Services Marketing: What It Is, What Is the Importance and How to Use in Your Company

by | April 3, 2019
Services Marketing: What It Is, What Is the Importance and How to Use in Your Company
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To sell an intangible product is a challenging task for most companies in the country. How can you sell a product that a consumer will never own? Then you enter the marketing services!

The campaigns of tourism’s most successful do not sell products, they sell experiences. Consider the marketing campaign “what happens in Vegas, stays in Vegass”, of the Authority of Visitors and Conventions of the city of Las Vegas.

The LVCVA is responsible for bringing millions of people to the city every year and “What Happens in Vegas, Stays in Vegas” is your marketing campaign the most successful until today.

Launched in 2004, this campaign broke all records for visitors to the city in the same year. Las Vegas has recorded 37.4 million tourists in the year 2004.

The campaign may not sell a commodity, tangible, but promises to consumers that they will receive something that they can take home: a unique experience in the city of Las Vegas.

What is the marketing of services

The marketing of services is a broad category of marketing strategies focused on the sale of any thing that is not a physical product.

This includes everything from personal services such as medical care and spa treatments, rental of vehicles and spaces, to experiences such as concerts and dance classes.

Any method that can communicate the appeal and the benefits of a service to a client is a valid approach marketing services, including informational content, promotional offers, advertisements and many other types of materials of inbound marketing.

In the case of the campaign of Vegas “What Happens in Vegas”, the city sold the experience of visiting Las Vegas in an attempt to generate customers for hotels, restaurants and other local businesses.

The campaign consisted of a wide variety of materials, such as television commercials, ads in magazines, Internet ads, billboards and other marketing materials that communicated consistently the message of the campaign.

The price of services vs. products and goods

A company that produces goods has an easier time in setting a price for its products than a provider of services. The goods cost a amount discreet money to manufacture, package, and send.

Already the services may vary greatly in actual value and perceived that they offer. Presentation, the beliefs of the consumer and rarity of the experience provided in the service provided may affect the price of a service.

So having a good strategy marketing of services is of the utmost importance to convince the consumer that their services are of high value.

Characteristics of services – Marketing of services vs marketing of products

The unique characteristics of marketing services give rise to problems and challenges that are rarely parallel to the marketing of products.

Many people may think that the disclosure of the services can be made in the same were that the dissemination of products. However, that is not how it works.

There are distinct characteristics between the two types of marketing that end up changing the way they attract and retain customers in each one.

The services are complex, multidimensional, and contain multi-layered. Not only are there multiple benefits, but there are also a multitude of interactions between customers and organizations, as well as between clients and other clients.

The four characteristics most frequently cited services are:

Intangibility

The concept of intangibility – services have no physical form; they do not interact with any of our senses in a conventional manner, they cannot be touched or held.

Services are intangible and have no physical existence. Therefore, the services cannot be touched, held, tasted, or cheirados.

This is the most feature defining a service and what basically differentiates it from a product. In addition, it represents a unique challenge for those involved in the commercialization and marketing of a service, because they need to attach tangible attributes to an offer that otherwise would be intangible.

Implications of intangibility on the marketing of services: The property may not be transferred, the value derives from the consumption or experience, the quality is difficult to assess before consumption or purchase.

Inseparability

The concept of inseparability – production and consumption cannot be separated (in comparison with the goods in which the production and consumption processes are entirely different).

This refers to the fact that services are generated and consumed within the same period of time.

For example: a haircut is delivered to and consumed by a customer simultaneously unlike, say, a hamburger for the trip that the customer may consume even after a few hours of purchase.

In addition, it is very difficult to separate a service from the service provider. For example: the barber is necessarily a part of the service of a haircut that he is delivering to his customer.

Implications of inseparability in services marketing: services are typically systems of high-contact and require a lot of work; less opportunity to do business at a distance, less opportunity to substitute capital for labor; subject to human error.

However, with the advances of the internet, many companies have created digital products that are known as SAAS (Software as a Service) are services offered melsalmente, in which the customer pays the company every month to have access to these services.

A great and very well-known example of SAAS is the Netflix. That in addition to the content provided by the company, there is software far advanced that are also purchased in (indirectly) by the client when he subscribes to the service of online streaming of Netflix.

Pericibilidade

Perishability – Unlike physical goods, services cannot be stored or inventoried.

The services cannot be stored, saved, returned, or resold after being used. Once delivered to a client, the service is completely consumed and cannot be delivered to another customer.

For example: A customer dissatisfied with the services of a barber cannot return the service of the haircut that you have been provided. At the most, he can decide not to visit the one barber in particular in the future.

Implications of perishability in services marketing: The demand is subject to large fluctuations, no stock to serve as a buffer between the supply and the demand; unused capacity cannot be reserved or stored, so the service has a high opportunity cost.

