Marketing of Services & Goods

There are obvious differences between goods and services that are analyzed based on characteristics of each. A good is a tangible object used either once or repeatedly. A service is intangible. The tangibility differentiator indicates the ability to touch, smell, taste and see which is absent in services. This can be a deterrent to the service receiver  to gauge the quality and dependant on the service company reputation. In the case of goods the ownership of the product is transferable from sellers to buyers, whereas in services there is no ownership involved.

On the quality front, with goods it is homogeneous, once produced the quality is uniform across all line of products. They can be separated from the seller/ provider and not dependant on the source for its delivery to the purchaser. With regard to service it is inseparable from the service provider and heterogeneous, where each time the service is offered it may vary in quality, output, and delivery. It cannot be controlled and is dependant on the human effort in achieving that quality hence is variable from producer, customer and daily basis.

Another key distinction is perishing ability of services and the non perish ability of goods. Goods will have a long storage life and are mostly non perishable. Whereas services are delivered at that moment and do not have a long life or cannot be stored for repeat use. They do not bear the advantage of shelf life as in the case of goods like empty seats in airlines. With the production and consumption taking place simultaneously in services, it differs from goods on simultaneity and the provisions for quality control in the process.

 Both goods and services need not be driven by economic motives. Several times goods and services are linked closely and cannot be detached. For example on purchase of a car, the good is the car but the processing, the provision of accessories, after sales activities are all services. It is essential to note that the difference between pure goods and pure services are in contrast but most goods and services exist in between with a mix of both. For instance, in a restaurant, food refers to goods while the service is the waiters offering, the ambience, the setting of tables amongst others.

 Summary:

1. Goods are tangible, and transferable while the services are intangible and non transferable.

2. Goods are separable, and non – perishable while services are inseparable.

3. Goods are homogeneous while services are heterogeneous.

SERVICE MARKETING & PRODUCT MARKETING

Services marketing is marketing based on relationship and value. It may be used to market a service.

Marketing a service-base business is different from marketing a product-base business.
There are several major differences, including:

The buyer purchases are intangible. The service may be based on the reputation of a single person It's more difficult to compare the quality of similar services. The buyer cannot return the service. Service Marketing mix adds 3 more p's, i.e. people, physical environment, process.

 When one markets a service business, one must keep in mind that reputation, value, delivery of service and follow-through are keys to a successful venture.

"Managing the evidence" refers to the act of informing customers that the service encounter has been performed successfully. It is best done in subtle ways like providing examples or descriptions of good and poor service that can be used as a basis of comparison. The underlying rationale is that a customer might not appreciate the full worth of the service if they do not have a good benchmark for comparisons.

However, it is worth remembering that many of the concepts, as well as many of the specific techniques, will work equally well whether they are directed at products or services. In particular, developing a marketing strategy is much the same for products and services, in that it involves selecting target markets and formulating a marketing mix.

Product Marketing deals with the first of the "4P"'s of marketing, which are Product, Pricing, Placement, and Promotion. Product marketing, as opposed to product management, deals with more outbound marketing tasks. For example, product management deals with the nuts and bolts of product development within a firm, whereas product marketing deals with marketing the product to prospects, customers, and others. Product marketing, as a job function within a firm, also differs from other marketing jobs such as marketing communications, online marketing, advertising, marketing strategy, etc.

Product marketing in a business addresses four important strategic questions:

• What products will be offered (i.e., the breadth and depth of the product line)?
• Who will be the target customers (i.e., the boundaries of the market segments to be served)?
• How will the products reach those customers (i.e., the distribution channels to be used)?
• Why will customers prefer our products to those of competitors (i.e., the distinctive attributes and value to be provided)?

MARKETING OF SERVICES &  MARKETING OF GOODS

Services play an increasingly important role in the economy and in individual organizations. Services are particularly relevant in industries where competitive pressures are forcing companies to find ways to create competitive differentiation. However, there are significant differences between the marketing of services and the marketing of tangible products.

Although services’ marketing has been practiced by some enlightened professionals for decades, the concept of services marketing is still new to many marketing professionals. Many current marketing concepts and tools have simply been transferred from the manufacturing sector. There are common elements between services and products, yet there is a need for marketing methods, tools and concepts that are specific to services.

Developing a New Service Offer

Marketing a service differs from marketing physical goods. Goods provide benefits because of their physical characteristics. Services are actions and are:

• Performed, not produced
• Experienced - the result of a deed or action
• Intangible - cannot be seen, felt, tasted or touched
• Cannot be stocked
• Once performed, the service cannot be returned
• Highly dependent on the human element
• Typically, the customer is a participant in the service delivery process
• Service delivery quality is dependent on the individual service provider

Services can be tangible acts directed at people's bodies, for example medical procedures, or beauty salons. Or services can be directed at goods and other physical possessions, for example maintenance services. Services can also be intangible acts, for example education, or consulting services.When a company is considering creating a new service for its customers the starting point is to determine:

• what should be done
• to whom
• how the service will be performed
• with which resources
• why there is a customer need
• which benefits are provided to customers

It takes a managed approach to creating, assessing and developing a new service concept to ensure the company offers the right things, to the right customers, and for the right reasons.
Traditionally, marketers have used a product marketing approach to services, focusing on a careful balance of the well-known Four P's of the Marketing Mix: Product, Place, Price, and Promotion. The right mix of these is still critical. However, because of the nature of services, the additional P's of "People," "Process," and "Physical Evidence" take on a greater importance. The intangible nature of services requires a special approach at the strategic stage of service offer development.

The following factors need to be addressed through the P's of "People," "Process" and "Physical Evidence":

• Services do not have physical properties to shape a customer's perception. Because of this, services need to be defined so customers can understand and value the service, and therefore will buy the service. In other words, service descriptions need to emphasize "benefits." Also important is recognizing the value that service personnel provide because of their interaction with customers ("People" considerations).
• People, processes, tools, methods and management capability need to be in place ready to respond to a market opportunity. Processes need to enable a consistent level of service delivery. These factors are of importance for the service provider organization for efficiency and for quality management in your customer's eyes ("Process" & "People" considerations).
• Service needs to become more tangible so they can be charged for and perceived as something to be purchased ("Physical Evidence" considerations).