What is Service? Definition, Features, Types, Service Mix, Strategy, and Examples

What is Service?

Service in marketing refers to intangible activities, benefits, or satisfactions offered for sale or provided alongside goods. Unlike physical products, services lack a tangible presence; you can’t touch, taste, or store them.

They’re diverse and unique, varying from one provider to another, making each service experience different. Once consumed, services can’t be returned or resold.

They are produced and consumed simultaneously, often involving people directly. Service marketing focuses on promoting these intangible offerings, crucial in sectors like hospitality and finance.

Excelling in service marketing involves training employees, ensuring customer satisfaction, and emphasizing the unique value of intangible services. Understanding these aspects is essential for businesses to effectively market their services to consumers.

What is Service Marketing?

Service marketing is the promotion of intangible benefits, activities, and satisfactions that are offered alongside the sale of goods or as standalone service offerings. In contrast to physical products, services are characterized by their intangibility, meaning they lack a physical presence that can be touched or held.

They are also unique and heterogeneous, with each service encounter varying from one provider to another. Once consumed, services cannot be returned or resold. Importantly, services are produced and consumed simultaneously.

Service marketing encompasses the strategies and techniques used to showcase and sell these intangible offerings, particularly relevant in industries like hospitality and finance. Successful service marketing requires a focus on employee training, customer satisfaction, and highlighting the distinctive value of these intangible services.

Characteristics of Service

The characteristics of services are vital to understanding the unique nature of service offerings. Here’s an explanation of its six key characteristics:

Intangibility

Services lack physical attributes; they cannot be seen, touched, tasted, or smelled before consumption. For instance, you can’t preview a haircut like you can inspect a product. To overcome this, service providers often use tangible cues (like a clean salon) and branding to add a sense of quality and professionalism.

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Perishability

Services cannot be stored or saved for future use. Once provided, they are immediately consumed. For example, a hotel room left vacant for a night cannot be saved for a future date. To manage this, businesses often employ strategies like dynamic pricing to match supply with demand.

Variability in Quality

The quality of services may vary even when provided by the same service provider. This variability arises from differences in human interaction, environment, and other factors. For example, the service experience at a restaurant may differ depending on the server’s attitude. To address this, businesses focus on training and standardization.

Non-Measurability

Services are challenging to measure and quantify compared to tangible products with distinct specifications. Measuring the quality of a haircut or a doctor’s visit can be subjective. To manage this, businesses use customer feedback and service quality indicators to assess and improve their services.

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No Ownership Transfer

Unlike products, services cannot be owned or possessed by customers. Once a service is provided, it cannot be transferred or resold. This is significant in understanding the customer-service provider relationship, as customers pay for access to services, not ownership of them.

People Involvement

Services heavily rely on the interaction between service providers and customers. Employees play a crucial role in delivering services and creating customer experiences. For example, a friendly and skilled waiter can enhance the dining experience. Businesses prioritize employee training and customer service to ensure positive interactions.

Types of Service Products

There are a variety of services that are difficult to define one by one. However, they can be summarized into four main categories. They are:

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Pure Product

Imagine you’re buying a physical item like a smartphone. In this case, the primary focus is on the tangible product itself. You get the phone, and that’s it. There are no extra services attached. It’s like buying a tasty apple – you enjoy the fruit, but there’s no added service involved.

Core Products with Associated Services

Sometimes, when you buy a product, you also get some services with it. For example, when you purchase a laptop, you might get customer support or a warranty. These extra services enhance your experience and add value. It’s like buying a bicycle that comes with a free repair service – you not only get the bike but also help when it needs fixing.

Core Service with Adjunct Products or Services

In this scenario, the main focus is on the service itself. Let’s say you hire a wedding planner. The core service is the planning and organization of your special day. But the planner might also offer additional services like photography or floral arrangements. It’s like booking a vacation package – the main service is the trip, but you can add options like excursions or airport transfers.

Read More: Core Product

Pure Service

Pure services are intangible and revolve entirely around experiences or expertise. Think of a personal trainer. You’re not buying a physical product; you’re investing in their knowledge and guidance to achieve your fitness goals. It’s like having a coach who helps you become better at something, whether it’s sports, business, or personal growth.

