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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 a Master of Business Administration (MBA) with a Concentration in Marketing through the University of Texas at Tyler (UT Tyler), 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

Many basic marketing principles apply to jobs in both product and service marketing. These include the “four Ps” of marketing: place, price, promotion and product, which, in the case of a service industry business, is the service provided.

However, unlike selling a product that a person can touch or see, the service provider must sell a potential customer on the qualitative results the customer can expect. Additional factors or “Ps” worth consideration in service marketing include the people and processes involved in delivering the service and the physical evidence of the service delivered, such as a spotless home for a cleaning service.

The following are three differences between service marketing and product marketing, outlined in a LinkedIn article by business consultant Jan Griffioen. These differences pose unique challenges for service providers.

  • The intangibility of services: 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 into 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.

  • The variable, subjective nature of a performed service: Unlike a product produced or manufactured under relatively 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 do not 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. As Griffioen explains, customers are essentially buying the expertise and time of a service provider.

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

Plus, a customer cannot return a service once that service is rendered. The time has already been spent. If the customer is not satisfied with the result, the service provider can only attempt to address the situation and satisfy the customer through solving the problem, providing a refund or discounting additional services.

Solutions to the Challenges of Marketing a Service Business

In the end, 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. According to Griffioen, a service description that clearly outlines, defines and answers the following questions can help optimize service delivery:

  • What is the service?
  • Why is the service important?
  • How is the service delivered?
  • Who is the service designed for?
  • What are the benefits of the service?
  • 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. Equally important, 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 advanced marketing concepts and practices can help you build successful service marketing strategies.

Taught by qualified faculty with industry experience, the online MBA in marketing from UT Tyler emphasizes business-to-consumer and business-to-business services marketing. This specialized yet comprehensive degree program can give you the tools you need to excel in marketing services across sectors.

Learn more about the UT Tyler online MBA in Marketing program.

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