Principles of Marketing: Services Marketing - Characteristics of Services, Intangibility Inseparability Variability Perishability

What It Is

Services are intangible products that lack physical form, yet provide value to customers. Understanding the characteristics of services is crucial in marketing as it helps businesses design and deliver services that meet customer needs. For instance, Apple's Genius Bar offers personalized technical support, which is an intangible service that requires human interaction and expertise.

Key Concepts & Frameworks

• Intangibility: Services are non-physical and cannot be touched or seen. Example: A haircut is an intangible service as it's an experience rather than a physical product.
• Inseparability: Services are produced and consumed simultaneously, meaning the customer is involved in the production process. Example: A restaurant meal is inseparable as the chef prepares the meal while the customer waits.
• Variability: Services can be customized to meet individual customer needs, but this also means that quality can vary. Example: A tailor-made suit is a variable service as the quality depends on the tailor's skills and attention to detail.
• Perishability: Services have a limited availability and cannot be stored for future use. Example: A concert ticket is perishable as it has a specific date and time, and if not used, it expires.
• Service Blueprint: A visual representation of the service delivery process, highlighting key touchpoints and interactions. Example: A hospital's service blueprint would show the patient's journey from check-in to discharge.
• Service Quality: A measure of how well a service meets customer expectations. Example: A 5-star hotel's service quality is measured by its staff's friendliness, room cleanliness, and promptness in responding to customer needs.
• Service Encounter: The interaction between the customer and the service provider. Example: A customer service representative's phone call with a customer is a service encounter.
• Service Experience: The overall experience a customer has with a service. Example: A customer's experience with a new airline includes check-in, boarding, in-flight service, and baggage claim.

How to Apply It

• To design a service, start by understanding the customer's needs and pain points.
• Use service blueprints to visualize the service delivery process and identify areas for improvement.
• Measure service quality through customer feedback and surveys.
• Train staff to deliver exceptional service experiences.
• Continuously monitor and adjust the service to meet changing customer needs.

Common Mistakes

• Mistake: Assuming services are just like physical products.
• Correction: Services require a different approach, focusing on intangibility, inseparability, variability, and perishability.
• Mistake: Ignoring the importance of service quality.
• Correction: Service quality is critical to customer satisfaction and loyalty.
• Mistake: Failing to train staff on delivering exceptional service experiences.
• Correction: Invest in staff training to ensure they can meet customer needs and expectations.

Exam / Interview Tips

• Be prepared to explain the characteristics of services and how they differ from physical products.
• Use examples from real-life services to illustrate key concepts.
• Highlight the importance of service quality and how it's measured.
• Be able to describe a service blueprint and its application in a service industry.

Quick Practice

Scenario: A customer visits a coffee shop and orders a latte. The barista is friendly and efficient, but the coffee is over-extracted. What is the service quality in this scenario?

A) High B) Low C) Average

Answer: B) Low (The coffee is over-extracted, which affects the customer's experience.)

Scenario: A hotel chain wants to improve its service quality. What is the first step it should take?

A) Conduct market research B) Train staff on delivering exceptional service experiences C) Invest in new technology

Answer: B) Train staff on delivering exceptional service experiences (Staff training is essential to ensure they can meet customer needs and expectations.)

Scenario: A restaurant offers a loyalty program that rewards customers for repeat visits. What is the service experience in this scenario?

A) The customer's experience is limited to the food and service quality. B) The customer's experience includes the food, service quality, and loyalty rewards. C) The customer's experience is only related to the loyalty program.

Answer: B) The customer's experience includes the food, service quality, and loyalty rewards (The loyalty program is part of the overall service experience.)

Last-Minute Cram Sheet

• Services are intangible, inseparable, variable, and perishable.
• Service quality is critical to customer satisfaction and loyalty.
• Service blueprints visualize the service delivery process.
• Service encounters are interactions between customers and service providers.
• Service experiences are the overall experience customers have with a service.
• Intangibility does not mean services are not valuable.
• Inseparability does not mean services are always produced and consumed simultaneously.
• Variability does not mean services are always customizable.
• Perishability does not mean services are always limited in availability.
• Service quality is not just about physical aspects, but also about intangible aspects like friendliness and responsiveness.