What is Service Marketing
Service marketing is simply the process of promoting and selling a service or an intangible good to a specific group of people. It is a new way of marketing that has become very popular and helps companies all over the world promote their services.
It is a concept which focuses mainly on the business of non-physical intangible goods. It is done for company given benefits which cannot be seen, touched, felt etc. These are benefits which are driven mostly by people, process & cannot be kept by a customer.
Factors in Service Marketing
The key factors which define marketing for services are:
1. Intangible
services are non-physical unlike physical products which can be touched, felt, seen. This makes services different from products and hence the marketing approach would also be different.
2. No ownership
Services cannot be owned but can only be experienced. This is a holistic concept which is related to customer experience.
There is ownership in service in form of evidence like plan, bills, invoice etc. but you cannot own it like a product.
3. Inseparability
Service marketing is driven by a concept of moment of truth, i.e. the services are created & used at the same moment.
They cannot be stored like products in an inventory, they are produced and consumed at the same time.
4. Variability
Services vary in nature despite the same people, process, type of work etc., unlike standardized products. Different customers can get different experience for exactly the same service used.
e.g. a telecom customer might get different experience for the same plan.
5. Perishability
Unlike products which can be stored, services are consumed at that very moment. But there is another way to look at it as well. These days many services or plans do have expiry date. They are not similar to best before dates in products but these dates are more in terms of validity of service.
e.g. free warranty service after 2 years of purchase.
6. People involvement
Service marketing is driven by people who provide benefits & solutions to the needs of the customers. These days lot of automatic service solutions are coming up but people play the most important role in service marketing.
Service marketing planning involves taking care of 7Ps. Price, Place, Promotion, Product, People, Process and Physical evidence.
Types of Service Marketing
In general, there are three kinds of service marketing one should learn about them to better understand the idea as a whole.
1. External Service Marketing
The first type of service marketing is called “external service marketing.” This is when a company promotes its services to customers in a setting outside of the company.
This type suggests that services be advertised using tried-and-true methods like price, product, and purchasers.
External service marketing is all about promoting services in the outside world (between the company and its customers) so that they are availed of and used well.
2. Internal Service Marketing
Second, there is internal service marketing. It is used to promote service within the company (company employees).
This means that the service is promoted internally so that employees know where it is and can spread the word better.
Since employees are an important part of the marketing chain, internal service marketing pays more attention to them than to customers.
It is very important for a company’s employees to know a lot about the service so that they can spread the word and help the company promote the service on a large scale.
3. Interactive Service Marketing
Maybe technical service is also a very important part that needs the third type of service marketing, which is called “Interactive Service Marketing.” Service promotion happens between the employees and the customers in this case (employees-customers).
Service Marketing Mix
The service marketing mix is also called an extended marketing mix, and it is an important part of the design of a service blueprint. The 7 Ps make up this marketing mix. Let’s talk about them in more detail.
1. Product
2. Place
3. Promotion
4. Price
The product-service marketing mix is not something that can be seen or touched. Service products can’t be measured in the same way that soap or detergent can’t be. A good example would be the tourism or education industries. Service products are also different, change over time, and can’t be owned.
So, care needs to go into making the service product. Blueprinting is usually used to define the service product. For example, before starting a restaurant business, a blueprint will be made. This service blueprint shows exactly how the product (in this case, the restaurant) will be.
In the case of services, the place will decide where the service product will be. The best places to put gas stations are on highways or in cities. A place with little traffic is not a good place to start a gas station. In the same way, a software company will do better in an area with a lot of other businesses than in a town or the middle of nowhere.
Promotions have become an important part of the service marketing mix. Services are easy to copy, so the brand is usually what makes one service different from another. A lot of banks and phone companies work hard to get their names out there.
What is that? Because there is usually a lot of competition in the service industry, you need promotions to stay in business. So, advertising and promotions help banks, IT companies, and dotcoms stand out from the rest.
Putting a price on a service is a lot harder than putting a price on a product. If you run a restaurant, you could only charge people for the food you serve. But then, who will pay for the nice atmosphere you’ve made for your customers? Who will pay for the music group you have?
So, these things have to be taken into account when pricing. When pricing a service, labour, materials, and overhead costs are usually taken into account. When you add a profit markup, you get the final price for your service.
5. People
One part of the service marketing mix is the people. People define a service. If you run an IT business, your software engineers are what make you who you are. If you own a restaurant, your chef and service staff defines you. Additionally, if you work in banking, your employees and how they treat customers show what kind of banker you are. In service marketing, it’s the people who can make or break a business.
So, many companies today are putting extra effort into training their staff in people skills and customer service with the goal of making customers happy. In fact, many companies have to go through accreditation to prove that their employees are the best. In the case of services, this is a USP for sure.
6. Process
The service process is how a service is given to the end customer. Let’s look at two great companies as an example: McDonald’s and FedEx. Both companies do well because they offer fast service, which they can do because they trust their processes.
On top of that, these services are in such high demand that they have to deliver at their best without sacrificing quality. So, a service company’s process for delivering its product is very important. It is also a key part of the service blueprint, which is what the company uses to figure out how the service product will get to the end customer before it starts the service.
7. Physical evidence
A very important part of the service marketing mix is the last one. As we already said, services are not physical things. But to give the customer a better experience, tangible things are also sent along with the service. Take a restaurant with just chairs and tables and good food as an example. Or, take a restaurant with good lighting, nice music, and comfortable seating that also serves good food.
