Services Marketing - Chapter 1, PDF

## **Chapter 1: Services Marketing** ### Introduction - Reasons for growth in the service sector - Role of services in an economy - Services: Indian scenario - Types of services - Nature of services - Characteristics of services - Difference between goods and services - Need for services marketin...

## **Chapter 1: Services Marketing** ### Introduction - Reasons for growth in the service sector - Role of services in an economy - Services: Indian scenario - Types of services - Nature of services - Characteristics of services - Difference between goods and services - Need for services marketing - Obstacles in service marketing - The Service challenge - Summary - Questions ### Introduction The Industrial revolution of the eighteenth century involved changes not only in production, but also in financial structures, and in transportation and communication networks. Without the emergence of the two biggest service sectors namely banks and railroad, as well as other services, the economic benefits of large scale production could never have been realised. Since the Second World War there has been a steady decline in the traditional manufacturing-goods, their place has been taken by service based enterprise. This shift has been so significant that some refer it as the 'second industrial revolution'. With the individuals spending greater portion of their income in travel, entertainment and leisure, communication services and the like on one hand, and the growing complexity of banking, insurance, investment and legal services on the other hand indicated the inclination for the service sector to expand. Economies of countries like the USA, UK, Germany, Japan, Canada, Sweden etc., have changed from being goods dominated to services dominated. The developed economies also called as service economies reveal that the service sector accounts for more employment, contribution in GDP and more consumption than manufactured goods. | Countries | Manufacturing % of GDP | Service % of GDP | % of Employment in service sector | |---|---|---|---| | USA | 21 | 74 | 80% | | Japan | 29 | 58 | 60% | | UK | 32 | 69 | 77% | | Australia | 22 | 72 | 75% | | Canada | 24 | 70 | 79% | | India | 29 | 47 | 60% | (Source : 1998 Statistical year book, Department of International Economic and Social Affairs, U.N., New York) ### Reasons for Growth in Service Sector The above table shows a significant growth in the service sector all over the world. The trends indicate that the future belongs to the service. What are the factors, which have contributed to the growth? We may classify the environment factors into demography, economic, political and legal and social. 1. **Demography** - The study of population reveals a general increase in the world population, high birth rate has given scope for childcare centers, education institutions etc. As the baby boom generation began entering its years of prime capacity in the late eighties, it became a prime target fora variety of services - Fast food, entertainment etc., - The considerable increase in life expectancy indicated expanding market in the age group over 55 years - this has created a new market for health care, leisure and tourism. - There has been a movement of population from rural to the urban areas for over a century, and also shift from city to the suburbs. This again causes the need for infrastructure and support services. 2. **Economic** - The growth of corporate sector and stock market is usually an indicator of growth of an economy. - With an overall economic liberalization, resource mobilisation through capital market has reached unprecedented heights. - The growth of large firms has brought about greater dependence on special service providers like market research and advertising agencies. - The economic reforms have ushered consumerism. - There have been changes in the consumer purchasing power and spending patterns with middle class explosion which is now emerging as the 'Consumption community' 3. **Political and Legal** - De-regularisation has opened many service industries (Airlines, Banking) to more intense competition generating greater innovation and expansion - At the same time, many countries continue to strengthen consumer protection laws to improve public security and to protect the environment. - The increase in government interaction in the trade sector has increased trade relationships between nations leading to development of tourism and hotel industry. - Trading blocks such as North American Free Trade Agreement (NAFTA), European Common Market, Association of South East Asian Nations (ASEAN), South Asian Association for Regional Co-operation (SAARC) etc., have been formed to protect and promote regional interests in the global trade of goods and services. 4. **Social** - The increase in single person household, smaller families and working women mean more discretionary income, more time for travel and entertainment and also need for child care services. - Changing life styles of the masses due to cultural exchange and communication networks has resulted in continued emphasis on services. 5. **Technological** - Recent developments in computer science and Information Technology have brought about convergence of various technologies like Telecommunication, Entertainment and Data transmission. - The influence of Internet has resulted in increasing mobility of educated labour force among countries, and paradigm shift in many service industries like Travel, Banking, Education, Financial Services, Insurance etc. - The environmental trends and their impact on the growth of service sector are summarised in Exhibit 1.2. | Environmental Trend | Service Market | |---|---| | Consumer Affluence | Dine-out habits (hotels and restaurants), travel, entertainment, clubs, repairs and servicing, health care, carpet and dry cleaning, domestic services, banking and investments, retailing, insurance. | | Working Women | Domestic services, travel, nurseries, fast food restaurants, financial services, marriage counselling, retailing, personal