services-marketing

What Is Services Marketing? Services Marketing In A Nutshell

Services marketing originated as a separate field of study during the 1980s. Researchers realized that the unique characteristics of services required different marketing strategies to those used in the promotion of physical goods. Services marketing is a specialized branch of marketing that promotes the intangible benefits delivered by a company to create customer value.

Understanding services marketing

Services marketing can be used in a broad and diverse range of contexts. The strategy can be used to promote medical care, spa treatments, rental vehicles, concerts, and dance lessons. However, it is perhaps most useful in the tourism industry since most tourism campaigns sell experiences and not products. 

One of the most successful services marketing campaigns was the “What Happens Here, Stays Here” campaign created by the Las Vegas Convention and Visitors Authority. Launched in 2004, the campaign resulted in a record 37.3 million tourists visiting the city in the year following. The phrase itself associated the Vegas brand with adult freedom and the emotional connection between visitors and the city.

Whatever the application, services marketing calls upon marketing specialists to sell ideas, intangibles, and promises and communicate value to customers.

Services marketing characteristics

Broadly speaking, services marketing is exemplified by five characteristics:

  1. Intangibility – that is, the service being promoted cannot be seen or touched – only experienced. This means value is derived from the consumption of experience and cannot be transferred from one consumer to another. What’s more, value is difficult to evaluate prior to the consumer having the experience.
  2. Tangible product use – with the above in mind, it is important to note that many services marketing campaigns make use of tangible products to deliver customer value. Airline companies sell physical tickets to consumers which they associate with the experience of flying or traveling.  
  3. Perishability – intangible services cannot be managed in the same way physical product inventories are managed. As a result, inventory cannot serve as a buffer between supply and demand and there is a high opportunity cost of idle capacity. For example, a portrait photographer relies on their technical expertise and rapport-building skills to make money. Conversely, a merchant selling portraiture lenses must maintain a physical inventory of said items.
  4. Low price sensitivity – in the service industry, consumers are less sensitive to price and more sensitive to the quality of the experience. An experience considered to have zero defects has the highest earning potential.
  5. Value creation – service companies can differentiate themselves in the market in three ways. Value can be created by offering a superior delivery process or level of customer service. It can also be created by the company developing a superior physical environment in which the service will be delivered.

The services marketing triangle

The services marketing triangle was developed in 2000 to depict the three essential elements of the service industry. Each point of the triangle emphasizes the division of tasks based on necessary skills, strategies, and priorities.

The three elements are:

  1. Internal marketing – where employees are assisted and trained to deliver or provide services to customers. Service delivery values are aligned with organizational values, and the best performers are duly rewarded.
  2. External marketing – where the organization markets to consumers through channels including social media, television, email, and other platforms.
  3. Interactive marketing – or the delivery of the service itself according to internal and external marketing messages. Successful delivery is typically associated with customer satisfaction, customer retention, and brand equity. Service delivery is defined by many service interactions, where the business either keeps or breaks the promises made in other marketing messages.

Key takeaways:

  • Services marketing is a specialized branch of marketing that promotes the intangible benefits delivered by a company to create customer value.
  • Services marketing is described by five characteristics: intangibility, tangible product use, perishability, low price sensitivity, and value creation.
  • The services marketing triangle was developed in 2000 to depict the three essential elements of the service industry. Successful service delivery is defined by many service interactions, where the business keeps or breaks the promises made in its marketing campaigns.

Other Types Of Marketing

Email Marketing

email-marketing
Email marketing leverages a set of tactics to build a stronger brand, drive traffic to your products, and build a solid funnel for converting leads into loyal customers. While email marketing isn’t new, it’s still one of the most effective marketing strategies to build a valuable business.

Affiliate Marketing

affiliate-marketing
Affiliate marketing describes the process whereby an affiliate earns a commission for selling the products of another person or company. Here, the affiliate is simply an individual who is motivated to promote a particular product through incentivization. The business whose product is being promoted will gain in terms of sales and marketing from affiliates.

