By N2H

Marketing mix for services

October 24, 2007

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Service Economy

A service is a product that is purely or mostly intangible. The size and growth of the service sector makes marketing important, but in the service sector marketing has been slowly taken up. This is because of :

Limited competition:

Many service industries have been regulated i.e. banking, public utilities etc and thus they have faced little competition

Lack of creative management:

Most service industry leaders have been accused of lacking creativity.

No obsolescence:

Many services are not subject to obsolence unlike goods. This reduces urgency to make changes.

Lack of innovation in the distribution service

Characteristics of Services:

Intangibility
Inseparability

Since services are intangible, this leads to them being produced and marketed simultaneously. Inseparability means that customers not only want a particular type of service, they want it to be provided by particular people or group of people.

Involvement of the customer:This is caused by inseparability in that customers are involved to a relatively greater degree in the production and marketing of many kinds of services.

Variability of Quality

The quality of services vary due to the fact that they are produced and consumed at the same time.

Perishability

Its important to plan for fluctuation in demand of the service e.g if no one makes an appointment to see a doctor at 4.00 pm then the service is perishable

Categories of Service mix:

Developing and targeting the service: The organization must tailor these services to the needs of specific customers

Pricing the service
Distribution channels for the service
Communication about the service

The service mix for the service industry is much like the product mix of the products.

Marketing mix for services

The characteristics of services give rise to special needs in preparing the market mix.

Developing and targeting the services through

1. Quality:

To provide quality service, organizations must tailor these products to the needs of specific customers. A marketer should ensure that the organization employees are providing quality service time after time. An org should include quality measures in the org performance standards.

The org should also have its employees practice focusing on quality by setting the standard that each employee must satisfy his or her internal customers.

Another approach to improving standards of service is empowering the employee to satisfy customers. This allows employees to make effective decisions thus providing quality service to employees.

Lack of patent protection

Marketers of service should continually innovate and improve so as to distinguish themselves from competition.

Managing fluctuating demand

When demand for a service is low, this leads to staff being idle so an organization should pay staff on commission so as to help to keep costs in line with sales.

Pricing the service

Prices influence a buyer to buy particular products thus an organization should make sure it understands the various costs also the org must understand which customers want.

Customers are usually happy when they look at an itemized bill and see the value for their money. Services are perishable thus marketers use price to limit idle time i.e. the organization might use off-peak pricing, this includes charging different prices during different times in order to stimulate demand during slow periods.

Distribution demands for the service

Since production and mixing a service are difficult to separate distribution emphasis finding convenient ways to provide the services to customers. Distribution strategy can help to attract more clients and help a service provider position itself. A common strategy for distribution of services to a broad consumer market is through franchising.

Communicating about the service.

Communication tries to explain what the service is and how it will affect the buyer. Advertising is one of the strategies here, an organization can advertise its service to the consumer through the media.

Another strategy is personal selling i.e. a sales person can advertise its service to a buyer, he can reassure prospective buyers by providing customer testimonials e.g. real estates agents.

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