There are characteristics of services that differentiate it from a product (tangible good).

1) Intangibility – Services are intangible offerings. A buyer cannot see, hear, feel or taste a service unless it is bought. A person who pays for a massage will not see the effects of massage till the time the massage is done on his/ her body. Similarly, a person who wants to travel to a foreign country by air will have to buy a ticket for an airline as well as board the plane to travel and experience the flight. As a buyer cannot feel the service beforehand, they look for indications and evidence of quality of service. The decision making is done basis the information derived from presentation, tools or equipment, place, message (communication content and material), symbols, people, and price.

McDonald’s tries to influence buyers by given an experience of

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The traditional Marketing Mix or Marketing Program consists of 4P’s – Product, Price, Place, and Promotion. The marketing strategy of a Product consists of these Marketing Mix elements to meet the business needs and objectives. These objectives can be profit related, market share related, and even to bring social change in the society (NGO’s).

As services differ from a product, three additional marketing mix elements are taken into account for marketing strategy. Hence, the marketing mix or marketing program for services is often referred to as “7P’s of services.”

The 4P’s of traditional marketing remain the same but their implications on services is different as services differ from a product in many ways. The Service is perishable, heterogeneous, intangible and inseparable. Therefore, Product customization, Price, Place and Promotion of a service needs a different approach as compared to a physical product which can be produced at a different place, stored, and transported as required.

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There are different ways in which classification of services is done. Services are bought differently by different buyers in different ways. The presence of a buyer is sometimes needed and sometimes not. Similarly, the service can be provided by the seller or by an equipment/ machine.

1) People based and Machine based services –
A service can be provided through a human or even a machinery. People based service refers to the presence of a human being with skills in providing the service. For example, a doctor needs to be present with the patient. Similarly, a carpenter, cobbler, mechanic, barber, etc. fall under people based services category.

Equipment/ machine based service is provided by automated machines like robots doing car wash, vending machines, etc. The presence of the seller is not required.

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Marketing Strategy of Services –
A marketer should have an effective marketing strategy at his/ her disposal for business success whether it’s a product or a service offering.

Services have different characteristics from that of a product. This difference demands a marketing strategy that is exclusive to services. The traditional marketing program or the marketing mix (product, price, place, and promotion) of marketing cannot be relied on for services marketing. Addition of three P’s – people, physical evidence, and process – also form integral part of the strategy.

Christian Gronroos has highlighted that Service Marketing needs to focus on Internal as well as interactive marketing apart from the regular activities of external marketing.

External marketing refers to the regular activities of preparing, pricing, distributing, and promoting the service.

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Discuss dealing with competition in case of service offerings.

Differentiation in Service –
A customer can travel by any airline basis the lowest airline fare. Since the basic need is travel, the customer needs to check a suitable time, book a flight and reach his/ her destination. Instead of providing lowest fares possible to gain a competitive edge, organisations try to differentiate their offering. This is known as differentiation – Doing things differently. An organisation can differentiate its offering, its delivery, and brand image and communication. This way the organisations avoid price wars in the industry.

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We all receive information on products and brands from different sources in different ways. Our grandparents usually got informed about news and updates through print media – newspapers, magazines, etc.). Today, even if we look around, there is information overload from different companies informing masses about their products through hoardings, TV commercials, magazines, internet, personal selling (sales people), phone calls from company representatives, etc. This communication from the organisation helps an organisation share information on products available, and their benefits that set them apart from the offerings of the competitors. If the buyers in the market are not aware about a product that meets their needs and wants, they will not ask for that product or search about that product. Evena quality product without proper communication or promotion strategy accompanying it is set to fail in the market.

The organisations have no choice but to employ effective communication strategies. These strategies mostly focus on –
• What needs to be communicated in the target market (message),
• Who are these target customers, and
• Which mode of communication is to be adopted (tool of promotion mix).

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In a communication process, the information or message flows between a sender and the receiver.
From the marketing perspective, in the promotion function the information flows between the manufacturer and the audience (end consumers, intermediaries, stake holders, employees, financial institutions like banks, and all the elements which form the target market).

For a marketer, it becomes very critical to understand the elements of the communication process, and how the information flows.

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Creating a proper blend of promotion mix tools is one of the most critical decision for marketing managers. One organisation can rely on television advertising and the other can remain dependent on the efforts of its sales team.

The marketing managers are forced to select certain promotion mix tools (advertising, sales promotion, publicity, personal selling, and direct marketing)depending on large number of factors. We will look at these factors in brief–

1) Promotion Budget allocation, objectives and policies– Depending on the market research done for making a product of consumer’s choice, budget is allocated for various promotion activities. The organisations do alter the budget basis their marketing strategies. For many organisations, the budget allocated is the final deciding factor in selecting the promotion tools. The company has to decide on the reach (number of target customers to reach) and frequency (how often to spread the message to the target customers). For example, a low budget may not let an organisation promote its product on TV shows that have maximum viewership. In such cases they opt for newspaper ads, fliers or promotion activities like free samples at crowded locations in the target market.
The objective of the Promotion also determines the selection of appropriate promotion tool – Whether the objective is sharing information or persuading the customers to buy the product,
– Creating an image about the product in the minds of customers (positioning),
– How frequently the message is to be disseminated in the target market.

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A marketer has five promotion tools at his/ her disposal for carrying out the promotion activities – Advertising, personal selling, publicity, sales promotions, and direct selling. Each of these offer advantages and disadvantages for different conditions in the market. To help utilise an effective promotion plan, most of the organisations follow the steps shown in the figure.

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The organisations invest heavily in making a product of customer’s choice. If the organisation don’t make arrangements to  deliver or make it available to prospective buyers at the right time and the right place, it is sure to fail in the market. Imagine a customer has to contact the manufacturer for the products like shampoo, soaps, etc. and arrange his own transport. It will be a big hassle for the customer who would rather prefer something that is easily accessible.

Making the products available effectively and efficiently to the end consumers is taken care under the place concept of the marketing mix also known as marketing channel or distribution channel. Decisions concerning distribution channels are of utmost importance to manufacturers. It is concerned with how the product gets through the producer to the consumer. Most of the manufacturers do not sell the products to the end users. They use a set of intermediaries which perform different roles in the channel network. Each member in this chain or channel serves as a link in the distribution network linking the manufacturer to the end user.

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