Service Marketing and Product Marketing - What's the Difference?

Marketing of services and products is one and the same in the minds of many people. It is not so! Find out what its secrets are and how it is done using the example of individual industries such as hospitality and logistics. 

Service marketing and product marketing are two separate branches of marketing. By running a service enterprise in a different way, we will reach our customers. Why? You need to be aware of the basic characteristics of services that distinguish them from products. These are:

• Immateriality - the service cannot be touched, it cannot be measured by means of measures of size, weight or volume.
• Heterogeneity - each service is unique and will depend on the employee who performs it, the customer who comes to consume it and the entire environment.
• Impermanence - the service lasts only while it is being performed and passes when it ends. This means that the service cannot be created in the future, in stock, or stored.
• Simultaneity of the service process - the recipient simultaneously provides the service and consumes it.
• Inseparability of the service production process - the service exists in a given place and time, it does not exist outside the process of its provision.

Why is differentiation between service characteristics so important? Because it has a direct impact on the marketing of services. The above differences between the service and the product mean that the company must interact with its customers differently. The organizing facility will be promoted differently wedding receptionotherwise the shop. How is it done?

Marketing of services - definition

The authors of the book "Marketing of services" clearly explained all the consequences of service features that directly translate into marketing activities.

The most important feature of services: Intangibility has a huge impact on the marketing of services. Makes the activities of the organization be focused on "minimizing the uncertainty of purchase by creating and providing customers with material evidence, such as catalogs, guides, performance quality guarantees. " In this case, customers should be informed about the quality of the services provided and the benefits of the purchased service should be presented.

Due to impermanence, the marketing of services will be based on various types of promotion of services in order to attract customers as well as minimize the impact of the seasonality of demand on certain services.

The inseparability of the process of producing a service and consumption clearly shapes the marketing of services. The company should "Recognize the staff as an important marketing instrument, educate and train them, focus on providing customers with favorable conditions for the provision of services." In turn, heterogeneity requires stimulating brand-building activities as well as developing service quality standards.

When running a service enterprise, you need to be aware that most traditional marketing activities will not be possible to implement due to the specific nature of the services. Marianna Daszkowska in "Services, production, market, marketing" emphasizes especially the intangible nature of services, which determines much deeper relationships between service organizations and their customers. The starting point in the marketing of services will be the needs and preferences of customers as well as the effectiveness of satisfying them.

Marketing of services also uses the basic marketing mix instruments: product, price, promotion, and distribution. The same applies to commercial services and products. However, due to the different characteristics of the services, the 4P formula had to be supplemented with an additional 3 elements. These are people, material testimonials, and the benefit process. What's in them?

Most of all, it's people. The provision of services is based on the relationship between the person who performs the service and its buyer. That is why the company's employees are so important in marketing activities (their qualifications, attitude to clients, etc.)

Material certificates - this is the environment in which the service is provided, as well as the relationship between the recipient of the service and the person providing the service. These material certificates include, for example, the external and internal appearance of the company, its equipment, and the employees' approach to the customer.

Provision process - applies to the entire service provision process. If something goes wrong in the process, the consumer will be dissatisfied and may resign from our services.

Marketing of services - quotes

Daszkowska Marianna, in the book "Services, production, market, marketing" indicates that "service marketing is a system focused on the broadly understood exchange of people's activities (market and non-market). "  It explains the specificity of service marketing in two respects.

"Marketing of services is a wide complex of a very heterogeneous nature, for which it is difficult to develop one theory of marketing activities common to all sectors and types of marketing activity." Additionally "Marketing of services, as opposed to marketing of a product treated as a tangible good, must take into account the specific properties of services and the process of their provision, which has a decisive impact on the design of specific marketing activities."

A. Mayer proposed a universal definition by saying that "Service marketing is a specific (market-oriented) system aimed at a specific goal of managing and shaping all activities proposed by individual economic entities in the field of services."  A. Palmer in "Principles of Services Marketing" clearly shows the difference between marketing services and marketing consumer goods. The difference is marketing itself. In the case of services it becomes he "a means of facilitating the exchange" - activities such as advertising, public relations or others in the case of services are only part of the overall marketing function because "Consumer opinions about a service and the company that provides it are also based on the relationship between the buyer and seller when producing and consuming at the same time." In the case of marketing of tangible goods, marketing is a medium of exchange in itself.

