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3 Challenges in Service Marketing

Marketing professionals working for service businesses face a unique set of challenges when it comes to developing effective marketing strategies.

By earning an MBA with a concentration in Marketing through UT Tyler’s online program, you can develop a better understanding of these issues. You’ll gain broad-based business management skills while focusing on practical marketing applications.

Basic Marketing Principles of a Service Business

As Karen S. Johnson points out in a Houston Chronicle article titled “Marketing Challenges in the Service Business,” the same basic marketing principles apply to both product and service marketing. These include place, price, promotion and product, which in this case, is the service you provide. However, unlike a product that a person can touch or see, a service is intangible and the service provider must sell a potential customer on the results they can expect. Additional factors worth consideration include the people and process involved in delivering the service and the physical evidence of the service delivered, such as a spotless home for a cleaning service.

Jan Griffioen of Griffioen Consulting identifies the major challenges unique to service providers.

  1. Services Are Intangible

    As a service provider, you are not providing a physical, tangible product. In many cases, customers seek out a service provider to help fix a problem of some kind as in the case of somebody needing a mechanic, a plumber or a landscaping service. In other cases, roles may be reversed, with service providers approaching potential customers to introduce new offerings. A provider of satellite or cable internet would fall in this category. In either case, the provider must convince customers that their service is worth the price. If your competition is offering a lower price, you will need to demonstrate how the value your service adds merits the higher price.

  2. Quality Is Variable and Difficult to Control

    Unlike a product produced under controlled conditions, services are often performed and consumed simultaneously. The environment may not be the same every time and other variable factors may come into play. Take the case of a hair stylist faced with the unique hair characteristics and different requests of every customer. In a product business, the manufacturer either defines the quality requirements or adheres to regulatory standards and requirements; products that don’t meet standards are discarded or reworked. The quality of a service provider, however, is often defined in the moment — as much by the consumer as it is by the provider.

    The quality of service can vary based on the amount of experience and motivation level of staff members.

  3. Services Cannot Be Stocked

    A product business can maintain an inventory of items and wait for them to sell. A service business, on the other hand, cannot stock service. At best, it can prepare for possible surges in demand that may test the service provider’s ability to supply.

Solutions to the Challenges of Marketing a Service Business

In the end, Griffioen highlights the fact that service is all about people. In other words, service is a relationship between a customer and a service provider, and it is important to define the terms of that relationship up front in order to consistently deliver the best possible results. A service description that clearly outlines the following items can help optimize service delivery:

  1. What is the service?
  2. Why is the service important?
  3. What are the benefits of the service?
  4. What are the deliverables?

By taking the time to develop a clear service description, a business can ensure that a customer will understand what to expect as an outcome. Just as importantly, employees will have a clear definition of what service means and how to achieve customer satisfaction. In the end, a service description can minimize misunderstandings by establishing a framework for the relationship.

Preparing for Your Career in Service Marketing

Understanding a customer’s needs is the first step in identifying your service as the right solution. An understanding of marketing concepts can help you build successful service marketing strategies.

Taught by qualified faculty with industry experience, UT Tyler’s online program for an MBA with a concentration in Marketing can give you the tools to excel in marketing services across sectors.


Houston Chronicle: Marketing Challenges in the Service Business

Griffioen Consulting: Services Marketing Is Different from Product Marketing

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