Service products - Marketing Management

In some economies the service sector is now the largest sector. As we explained, there is no difference between more tangible physical products and their service counterparts with respect to their importance in overall marketing strategy, or in the importance of physical and service products meeting customer requirements. However, service products have characteristics that set them aside from their physical product counterparts and in turn give rise to additional considerations in their marketing.

The term ‘service product’ encompasses a myriad of different types of products and markets in which they are sold, but essentially a service is intangible involving some deed, performance or effort that cannot be physically possessed by the customer. The most important distinguishing characteristics of services is that they are essentially intangible, are often consumed at the same time and place as they are supplied, and customer and supplier often directly interact during the sale and consumption process. Because of these characteristics we find additional important elements in their marketing that are referred to as the ‘extended marketing mix’. In addition to the conventional 4Ps for the marketing of physical products, when marketing service products, an additional 3Ps (making 7Ps in all) are added to the marketing mix. These three additional Ps are:

‘People’: because of direct contact with customers when marketing services, the service provider’s staff, i.e. people, are an important element of the marketing mix.

Process’: in services marketing, how the service is provided is important, e.g. systems for serving customers and dealing with orders take on an important significance.

‘Physical evidence’: the intangible nature of service products means that customers often use other evidence such as the physical facilities of the service provider, their promotional and other literature as evidence of the potential quality of the service.

We consider special characteristics of service products and additional marketing mix elements. Most products have a mixture of both tangible and intangible components. In some cases, the service element of a manufactured product is the most important factor in competitive success as it is the main means of differentiation. In reality, most products have a personal dimension.

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