Page 13 - DMGT510_SERVICES_MARKETING

Services Marketing

Notes
Figure 1.3

Philip Kotler has further expanded and clarified the point of view of Levitt and suggests four
categories in which product-service relationship can be categorised.

Table 1.2
S. No. Physical Goods Services
1. Tangible Intangible
2. Homogeneous Heterogeneous
3. Production and distribution are Production, distribution and
separated from consumption consumption are simultaneous
processes
4. A thing An activity or process
5. Core value produced in factory Core value produced in buyer-seller
interactions
6. Customers do not participate in Customers participate in the production
the production process
7. Can be kept in stock Cannot be kept in stock
8. Transfer of ownership No transfer of ownership

First, it is the pure tangible good which is like a commodity where it’s rather difficult to
distinguish between the goods supplied by two suppliers and these goods look identical. There
is absolutely no service or intangibles associated with either of the goods.
Second, it is the tangible good with accompanying service. In this case the offer consists of a
tangible good with service(s) associated with it. Here an effort is made to distinguish the product
from competing products based on service.

Example: Consider two brands of refrigerators – one with a five-year guarantee while
the other with a seven-year guarantee; based on the guarantee the manufacturer is trying to
differentiate the product.
Third, it is a major service with accompanying minor goods or service. In this case the
manufacturer or supplier is primarily offering a service to the market and along with it minor
goods or services may or may not be associated.

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