Q. Define Service Marketing and explain its characteristics.

Service According to Philip Kotler A service is an act of 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. 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, timeliness, comfort or health). Characteristics 1) Intangibility Services are experiences created for customers. They comprise action rather than objects. Bateson (1977) first described services as intangibles because Services are performances rather than objects, they cannot be seen, felt, tasted or touched in same manner in which goods can be touched. He identified intangibility as the critical difference between goods and services from which all the other differences emerge Bateson further categorized intangibility into physical intangibility, which is not palpable or cannot be touched and mental intangibility, which is difficult for the consumer to grasp or measure even mentally. For example, it is not easy to judge how thoroughly a car has been serviced immediately after service. He thus concluded that services are doubly intangible. The intangibility of services results in the following implications for marketers: Services cannot be patented legally, hence they can be easily copied by competitors. Services cannot be readily displayed or easily communicated leading to difficulty in assessing its quality. Pricing services is difficult as it is hard to determine the actual cost of a unit of service and price/quality relationship is complex. t is less efficient than goods production. Design of total service package is not possible. Some of the possible solutions for service marketers to overcome intangibility issues can be:

Use tangible cues Stimulate, manage, and promote word-of-mouth communication Use personal sources of information more than non-personal sources Use post-purchase communication Strengthen internal and external marketing Use relationship marketing Create strong organizational image Use cost accounting to help set prices. 2) Inseparability

This stands for inseparability of production and consumption. Services are created (by the provider) and consumed (by the client/user) simultaneously and cannot be stored like goods. Hence a mobile phone (product), which is manufactured in Korea and shipped to Sweden, is sold four months later, and is used for years. On the other hand, the transportation services of an airplane are first sold, and then produced and experienced or consumed simultaneously (Zeithaml et al.1985). This also implies that the customers have to be present during service production. Consumers frequently interact with each other and may influence each others experience. Thus a service must be provided at the right time, in the right place, and in the right way. Service producers themselves play an important role as part of the product itself, as well as an essential ingredient in the service experience for consumers. We can thus summarize that Inseparability involves the presence of the customer, customers role as co-producer, customer to employee and customer to customer interaction (lovelock and gummesson 2004).

A case in point has been the emergence of healthcare tourism in India. Efficient and skilled healthcare at affordable costs has made India a favorite global health destination. As services are inseparable and aimed at giving the customer an experience of a lifetime, several leading medical care chains are tying up with hospitality chains to provide a unique combination of health and tourism. The inseparability of services results in the following challenges for those marketing services:

 Customer experience depends upon the action of employees and interaction between employees (service providers) and customers. consumers at convenient locations. and this influence the outcome of the service transaction. Some of the probable solutions to overcome inseparability problems of services can be: Having strong selection and training programmes for personnel wko would be dealing with public/clients Announcing strong incentives and motivations to attract and satisfy the customer Marketing at multi-site locations Innovating techniques ofrAchieving standardization to the maximum extent possible Resorting to consumer management Focusing on personal attention Developing a distribution network with quality control mechanism. 3) Variability Services face the difficulty of achieving uniform output, especially labor-intensive services. Olsen and Wyckoff (1978) described the challenge of setting up standards the behavior and performance vary not only among service workers, but even between the same employees dealings with different customers, and on different days. Variability or heterogeneity also results because no two customers are alike in their demands. Thus, quality and essence of service vary from producer to producer, customer to customer, and from day to day (Zeithaml et al.1985), and is largely the result of human interaction and all the vagaries that accompany it. The implications for marketing due to variability in services are: Difficulty in achieving standardization Difficulty in setting quality controls Determination of quality possible only after performance of service

 Difficulty in communicating to the clients what exactly they would get. Some of the probable solutions to overcome inseparability problems of services can be: Having strong selection and training programmes for personnel wko would be dealing with public/clients Announcing strong incentives and motivations to attract and satisfy the customer Marketing at multi-site locations Innovating techniques of indirect interaction 4) Perishability It implies that services cannot be saved (Zeithaml et al. 1985). Goods once produced can be stored and then sold at a later date but service peter out. They cannot be stored. An unutilized service capacity cannot be saved, stored for reuse. The marketing implication as a result of perishes ability of services are: Short-lived value of services Marketing strategies that can be adopted to overcome the marketing implications are: Demand forecasting and creative planning for capacity utilization to close gaps between demand and supply Formulate strategies to cope with fluctuating demand Devise strong recovery strategies when things go wrong Focus on competence and expertise Continuous study of demand patterns and competitive parameters Develop creative pricing options such as early bird or frequent flier specials. 5) Heterogeneity As services are produced by humans, hence no two services can be identical.Further no two customers are precisely alike and hence their experiences of the same service are different.

