Module 06
Service Characteristics of Tourism Marketing
Services Marketing: Focus on Service
Characteristics to Create Competitive
Advantage
Margaret M. Martin
Central Oregon Community College.
• How does one go about marketing a service—a
pet boarding and grooming service, for
example?
The challenges associated with marketing a
service-based business are quite different from
the challenges associated with marketing a
product-based business. Service businesses
have unique characteristics that should be
explored and understood when developing a
marketing plan and competitive strategy.
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The four key characteristics of service
businesses are:
Intangibility,
Inseparability,
Perishability, and
Variability.
1) Intangibility. When you buy a car, you can see
it, feel it, and even test it prior to purchase. In
other words, products have tangible qualities
that provide information to consumers so they
can easily compare one product to another.
Services, on the other hand, are intangible.
Most services cannot be experienced or
consumed until the purchase is made.
Customers can easily end up feeling like they
have to make a purchasing decision without
adequate information.
What is the answer to this challenge? Communicate,
communicate, communicate. Communication can come
from a variety of sources. The use of customer
testimonials and referrals is an excellent way to reduce
the level of intangibility for your service.
Additionally, you can increase customers’ comfort level
by explaining your service in as much detail as possible.
If you provide your services at one location (e.g. a doggy
daycare) you might consider allowing customer preview
visits. Here is a tip: a well-designed brochure or website
can provide information to customers before they talk to
you, improving your overall efficiency and increasing
your chances of securing new business.
2) Inseparability. To continue using the
automobile analogy, cars are produced at one
location, sold at another, and used at yet
another location. Services are unique because
they are usually provided and consumed at the
same time in the same location (e.g. a haircut or
car tune-up).
Because of the characteristic of inseparability,
customers have strong expectations about how
a service will be provided, which can lead to
disappointment if their expectations are not met.
A solid customer service process is the
key to managing this challenge effectively.
• How do you ensure customer satisfaction?
• How do you deal with unhappy
customers? If you don’t know the level of
your customers’ satisfaction with your
service, ask them!
3) Perishability. If a car does not sell today, it can
be stored and sold the following day or at some
other time in the future. Services, on the other
hand, are often perishable, meaning that unused
capacity cannot be stored for future use or sale.
For example, a restaurant might be full one night
and half empty the next. If the restaurant runs
with an inflexible staffing model, expenses are
the same each night. However, the revenue
picture is quite different, which impacts profits.
This challenge can be overcome by carefully managing
supply and demand. A restaurant might operate with
fewer staff during the week and hire additional staff to
cover weekends when demand is higher.
This strategy will allow the restaurant to provide the
same level of customer service with varying customer
demand—and improve productivity. Does your business
have peak periods? What can you do to control supply
and demand?
Tip: Use pricing strategies and promotions to stimulate
demand for your service.
4) Variability. Once you have decided to buy a
Honda Accord, you know that there will be no
variation in the quality of the Accord from one
Honda dealer to another. Manufactured goods
tend to have automated processes and quality
assurance procedures that result in a consistent
product. However, the quality of a service can
vary by many factors, including who provides it,
where it is provided, when it is provided, and
how it is provided. The more your business
relies on humans to provide services (instead of
automation), the more susceptible you are to
variability.
• How can you manage this challenge?
Establishing standard procedures (or checklists)
can ensure consistent service delivery. If you
have employees, training is essential. Can
technology improve an aspect of your business?
One obvious example of technology’s impact is
illustrated by ATMs reducing bank teller service
variability for customers. Don’t forget the “little
things” like invoicing and newsletters. Any time
you have a “customer touch” you have an
opportunity to demonstrate consistency and
professionalism, which will translate into your
customer’s perception that your service is
consistent in quality.
Now put a few of these characteristics together
to improve your competitive position. In order to
be successful, a small service business must not
only attract new customers, but it must also
develop long-term relationships with existing
customers. Take advantage of the opportunities
offered by the characteristics of “inseparability”
and “variability” to build trust and satisfy your
customers—and earn their loyalty and referrals.
As you explore the unique characteristics of your
service business, do not become overwhelmed
by the challenges they present. “Challenges” are
simply disguised opportunities. Now that you
have this information, turn one or more of these
service characteristics into a competitive
advantage for your business.
Margaret M. Martin is an assistant professor of business
at Central Oregon Community College.