SERVICES MARKETING

SERVICES
MARKETING

Basic concept of services marketing and how
to go beyond

service to create experiences

TABLE OF CONTENTS

1 Introduction To Services Marketing
2 Creating The Service Product
3 Model of Services Consumption
4 Service Marketing Programmed
5 Service Quality and Productivity
6 Assessment

Conclusion

Chapter One

INTRODUCTION TO
SERVICES

MARKETING

INTRODUCTION TO SERVICES MARKETING

1.1 Define Services Marketing

In everyday
life,

What service
you always

use???

INTRODUCTION TO SERVICES MARKETING

1.1 Define Services Marketing

• Service marketing is a sub field of marketing which
can be split into the two main areas of goods
marketing which includes the fast-moving consumer
goods and durables.

• Service also is an act or performance offered by one
party to another. Although the process may be tied to
a physical product, the performance is essentially
intangible and does not normally result in the
ownership of any the factor of production.

• Service marketing typically refers to both business to
consumers and business to business services and
includes marketing of services such as
telecommunications services, financial services, all
types of hospitality services, car rental services and
health care services

• For example: Hotel, Banking, Fast Food, Restaurant
,Medical.

INTRODUCTION TO SERVICES MARKETING

1.1 Define Services Marketing

1.2.1 Factors Stimulate the transformation of service
markets.

A.Governme
nt policies

E.Internalization B.Social
changes

D.Advances C.Business
in trend

information
technology

1.2.1 Factors Stimulate the transformation of service
markets.

A: Government policies

a. Change in regulation
➢ Many service industries are strictly regulated.
➢ Government regulated the policies to increase the

investment in physical infrastructure.
➢ For example: SST, Income tax that should be paid

by all businesspersons, etc.

1.2.1 Factors Stimulate the transformation of service
markets.

A: Government policies

b. Privatization
➢ The transfer of ownership, property, or business from

the government to the private sector is termed
privatization.
➢ The government ceases to be the owner of the
entity or business.
➢ Privatization is considered to bring more efficiency
and objectivity to the company, something that a
government company is not concerned about.
➢ For example: Tenaga Nasional Berhad, Malaysia
Airline System, and Malaysia International Shipping

Corporation.

1.2.1 Factors Stimulate the transformation of service
markets.

A: Government policies

c. New regulations to protect customers, employees,
and the environment
➢ Government regulated these regulations to

protect the customers, employees, and the
environment.
➢ Not all the laws changes are to show that the
government gives relaxation to the regulations.
➢ For example: Department of Environment (DOE),
Malaysian Consumer Product Safety Mandatory
(mySAFE), KPDNKK, TRIBUNAL TUNTUTAN
PENGGUNA, Increased taxes to aviation industry
for harmful gas emission.

1.2.1 Factors Stimulate the transformation of service
markets.

A: Government policies

1.2.1 Factors Stimulate the transformation of service
markets.

A: Government policies

d. New agreement on trade in services.
➢ International trade in services is being stimulated

by decisions to loosen trading restrictions through
negotiations of the world trade organization, and
individual countries are choosing to enter into free-
trade agreement with some of their neighbours
example include NAFTA, concluded between
Canada, Mexico and the United State.
➢ Example, Companies from foreign countries can
take over basic services like water, health,
transportation and education.

1.2.1 Factors Stimulate the transformation of service
markets.

B: Social changes

a. Rising consumer expectations
❖ The consumer’s services demand will easily

influenced by an owner of changes.
❖ The income of consumer is higher; the demand of

consumer will also become higher.
❖ For example, the consumers always expect the

shop owner will gives them the perfect services.

1.2.1 Factors Stimulate the transformation of service
markets.

B: Social changes

b. More affluence
❖ The increasing affluence of user will cause them to

purchase for physical property and they need
more services and experiences.
❖ Affluence increase of region will easily help a
country grow faster.
❖ For example, people that high income will be more
efficient with buying service and experiences
❖ Example, credit card

1.2.1 Factors Stimulate the transformation of service
markets.

B: Social changes

c. Increased desire for buying experience versus
thing
❖ The consumers desire will let the owner to add on

their equipment for them to use.
❖ The consumer who had income ability like to visit to

resort or gym, so the owner will increase the
equipment and ambient of their shop.
❖ For example, consumers will go to the gym room
that had more equipment.