Even the same customer can be with different frame of mind at different times which results in differing satisfactions from the same service at different times. Eg. A tax consultant may provide different a service experience to two different customers on the same day depending upon their needs and on whether the consultant is meeting the customer when he is fresh in the morning or tired at the end of the day. Because of this ensuring a consistent quality becomes a challenging job. The quality depends upon a number of factors like the customer, service provides, other customers (their presence or even absence) etc., hence the service provider cannot know if the service is delivered in a manner which has been originally planned and promoted. Sometimes services are provided by a third party further increasing the heterogeneity. 6) Ownership Ownership is never transferred in the case of services. In products, the product is produced first and than it is sold. However in services, the product is bought first and than produced and consumed. In this case the ownership is not transferred. Eg: For example when one buys an aeroplane ticket to fly to the USA, he is buying a service which will start at the beginning of the flight and finish at the end of the flight. He cannot take the aero plane flight home with him. Marketing implications of Ownership A lot of the implications of ownership depend on how your people perform while delivering the service. The ownership criteria come after the service product has been delivered to the customer and not before. Eg : A customer might not like the service in a shop, a restaurant or an airline. However he would have already paid for the usage of the service product. Thus in such a case he can positively or negatively impact the service product. Hence measures should be taken in the complete marketing mix to not disappoint the customer post the service sale. Additional blog which you may add after including all the above mentioned points 1) Services are sold exclusively on the basis of benefits they offer Why is it that Accenture has such a high brand equity? This is because of one single thing which they have

commanded over time Trust. Thus this is one benefit to the service of Accenture which other companies can hardly give. Therefore, word of mouth publicity and a good reputation are some benefits which are critical to make a service brand over time. The first restaurant you try, is one recommended by your friend. 2) Services cannot be made available in advance If you were running a restaurant, can you make all the dishes one day in advance and then serve the customer when he comes? No you cant. All you can do is make the ingredients. Even fast food restaurants take care that the food is replenished every single day. The simple reason behind this is that services cannot be stored. They cannot be given in advance. They can be given only when a purchase of the services has been made. 3) Time utility is critical If you were a doctor, and you gave half an hour to each patient, talking idle talks just to make him comfortable, you will probably lose the 10 customers sitting in your lobby. In services, you charge by the amount of time a person consumes. Thus the way you utilise your time is critical to the profitability of your business. A restaurant which does not have any customers today, will have lost a lot of money in keeping the restaurant open, in labour charges etc. 4) Services cannot be transferred Outsourcing is the best example of non transference of services. If you wanted to outsource your calls, can you bring the call centre to your country? You cant. Because again the costing will go high. That is why call centres are in cheaper countries. You cannot separate the process from the source. You will have to keep the call centre services in one place and provide these services in another. 5) Services perish The point is similar to perishability of services marketing. The concept is simple if you do not watch the movie now, you wont get a refund of the ticket. If you do not board your plane or your train, you cannot ask back for the charges of the ticket. A service once order, perishes, if it is left unused. 6) A service once consumed cannot be returned You pay a doctor for consultation and medicines. But your illness does not get cured or he is unable to find the source. Can you ask your money back? You cannot. He gave you the service which you asked for. He might not ask for money anymore or you can return the medicines and receive the money for the medicines. Medicines are not a service. They are a product. The bottomline you cannot return a service once it has been consumed. In restaurants, you can return the dish if you dont like it, and ask for another same one. But you cannot walk out of the restaurant without paying for the services. 7) Controlling the quality of services is difficult My local auto service centre has one rule for loyal customers Do not give your bikes on weekends. The reason is quite simple. He has a heavy workload on weekends as a result of which the quality of service is low. This is

human factor and the owner can hardly do anything. Even in a restaurant, the quality of food served or the service given will vary during peak hours. Furthermore, as services are intangible, it is not possible to measure the quality of service given. Thus controlling the quality of services over time is very difficult as long as the human element is involved. Overall these seven characteristics define a service. A hint here for a marketer / entrepreneur. Go through each of these characteristics and find out where you can bring about an improvement in your organization. I am sure even if you are meeting your customers satisfaction goals, there is scope for exceeding customer expectations by analysing these seven characteristics of services.