Marketing Mix in Service Industry

1. Marketing Mix in Service
Industry
BY
P RO F. D H A N A PA L C
A S S I STA N T P RO F ES S O R
D E PA RT M E N T O F CO M M E RC E
K R I ST U JAYA N T I CO L L EG E
B E N G A LO R E

3. Marketing Mix in Service Industry

4. 1. Product:
Product in the service industry refers to the service itself. Marketers design the service based on
the features and benefits desired by customers. Comparing services to goods, services are
intangible. Services are not physical goods and most of them have no shelf space. As a result,
they are more difficult to describe. Brand name or identifying logo is particularly important in
identifying services. Service organizations pay attention to branding strategies in order to
distinguish themselves in the minds of the consumers. The brand is the signal not only of
identification but also of differentiation and the image. A well-known brand name makes it easier
for service organizations to maintain their current services as well as to introduce new
services.

5. Example
An example of a service is carpet cleaning or deck cleaning.
AndreyPopov/iStock/Getty Images

6. 2. Price:
Price considerations include levels of prices, discounts allowances and commissions, terms of
payment and credit. Price may also pay a part in differentiating one service from another and
therefore the customers perceptions of value obtained from a service and the interaction of price
and quality are important considerations in many service price sub mixes.
Services are intangible activities. Pricing is often seen as an indicator of quality for services.
Consumers compare the price to the value they receive from the service.

7. Critical Thinking Activity
You walk into a dental service location, which is new to the area. They do not bill directly to
insurance companies but they advertise that they have reasonable pricing. You ask for the
pricing and scheduling for a dental surgery. The price they give you is $30 and they have an
opening this afternoon. Would you consider scheduling this $30 surgery?
filo/iStock/Getty Images

8. 3. Place (Distribution):
The place where a service is received is often the location of the producer. Customers go the
hairdresser’s salon or to the dentist’s office. For that reason, place, or distribution, is a major
factor in providing services.
Recently, the inseparability of services from the producer has started to change. Technology is
enabling producers to provide some services online without customers physically going to the
service provider’s location.
Service providers are using the latest technology to provide the value of convenient distribution.
Some service providers like dentists and hairdressers must use their locations. They open
multiple locations to provide easy access. Some other service providers rely on distributing their
services over the internet. Travel services, banking, education, and entertainment depend on
the internet for global access.

9. Example
banking services. Online platforms are available for many transactions from depositing checks to
transferring money and paying your bills online.
tachka2000/iStock/Getty Images

10. 4. Promotion:
Due to the intangible nature of services, promotion (especially advertising) is very valuable for
many services. Most services do not occupy a shelf space and the only way to be seen or heard
is through advertising. Advertisements can be done on TV, magazines, radio, internet, billboards,
and social media.
Public relations is also an important promotional tool for service firms. Many public relations
tools, such as event sponsorship or public-service activities, are often applied by service
companies. The goal is to be more visible and communicate the value they provide.
Personal selling is an imperative part of services marketing. Most consumers are directly in
contact with the person who is providing the service.
Personal assurance on the quality of the service makes it more comfortable for the consumers.

12. 5. People:
All human actors who play a part in service delivery and thus influence the buyer’s perceptions:
namely, the firm’s personnel, the customer, and other customers in the service environment. All
of the human actors participating in the delivery of a service provide cues to the customer
regarding the nature of the service itself. How these people are dressed, their personal
appearance their attitudes and behaviors all influence the costumers perceptions of the service.
The service provider or contact person can be very important. In fact, for some services, such as
consulting, counselling, teaching, and other professional relationship – based services, the
provider is the services. In other cases the contact person may play what appears to be a
relatively small part in service delivery, for instance, a telephone installer, an airline baggage
handler, or an equipment delivery dispatcher. Yet research suggests that even these providers
may be the focal point of service encounters that can prove critical for the organization.

13. andresr/E+/Getty Images

14. 6. Physical Evidence:
The physical environment in which the service provider and customer interact plays an
important role. It has an impact on the customer's perception of the service.
The physical evidence of the service includes all the tangibles surrounding the service: the
buildings, landscaping, vehicles, furnishings, signage, brochures, social media, websites, and
equipment.
Service providers pay a lot of attention to how they manage physical evidence, in order to leave
a good impression of the service on the customer. This is related to the concept of impression
management, or evidence management.

15. Example
You walk into a bakery to buy freshly baked bread. They have a good variety of choices and their
samples taste great. However, you notice that the floor and counters are dirty and there are
spider webs in the corners of the walls. Even though you like their freshly baked goods, you
decide not to go back to the bakery again. It is an example of how impression management is
crucial for service organizations. Even though their service is exceptional, physical evidence
might leave a bad influence on the customers.
sergeyryzhov/iStock/Getty Images

16. 7. Process:
In the case of services, how the service is created should be well defined. Process is the
definition of how the service is provided in a step-by-step manner. Process refers to the actual
procedures, mechanisms, and flow of activities by which the service is created and delivered.
Most service organizations create a customer contact audit to identify the steps taken when
providing the service. The customer contact audit is the flow chart of the points of interaction
between the customer and service provider. It provides guidelines for both employees and
customers. It also helps to improve the quality of the service by ensuring that the necessary
steps are taken for a smooth delivery of the service.

17. Example:
The figure below is a customer contact audit for a car rental company. The steps are clearly
identified at each point of interaction between the service provider and the customer. White
boxes indicate customer activity and the yellow boxes indicate service provider activity. Each of
the steps numbered 1 to 10 are customer contact points where the tangible aspects of the car
rental service are seen by the customer. Steps A to D show a series of steps that involve two
levels of inspections on the automobile. These steps are necessary to providing a working rental
car, but these points are not points of costumer interaction.

19. Reference
https://www.yourarticlelibrary.com/services/7-elements-used-in-marketing-mix-for-
services/34003
https://contensis.uwaterloo.ca/sites/courses-archive/1191/ECON-344-ARBUS-302/lecture-
content/module-2/week-8-1.aspx

20. Thank You