Describe how the marketing of services differs from the marketing of products. Provide examples to illustrate your answer. (relate to tiger airways company)
Marketing of products and services involves different strategies due to the dissimilarities in their characteristics. While in product marketing, the aim is to fulfil the needs and wants of the target population. As against, in service marketing, the firm seeks to create a good relationship with the customer, to win their trust.
The two most important activities undertaken by the business is production or procurement of products and its distribution to the end user. The procurement of raw materials and its conversion into a finished product is an easy job. However, the disbursement of the product is a strenuous one, because creating a place for a product in the market is a bit difficult task, as the market is already flooded with lacs and lacs of products, where no one knows about your product and in this way the marketing comes into the picture.
Nowadays, marketing is not confined to the product, but services, ideas, property, experiences and even people are marketed. The marketing activities are aimed at creating an impression of the product or service in the consumer mind, in such a manner, that your brand becomes a synonym for that particular product or service. Here, in this article, we are going to talk about the differences between product and service marketing, read carefully.
The difference between product marketing and service marketing
Definition of Product Marketing
The entire process, right from the market analysis, to delivering product to the customer and receiving feedback, is called product marketing. The process is aimed at finding out the right market for its product and its placement in such a way that it gets good customer response. It entails promotion and sale of a product to its target audience, i.e. prospective and existing buyers.
Various activities involved in the product marketing involves analysis of the market, identification of consumer demand, designing and development of product, pricing, pitching of a new product, communicating, advertising, positioning, distributing, selling, review and feedback.
Example: Marketing for tangible objects like books, handbags, laptops, mobiles, clothes and so on.
Definition of Service Marketing
When a person or business entity promotes services it offers to its customers or clients, it is known as service marketing. It is aimed at providing solutions to the problems or difficulties of the clients. It includes both business-to-business (B2B) and business-to-consumer (B2C) marketing.
A service is an act of performing something for someone in exchange for adequate consideration. It is intangible, consumed at the time of its production, can’t be inventoried and resold. Each service offering is unique in itself because it cannot be repeated exactly alike, even if the service is rendered by the same person.
Example: Marketing of professional services, beauty parlours or salon, spa, coaching centres, health services, telecommunication, etc.
Let’s break down some of the traditional differences between product and services and how this might affect the marketing decisions around each.
In a product marketing, only 4 P’s of the marketing mix are applicable which are product, price, place and promotion, but in the case of service marketing, three more P’s are added to the conventional marketing mix, which are people, process and physical existence.
Products are tangible in nature, they can be felt and touched, which make its promotion easier. On the other hand, services are intangible, people can only experience it, and so marketing of services is a bit difficult.
While products are designed, built and delivered to a range of customers ‘as standard’, services can be tweaked and customised depending on the needs or wants of customers. Your service marketing strategy should reflect this by highlighting the personal touches you provide or how you listen to your customers’ needs.
When a business sells a product to a customer, the buyer takes it away with them. In the case of a service, the customer must go to the service provider if they want to enjoy or experience it. You cannot separate the service from the provider. For example, if you wanted to buy a DVD , you click on the buy button and wait a couple of days for the product to arrive. However, if you want to enjoy the videos and song streaming service, where movies are updated regularly, you need to head to the website and watch the film there.
A product can be bought, used and then resold ‘second-hand’, while a service cannot – once it’s been consumed. A product is also a separate entity to the business who creates/sells it. A service, on the other hand, is always connected to the business who provides it. Marketing for services should be all about building the brand and personality of the service provider.
In product marketing, the quality of the product can be measured by making a comparison between various products, but this is just opposite in service marketing, where the measurement of services is not possible
It’s also important to understand that services are consumed immediately and cannot be returned once carried out. This is where the marketing goal of creating trust comes in. If you provide a bad service, your customers cannot return the service, but they may not return as customers. Once a buyer has bought a product, it doesn’t mean they will buy from you again – but if they are happy with it, it’s more likely that they will.
Product and the company producing it, are separable.But,Service cannot be separated from its provider.
Usually, services are provided at a specific time for a specific period. After this, the service agreement must be renewed or cancelled. A product can be bought and owned without any time constraints. Marketing differences here should centre around the value of low-cost monthly subscriptions in the case of services, or a ‘buy once, use forever’ message for a product.
Whether, it’s a product marketing or a service marketing, the task is equally onerous. However, with the former, there are some advantages such as tangibility, separability, durability, transferability, etc. which the latter lacks, making it a bit difficult. Demonstration of product or service is one of the best ways to promote it. Further, word of mouth also helps in marketing them.
Examples of product marketing
New Balance is not the only brand that sells sneakers — but year after year they’ve been able to keep selling sneakers despite having to compete with Nike, Adidas and up-and-comers like Under Armour.
How have they been able to do it? They’ve found their niche and how to connect with their audience. New Balance has taken a differentiated position in the market. They dont sell sneakers. They sell classic sneakers — and they are “reinventing how athletic looks.
Evernote is a produt that can be used for almost everything: taking notes, making lists, saving things you don’t want to forget and more.
From a product marketing perspective, that presents a challenge: What actions do we want users to take? Which features should be highlighted?
Instead of getting into the feature wars, Evernote’s message has always been simple and clearly focused on the benefit to the user: “For everything you’ll do, Evernote is the workspace to get it done.
Examples of service marketing
Wealthfront is an automated investment service: you deposit money, and they automatically invest it.
“They invest your money for you” could have easily been Wealthfront’s leading message, but instead they decided to focus on trust and credibility, highlighting the fact that Wealthfront manages over $2B from clients.
They also frequently highlight the work of two financial experts that they’ve hired full-time on their team, deciding to focus on the benefits (a smart, trusted team) than the features (automated investing).
Company that provides swing dance lessons would use services marketing strategies to research what kinds of people are most interested in swing dancing, and then create advertising materials and promotions designed to appeal specifically to those kinds of people.
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