care. | | Greater Life Expectancy | Hospitals, nursing homes, entertainment, travel resorts, leisure services, investments, banking. | | Complexity of Life | Travel, legal aid, tax counselling, professional services, airlines, courier services, insurance, banking. | | New Young/Youth | Entertainment, leasing, fast food, travel, picnic resorts, educational institutes, tutorial aids, counselling, retailing. | | Corporate Crowd | Hotels, advertising, legal services, recruitment services, management counselling, health care, airlines, travel booking, courier services, insurance, banking, marketing research. | | Product Innovation | Repair and servicing services (e.g. computers), training, education, sharing services. | | Growing Product Complexities | Expert advice, specialists. | (Source : Schoell W. F. and Ivy J. T - “Marketing Contemporary Concepts and Practices") ### The Role of Services in an Economy Services lie at the very center of economic activity in any society. Dorothy Riddle, in writing about the role of the service sector in world development, formulated the economic model shown in figure 1.1. This model of the economy shows the flow of activity among the three principal sectors of the economy, extractive (mining and farming) manufacturing and service, which is divided into five sub groups. All activity eventually leads to the consumer. Examples of services in each of the five subgroups are: - Business services: Consulting, finance, banking. - Trade services: Retailing, maintenance and repair. - Infrastructure services: Communications, transportation. - Social/personal services: Restaurants, health care. - Public administration: Education, Government. Infrastructure services, such as transportation and communication are the essential links between all sectors of the economy, including the final consumer. In a complex economy, infrastructure services and trade services function as intermediaries between the extractive and manufacture sectors and as the channel of distribution to the final consumer Infrastructure services are a prerequisite for an economy to become industrialised, therefore, no advanced society can be without these services. In an industrialised economy, specialised firms can supply business services to manufacturing firms more cheaply and more efficiently than the manufacturing firms can supply the services for themselves. Thus, more often we find advertising, consulting, financing, and other business functions being provided for the manufacturing sector by service firms. Service activities are absolutely necessary for the economy to function and to enhance the quality of life. Consider, for example, the importance of banking industry to transfer funds and/ transportation industry to move food to areas that cannot produce them. Moreover, a wide variety of social and personal services such as restaurants, lodging, cleaning and child care have been created to move former household functions into the economy. Public administration plays a critical role in providing a stable environment for investment and economic growth. In communities and countries where public administrative services are weak or heavily skewed solely by political or idealistic concerns, essential services are inaccessible to many citizens. Thus it is imperative to recognise that services are not peripheral activities but, rather, integral parts of society. They are central to the functioning of a healthy economy. The service sector not only facilitates but also makes possible the goods producing activities of the extractive_and_ manufacturing sectors. Services are the crucial force for change towards a global economy. ### Services: Indian Scenario Modern technology and communications have revolutionised trade in services, which in 1997 totalled no less than $1,372 billion. This was almost a quarter of global merchandise exports of $5,372 billion. The services export revolution has spread to India without attracting the attention it should. India's service exports in 1997 were $9.3 billion against its merchandise exports of $32.2 billion. It is expected that service exports could be a third of merchandise exports now. This will be well above the global average of one quarter. It implies that India, which has failed to catch the bus in the export of manufactures, is among the early leaders of the developing world in the race for service exports. For decades, industrialisation was seen in India as a driving force of modernisation and prosperity. The service economy was seen as a mere adjunct to manufacturing, not as a driving force in its own right. This was the consequence of the mindset induced by Soviet-type planning although India never went as badly wrong on this as Moscow did. Today service economies like Hong Kong and Singapore have become richer than their former colonial master, Britain, which spearheaded the industrial revolution. Initially, Hong Kong and Singapore specialised in labour intensive manufacturing, and this took them to middle income levels. But they graduated to high income status only when they switched to services (The share of services in GDP is no less than 84% in Hong Kong, and 65% in Singapore. The share in the USA is 74%, and its new focus on knowledge intensive services has made it an economic powerhouse in the 90s. India too is becoming a service economy, the share of services in its GDP is almost 47%, against 29% for industry and 24% for agriculture. India has become a service economy without even realising it or striving for it. Yet India remains a laggard in services, by not only global standards, but even South Asian standards. Pakistan's share is 50%, Bangladesh's is 49%, and Sri Lanka's is 52%. India's ratio is actually lower than that of sub Saharan Africa (48%) or Latin America (60%). India is a laggard both because of neglect of services_and_failure to become a great manufacturer or exporter. But there is silver lining; India can leapfrog over Asian neighbours in services. The Asian Tigers harnessed cheap skills to manufacture relatively