Services marketing

     

        Services marketing is a sub-field of marketing, which can be split into the two main areas of goods marketing (which includes the marketing of fast-moving consumer goods (FMCG) and durables) and services marketing. Services marketing typically refers to both business to consumer (B2C) and business to business (B2B) services, and includes marketing of services such as telecommunications services, financial services, all types of hospitality services, car rental services, air travel, health care services and professional services.

Services are (usually) intangible economic activities offered by one party to another. Often time-based, services performed bring about desired results to recipients, objects, or other assets for which purchasers have responsibility. In exchange for money, time, and effort, service customers expect value from access to goods, labor, professional skills, facilities, networks, and systems; but they do not normally take ownership of any of the physical elements involved.

There has been a long academic debate on what makes services different from goods. The historical perspective in the late-eighteen and early-nineteenth centuries focused on creation and possession of wealth. Classical economists contended that goods were objects of value over which ownership rights could be established and exchanged. Ownership implied tangible possession of an object that had been acquired through purchase, barter or gift from the producer or previous owner and was legally identifiable as the property of the current owner.

More recently, scholars have found that services are different than goods and that there are distinct models to understand the marketing of services to customers.[2] In particular, scholars have developed the concept of service-profit-chain to understand how customers and firms interact with each other in service settings,

Adam Smith’s famous book, The Wealth of Nations, published in Great Britain in 1776, distinguished between the outputs of what he termed "productive" and "unproductive" labor. The former, he stated, produced goods that could be stored after production and subsequently exchanged for money or other items of value. But unproductive labor, however" honorable,...useful, or... necessary" created services that perished at the time of production and therefore didn’t contribute to wealth. Building on this theme, French economist Jean-Baptiste Say argued that production and consumption were inseparable in services, coining the term "immaterial products" to describe them.

       Services marketing relates to the marketing of services, as opposed to tangible products. A service (as opposed to a good) is typically defined by the paraphrase of 5 I's :

Inseparability - The customer cannot be separated from the service and therefore, the use of it is inseparable from its purchase (i.e., a service is used and consumed simultaneously)

Intangibility - It does not possess material form, and thus cannot be touched. Yet, many services are directly connected to products. Services (compared with goods) can also be viewed as a spectrum. Not all products are either pure goods or pure services. An example would be a restaurant, where a waiter's service is intangible, but the food is tangible.

Service Products - Those pure services or major service components, directly offered to customers, such as a gig

Product Services - Those service elements associated with a physical objects such as on-line shopping or instrument tuning

Inconsistency (Variability) – Every delivery of the service will be different. Furthermore, the use of a service is inherently subjective, meaning that several persons experiencing a service would each experience it uniquely.

Inventory (Perishability) – the service cannot last

Involvement – customer can tailor the service while using it (e.g. hairdresser)

For example, a train ride can be deemed a service. If one buys a train ticket, the use of the train is typically experienced concurrently with the purchase of the ticket. Although the train is a physical object, one is not paying for the permanent ownership of the tangible components of the train.