Page 139 - DMGT408DMGT203_Marketing Management

Marketing Management/Essentials of Marketing

Notes Physical products have certain benchmarks against which quality can be evaluated but any
quality parameters can often be defined in the minds of consumers. Much depends on the
expectations of customers.
Intangibility of services poses some problems for service marketers. A service marketer sells a
promise to customers and customers are forced to place some degree of trust in the service
provider to get the expected level of service performed.
Marketers also face problem in communicating with customers about pure services because there
is nothing tangible to put in ads or display in a store. Where tangible products are an important
part of service offer, the problems may not be so challenging. The visible part gives customers
some basis to assess quality. For example, an auto service garage may have reassuring tangible
cues to build customer confidence, but there is really nothing tangible to show in case of life
insurance. Lack of tangible aspects increases the degree of uncertainty among consumers while
considering competing offers. It is interesting to note that wherever possible, service marketers
strive to add tangible physical evidence to their service offer and pure tangible product marketers
often try to augment their products by including elements such as assured post-purchase service.
Pricing of services also poses problems. In case of tangible products there are raw material and
labour cost to have some pricing base, in case of many services determining the cost of producing
and delivering the service is very difficult. For example, to determine the price of producing and
delivering a massage or haircut is very difficult. Besides, marketers may face difficulty for
justifying the prices of services to customers because customers cannot evaluate services before
their actual consumption.
Inseparability

In case of tangible products, their production and consumption are two separate activities and
consumers are not a part of the process of production. Goods are generally produced in some
central location at different times, stored, and transported to those locations where there is
existing or potential demand. Inseparability of services refers to the fact that service production
and consumption cannot be separated. Both, the production and consumption of services take
place simultaneously. Tangible products can be bought, taken to home, stored, and consumed
after sometime. This characteristic of services has implications for marketing.
Because of inseparability, the role of service provider becomes very important in the process of
delivery and in some extreme cases of personal customer-care must participate in the production
of service.

Example: The patient must be present and participate in a surgery; a consumer must be
present in a face uplift service. Mary Jo Bitner reported that for services such as education,
healthcare, and hairstyling, the service provider is the service in the eyes of consumer. The
service marketer must pay careful attention to proper training of service personnel.

Heterogeneity

With technological advances, most tangible products can now be produced with high degree of
consistency. However, people-based services are usually susceptible to variability, or variation
of quality. It is very difficult to ensure service consistency because of the very nature of human
beings. Tangible products offer the opportunity of inspection and rejection before delivery but
this is normally not possible in case of services.
Service marketers’ greatest concern is about the variability in production standards of services,
where consumers are highly involved in service production process and monitoring it is impractical
such as personal healthcare. In case of machine-based services, such as telecommunication, it is

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