low-tech goods for global consumption. India hopes to take the same route, but has made little progress. The problem is not just its poor policies technological change has greatly reduced the potential of comparative advantage based on low wages. Rapidly increasing mechanisation of production means that in most lines of production, the labour content has dropped below 10%. By contrast, the labour content in services can approach 100%. So comparative advantage flowing from cheap skills has far greater scope in services than in manufacturing. The biggest and fastest growing service segment is computer software National Association of Software and Service Companies (NASSCOM) estimates that software exports grew from $734 million in 1995-96 to $2625 million in 1998-99 and will grow further to an estimated $4000 million in the fiscal year 2000 with a potential to grow upto $45 billion by 2005-06. In the years to come, India may emerge a major player not only in software services, but also other service sectors. ### What Are Services? The Service Industries Journal defines “service as any primary or complimentary activity that does not directly produce a physical product, that is, the non goods part of transaction between buyer (customer) and seller (provider)”. "Services are those separately identifiable, essentially intangible activities, which provide want satisfaction when marketed to consumers and/or industrial uses and which are not necessarily tied to the sale of a product or another service" - Stanton. "A service is an activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything. Its production may or may not be tied to a physical product" - Kotler and Armstrong (1991). In practice, it can be very difficult to distinguish services from goods, for when a good is purchased there is usually an element of service included. Similarly, a service is frequently augmented by tangible product attached to the service. In this way, a car may be considered to be a good rather than a service, yet cars are usually sold with the benefit of considerable intangible service elements, such as a warranty or a financing facility. On the other hand, a seemingly intangible service, such as a package holiday includes tangible elements in the purchase - use of an aircraft, a transfer coach and a hotel room. In between is a wide range of outputs that are a combination of tangible goods and intangible service. A meal in a restaurant is a combination of tangible goods (the food and physical surroundings) and intangible service (the preparation and delivery of the food, reservation service etc.) ### Types of Services Service may be mainly professional or consumer oriented. Professional service firms may serve the business market, the private individual or may serve both market segments. Professional services are often characterised by the following; advisory and problem solving, provided by a qualified professional known for their speciality, include an assignment requested by the client, provided by a professional who is independent and not connected with other suppliers, supervised by professional associations which attempt to define the nature of profession, to lay down requirements of competence, to control the practice of the profession and to enforce a code of ethics. These would include services like financial advice, advertising, business and management consultancy, engineering, architectural and interior design, legal and medical to which may be added other agencies and brokers, such as estate agents, stock and insurance brokers and market research agencies. Those firms which tend to be non professional again may either be in the business to business market, or be consumer oriented. Those services which may be included in the former category can include office catering services, cleaning services etc., Those service firms which may be in the latter category are the ones which the consumer is more acquainted with, such as holiday tour companies, fast food outlets or entertainment companies. Exhibit 1.3 indicates one of the classification schemes for service providers. ### The Nature of Services The more a product is intangible, the more it becomes a service rather than a good. Every product is a combination of physical (tangible) and non physical (intangible) attributes. (Figure 1.2) Products that are primarily intangible are classified as services. The major difference between goods and services is that goods are produced, while services are performed. In addition, services are activities, not things and the production and consumption of a service are more or less simultaneous. Services possess other characteristics that suggest certain marketing approaches, which in turn lead to particular marketing strategies, that differ from those for goods. Among these characteristics are four that are widely accepted; intangibility, heterogeneity, inseparability and perishability. 1. **Intangibility** When a product is purchased, something is acquired that can be seen) When a service such as travel, entertainment or education is purchased, there is nothing tangible to show for it. (After a day of buying services, the customer still has an empty market basket.) What the consumer is buying is a performance provided by the seller. The intangibility of services makes advertising and promotions more difficult than for products because the marketer must communicate an idea or concept rather than a physical object Marketers have developed two strategies to facilitate communicating the benefits of a service (1) developing a tangible representation of the service and (2) focusing on the service provider rather than on the service. - *Make Services more Tangible* : One way to make services more tangible is to develop a physical object that represents the service. In a sense a college degree is a physical manifestation of a service since it symbolizes the educational experience. Financial institutions have developed bank credit cards and physical manifestation of credit. As a result of the credit card, customers can now "store" credit and carry it around with them. The tangibility of the bank credit card has also allowed banks to differentiate their credit service by creating different brand names and images. For example, American Express conveys prestige by offering a gold card and creates an even higher level of status for the most frequent users by offering the platinum cards. - *Focus on the Service Provider* : The service provider (airline, life insurance agent, doctor) is more tangible than the service itself (e.g. airline travel, life insurance, medical care). (The service provider usually has a level of skill and expertise that represents the service. As a result, advertising often focuses on the skill and technical competence of the service provider. Thus airline ads frequently show competent pilots and courteous flight attendants. Life insurance ads present agents as concerned family counsellors, bank advertising emphasises the personal attention of its executives. In each case, the service becomes more tangible because of the association with the service provider. If this approach, is to be used, it is important to ensure that the service provider is presented as a credible and knowledgeable source of service. Life insurance agents and bank executives are paid as being sensitive to customer needs and having basic facts at their disposal, thus increasing the consumers confidence in the service company. Some other implications of service intangibility are shown in Figure 1.3. 2. **Service Variability** Service industries tend to belabour intensive, whereas manufacturing is more capital intensive. As a result services are much less standardized than products. An opera singer, actor or ballet dancer may be superb in one performance but mediocre in another. A customer going to a restaurant can obtain excellent service on one occasion but be kept waiting on another. A shopper may find that sales people are helpful and courteous in one trip, but rude in another. On the other hand, consumers purchasing the same toothpaste, cereal or detergents expect the same performance. 3. **Simultaneous Production and Consumption/Inseparability** Products are generally produced, then sold and then consumed. Services are usually sold first, then produced and consumed at the same time. A consumer buys a plane ticket first. The service is produced as the plane takes off and consumption occurs because the consumer is on the plane. Similarly, services for health care, hotels, beauty care, entertainment and education are reserved in advance and then consumed as they are offered. The simultaneous production and consumption of services means that (1) distribution of services must be simple (2) services must be delivered close to the customer and (3) the image of the service producer becomes more important. - *Simplicity of Distribution*: Because services are consumed when they are produced, they cannot _be_stored, transported, or inventoried. As a result, the distribution of services is much simpler than the distribution of goods. Distribution involves the simple transfer of the service from the provider to the consumer, with the occasional use of intermediaries such as real estate brokers, brokers or travel agents. - *Importance of Many Locations*: Because services cannot be stored or transported, the service marketer's job is easier since most intermediaries can be eliminated. But services then must be offered in many locations Consumers may be willing to travel a distance for certain services (health care, air travel) but service establishments such as banks, movie houses, restaurants, beauty salons and dry cleaning establishments must be located close to the consumer. As a result, the service is produced in several locations. Offering services in more than one location increases costs because of duplication of facilities. This is one reason why productivity is lower in the service than in the product sector. Several strategies can permit service marketers to enjoy more centralized production of their services for example: - Reduce the number of outlets by encouraging consumers to travel longer distances for the services. - Combine complimentary services into central facilities. - Encourage one - stop service shopping. - *Image of the Service Provider*: Since service production and consumption occur simultaneously, the consumer is generally present when the service is being provided. As a result, the service provider's impression is one of the most important determinants of a repeat purchase. Consumers may prefer a particular airline, beauty salon or health care facility because of the way the service provider offers the service. The décor of a doctor's or lawyer's office is important in conveying an image of competence. That is why many professional firms spend large amounts on furniture and office décor to create the right atmosphere or ambience. Some of the implications of service inseparability are shown in Figure 1.4. 4. **Service Perishability** If services are not consumed when offered they go waste. An empty airline or theater seat represents lost revenue. Shifts in demand for products can be accommodated for the most part by taking goods from inventory. But there is no inventory of services. As a result, services have a much more difficult time regulating supply to meet demand, because demand is rarely steady or predictable enough to avoid service perishability. The service marketer can try to overcome the problems of perishability by trying to match supply and demand by (1) varying supply in accordance with demand (service supply management) (2) keeping supply fairly constant but trying to smooth out demand to avoid excess capacity (service demand management). ### Elements of Marketing Mix 1. **Product/Service** The service or activity itself is a product in service marketing. Since service products are intangible their performances are evaluated by the consumers based on features, quality, availability etc. of the services. On account of this intangibility, the firm may find it difficult to understand