Service Marketing Mix

Service Marketing Mix refers to the combination of elements that a service provider uses to promote and deliver their services effectively. It consists of seven essential components, often referred to as the 7Ps, which are crucial for marketing services. Let’s briefly explain each component:

Read More: Marketing Mix – Definition, 4Ps, 7Ps, 4Cs, Strategy, and Examples

• Product (Core Service): This represents the main service being offered. It’s the heart of your service marketing mix. For example, if you’re a fitness center, your core service is providing fitness training.
• Price: Pricing in service marketing is about determining the right cost for your services. It involves strategies like tiered pricing, discounts, and value-added options. For a spa, pricing may vary based on different packages and services.
• Place (Distribution): This component involves making your services accessible to customers. It’s about choosing the right locations, distribution channels, and methods to reach your target audience. If you have a restaurant, the place is the physical location of your restaurant and the online platforms where customers can place orders.
• Promotion: Promotion includes all the ways you market your services to attract customers. It involves advertising, social media, content marketing, and more. For a travel agency, the promotion might include online ads, social media campaigns, and email newsletters to showcase their travel packages.
• People: The people component emphasizes the role of employees in delivering quality services. Well-trained and customer-oriented staff are crucial. In a hotel, the staff’s behavior and service quality significantly impact the overall experience for guests.
• Process: Process refers to the procedures, systems, and steps involved in delivering the service. It’s about ensuring efficiency, consistency, and a smooth customer journey. For an insurance company, the claims process should be straightforward and efficient.
• Physical Evidence: This component deals with the tangible cues that help customers evaluate a service. It includes factors like the service environment, equipment, and other physical aspects. A spa’s physical evidence might include the ambiance, cleanliness, and the quality of massage tables.

How To Measure Service Quality?

Measuring service quality is crucial for businesses to ensure they are meeting customer expectations and continuously improving. Here are five key points on how to measure service quality:

• Customer Feedback: Gathering direct feedback from customers is one of the most effective methods. Surveys, feedback forms, and online reviews provide insights into their experiences. Analyzing this feedback helps identify areas that need improvement.
• Mystery Shopping: Employing mystery shoppers who pose as customers allows businesses to assess service quality objectively. They evaluate various aspects, from staff behavior to the service process, and provide detailed reports.
• Service Metrics: Key performance indicators (KPIs) specific to service quality can be tracked. These might include response time, resolution time, error rates, and customer satisfaction scores. Monitoring these metrics over time provides a clear picture of service quality.
• Service Recovery: Evaluating how well the business handles service failures or complaints is important. A quick and effective service recovery can often improve a customer’s perception of the service. Monitoring the number and nature of service recovery incidents can highlight areas of improvement.
• Benchmarking: Comparing your service quality with industry standards and competitors can offer valuable insights. This helps in understanding where your service stands in the market and identifying areas for enhancement.

Read More: Product Mix – Definition

Examples of Services

Here are the 10 examples of service products:

• Haircut
• Legal consultation
• Plumbing Repair
• Airline ticket
• Fitness training
• Software as a service (SaaS)
• House cleaning
• Car rental
• Spa treatment
• Online education courses

Strategies For Service Marketing

Service marketing involves various strategies to promote and deliver intangible services effectively. Here are five key strategies:

Relationship Marketing

This strategy focuses on building and maintaining strong relationships with customers. It aims to create loyal, long-term customers who will not only use the service repeatedly but also recommend it to others. Relationship marketing includes personalized interactions, feedback mechanisms, and loyalty programs.

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Service Quality Improvement

Providing high-quality service is essential for service marketing. Continuous improvement in service quality can lead to customer satisfaction and loyalty. Companies often use tools like Six Sigma or Total Quality Management (TQM) to enhance service quality.

Service Differentiation

To stand out in a competitive market, service providers must find ways to differentiate their services. This can be achieved through unique service features, pricing strategies, or branding. Differentiation helps attract and retain customers by offering something distinctive.

Service Recovery

Even with the best efforts, service failures can occur. Service recovery strategies involve addressing and resolving customer complaints and issues promptly and effectively. Handling service failures well can turn dissatisfied customers into loyal ones.

Integrated Marketing Communication (IMC)

IMC involves creating a consistent and seamless marketing message across all communication channels. This includes advertising, public relations, social media, and more. A cohesive marketing message helps build brand awareness and trust.

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What is the difference between service and product?

The primary difference between a service and a product lies in their nature. A service is intangible, meaning it cannot be touched, seen, or held; it involves actions, experiences, or expertise. In contrast, a product is tangible, a physical item that can be touched, felt, and seen.

Services are typically perishable, variable in quality, and often involve people in their delivery. Products, on the other hand, can be stored, have consistent quality, and may not require direct human involvement in their use. Understanding this distinction is crucial for marketing, as the strategies and challenges differ significantly between marketing services and products.

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