Services Vs Goods

Services Goods
Intangible Tangible
Heterogeneous Homogenous
Produced in Buyer Seller interaction Produced in factory

Production, distribution & consumption takes All three are separate & independent
place simultaneously

Consumers participate in production Consumers don’t generally participate

Cannot be stored Can be stored

Transfer of ownership cannot take place Transfer of ownership does take place
 Classification of Services

It is required to design & apply marketing techniques to

completely satisfy the customer & increase profits & identify
new emerging services.

Classifications can be done on following basis:

• Classification by Industry
• Classification by Target Effect
• Skill level of service provider (Professional/ Nonprofessional)
• Labor intensiveness (People-based/Equipment-based)
• Degree of customer contact (High / Low)
• Goal of the service provider (Profit /Nonprofit)
 Classification By Industry

a. Entertainment industry
b. Education
c. Telecommunications
d. Finance & Insurance
e. Transportation
f. Public utilities
g. Government services
h. Health
i. Hospitability Industry
j. Business services
k. Telecommunications
l. Trading
 Classification By Target Effect

Based on Degree Of Customer Involvement:

1. People Processing: Services aimed at physical care e.g.

Healthcare, clinics, restaurant, hospitals, hair stylists, fitness centers

2. Mental Stimulus Processing: Services aimed at mind of customer

e.g. Education, information, entertainment, consulting, psychotherapy

3. Possession Processing: Services aimed at physical possession &

tangible assets e.g. repair & maintenance, laundry, repair services,
landscaping, house cleaning services

4. Information Processing : Services for intangible assets e.g.

Banking, legal consultation, brokerage, financial services.
 Skill level of service provider

•Teacher

•Doctor

•Engineer

•Accountant
 Labor intensiveness

Mechanic

Electrician

Labor

Plumber

Artisan
 Degree of customer contact

High Degree (Every day) – TV channels, mobile etc.

Moderate Degree (Regular) – Teacher, Barber, washer

man etc.

Low Degree ( Occasional ) – Priest, Doctors etc.

 POSITIONING SERVICES

• Differentiate from competition on attributes

that target customers highly value
• Entails two decisions:
Choice of target market (where to
compete)
Creation of differential advantage (how to
compete)
 Positioning Services (Contd.)

• Determine important choice criteria of

customers carefully
• Most important decision of a service
organization is selecting the factors on
which it will compete
• Select a few factors and provide superlative
performances in the chosen factors
• Target marketing
• Differential advantage
 Target marketing
Target marketing concentrates on
• Identifying similarities between customers
• Identifying differences between different
groups of customers
• Identifying differences among members of
homogeneous groups of customers
 Target Marketing
• Service offer 1 Market segment 1
• Service offer 2 Market segment 2
• Service offer 3 Market segment 3

• Target marketing recognizes that different

groups of customers have different needs and
might also desire different core benefits from
the same service.
 Process of Target marketing in
services

• Marketing market Market Market

marketing
information segmentation targeting positioning Mix
 Market Segmentation
• It is defined as dividing the market into distinct group
of buyers with different needs , characteristics or
behavior who might require separate services.
• Each of these groups are known as segments and the
process is known as segmentation
 Bases for Market Segmentation
Demographic
Gender Psychographic Segmentation
Age  Activities
Family life cycle  Interests
Race/Ethnic group  Opinions, Attitudes & Values
Social class  (AIO) surveys for measuring
Education
Income lifestyle. Lifestyles
Occupation  Personality
Family size
Religion
Potential  Self-image

Home ownership
Markets
Behavioural
actual behavior toward product itself. A
Geographicn good starting point for segmentation
Country  Benefits sought
Region  Usage rate
Urban/Suburban/Rural Geo-Demographic –  Brand loyalty
Population density Ethnic .. "birds of a  User status: potential, 1st-time, regular
etc.
City size feather flock together"  Readiness to buy
Climate  Occasions: holidays & events that
stimulate purchases
14
 Bases for segmenting the service
to the consumer
• Demographic(Age, gender , marital status,
education , family size)
• Geographic(region-urban/rural , North ,
south , east , west)
• Socio-economic(Income , social class,
occupation)
 Examples
• Age segmentation : for newly born baby-full-
time nurse maid)
• Child market : play schools , day care centres ,
schools, child insurance plans
• Teens market : sports , entertainment ,
discotheques , education loans
• Middle age : hospitals , resorts , holiday trips
,life insurance , health insurance
• Seniors : pension funds, health care
• Occasions : anniversary dinner at restaurant
Play school
Insurance

Restaurant
 Process of market positioning
• Identify key offer characteristics
• Draw a perceptual map
• Decide on a competitive strategy
• Design service product features and
associated images
• Sustain a competitive advantage
 Positioning and differentiation of services
• company’s perception
• of itself

•
•
company

Competitors Customer’s
Company’s perception of
perception of perception of
customers
company competitors
custom
compe er
titor
Competitor’s
Competitors perception perception of Customer perception of
customers themselves