how consumers perceive their services. Therefore in order to attract consumers towards a particular service, the services marketer should rely on tangible offerings to build an image of the organization and its services in the market. The service product is therefore a package consisting of the intangible service and certain tangible offerings such as the brochures, the furniture at the service outlet etc. A service package is also classified as follows: - *(a) The core service* – This is the actual service which is absolutely intangible. It is this service which will enable the consumers to satisfy their needs. Examples: the consultation offered by a consultant, the counseling offered by a counsellor etc. - *(b) The facilitating services* – Since services are intangible, their delivery to the consumers requires certain facilitating aspects which may be physical entities also. These are the facilitating services. Examples: a consultant needs an office to interact with the client; a counsellor needs a room to counsel people etc. - *(c) Supporting or supplementary or augmented services* – These are the services which are offered by the service providers to enhance the value of the core services. Examples: a lodge offering travel guidance to its clients, a doctor offering general health tips etc. Providing such additional services makes the core services more attractive from a marketing point_of_view. 2. **Price** Price is the amount a consumer has to pay to purchase and consume the service. Price from the view point of the service provider represents revenue and this is the only component of the marketing mix which brings him revenue whereas all other components are sources of expenses. Service being intangible in nature, pricing is a very difficult and complex issue as compared with pricing of goods. Price is also considered an indicator of quality of service. It is essential, therefore that the service firm prices its services very appropriately. Price discrimination is a common phenomenon in pricing services. Ideally, the price should provide for the cost of generating the service and also a certain amount of profit to the service provider. A service provider may follow any_of_the_following pricing objectives while pricing: - *(a) Profit related objectives* - *(b) Volume or value of sales objective* - *(c) Competition based objectives* - *(d) Social responsibility related objectives* - *(e) Market leadership related objectives* - *(f) Market share related objectives* The following are the factors influencing pricing decisions: - *(a) Cost of providing the service* - *(b) Market demand* - *(c) Expected competitors' reactions* - *(d) Government restrictions* - *(e) Company objectives* - *(f) Barriers of entry and exit in the industry* - *(g) The prevailing economic situation* 3. **Place** Place refers to the places where the services can be acquired by the consumers. It also includes the distribution channels of services. Most of the services are sold directly by the service producers to the consumers. Examples: consultancy, counseling etc. In certain cases however merchant middlemen or agents are used to sell services to the final consumers. Even though services are intangible, the place factor is very crucial in case of services marketing. Consumers would like to buy and use services with minimum amount of travelling. The choice of a particular channel of distribution for services depends on several factors. A service marketer can use any of the traditional channels of distribution for distributing services to the consumers. **Types of distributors for service delivery** - *(a) Franchisee* – A franchisee is a person or a retailer who distributes the services_to_the_ service consumers under a franchise agreement with the service operator. A franchisee has to follow all the instructions given by the service provider in matters relating to pricing, methods of service delivery, advertising, maintenance of the delivery point etc. A franchisee generally gets commission based on the sales of services effected by him. - *(b) Agents and brokers)* – These are merchant middlemen appointed by the service providers to sell the services_to_the_final consumers. These merchant middlemen enable a wide distribution of services_to_the_final consumers. - *(c) Electronic channels)* - These are the electronic devices used to deliver the services_to_the_ final consumers. The electronic devices used are the television, telephone, the mobile phone, internet etc. 4. **Promotion** Promotion is equally important to enhance the sales of the services as it is in the case of tangible goods. Service providers should put in all efforts to promote the products and bring them to the notice of the consumers. A service provider can use any of the following techniques of promoting his services among the consumers: advertising, salesmanship, publicity, sales promotion, direct marketing, word of mouth promotion etc. Word of mouth promotion is a very effective method which ensures high sales of the services. The type of promotion to be used in case of a service largely depends on the target customers. In case of services, post-purchase communication is very important in retaining existing customers and attracting potential customers. 5. **Physical Evidence** Physical evidence refers to the place and all the other physical things which are present in that place in which the service provider and the service consumer meet each other and interact for the purpose of selling and buying the service. It includes the place itself, the interiors, the furniture, the stationery, the brochures, the lighting, the dress of the staff etc. Physical evidence is an important aspect in case of services marketing because the customers form an impression of the organization on the basis of physical evidences. An effectively planned physical evidence can create a positive image of the organization in the minds of the consumers and create goodwill to the organization. 