1.2.1 Factors Stimulate the transformation of service
markets.

B: Social changes

d. Rising consumer ownership of high tech equipment.
❖ A combination of changing lifestyle, higher

incomes and a declining prices for many high-
technology product has meant that more people
are enjoying computers, thus enabling them to use
internets to send and receive e-mail and across
website from around the world.
❖ Nowadays, the online world is becoming more
widespread, more consumer will be pursuing more
higher technology equipment.
❖ For example, more consumers will be pursuing
smart equipment such as, smart home, smart TV,
and Internet of Things (IoT) equipment.

e. Easier access to information
❖ In this generation, people can receive the

information easily by internet access.
❖ People can know the news or other else

information from social media.
❖ For example, Facebook, Instagram, Twitter, etc.

1.2.1 Factors Stimulate the transformation of service
markets.

B: Social changes

f. Immigration
❖ Many people immigration to foreign country for

education and working chance.
❖ They immigration to other country is because the

salary that they can get is more than in own
country.
❖ For example, Malaysian immigration to Singapore
because to get a higher salary.

g. Growing but aging population
❖ Government provide more medical demand for

the elder such as, hospital, old folks house, etc.

1.2.1 Factors Stimulate the transformation of service
markets.

C: Business trend

a. Push to increase shareholders value
❑ Find a new income sources to afford extra

consumption, higher prices, to decrease the
consumption.
❑ Many people buy stocks to get their extra revenue.

b. Emphasis on productivity and cost savings
❑ According to the price’s competition, the

company are forced to improve their product
produce.
❑ Investor will find the higher returns on the
investment to reduce their cost.

1.2.1 Factors Stimulate the transformation of service
markets.

C: Business trend

c. Manufacturers add value through services delivery
❑ In these few years, business firm have a large

change.
❑ Company provides the easier transportation,

installation, payment, and other services course to
easily earn more profit.
❑ For example, E-wallet help seller to easily collect
their payment.
❑ Example, IBM gives consulting IT.

1.2.1 Factors Stimulate the transformation of service
markets.

C: Business trend

d. More strategic alliances and outsourcing
❑ Company that joint together to reduce their cost

on a project.
❑ For example, Google and NASA joint venture to

developing Google Earth.

e. Focus on quality and customer satisfaction
❑ Company produce quality products and services

to earn confidence of customers.
❑ For example, Apple produce quality iPhone and

iPad and provide good services for customer to
build confident of customer.
❑ Hotels and motels all level define standards more
tightly and seek to meet them consistently.

1.2.1 Factors Stimulate the transformation of service
markets.

C: Business trend

f. Growth of franchising
❑ Company that offer franchise for salesperson who

interest to widespread the brand.
❑ They sale the license to entrepreneurs and make

the brand become famous.
❑ The franchise will provide the same products and

services to customer.
❑ For example, KFC, PIZZA HUT, Tealive offer taking

franchise to widespread their branding.

1.2.1 Factors Stimulate the transformation of service
markets.

C: Business trend

g. Marketing emphasis by nonprofits
❑ Nonprofit marketing involves the creation of logos,

slogans, and copy, as well as the development of
a media campaign to expose the organization to
an outside audience.
❑ Nonprofit marketing refers to the tactics and
strategies nonprofit organizations use to raise
donations and spread their message.
❑ Many Public and Non-Profits Organizations have
forced the business firms not only to develop more
efficient operations but also to pay more attention
to customers needs and competitive activities.
❑ Museum seeks to expand audiences and generate
more frequent repeat visits.
❑ For example, FOMCA, MAKNA, Persatuan
Pengguna Malaysia
❑ For example, company held consumer charity to
let customer know about them.

1.2.1 Factors Stimulate the transformation of service
markets.

D: Advances in information technology

a. Growth of the internet
▪ Internet is the best platform to do services and

communications of seller to customer.
▪ Many departments do their customer service by

online for customer to ask questions.
▪ For example, Shopee create the online service to

help customer solve their problem.

b. Greater bandwidth
▪ Many network companies change their network

become fiber optics to increase the bandwidth of
the network.
▪ The greater network bandwidth will cause
customer can contact the seller faster.
▪ For example, TM change Streamyx to Unifi to get
greater bandwidth.

