What is Services Marketing and differentiate between Service and Product, and Categories of services.

Definitions of Services –

“Activities, benefits and satisfactions, which are offered for sale or are provided in connection with the sale of goods” (American Marketing Association, Committee of Definitions 1960, p. 21).

“Services include all economic activities whose output is not a physical product or construction, is generally consumed at the time it is produced, and provides added value in forms (such as convenience, amusement, timeliness, comfort or health) that are essentially intangible concerns of its first purchaser” (Quinn, Baruch and Paquette, 1987).

“A service is any act or performance that one party can offer to another that is essentially intangible and does not result in the ownership of anything. Its production may or may not be tied to a physical product (Prof. Philip Kotler)

A courier service, a phone call, a legal help from a lawyer, air travel, train travel, and police services are few examples of service offerings.

Key differences between Products and Services-

Products	Services
A physical item	An activity, benefit, facility, performance, or a process
Tangible in nature	Intangible
Homogenous	Heterogeneous
Production of a good and its consumption or usage are separate	Creation and consumption at the same time
Can be stored for later use	Cannot be stored for later use
Ownership can be transferred	Does not result in the ownership of anything,hence, ownership cannot be transferred
Evaluation is simple and easy	Difficult to evaluate
A physical product will maintain its design, physical characteristics, and quality.	Services can never remain same. They change basis the time, location and service seekers constraints.

There has been a phenomenal growth in services in recent decades. In today’s times, service jobs are not only offered in pure service sector like banks, theatre, airlines, hotels, etc. but also in physical product industries like Human Resources, financial consultancy, legal services, advertising, training, etc. A physical goods manufacturer which provides excellent service during and after the sale of a physical product performs better in a market than a manufacturer with poor services accompanying its sale of physical products.

Consider a scenario where a person visits a shop to buy a sewing machine. In one shop the salesman informs about the rate and insists of buying the machine for its good quality.

In the second shop, the manufacturer’s representative, first educates the buyer about all the functions, quality, warranties associated, gives a proper demo, etc. and then asks if the buyer has any more questions before making the final sales pitch.

The difference in these two situations is not only the product but also the level of service associated. The buyer will feel more valued and confident in buying from the second shop because of the level of service provided the representative.

Any offering made available in the market can be-
(i) a physical good, or
(ii) a service, or
(iii) a combination of both.

Professor Kotler has listed five categories of offerings that are sold in the market place-
1) Pure Tangible Good – This offering is a pure physical product like toothpaste, packaged food, soaps, sugar, etc. There is no service associated except the courteous response and help from the sales people.

2) Tangible Good with accompanying services – The tangible offering is made available along with 1 or 2 services for a better customer experience. Most of the technologically advance and expensive products have quality services associated with their sale. These can be free installation, free servicing for a certain period, warranties and guarantees, etc. These are directed towards increase in sales. For example, most of the Mobile manufacturers during their launch always emphasise the number of service centres they have in the region.

3) Hybrid – The offering is an equal combination of the tangible good and the intangible service. For example, a premium restaurant with quality food and service, and Domino’s quality offering with free delivery within promised time.

4) Major Service with accompanying minor Goods and Services – In this category a major service is provided along with some additional service and/ or goods. For example, travel by airline or a first class train travel accompanies food, drinks, books, magazine, internet, etc. The passenger pays for the transportation and these additional/ complementary food items and services from the staff enhance the travel experience of the passenger.

5) Pure Service – The offering is only a service provided without any accompanying tangible product or additional service. For example, courier service, massage, financial consultant, and psychotherapy.

Services need a different approach when it comes to marketing functions. They are produced, distributed and consumed differently as compared to physical offerings.