increase the service encounter.

Inconsistency

Service variability has impact upon not just outcomes but also the production process. The output usually depends on the input by the service personnel conducting the transaction. It can be difficult to monitor and control during the production and consumption process to ensure consistency due to the simultaneous occurrence of the two. This results in variations in quality and quality management and control becomes difficult. Because services depend on who provides them, when and where they are provided, they are highly variable. Kottler (2000)

Marketing Implications

According to Kottler (2000) knowing this, service firms can take three steps toward quality control. The first is recruiting the right service employees and providing them with excellent training. This is crucial regardless of whether employees are highly skilled professionals or low-skilled workers Whereas marketing focuses on interaction, management has to provide high level training for service personnel, for instance, in banks, the personnel should be able to attend to customers at any time without wasting the customer’s time. More to that, they have to effectively screen and recruit skilled personnel normally for high involving purchases of services like medical services and legal services who can interact nicely with the customer for good results. In addition, management can also go a long way by decentralizing.  This is necessary to enable quick response to customers, that is, concerning queries and complaints as in the case of banks, hair salons and barber shops. This, however, will enhance customer satisfaction, for example, the use of service recovery techniques when a mistake occurs, since the service personnel will make a quick decision when things go wrong instead of making the customer to wait while s/he enquires with the superiors.

. 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, vending machines and so on. 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 failure 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.

Ininventorability

According to Kottler (2000) services cannot be stored and are produced on demand and in the presence of a consumer, that is, they are perishable. Services cannot be stored; once an airplane takes off or a movie starts, any unsold seats cannot be held for future sale. Perishability is not a problem when demand for a service is steady, but fluctuating demand can cause problems. For example, public transportation companies have to own much more equipment because of higher rush hour in the morning and the evening.

Marketing Strategies

The fact that services cannot be stored, calls for effective management of the services being offered to avoid loosing out. The following strategies can be implemented to curb ininventorability according to Kottler (2000.)

The following strategies can be used to address the demand side. Use of differential pricing to shift demand from peak to off-peak periods, movie theaters and car rental firms do this by lowering prices during off-peak periods. Cultivating nonpeak demand to build sales during off-peak periods; hotels do this with their weekend mini vacation packages. Developing complementary services to provide alternatives for customers during peak periods, many banks do this by providing drop-off boxes for deposits and payments. Install reservation systems to better manage demand levels; airlines, hotels, and physicians employ such systems extensively.

The following strategies can be implemented to address the supply side of the services. Hiring part-time employees to meet peak demand; restaurants, stores, and Web-based businesses often bring in temporary staffers to help out during holidays and other peak periods. Introducing peak-time efficiency routines to keep productivity high during periods of high demand; paramedics often assist physicians during busy periods. Increase consumer participation to speed transactions; this is one reason why supermarkets are experimenting with self service checkouts where shoppers scan and bag their own groceries. Plan facilities for future expansion to increase supply; an amusement park can buy surrounding land for later development as demand increases. Share services with other providers to help manage demand; hospitals can do this by sharing medical-equipment purchases and scheduling.

Conclusion

Services and physical products are different in nature. The characteristics of services and their nature play a significant role when deciding how best to market services.  However it has to be noted that there are some strategies that apply when marketing physical products and services such as market research.

BIBILOGRAPHY

Marketing Management 7^th Edition:                     Phillip Kotler

Principles of Services Marketing 1^st Edition:       Palmer A

Services Marketing 2^nd Edition:                             Luvlock

 Marketing Management Millenium Edition       Phillip Kotler

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