Marketing Characteristics of Service Businesses
Written by Samuel Muriithi for Gaebler Ventures
Service-oriented businesses are denoted by distinctive characteristics which in turn elicit the need for a different approach in as far as the marketing effort is concerned. What are these characteristics and how do they make service marketing different from product marketing?
Marketing widgets is easy. It has a size, color and purpose. But how do you market a complex service?
1. The intangibility of services
It is common knowledge that services are intangible, in that they cannot be assessed using the senses of touch, smell, sight, hearing, or taste before they are purchased.
In the marketing of service businesses the onus is on the marketers to concentrate on the benefits that the consumer will accrue from using the same. A service cannot be effectively marketed if emphasis is solely placed on its features.
2. The inseparability of services
In most cases it is impossible to separate the service from the person who is offering it e.g. it is impossible to detach the dentist from the dentistry service that he/she is offering. The marketing of service businesses must take this factor into account and understand that direct sales can only be made at the place where the service is offered. With this in mind it becomes common knowledge that such businesses cannot be sold in extensive markets in a manner akin to product-oriented businesses. It also means that service businesses are limited in terms of their scale of operation. However, the marketing of service businesses can be done differently whereby the service provider is represented by a marketer. Some marketers in this context can include travel agents and insurance brokers.
3. The heterogeneity of services
The marketing of service businesses is further made complicated by the fact that a standardization of output is impossible. It is impossible for a person who needs to buy a service to determine the quality of the same before making use of it. Providers of transport services e.g. airlines have different packages for people travelling to the same destination. Movie theaters charge viewers a fee to watch a movie, new or otherwise. As a consumer of the service you pay that fee in advance regardless of what your conclusion at the end of the movie will be in terms of being boring or enthralling.
As such, the marketing effort of such service businesses must always focus at the planning stage of service delivery. The management ought to ensure that high quality control levels are maintained and that the quality is consistent.
4. Perishable services and demand fluctuations
It is impossible to store services - they are highly perishable in nature. Empty seats in a bus or movie theater represent lost business. The demand for accommodation in a college town fluctuates when students are away. Some of the exceptions in this context include insurance services whereby a purchased service is held by the company until it is required by the buyer. The marketing of service businesses must take note of these two characteristics and seek new ways to tackle the challenges posed in terms of planning, promotion and pricing. To counter the effects of perishability and demand fluctuation some firms have taken to finding new use for their premises e.g. using movie halls as church venues, enclosed stadia as meeting venues etc. Businesses like hotels design cheap off-season packages to create demand in the low seasons.
Samuel Muriithi is a business owner in Nairobi, Kenya. He has extensive international business experience in the United States and India.
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