1.2.1 Factors Stimulate the transformation of service
markets.

D: Advances in information technology

c. Wireless networking
▪ The wireless networking and wireless equipment

such as smartphones and laptop to easily stay
connected with seller.
▪ Seller can easily help customer to solve their
problem with the wireless networking at every time
everywhere.

d. Faster, more powerful software
▪ Powerful and faster software can help seller easily

do their jobs such as, transaction while purchasing
and process their jobs.
▪ For example, E-wallet can help customer do the
payment faster.

1.2.1 Factors Stimulate the transformation of service
markets.

D: Advances in information technology

e. Digitization of text, graphics, audio, video
▪ Company do their advertisement with text,

graphics, audio, video to let customer more
interest to know about their products.
▪ For example, Apple do their skills of filming to do an
advertisement when the new product had
launched to attract customer.
▪ Organization allows text, graphic, video and audio
to be manipulated stored and transmitted in digital
language of computer.
▪ Example, Bank.

1.2.1 Factors Stimulate the transformation of service
markets.

E: Internalization

a. More companies operating on transnational
❑ Company combine domestic and global

strategies, using a central control structure to
manage all operating units as an integrated global
company.
❑ Training of staff in local markets to upgrade skills,
capabilities and service standard.
❑ For example, McDonald’s is a giant fast-food chain
with the same core menu items worldwide, as well
as the same brand name, identity, and marketing.

1.2.1 Factors Stimulate the transformation of service
markets.

E: Internalization

a. More companies operating on transnational
❑ Company combine domestic and global

strategies, using a central control structure to
manage all operating units as an integrated global
company.
❑ Training of staff in local markets to upgrade skills,
capabilities and service standard.
❑ For example, McDonald’s is a giant fast-food chain
with the same core menu items worldwide, as well
as the same brand name, identity, and marketing.

1.2.1 Factors Stimulate the transformation of service
markets.

E: Internalization

b. Increased international travel
❑ Provide more international travel for greater

competitor.
❑ Company can provide more services like visit to

more places, more country.
❑ For example, Star Cruise
❑ For example Air Asia X

c. International merges and alliances
❑ Expand market coverage and improve

operational efficiency, but consolidation may
reduce work.
❑ For example, insurance company merge with
airlines.

1.2.1 Factors Stimulate the transformation of service
markets.

E: Internalization

d. “Offshoring” of customer service
❑ Investment in technology and infrastructure can

easily improved the living standards and attract
customer.
❑ For example, United States based company to
produce their goods in Mexico.

e. Foreign competitors invade domestic markets
❑ Company build the network of payment that

through overseas.
❑ Build branch network by purchasing one or

regional banks.

1.2.2 Roles of Technology in Services.

A: Increased Productivity

Against the background of a world increasingly
shaped by technology, and an increasingly high
amount of technological support in the
implementation of services, e.g. regarding
communication, provision of data and diagnosis, the
question arises, etc.

1.2.2 Roles of Technology in Services.

B: Enhancing decision making

Decision making in business has changed from
decisions being made by management to decisions
being made throughout the different levels of a
business

1.2.2 Roles of Technology in Services.

C: Improving the delivery of service-through the
use of internet technologies

The challenge of improving IT service delivery has
never been greater Improving the delivery of IT
services is one of the most challenging aspects of
running an IT organization.

1.2.2 Roles of Technology in Services.

D: Market Place vs Market Space

➢ Marketplace is a physical location of buyer and
seller interaction. At the marketplace, the seller and
buyer meet each other individually and share
information. Thereafter, negotiations take place and
exchange of product or service occurs. Examples of
marketplace are retail stores, outlets, supermarkets,
etc.

➢ Marketspace can be defined as the information and
communication technology based electronic or
online exchange environment. Physical boundaries
do not possess any interference for such transactions.
The buyers and sellers interact and transact in a
virtual environment where direct physical
communication is not required.

