The service market plays by different rules from the goods market, and in this article, we will consider the main canons of an effective marketing strategy for the service sector. We are going to tell about key peculiarities and specifics of services marketing. Describe in detail the main goals and objectives which should be pursued by the business in the services market. Describe a universal complex of services marketing and give basic principles of competitive marketing strategies for products at the services market. At the end of the article, there is a short checklist that will help you to implement the right services marketing in your company.
The peculiarities of services marketing
The service market differs from the market of consumer and industrial goods first of all by its intangible nature. But this peculiarity is not the only parameter that should be kept in mind while engaging in services marketing. There are seven key differences in consumer behavior in the services market which have a direct influence on the strategy of promotion and types of marketing programs:
- Difficulties in assessing the quality of the service before making a purchase
- Non-transparent structure of service costs
- Higher uncertainty in the level of service
- The lower level of company knowledge
- Difficulties in determining the final cost before the purchase
- Inconsistent structure of demand
- A high portion of fixed costs
Let’s analyze each feature of the service market in more detail.
Difficult to evaluate the quality
It’s difficult for the consumer to evaluate the quality of service before buying it, and it’s difficult for companies to prove and show the quality of their services to the consumer. When buying a product, the consumer sees the visual component of the product, can touch the product, assess the packaging, evaluate the smell, and check functionality. When buying a service, the consumer has only an understanding of the characteristics of the service and makes a blind purchase.
In general, the purchase of a service is somewhat comparable to buying a product over the Internet, where we can only judge the quality of the product by the described characteristics, brand, and reviews.
It is difficult to estimate the unit cost of a product.
The cost that a company incurs to provide 1 unit of service is difficult to estimate. Most companies have difficulty in determining the cost of services because a large share of the cost of service is made up of intangible costs (how do you evaluate the quality of advertising agency creativity? – Worse or better in comparison with the market).
It is also difficult to determine the starting point for calculating the price. What to take as a unit of consumption? Improperly defined unit of service consumption leads to dissatisfaction of consumers, because some begin to believe that they are overpaying. For example, how to estimate the cost of haircuts of different lengths of hair? Insurance software development companies will help you with that issue.
Customers are not familiar with the service process
Low awareness of the quality of service prevents the customer from forming a correct idea of the cost of the service. All major service companies improve service every year by adding many additional free services to the service. Unfortunately, it is very difficult for the average consumer to compare services with each other, and it is difficult for the company to convey all the additional benefits.
For example, a consumer choosing a hotel compares it by the number of stars, room rate, food, and a small list of additional services. But there is also the quality of service, politeness of staff, pleasantly furnished rooms. It is difficult to compare a wide range of parameters on several separate hotels.