Influencer Marketing

influencer-marketing
Influencer marketing involves the marketing of products or services that leverages the popularity, expertise, or reputation of an individual. Influencer marketing is often associated with those who have large social media followings, but popularity should not be confused with influence. Influence has the power to change consumer perceptions or get their audience to do something different.

Sustainable Marketing

sustainable-marketing
Sustainable marketing describes how a business will invest in social and environmental initiatives as part of its marketing strategy. Also known as green marketing, it is often used to counteract public criticism around wastage, misleading advertising, and poor quality or unsafe products.

E-commerce Marketing

e-commerce-marketing
E-commerce marketing is part of the digital marketing landscape, and beyond, where e-commerce businesses can enhance their sales, distribution, and branding through targeted campaigns toward their desired audience, convert it into loyal customers which can potentially refer the brand to others. Usually, e-commerce businesses can kick off their digital marketing strategy by mastering a single channel then expand for a more integrated digital marketing strategy.

Buzz Marketing

buzz-marketing
Buzz marketing leverages the power of word-of-mouth advertising to create products or services with enough novelty that they go viral. In many cases, buzz marketing leverages on versatile content that can easily scale and be readapted to various contexts and fear of missing out (FOMO) to amplify the effect of word-of-mouth campaigns.

Shotgun Marketing

Shotgun Marketing
Shotgun marketing is a form of above-the-line (ATL) marketing, where popular mediums such as TV and radio are used to market to a mass audience. This technique of marketing targets as many consumers as possible. Also known as mass marketing, the technique attracts a large number of leads that, on average, might be of lower quality in nature.

Multichannel Marketing

multichannel-marketing
Multichannel marketing executes a marketing strategy across multiple platforms to reach as many consumers as possible. Here, a platform may refer to product packaging, word-of-mouth advertising, mobile apps, email, websites, or promotional events, and all the other channels that can help amplify the brand to reach as many consumers as possible.

Inbound Marketing

inbound-marketing
Inbound marketing is a marketing strategy designed to attract customers to a brand with content and experiences that they derive value from. Inbound marketing utilizes blogs, events, SEO, and social media to create brand awareness and attract targeted consumers. By attracting or “drawing in” a targeted audience, inbound marketing differs from outbound marketing which actively pushes a brand onto consumers who may have no interest in what is being offered.

Partnership Marketing

partnership-marketing
With partnership marketing, two or more companies team up to create marketing campaigns that help them grow organically with a mutual agreement, thus making it possible to reach shared business goals. Partnership marketing leverages time and resources of partners that help them expand their market.

Growth Marketing

growth-marketing
Growth marketing is a process of rapid experimentation, which in a way has to be “scientific” by keeping in mind that it is used by startups to grow, quickly. Thus, the “scientific” here is not meant in the academic sense. Growth marketing is expected to unlock growth, quickly and with an often limited budget.

Guerrilla Marketing

guerrilla-marketing
Guerrilla marketing is an advertising strategy that seeks to utilize low-cost and sometimes unconventional tactics that are high impact. First coined by Jay Conrad Levinson in his 1984 book of the same title, guerrilla marketing works best on existing customers who are familiar with a brand or product and its particular characteristics.

Ambush Marketing

ambush-marketing
As the name suggests, ambush marketing raises awareness for brands at events in a covert and unexpected fashion. Ambush marketing takes many forms, one common element, the brand advertising their products or services has not paid for the right to do so. Thus, the business doing the ambushing attempts to capitalize on the efforts made by the business sponsoring the event.

Relationship Marketing

relationship-marketing
Relationship marketing involves businesses and their brands forming long-term relationships with customers. The focus of relationship marketing is to increase customer loyalty and engagement through high-quality products and services. It differs from short-term processes focused solely on customer acquisition and individual sales.

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