1.2.2 Roles of Technology in Services.

D: Market Place vs Market space

MARKET SPACE MARKET PLACE

PROCESS ɷ Mental (iklan) ɷ People (face2face)

ɷ Information (on9) ɷ Possession (dobi)

DELIVERY/ ɷ Transaction at arm’s ɷ Customer goes to
penyampaian
length organization
CONTACT/ hubungan
ɷ Customer come to

customer

ɷ Low ɷ High
ɷ medium

LOCATION ɷ On-line ɷ Shop

EXAMPLE ɷ Maybank2u ɷ Maybank
ɷ Ebay ɷ Spa

1.3.1 Features/Characteristics Of Services.

1.3.1 Features/Characteristics Of Services.

A: INTANGIBILITY

➢ Service are often defined based on their most
obvious features of intangibility.

➢ Service cannot be seen, touched, held or put on a
self, because it lacks a physical existence or form.

➢ Yet a service is not just an intangible product.
Intangibility is not a modifier, but state of being.

➢ For example, Teaching, Consulting, Legal Advice.

i. Place
➢ Highlights the fast service, international and external

aspects should look clean, layout. For example,
equipment in spa should be neat and tidy.

ii. People
➢ Workers have no work to do not sit idle only. For

example, customer and staff.

1.3.1 Features/Characteristics Of Services.

A: INTANGIBILITY

iii. Equipment / Tools
➢ Tools necessary bank in state of the art. For example,

Computers, photocopy machine and table work
well.

iv. Materials for communication
➢ Should provide tools to communicate clearly so that

it is understood by the customer. For example , bank
broacher and pictures in a bank must show speed
and perfect.

v. Machine and equipment
➢ All the equipment must can be used as well as

possible. For example an ATM machine.

1.3.1 Features/Characteristics Of Services.

B: INSEPARABILITY

➢ Service are typically produced and consumed
simultaneously, increase of physical goods they are
manufactured into products distributed through
multiple resellers and consumer later.

➢ But increase of services, it cannot be separated from
the service provider thus, the service provider would
become part of a service.

➢ Example, taxi operator drivers' taxi and the
passengers uses it. The presence of taxi driver is
essential to provide the service.

➢ Other example : doctor >patience,
lecturer>student.

1.3.1 Features/Characteristics Of Services.

C: PERISHABILITY

➢ Services are deeds performance or act whose
consumption take place simultaneously they tend to
perish me the absence of consumption. Hence,
services cannot be stored. The service go waste if
they are not consumed simultaneously value of
service exist at the point when it is required.

➢ Service can not be stored and pending sales on
other days.

➢ Strategy can be used to adjust supply and demand.

i. Demand
▪ Different pricing.
▪ Example: car rental in Langkawi increase during

school holiday.
▪ Complimentary services.
▪ Example: Bank provides a place to wait before being

entertained by the bank.
▪ Reservation system to be easily manage service.
▪ Acculturation consumption during non-peak service.

1.3.1 Features/Characteristics Of Services.

C: PERISHABILITY

➢ Services are deeds performance or act whose
consumption take place simultaneously they tend to
perish me the absence of consumption. Hence,
services cannot be stored. The service go waste if
they are not consumed simultaneously value of
service exist at the point when it is required.

➢ Service can not be stored and pending sales on
other days.

➢ Strategy can be used to adjust supply and demand.

i. Demand
▪ Different pricing.
▪ Example: car rental in Langkawi increase during

school holiday.
▪ Complimentary services.
▪ Example: Bank provides a place to wait before being

entertained by the bank.
▪ Reservation system to be easily manage service.
▪ Acculturation consumption during non-peak service.

1.3.1 Features/Characteristics Of Services.

C: PERISHABILITY

ii. Supply
➢ Part time employees-part time workers use to sort of

cards.
➢ Peak time efficiency routines-workers make just one

job only at rush hour(peak time)
➢ Increased consumer participation-engage your

customer to fill in personal information when register
at the clinic, or ATM use to remove the cash in the
bank.
➢ Shared services-several hospitals share medical
equipment provides.
➢ Facilities for future expansion confines future.

1.3.1 Features/Characteristics Of Services.

D: VARIABILITY

❑ Services are highly variable as they depend on the
service provider and where and when they provided.

❑ Service marketers face a problem in standardizing
their service as it varies with experienced hand
customer, time and firm.

❑ Service buyers are awake of this variability. So, the
service firms should try to deliver high and consistent
quality in their service and this is attained by
selecting good and qualified personnel for rendering
the service.

