2. Introduction
• Phenomenal growth of services, with the
resultant shift towards a service economy
attributed to rising affluence, more leisure
time and growing complexity of products that
require servicing.
• In major European countries, USA and Japan,
private and public sector services account for
60-75% of gross domestic output.
3. Introduction
• Service industries vary greatly from
governmental organisations such as the
National Health Service of the United Kingdom
to private non profit organisations such as
museums and charities.
4. The nature of services
• A service is defined as any activity or benefit that one
party can offer to another which is essentially intangible
and does not result in the ownership of anything.
• The same general principles of marketing apply to both
products and services, but services have characteristics
that mean that instead of four P's, there are seven in a
services marketing mix.
5. Services defined
• A service is any activity or benefit that one
party can offer to another which is essentially
intangible and does not result in the
ownership of anything. Its production may or
may not be tied to a physical product.
6. Services defined
• Most company offerings to customers contain an element
of service and this is illustrated by the service continuum.
Figure 15.1 The tangible–intangible continuum for goods and services
7. Categorising offerings along the service continuum
• Pure tangible goods
– toothpaste
• Tangible goods accompanied by one or more service
– computer and warranty
• Hybrid offer consists of equal parts of goods and services
– restaurants
• Service with accompanying minor goods
– air travel
• Pure service
– haircut
8. Service characteristics
Intangibility
Inseparability
Variability
Perishability
Lack of ownership
Produktion och konsumtion är förenat
Sällan exakt likadan – kvalitet?
Kan ej lagras
Går ej att känna osv
Upphör att existera efter konsumtion
9. Intangibility
– Cannot be seen, tasted, felt, heard or smelt before
they are bought.
– Service providers need to manage the evidence by
providing evidence of the benefits.
10. Inseparability
– Services produced and consumed simultaneously.
– Cannot be separated from providers, whether
people or machines.
– Customers are always involved
11. Variability
– Quality may vary greatly depending on who
provides the service, when and how.
– Staff need to know how to do something well.
– Staff must be well motivated to maintain high
standards of service.
13. Lack of ownership
– No physical product is exchanged and therefore
nothing owned.
14. Marketing strategies for service
firms
• The service component and support processes
of product offerings are rapidly becoming the
competitive advantage in winning customer
loyalty.