Services Marketing What It Is, What Is the Importance and How to Use in Your Company 1

Variability

Variability (also known as heterogeneity) – the services involve processes delivered by personal service, and subject to human variation, customers generally seek solutions that are highly customized, services are inherently variable in quality and content.

Given the nature of the services, each service offering is unique and cannot be repeated exactly by the same service provider.

Although the products can be mass produced and be homogenous the same is not true with the services. For example: All hamburgers of a particular flavor at McDonalds are almost identical.

However, the same does not happen with the service provided by a team of counters to two different clients.

Implications of variability in services marketing: service quality is difficult to manage; fewer opportunities to standardize the provision of services.

Who can use the services marketing

All organisations that provide services of some kind, use strategies of services marketing.

They fit into two broad categories: organizations that provide services to individuals (business-to-customer or B2C) and organizations that provide services to other organizations (business-to-business or B2B).

The marketing of services is more commonly used by companies that sell to individuals. They research the behavior of the consumer to create ads that are of interest to certain demographic data, enabling companies to reduce the focus of marketing to a concentrated effort.

For example, a company that offers dance classes country would use strategies of services marketing to search what types of people are more interested in dancing the backcountry, and then create advertising materials, and promotions designed to appeal specifically these types of people.

Organizations that provide services to other organizations to apply these techniques of services marketing in their efforts of B2B marketing. This usually requires an approach that involves more contact from person to person, as it is usually a sales representative of the service provider negotiates with another representative of the client’s business.

A company that provides technical support for the computers of another company, for example, would use the services marketing to convince customers that your service is somehow necessary or a good investment.

It is likely that this will include meetings, presentations, and contract negotiations, in addition to creating advertising materials that will attract the businesses that use computers.

How to use the marketing of services

Regardless of the specific types of advertising and sales techniques that a company uses in conjunction with the marketing of services, the general plan will follow three steps: Research, Materials, and Evaluation.

Before embarking on campaigns, companies often poll their customers to develop projections of their interests and needs. For the campaign “What Happens in Vegas” city of Las Vegas, the city hired the marketing firm R & R Partners to search for people in several U.S. cities to determine how they felt in Las Vegas as a tourist destination.

When a company joins and analyzes the data from the market research, she can create marketing materials based on the message that you believe attract your target audience.

The data that the R & R Partners brought together to the city of Las Vegas strongly suggest that people associate Las Vegas with freedom and indulgence that, while not acceptable at home, is allowed in Vegas.

The company has developed a series of ads in various media, which reported this message, linked to the slogan “what happens in Vegas, stays in Vegas”.

The final step of a marketing plan for services is to assess the success of the plan. The service company should set specific targets for sales, conversion rates, cost per customer and other metrics concrete.

After a specific period of time, the marketing campaign service shall terminate and the company must assess the changes in the metrics that you expect with the marketing campaign.

The 8 Ps of Services Marketing

It is important to understand well the principles on which the marketing of services based on, and what is the role of each in the mission to convince people to become your customers.

It may be that you already heard about the 4 Ps of marketing. But, when it comes to selling services, this number doubles.

The challenge for the service sector is even greater when it is necessary to determine the strategies to achieve competitive advantages over competitors. The ideal way is to develop your strategy containing all of the 8 Ps of services marketing.

Product

In this case, the product is the service offered by the company

The product is related to the identification and elaboration of the characteristics of services with emphasis on the benefits and advantages relevant to the needs of the market, adding value to the customers.

In the case of services, the “product” is intangible, heterogeneous and perishable. In addition, its production and consumption are inseparable. Therefore, there is space to customize the offer according to the needs of the client and, therefore, the real meeting with the client takes on a particular significance.

However, the customization is excessive would compromise the standard delivery of the service, and would affect adversely their quality. For this reason, you should take special care to design the supply of services.

The product of the base service must be associated with the greatest number of “additional services”, to turn it into a product more comprehensive.

These complementary services should be designed according to the needs of specific consumers.

Price

The price of the services includes the measurement of the efforts of the teams, as well as the time required for the execution of the services and the complexity of each project.

It is also important to evaluate all costs and expenses indirectgenerated in the provision of the service.

The price of the services is more difficult than the price of the goods.

While the products can be priced easily by taking into account the costs of the raw material.

In the case of services, a number of other costs – such as labor and overhead – also need to be taken into account.

Thus, a restaurant not only has to charge the cost of the food served, but you also have to calculate a price for the environment provided, the value of labour-power, etc. The final price for the service is then obtained, including a markup large enough to maintain a profit margin adequate.

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Square

The Square, also known as “time and place” are the processes of distribution of services

However, this topic is translated as the time when and the place where service occurs. Involves the delivery of services, since terms up to means of implementation.

As a delivery of the service is simultaneous to its production and cannot be stored or transported, the location of the product assumes a great importance.

