Definitions of Services –

“Activities, benefits and satisfactions, which are offered for sale or are provided in connection with the sale of goods” (American Marketing Association, Committee of Definitions 1960, p. 21).

“Services include all economic activities whose output is not a physical product or construction, is generally consumed at the time it is produced, and provides added value in forms (such as convenience, amusement, timeliness, comfort or health) that are essentially intangible concerns of its first purchaser” (Quinn, Baruch and Paquette, 1987).

“A service is any act or performance that one party can offer to another that is essentially intangible and does not result in the ownership of anything. Its production may or may not be tied to a physical product (Prof. Philip Kotler)

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There are characteristics of services that differentiate it from a product (tangible good).

1) Intangibility – Services are intangible offerings. A buyer cannot see, hear, feel or taste a service unless it is bought. A person who pays for a massage will not see the effects of massage till the time the massage is done on his/ her body. Similarly, a person who wants to travel to a foreign country by air will have to buy a ticket for an airline as well as board the plane to travel and experience the flight. As a buyer cannot feel the service beforehand, they look for indications and evidence of quality of service. The decision making is done basis the information derived from presentation, tools or equipment, place, message (communication content and material), symbols, people, and price.

McDonald’s tries to influence buyers by given an experience of

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The traditional Marketing Mix or Marketing Program consists of 4P’s – Product, Price, Place, and Promotion. The marketing strategy of a Product consists of these Marketing Mix elements to meet the business needs and objectives. These objectives can be profit related, market share related, and even to bring social change in the society (NGO’s).

As services differ from a product, three additional marketing mix elements are taken into account for marketing strategy. Hence, the marketing mix or marketing program for services is often referred to as “7P’s of services.”

The 4P’s of traditional marketing remain the same but their implications on services is different as services differ from a product in many ways. The Service is perishable, heterogeneous, intangible and inseparable. Therefore, Product customization, Price, Place and Promotion of a service needs a different approach as compared to a physical product which can be produced at a different place, stored, and transported as required.

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There are different ways in which classification of services is done. Services are bought differently by different buyers in different ways. The presence of a buyer is sometimes needed and sometimes not. Similarly, the service can be provided by the seller or by an equipment/ machine.

1) People based and Machine based services –
A service can be provided through a human or even a machinery. People based service refers to the presence of a human being with skills in providing the service. For example, a doctor needs to be present with the patient. Similarly, a carpenter, cobbler, mechanic, barber, etc. fall under people based services category.

Equipment/ machine based service is provided by automated machines like robots doing car wash, vending machines, etc. The presence of the seller is not required.

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Marketing Strategy of Services –
A marketer should have an effective marketing strategy at his/ her disposal for business success whether it’s a product or a service offering.

Services have different characteristics from that of a product. This difference demands a marketing strategy that is exclusive to services. The traditional marketing program or the marketing mix (product, price, place, and promotion) of marketing cannot be relied on for services marketing. Addition of three P’s – people, physical evidence, and process – also form integral part of the strategy.

Christian Gronroos has highlighted that Service Marketing needs to focus on Internal as well as interactive marketing apart from the regular activities of external marketing.

External marketing refers to the regular activities of preparing, pricing, distributing, and promoting the service.

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Discuss dealing with competition in case of service offerings.

Differentiation in Service –
A customer can travel by any airline basis the lowest airline fare. Since the basic need is travel, the customer needs to check a suitable time, book a flight and reach his/ her destination. Instead of providing lowest fares possible to gain a competitive edge, organisations try to differentiate their offering. This is known as differentiation – Doing things differently. An organisation can differentiate its offering, its delivery, and brand image and communication. This way the organisations avoid price wars in the industry.

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