6. **People** People include all the people involved in the delivery of the service_to_the_consumers. Therefore, people in this context include the employees, the executives, the salesmen etc. who work for the service provider. People form an important element of marketing mix for services as most services are highly labour oriented. The behaviour, attitude, customer friendly nature of the personnel providing the service and the customers involved in production have a profound influence on providing quality customer service. Therefore, it is quite essential for the service provider to hire right people for the right job to be performed. This will go a long way in providing consumer satisfaction and building a positive image of the organization. Examples of people: a receptionist at the front office, the executives interacting with the consumers etc. For successful services marketing, the people factor is very important. Therefore, an organization should focus on all the aspects of its employees. Care should be taken at the stage of recruitment to employ the right people. They should be sufficiently trained in the art of creating and delivering services. They should also be sufficiently motivated through financial and non-financial motivators. The people should be made to realize the importance of dealing effectively with the service customers. This concept is also called internal marketing. 7. **Process** Process refers to the entire stream of actual procedures, mechanisms, and flow of activities by which the service is delivered to the customers. Experience in the past with a service also influences the expectations of the customer. If the customer has had a bad experience with the service on any previous occasion, it will influence his or her future perceptions of the service. It is essential to train the front line employees, whose actions and behavior influence the customers' opinions of the organization and the actual service provided. It is very difficult to measure quality in service. Therefore, customers' perception about the quality of the service is largely influenced by the process. The process should create a pleasant memory in the minds of the customers. The process should be such that the service is delivered in a manner which is efficient, pleasant and prompt. It is essential to have complete knowledge of the customer to know their expectation, perception and behavior. To analyze behavior of the customers marketing research has to be conducted to look into the ability of the service providing organization. The service provider should provide services much beyond the expectation of the customers to save the organization from the downfall and to ensure long run relation with the existing and potential customers by creating an effective process. ### Definitions of Service: -“Services are activities, benefits or satisfactions, which are offered for sale or are provided in connection with the sale of goods" - American Marketing Association -“Services refer to social efforts, which include government to fight five great evils - wants, disease, ignorance, squalor and illness in the society”. - Sir William Bieveridge -“A service is any activity or benefit that one party can offer to another which is essential intangible and does not result is the ownership of anything. Its production may or may not be tied to a physical product. - Philip Kotler "The service is an activity that has an element of intangibility associated with it and involves the service provider's interaction either with the customer or with the property belonging to the customer. The service does not involve the transfer of ownership of the output". - Adrian Payne “Services are actually all those economic activities in which the primary output is neither a product nor a construction." - Quinn, Gagnon "A service is and activity or series of activities of more or less intangible nature that normally, but not necessarily, take place in interactions between the customer and service Scanned with CamScanner ==End of OCR for page 19== <start_of_image>-*Differences between products marketing and services marketing*- Though the basic challenges of marketing remain the same irrespective of what is marketed, there are a few differences in reality between marketing of products and services. The_following_is a table showing the differences: | Basis of difference | Products marketing | Services marketing | |---|---|---| | Meaning | Product marketing refers to the process in which the marketing activities are aligned to promote and sell a specific product for a particular segment. | Service marketing implies the marketing of economic activities, offered by the business to its clients for adequate consideration. | | Marketing mix | 4 P's | 7 P's | | That which is being sold | Value packaged in goods | Relationship | | Who comes to whom? | Products come to customers. | Customers come to service provider | | The legal title/ownership | Is always transferred from The seller to the buyer products can be returned. | There is no ownership as services are not tangible | | Returnability | Services cannot be returned after they are rendered. | | Tangibility | They are tangible, so customer can see and touch it, before coming to the buying decision. | They _are_intangible, so it is difficult to promote services. | | Separability | Product and the company producing it, are separable. | Service cannot be separated from its provider. | | Customization | Products cannot be customized as per requirements. | Services vary from person to person, they can be customized. | | Imagery | They are imagery and hence, receive quick response from customers. | They are non-imagery and do not receive quick response from customers. | | Quality comparison | Quality of a product can be easily measured. | It is difficult to measure the quality of service. | - *Importance of Service Marketing* 1. Importance of relationship 2. Customer retention 3. Create awareness 4. Generation of employment Opportunities 5. Optimum Utilization of resources. 6. Increasing the standard of living Scanned with CamScanner ==End of OCR for page 19==