Notes

Selling services is different from selling tangible products. Service companies need to be aware of the dimensions of services and have a plan in place for countering them.

In this module, you will differentiate between services marketing and goods marketing, describe the dimensions of services, read about the Tangibility Spectrum, and explore how to counter the dimensions of services. While the marketing of services and tangible goods have some similarities--for example, whether you're selling services, goods, or both, you need to know your target customer and your brand promise--the marketing of services does have unique challenges.
Marketing for services is more challenging than marketing for tangible goods. Service - is the fulfillment of a promise. Brand promise = what the brand will promise to do to fulfill a customer need. The services have challenging characteristics and need a different set of strategies versus tangible goods.

In this video, Professor Kwortnik describes the four dimensions of services—intangibility, inseparability, heterogeneity, and perishability—and provides examples of each.
Intangibility: services cannot be easily sensed or touched before the purchase. Ex: you need a haircut. how do you choose the right barber? It's intangible
Inseparability: The customer is in the service factory. If you choose to sit in the barber's chair and don't say a single thing, you may not enjoy your cut. You have to enable the service to do a proper job by "co-creating" or communicating what you want.
Heterogeneity/Variability: the idea that services are often delivered by different types of people. In a restaurant, different servers result in different experiences. The quality of the service will vary.
Perishability: It's not really possible to inventory the service product. The airplace seat that flys empty...it's gone. The revenue is gone for that seat and lost. When the barber seat is empty and you lose money, it's perishable inventory. It's important to understand supply and demand so that the service perisabhility is used as less as possible.

In the April 1977 edition of the Journal of Marketing, Lynn Shostack published an article titled "Breaking Free from Product Marketing." In the article, Shostack presented what she called the "Tangibility Spectrum" and argued that goods are not purely tangible and services are not purely intangible. Rather, goods and services live somewhere along a spectrum—with goods tending to be tangible dominant and services tending to be intangible dominant. For example, while an automobile manufacturer provides tangible goods—the cars themselves—it also provides intangibles such as the sense of luxury or the feeling of economy (luxury brands vs. economy brands), or the idea of freedom (you can drive virtually anywhere), or a sense of prestige (prestige brands or the first time your purchase a car entirely on your own).

Countering intangibility:
- A lot of experiences that consumers seek are intangible experiences
- Use physical cues or "tangibilize" the experience (ex. fine dining experience, make waiters wear black suits and play proper music). Different cues for the consumer whereever they go (ex. Hooters). They also use images...brand slogans or logos. (ex: all-state insurance) Imagery to suggest what the benefits are and to help combat the tangibility. Another idea is co-branding. Ex: a luxury cruise product can promise you a luxurious cruise experience...but the consumer can't prove it. They'll co-brand will well-known luxury brands to help them....stores with gucci or a luxury spa retailer. borrowing the meanings and understandsings of other products and attaching them to their experience. Ex: Lexus in movies!! Show the signs of what the experience will be like

Countering Inseparability
Customers are inseparable from the service they are purchasing. They are key players in the production of the service, and how one customer performs can affect the experience of other customers experiencing the service at the same time.
The customer is part of the service production for a restaurant meal. If you have a fine-dining experience and customers show up wearing booty shorts which will affect the experience. Communicate how consumers are supposed to co-produce by marketing communications...writing about it on their website etc. Another ex is a patient at a doctor's office. The services the doctor provides means that the consumer has to follow doctor instructions and take their medications and etc.

Countering Heterogeneity
When you go to the store to purchase a tube of your favorite toothpaste, every box of your favorite brand looks exactly the same on the shelf. When you get home, the new tube of toothpaste tastes and performs exactly the same as the tube you bought a month ago, or even a year ago. Tangible goods have the luxury of being homogeneous; the customer's experience with the product is consistent over time because factories can produce millions of instances of the same product with precisely the same characteristics. In the vast majority of cases, services are not homogeneous; they are heterogeneous—which makes it much more challenging to consistently deliver the exact same experience to every customer.

Countering Perishability
Tangible goods can be inventoried and replenished; services cannot. For example, an empty table at a restaurant today does not generate revenue today. You can't restock an empty table. Match supply and demand to help reduce perishability. Ex: revenue or yield management. Prices are used as a lever to leverage customer demand. Queue Management: self management...kiosks, etc. Ex: Fast Pass....use a fast pass and quickly go thru the lines to a ride and not have to wait in line for 2-4 hours. Mobile tech helps alert customers when demand is low.