Taking into account, first of all, the immateriality and simultaneity of the production and consumption of services, Lidia Kuczewska divided the marketing of services into: external and interactive.

External marketing "includes activities related to the delivery of benefits using the marketing-mix instruments. (…) This means that in order to meet the needs of customers, the company must first prepare a service. NThen determine its price, methods of delivering to the client and finally communicate to the market about the possibility of purchasing this service. "

In turn, interactive marketing "assumes that the quality of services perceived by the buyer depends to a large extent on the relationship between the client and the service provider, on the manner of its performance. " In the case of material products, the right quality does not depend on the way they are purchased. In turn, the quality of the service is influenced by both how it was done and what was done during the provision of this service.

Marketing of services and product marketing

It is more difficult than ever to distinguish between these two concepts on the web. Customers have access to thousands of more and less veiled advertisements for services and products on social media. Therefore, the lines between a service that can be used and a product that can be purchased blur for them. How can this be distinguished in the on- and off-line world?

Everyone usually knows if it's a service or a product. No definition needed here. A service is a non-ownership activity that can be carried out for the benefit of another person, company or institution. Marketing of services is therefore to persuade her to take advantage of it. In short, it is considered to be a more difficult task than product marketing. In this case, the client needs more information before making a decision. Not enough communication strategy based on simple messages or eye-catching graphics. Instead, in most cases it is necessary to develop answers to questions such as: for how much, how long, why, when, how, why, etc. marketing communication purposes.

How to create an effective service marketing strategy?

The basis of marketing activities is a well-thought-out strategy. A carefully prepared plan is a kind of manual for the entire campaign - it outlines the next steps and allows you to avoid basic mistakes that could hinder the implementation of marketing goals. Thanks to the strategy, everything is simpler and more effective!

Creating a service marketing strategy should start with a comprehensive analysis of the target group. The research should take into account demographic data, preferences, interests and aspirations of potential recipients. Creating a persona makes it easier to choose a communication strategy, i.e. language and form of messages - we will advertise hairdressing services differently than car repair services. The use of information obtained in the analysis of the target group increases the effectiveness of promotional messages, and thus - improves the implementation of marketing goals.

The second stage of shaping the marketing strategy is a meticulous definition of the nature of the services provided. It is worth focusing on the benefits that the company has to offer. The key in this aspect is the SWOT analysis, which allows to determine the strengths and weaknesses of services as well as opportunities and threats resulting from the marketing environment. A helpful tool at this stage is the competition analysis, which will allow you to determine the unique features of our offer.

A marketing strategy would be useless if it had no purpose. It is important that the goal complies with the SMART principles, i.e. it is specific, measurable, achievable, relevant and time-bound. The idea of promotional activities may be, for example, to increase the sales of a given service by 20% within the next year.

Every experienced marketer will admit that first customers have to notice and like the company, and only then will they use its services. The strategy should therefore take into account the aspect of creating a positive image on the market by means of appropriate marketing channels - tailored to the target group, the nature of the service and the goal that the company wants to achieve. Social media are extremely helpful in building recognition and relationships with recipients. A contemporary brand that keeps up with the times should take care of its presence in social networks.

The last stages of strategy creation include planning detailed actions and choosing ways to measure the effectiveness of the campaign.

What is included in the scope of marketing services?

Most studies present service marketing as a collection of seven equally important parts. They are: 

• people: employees, customers, communities; 
• material products: uniforms, equipment, equipment, signs; 
• processes: service, standardization, efficiency etc .; 
• promotions: advertising, promotion, referral marketing and other; 
• product: key service, additional and accompanying services; 
• price: including included cost, demand, competition and more; 
• place: access, location, delivery; 

Such a chart may take into account even several dozen different sub-items contained in the seven pillars of service marketing. This shows that we are dealing with a really complex phenomenon. 

Nowadays, with the development of technology and increased access to information, marketing services have become an extremely important element in running a business. Their scope is very wide and covers many areas. In short, marketing services include all activities aimed at promoting a product or service and increasing its sales. These may be advertising campaigns, market research, competition analysis or website design. It all depends on the needs and goals of the company. That is why it is so important to use the services of specialists who have appropriate experience and knowledge to propose the best marketing solutions for your business.

