Marketing Mix for Service (Service Marketing 13.04.2021)

Marketing Mix for Service

It is to be reiterated that the marketing concept is equally applicable to goods, services and ideas. Thus, service marketers, like goods marketers, must strive to provide a bundle of benefits that satisfies the needs of consumers.

Unfortunately, most of the firms providing services do not give any impor­tance to the marketing planning as in the case of products. Most producers feel that a service is a necessity and hence the demand will be instantaneous. This seems to be an incorrect philosophy. On the contrary, adoption of proper planning in service marketing could work wonders. Because, there are in­numerable services that could be offered almost simultaneously.

Theodore Levitt’s concept of ‘Marketing Myopia’ is found to have in­fluenced in preventing the adoption of marketing planning in its full perspec­tive in the area of marketing of services. For instance, the activities of a film studio are often described as – “making movies” instead of “marketing entertainment”.

 

In developing a service marketing strategy many firms were seen to consider the following seven areas:

i. Marketing should occur at all levels, from the marketing department to the point where the service is provided.

ii. Wherever possible, establish direct contact with the customers.

iii. Use only high-quality personnel for marketing job.

iv. Creation or loyalty among existing customers.

v. Ensure quick resolving of problems faced by customers.

vi. Provision of improved services at lower cost.

vii. Brand the services offered.

 

1. Service Mix:

Goods can be defined in terms of their physical attributes, but services cannot be because they are intangible. But there are also tangibles (such as – facilities, communications) associated with a service. These tangible elements help form a part of the product and are often the only aspect of a service that can be viewed prior to purchase, which is why marketers must pay close attention to associated tangibles and make sure that they are consistent with the selected image of the service product.

All other components of product mix are relevant here also. However, a caution may be noted. The service product is often equated with the service provider; for example, the teller becomes the service of a bank or the beautician becomes the service a beauty parlour provides.

Because consumers tend to view services in terms of the service personnel and because personnel are inconsistent in their behaviour, it is imperative that marketers effectively select, train, motivate and control contact people. It is true to say that service marketers are selling long-term relationships as well as performance.

 

2. Price Mix:

Another difference between the sale of products and services lies in the techniques of pricing. It has been observed earlier that pricing a new product is one of the most important and puzzling marketing problems. This is more so in the case of services where pricing plays both an economic and a psychological role.

It is psychological because consumers rely on price as the sole indicator of service quality when other quality indicators are absent. In its economic role, price determines revenue and influences profits.

Pricing of services can also help smooth fluctuations of demand. Given the perishability of service products, this is an important function. A higher price may be used to reduce demand during peak periods, and a lower price may be used to stimulate demand during slack periods.

For example, if a room in a hotel is not rented out or if there are vacant seats in a bus, the potential income is lost permanently. The concessional charge allowed for telephone calls in the night proves the stimulation of demand during off peak period.

Requirement for advance payment is another feature in pricing of service products. This is also related to the perishability of the services. When a potential customer indicates interest in a service, the seller often wants to make sure that the buyer makes a firm commitment.

For this the seller often insists on a guarantee from the buyer preferably in the form of receiving an advance payment. When we would like to travel, for example, we could reserve a ticket y paying a fee and sometimes by paying the full fare and obtaining a ticket.

The same is applicable to a cinema or a music concert when the buyer of the service will have to pay in full the price of the ticket in advance. Unless such a guarantee is obtained, in the event the buyer does not turn up, the seller loses completely. This is not the case with a product which could be sold to someone else later.

Negotiated price – In many of the service industries, the prices are settled after negotiations. For example, the price for management consultancy services is negotiated and fixed. The negotiated price gives an opportunity to the seller and the buyer to determine just the services required to meet the specific needs.

Bids for high-price services – Bidding is very common in the case of some specialised high-price services. For example, when a building is to be con­structed, tenders are invited. Or, when an individual (consumer) wants to have his house painted, he is likely to ask for bids or quotations.

 

3. Physical Distribution Mix:

Distribution for services is usually simpler and more direct than channels of distribution for goods. This is due to the intangibility of services. The marketer of services is often less concerned with storage, transportation and inventory control, and shorter channels of distribution are typically employed.

Further, the element of inseparability (i.e., services cannot be separated from producers) has created a feeling that direct sale alone is possible in the matter of sale of services. This is, however, not completely true. It is quite common to recognise some middlemen in certain areas.

 

The following kinds of middlemen are found in the channel of distribution of services:

i. Agents – For example, Travel agents, Employment agencies, Insurance agents. These agents are at par with agent middlemen who do not take a title.

ii. Wholesalers and Retailers – The actual service may not be easily transferable as the products could be transferred. Still, tangible representations of the services are transferable, for example, the transfer of shares. This type of channel is often found in cases where a contract exists as a tangible repre­sentation of the service.

The merchant middlemen dealing in services are rare. When an organisa­tion contracts for a charter flight and then sells space to others, it is acting as a merchant middleman because it is now the temporary owner of the service. In India, electricity was bought and distributed by some agencies in the past.

Some service firms may market on a wholesale basis. For example, many transporting agencies undertake to transport goods although they do not own any vehicle. The consumer actually has no contract with the firm that actually produces the services, namely the transport company. These transport agents are actually wholesalers or retailers working on a fixed commission from the fleet owner.

 

4. Promotion Mix:

Promotion mix is definitely an important aspect of the marketing mix for services. For instance, the advertising of services is somewhat challenging be­cause they are tangible-dominant products. The intangibility makes it difficult to use different media of advertising.

Service advertising should thus emphasise tangible cases that will help consumers understand and evaluate the service. The cues maybe the physical facilities in which the service is performed or some relevant tangible object that symbolises the services itself. For example, hotels may stress their physical facilities — clean, hygienic room facilities, etc.

Personal selling is potentially powerful in services because this form of promotion lets consumers and sales people interact. Customer contact personnel can be trained to use this opportunity to reduce customer uncertainty, give reassurance, reduce dissonance, and promote the reputa­tion of the organisation.

Sales promotions, such as contests, are feasible for service firms, but other types of promotions are more difficult to implement. For instance, a service can neither be displayed nor can it give free samples.

Although the role of publicity and the implementation of a publicity campaign do not differ significantly in the goods and service sectors, service marketers appear to rely on publicity, much more than goods marketers do.

Consumers tend to value word-of-mouth communications more than company sponsored communications. This preference is probably true for all products but especially for services because they are experimental in nature.

For this reason, service, firms should attempt to stimulate and simulate word-of-mouth communica­tions. In this connection it is highly essential for a service marketer to know clearly the distinctions between Advertising Publicity and Public Relations.