Page 349 - Foundations of Marketing

316 Part 4 | Product and Price Decisions

Table 11.2 Service Characteristics and Marketing Challenges

Service Characteristics Resulting Marketing Challenges
Intangibility Difficult for customer to evaluate.
Customer does not take physical possession.
Difficult to advertise and display.
Difficult to set and justify prices.
Service process usually not protectable by patents.

Inseparability of production Service provider cannot mass-produce services.
and consumption Customer must participate in production.
Other consumers affect service outcomes.
Services are difficult to distribute.
Perishability Services cannot be stored.
Balancing supply and demand is very difficult.
Unused capacity is lost forever.
Demand may be very time-sensitive.

Heterogeneity Service quality is difficult to control.
Service delivery is difficult to standardize.

Client-based relationships Success depends on satisfying and keeping customers
over the long term. Generating repeat business is
challenging.
Relationship marketing becomes critical.
Customer contact Service providers are critical to delivery.
Requires high levels of service employee training
and motivation.
Changes a high-contact service into a low-contact
service to achieve lower costs without reducing
customer satisfaction.
Sources: K. Douglas Hoffman and John E. G. Bateson, Essentials of Services Marketing (Mason, OH: Cengage
Learning, 2001); Valarie A. Zeithaml, A. Parasuraman, and Leonard L. Berry, Delivering Quality Service: Balancing
Customer Perceptions and Expectations (New York: Free Press, 1990); Leonard L. Berry and A. Parasuraman, Marketing
Services: Competing through Quality (New York: Free Press, 1991), 5.

cope with this problem, some service marketers offer standardized packages. For example, a
lawyer may offer a divorce package at a specified price for an uncontested divorce. When ser-
vice bundles are standardized, the specific actions and activities of the service provider usu-
ally are highly specified. Automobile quick-lube providers frequently offer a service bundle
for a single price; the specific actions to be taken are quite detailed about what will be done
to a customer’s car. Various other equipment-based services are also often standardized into
packages. For instance, cable television providers frequently offer several packages, such as
“Basic,” “Standard,” “Premier,” and “Hollywood.”
The characteristic of intangibility makes it difficult for customers to evaluate a service
prior to purchase. Intangibility requires service marketers, such as hairstylists, to market prom-
ises to customers. The customer is forced to place some degree of trust in the service provider
to perform the service in a manner that meets or exceeds those promises. Service marketers
must guard against making promises that raise customer expectations beyond what they can
provide. To cope with the problem of intangibility, marketers employ tangible cues, such as
well-groomed, professional-appearing contact personnel and clean, attractive physical facili-
ties, to help assure customers about the quality of the service.
The inseparability of production and consumption and the level of customer contact also
influence the development and management of services. The fact that customers are pres-
ent during the production of a service means that other customers can affect the outcome

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