Service Strategies

As the United States moves increasingly toward a service economy and beyond, marketers need to know more about marketing service products. Services are activities or benefits that one party can offer to another that are essentially intangible and do not result in ownership of anything tangible. Services are intangible, inseparable, variable, and perishable. Because services generally are intangible, customers perceive them as a more risky proposition and find evaluation more difficult. Accordingly, they tend to rely more on personal references or information sources, brand reputation, and the price and/or facilities of the service provider as an indication of quality. To overcome these risks and perceptions, marketers must reduce the complexity involved with the service, stress the positive elements of tangibility in the service, make all communications with the customer very clear and unambiguous, and focus constantly on service quality.

The evidence from the PIMS project (Profit Impact of Marketing Strategy-See The PIMS Principles, Robert D. Buzzell and Bradley T. Gale, ISBN 0-02-904430-8 for details) is absolutely clear, i.e., high quality products or services are both more profitable than lower quality products or services. On page 443, Kotler says, “Every business is a service business. Does your service put a smile on the customer’s face?” Every business should be striving to produce the highest quality products and services for their customers at all times. In real life, it is not possible to substitute a little higher quality service for a little lower quality product. Customers do not make such trade-offs.