MARK1012 Lecture Notes - Gross Domestic Product, Customer Service, Services Marketing
SERVICES: The Intangible Product
• Service: intangible offering that involves a deed, performance or effort that
cannot be physically possessed
• Customer service: refers to human or mechanical activities that firms
undertake to help satisfy their customers’ needs and wants
o Adds value to products if good
• AUS & NZ: services make up 70% of aus gross domestic product (GDP)
• Growth of service-oriented economies in developed countries have emerged
because:
o Less expensive for firms to manufacture their products in less
developed countries
▪ Proportion of service production to goods production in aus has
increased over time
o Place high value on convenience and leisure
▪ E,g, lawn maintenance, food prep, house cleaning
o People are demanding more specialised services
▪ E.g. health care specialists
Services marketing differs from product marketing
Differences are as follows:
• Intangible
o Service is intangible
o Its intangibility → images used must reinforce benefit or value that a
service provides
o There are laws governing advertising of professional services
• Inseparable Production and Consumption
o E,g, getting a haircut → customer is both present and a participant in
the service process
o Because of this can’t really try before purchase
▪ Because of risk service may offer guarantees and warranties
• Heterogeneous
o Humans → there will be variability
o Marketers can use this to advantage → micromarketing segmentation
strategy can customise a service to meet customers’ needs exactly
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