Implications for marketing of service products - Marketing Management

Services characteristics mean they must be marketed somewhat differently from other products. Attempts to summarize these implications for marketing. These are some of the major distinguishing or special characteristics of service products together with some of the major additionalmarketing issues and complexities which they give rise to. We emphasize that most of the other elements of effective marketing management and strategy, e.g. the need for effective segmentation and targeting, adequate market research and information systems, are no different for services than they are for physical products. In addition, both types of marketing are being impacted by the second major development in marketing thought and practice, namely, the growth of relationship marketing.

Service quality in services marketing: the SERVQUAL model

The importance of adequate levels of service quality, the notions of effective customer care and relationship marketing apply to all marketers and products whether physical or service products and markets. However, some of the special characteristics of service products mean that sometimes what constitutes service quality, the areas that are important in service quality and how to measure and evaluate levels of service quality can be more difficult than for the tangible physical product marketer.

For example, with a physical product it is relatively easy to objectively measure its functional performance. With an intangible service product, however, this can be more difficult. Recognizing this, several models have been proposed with regard to the criteria for assessing service quality and the sorts of data which would need to be collected and interpreted in order to make this assessment. One of the most influential of the models in this area is that developed by Parasuraman, Zeithaml and Berry and referred to as the ‘SERVQUAL’ model. The main ideas and elements of this model are that it proposes that most customers take five main factors into account when assessing the quality of a service they have received. These five main factors are easily remembered by the initials RATER which respectively stand for:

• Reliability – the extent to which the service is delivered to the standards expected and promised.

In essence it represents the customer getting what they feel they have paid for. Needless to say any shortcomings by the service provider in this respect are likely to be major causes of customer dissatisfaction.

• Assurance – the degree of trust and confidence the customer feels that the service provider is competent to supply the service. Mostly this stems from the degree of confidence that the customer has in the service provider’s staff. The customer will not be satisfied if he/she does not feel assured about the competence of the service provider.
• Tangibles – a key characteristic of service products is their intangibility. Because of this, the services customer often looks to any tangible signs which may be used as indicators of the quality of the service provision. Remember we have previously referred to this as the ‘physical evidence’ element of the services marketing mix. For example the customer will assess the premises of the service provider; or perhaps the appearance of the service provider’s staff.
• Empathy – services customers often have expectations with regard to the extent to which the service provider appears to understand and is concerned about their individual needs and wants.

The more the service provider can see things from the customer’s point of view the better. We refer to this ability on the part of the service provider as ‘empathy’.

• Responsiveness – this refers to the willingness and ability of the service provider to meet and adapt to customers needs, For example, a service provider may be willing to deliver outside of normal delivery times, and perhaps may have systems for responding to customer complaints on the same day.

Service Marketing Implications

Service characteristics and implications for marketing

The SERVQUAL model provides a comprehensive framework for identifying what are key criteria from the customer’s perspective when evaluating and assessing the quality of services provision. In turn, it suggests the key areas where a service provider has to perform effectively. Finally, and related to these first two aspects, the SERVQUAL model guides the implementation of quality programmes for services marketers together with systems of evaluation and control. The SERVQUAL model stresses that a company has service quality problems where there is a gap between what consumers expect and what they perceive they receive with regard to services quality. There are possible bases for such gaps and therefore strategies for filling them:

1. Customer intelligence gaps – First of all, a gap can exist because a company simply does not understand what customers want, and in particular what represents the key service attributes and levels of performance. They simply do not understand their customers’ needs.
2. Design gaps – Even if the service marketer understands the service need and requirements of customers, service levels may still be decided which we know do not meet these. This may be because of resource constraints on the part of the service provider or perhaps because the customers desired service levels are deemed to be too costly to provide and hence unprofitable.
3. Production gaps – Even if the marketer understands and proposes to meet customers’ service needs and requirements the process may simply fail to deliver these. Often such gaps are due to unrealistic targets for service levels and especially where these unrealistic levels are promised to customers so that the customer now expects them. Sometimes, this type of gap stems from lack of resources, training or systems devoted to achieving the standards set.
4. When Virgin Trains was first established, Virgin made several promises about the service standards customers could expect from the Virgin Train Service. These related to areas such as punctuality, reliability, cleanliness, safety and so on. As much as anything, some of the problems that Virgin Trains have experienced with regard to customer complaints about the service stem from the initial expectations which these promises encouraged on the part of customers.
5. Perceptual gaps – This type of gap stems from the customer simply not recognizing that their service requirements and expectations have in fact been met. For some reason the marketer has failed to persuade or convince the customer about this.