Page 160 - DMGT510_SERVICES_MARKETING

Unit 9: Service Product and Operation

Introduction Notes

This unit provides a detailed discussion on the service product and the operations. A product is
an offering of commercial intent having tangible and intangible features that goes to satisfy
needs, wants and desires of the consumers. A product thus becomes a tool by which an organization
achieves its strategic goal. Some examples are a car, soap, a book, a sofa, etc. The consumer gets
his various needs satisfied by the product.

Peter Ducker, the management guru, defined a product uniquely. He said,
“A product is a product if it is purchased and consumed; if it is not purchased and consumed then it remains
a raw material or material in process.”

This definition beautifully captures the responsibility of the marketer. He should not only
design beautiful products but also market them. By this definition, a movie or a play is not a
complete entertainment product if people don’t see them – although they might win a plethora
of awards.
Process is an important element of service marketing mix. It is a tactical tool for the service
marketer to achieve his strategic goal. All the other 6Ps of the service product mix form parts of
service operations.

9.1 The Concept of Service Product

The offer can be both a good as well as a service. The offer can be a good or a service or a
combination of both. The service product is an offering of commercial and not-for-profit intent,
having intangible and tangible features going on to satisfy various needs, wants and desires of
the customers.

Example: The credit cards have got various intangible features (convenience, flexibility,
maximum retail acceptance, insurance, contests, etc). The tangible features of a credit card could
be colourful mailers, complimentary diaries, calendars and other free gifts, price discounts, etc.
Thus in the marketing of services, unlike that of goods, no exchanges take place as the product
is intangible. The service marketer performs a deed for the buyer. What really happens is a
transaction between the marketer and consumer who actually consumes the experience – but
never gets to own the offer.

Example: A ride on the super-luxurious Volvo bus from Mumbai to Pune is a service.

The customer experiences the journey but never owns the bus. His quality of experience is
definitely affected by tangible components of the service offer: cushioned seats, air-conditioning,
complementary food, music and video entertainment etc. Thus service transaction remains the
main focus for the service marketing strategies and management.

9.1.1 Theodore Levitt’s Total Product Concept

Theodore Levitt explained that a product was now no longer an isolated goods offering. It now
was a combination of three products:
The core product: This had the very basic features and was the main reason for consumption.

Example: A motorcycle as a core product should have engine, petrol tank, wheels,
handlebars and a seat.

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