❑ Consistency is an important factor, and it can be
overcome through the standardization process and
the training given to prospective employees that the
distinction was no clearly.

✓ Way to control the quality of service.
✓ Focus on the service to customer.
✓ Regularize the service to the customer.
✓ Held execute workflow chart
❑ Example: Heart surgery by different experts that

given by the usual doctor.

1.3.1 Features/Characteristics Of Services.

E: OWNERSHIP

❑ Lack of ownership is a basic differences between a
service industry and a product industry a customer
may only have a access to or use of a facility.

❑ Example: a hotel room, a credit card-payment is for
use of, access to hire of items.

❑ With the sales of tangible good, barring restrictions
imposed say by hire purchase scheme, the buyer
has full use of the product.

1.4.1 Differences Between Services And Goods.

SERVICE GOOD

INTANGIBLE TANGIBLE

HETEROGENEOUS HOMOGENEOUS

NO OWNERSHIP OWNERSHIP

PRODUCE IN SELLER BUYER PRODUCED IN FACTORY
INTERACTION

SERVICES CANNOT BE PERISHABLE (can be
STORED stored)

SERVICE ARE NOT GOODS ARE PRODUCED
PRODUCED USING RAW USING RAW MATERIAL
MATERIAL

PRODUCTION, ALL THREE ARE SEPARATE
DISTRIBUTION & AND INDEPENDENT
CONSUMPTION TAKES
PLACE SIMULTANEOUSLY

SELLING IS A PART OF THE SELLING IS DEPENDS ON
PRODUCTION OF SERVICE PRODUCTION OF GOODS

1.5.1 Service Marketing Mix (8 P’s)

Services marketing mix refers to be combination of
marketing activities an organization engages in to
promote and sell intangible services, as opposed to
tangible product.

1.5.1 Service Marketing Mix (8 P’s)

A: PRODUCT ELEMENT

❑ Manager must select the features of both the care
product a good of service.

❑ Bundle of supplementary service elements
surrounding it, with reference to the benefit desired
by customer and how competing product performs.

❑ Must be attentive to all aspects of the service
performance that here the potential to create value
for customers.

1.5.1 Service Marketing Mix (8 P’s)

B: PLACE AND TIME

❑ Delivering product elements to customers can be
done physically and or electronically, depending
upon the service.

❑ Speed and convenience are essential to customer
and are important value-adds. For example, point-
of-sale placement or retailing. It is a channel by
which a product or service are sold.

❑ Delivering product elements to customers involve
decisions on the place and time of delivery as well as
on the methods and channels employed.

❑ Delivering may involved physical or electronic
distribution channels, depending on the nature of the
service being provided.

1.5.1 Service Marketing Mix (8 P’s)

C: PRICE AND OTHER USER OUTLAYS

❑ Pricing is only a part of what customers may be part
with when purchasing a service one must also
consider time and convenience.

❑ Marketers must recognize the customer outlays
involve more than price paid to seller.

❑ Traditional pricing tasks:
-Selling price discount, premiums
-Margins for intermediaries
-Credit terms

1.5.1 Service Marketing Mix (8 P’s)

C: PRICE AND OTHER USER OUTLAYS

❑ Pricing is only a part of what customers may be part
with when purchasing a service one must also
consider time and convenience.

❑ Marketers must recognize the customer outlays
involve more than price paid to seller.

❑ Traditional pricing tasks:
-Selling price discount, premiums
-Margins for intermediaries
-Credit terms

❑ Identify and minimize other costs incurred by users:
-Additional monetary costs associated with service
usage for example travel to service location,
parking, phone, babysitting.
-Time expenditures, especially waiting.
-Unwanted mental and physical effort.
-Negative sensory experiences.

1.5.1 Service Marketing Mix (8 P’s)

D: PROMOTION AND EDUCATION

Informing, Educating, Persuading, and Reminding
Customers

❑ Marketing communication tools
✓ media elements (print, broadcast, outdoor, retail,

Internet, etc.)
✓ personal selling, customer service
✓ sales promotion
✓ publicity/PR

❑ Imagery and recognition
✓ branding
✓ corporate design

❑ Content
✓ information, advice
✓ persuasive messages
✓ customer education/training