Service providers should give special attention to where the service will be provided.

So, a fancy restaurant should be located in a busy area, and sophisticated, for example

Promotion

The promotion of services is related to the strategies of communication and dissemination, as a way to show the audience the differences and benefits of the services.

As an offer of services can be easily replicated, promotion becomes crucial in differentiating a service offering in the mind of the consumer.

Thus, the service providers that offer similar services, such as airlines or banks and insurance companies, invest heavily in advertising their services.

This is crucial to attracting customers in a segment where the services providers have offerings that are almost the same.

To show the credibility of the company, technical competence and customer testimonials is one of the best ways to promote a service, obtaining the greatest competitive advantage over the competitors as possible.

Process

The Process represents all the flows, procedures and work methodologies used in the provision of a service.

The process of providing services is crucial, because it ensures that the same standard of service is repeatedly delivered to the customers.

Therefore, the majority of companies have a detailed standard of service it provides in the process of delivery. Many times, companies end up going up to the point of creating scripts, with phrases of greeting, and the step-by-step how to lead the interactions with customers.

It is an important means of ensuring the precision and the accuracy of the final result. The process can be a competitive advantage that the marketing of services can explore.

Mainly because some clients believe that the process, or methodology of one type of service is one of the main factors in deciding which service to purchase.

Palpabilidade

The Palpabilidade also conheido as the physical evidence is the perception of the environment where the service is provided.

Relates to several factors, ranging from personal presentation of the staff and the business cards until the organization of the facilities and equipment.

As services are intangible in nature, most service providers strive to incorporate certain tangible elements into their offering to enhance customer experience.

Thus, there are salons hair salons have waiting areas a well designed, often with magazines and plush sofas for customers to read and relax while waiting for your turn.

Similarly, restaurants invest heavily in their interior design and decorations to offer a tangible experience and unique for their customers.

It is the way the company interacts with the client and the environment where it occurs.

People

People also known as work force are all directly or indirectly involved in the provision of the service. The people and the labor force are considered to be the raw material of services.

Therefore, the concern with people is fundamental to the marketing of services.

People are a determining factor in the process of delivery of services, since a service is inseparable from the person who provides.

Thus, a restaurant is known as much for its food as for the service provided by its staff.

The same happens with banks and department stores. Consequently, the training of customer service became a top priority for many organizations today.

Training, capacity-building, motivation and customer orientation must be constant, generating a direct impact on the quality of service provided to customers.

Productivity

The Produtivade and quality are the basic premises for organizations of any branches of activity. However, for the branch of services, are factors of extreme importance for the success or failure of a company.

Productivity refers to the scope of the best practices in the implementation of services to maximize resources, reduce costs and optimize staff time.

The quality is the guarantee for the delivery of the best service as possible, preferably, exceeding expectations, to achieve the maximum satisfaction of the clients.

Importance of marketing of services

A strategy well-structured marketing services can generate a direct and positive impact on the company. This is because, to put in practice these actions, it can increase your visibility.

That is, more people are knowing what and how the company does. As a result, more business opportunities end up coming.

Given the intangibility of services, marketing them becomes a task particularly challenging, however, extremely important. Check out the major factors that make the marketing of services so important to businesses:

Single differential

Due to the increasing homogeneity in product offerings, the services provided are emerging as a key differentiator in the mind of consumers.

For example: in the case of two fast food chains serving a similar product (Pizza Hut and Domino’s), more than the product, is the quality of service that distinguishes the two brands from each other.

Thus, the marketing professionals can take advantage of the offer of services to differentiate themselves from the competition and attract consumers.

The importance of the Relationship with the client

Relationships are a key factor when it comes to marketing of services. As the product is intangible, a large part of the buying decision of the customers will depend on the degree to which he trusts the seller.

Hence the need to listen to the needs of the customer and satisfy them through the provision of services appropriate. And also very important to build a lasting relationship that will lead to the customer to buy again and do the marketing of word of mouth and the positive with your friends and family.

Retention of customers

Given the highly competitive environment of today, where several providers are competing for a limited group of customers, retaining customers is even more important than attracting new ones. In this way, the marketing of services is ends up being very close marketing relationship with the customer.

As the services are usually generated and consumed at the same time, they really involve the client in the process of provision of services taking into account their needs and feedback.

Thus, they offer greater space for personalization and the use of marketing one to one according to the needs of the client, offering greater satisfaction, leading to greater customer retention.

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Conclusion

Stated simply, Services Marketing refers to the marketing of services that are a kind of “products” that are intangible.

The marketing of services is a relatively new phenomenon in the domain of marketing, having gained in importance as a discipline only in the late XX.

Selling a service can be more complicated than selling a tangible product, but an effective strategy of marketing services can establish the basis for satisfied customers, growth of revenue over the long term, and a reputation that highlights your brand from the rest.