Marketing of hotel services

Let's analyze the way of advertising services on the example of marketing of hotel services. Here you can find our study based on marketing experience for a large accommodation facility in the Giant Mountains: How to get 1100 inquiries for events? In this case, effective marketing led to inquiries regarding the organization of weddings with a total value of PLN 30,000,000 per year.

According to Cognizant 20-20 insights (In-Product Marketing: A Game-Changer for Customer - Minded Companies), when consumers use a travel portal to book flights and hotels, they choose those that reflect their preferences and interests. "Their (...) data can be used to offer tailored, time-limited offers. For example, a person booking rooms in hotels of your favorite chain should automatically be included in the brand's loyalty program and receive experience offers based on previous choices (rooms, dishes, etc.). "

So how can you promote wedding hall Lower Silesia? At this point, it is worth mentioning cross-marketing of services, as well as about marketing instruments used during the service. However, it is not always possible. Nevertheless, often - thanks to offers targeted at customers who already use the service - it is possible to significantly increase the profit per customer. An example is the offer of taxis, trips or SPA treatments addressed to a hotel guest. Cross-selling can also be used here, in which the product is offered to services.

By analyzing the marketing of hotel services of the most popular brands, you can find examples of successfully used custom merchandising. Very few of the richest stay at Chateau Marmont in Los Angeles. But hundreds of tourists a day visit the store where they buy accessories, postcards and clothes with the logo of a famous hotel. To some extent, this protects, for example in the event of a pandemic - Chateau Marmont also has an on-line store. Customers dressed in sweatshirts or t-shirts with the logo of this place create reference marketing in its pure form.

Marketing of logistics services

Advertising services is also B2B marketing, and therefore more specialized, targeted at companies. "The use of marketing in the operations of a logistics company means the adoption of the following rules of conduct:

• taking into account the key role and position of the client
• alerting market research as an integral part of modern marketing,
• developing and introducing innovative products,
• systemic approach to market problems. "

G. Rosa, M. Jedliński and U. Chrąchol-Barczyk write in their comprehensive study of this topic.

Factors influencing the behavior of recipients of services in the TFL industry determine the shape of marketing activities in logistics. The most important in this case will be to emphasize practical but also basic features, such as price or delivery time. In this case, they dominate the image or image, which is more important in the B2C segment branding. 

How to promote services on the Internet?

As already mentioned in the introduction, the marketing of services on the Internet is primarily associated with specific requirements. The traditional division becomes less clear here. Applications or software can be advertised both as products and as services. Streaming and music services are a banal example. They replaced physical media, i.e. music or movie CDs that were purchased. From time to time, one of the users reads the rules of the application. He then realizes that he only has a license for the song in iTunes for a certain period of time, but the songs are not his property and he cannot, for example, save them in a will.

It is similar with streaming services that technically only grant permission to watch a movie. Here a philosophical question arises: are these then products or services? On the Internet, both concepts are often combined, and sometimes - as in the case of the platforms described - the features related to the service nature of the application (renting, making available, not selling) are not emphasized.

How to choose a marketing agency?

Choosing the right marketing service can be difficult. First of all, it is worth paying attention to the experience and portfolio of the agency, which should include various projects that it has successfully implemented for its clients. References and opinions of other companies are also very important. Also remember to match the selected agency to your needs – it provides many marketing services that are divided into specific areas. To make the best decision, it is also a good idea to ask several companies for an offer and compare them in terms of costs and services offered.

Choosing a marketing agency that creates effective advertising campaigns is more than half the battle. Thanks to its activities, we can count on an increase in sales as well as an influx of potential customers. Outsourcing of marketing services will ensure the implementation of marketing campaigns at the highest level and will also help in acquiring new customers. And all this thanks to a wide range of agency services, including:

• google ads,
• outbound marketing,
• inbound marketing,
• social media marketing,
• content marketing,
• e-mail marketing,
• mobile marketing,
• event marketing,
• SEO audit,
• customer service audit,
• video marketing.

And how much should the budget for marketing services be? There is no unequivocal answer to this question. It all depends on the specifics of a given company and its business goals. However, it is worth remembering that marketing is one of the key areas that affects the level of sales. The larger the budget for marketing services, the wider the range of actions that can be taken to attract customers and increase the brand's popularity. It's important to plan your marketing spend wisely and focus on what brings the greatest benefits to your business.