library / lib72e603cb5a90b9d4
Marketing of services
In a sentence
A 1981 American Marketing Association conference proceedings compiling early academic and practitioner thought on why and how the marketing of intangible services differs from the marketing of physical goods.
This pioneering volume, the proceedings of the first AMA conference devoted solely to services marketing, assembles dozens of papers from leading scholars and practitioners who collectively forge a new sub-discipline. It wrestles with the foundational question of whether services require distinctly different marketing management, examines commercial services (especially banking and financial institutions), professional services (law, accounting, medicine), and nonprofit/public-sector services, and advances services-marketing theory through concepts such as the expanded marketing mix (the seven P's), the inseparability of production and consumption, the centrality of contact personnel, and the difficulty of quality control. For anyone seeking the intellectual roots of modern services marketing, this collection captures the field at its formative moment, blending empirical segmentation studies, conceptual frameworks, and managerial prescriptions.
The four lenses
- Science
- Statistics
- Systems
- Strategy
The model
An inferred model linking the distinctive characteristics of services and the design levers of an expanded services marketing mix to customer psychological and behavioral states, and ultimately to satisfaction, patronage, and competitive performance outcomes.
Service Intangibility and Inseparabilitycontextual condition
The contextual condition that services are intangible deeds or performances produced and consumed simultaneously, cannot be inventoried, and require customer presence or participation, which shapes all downstream marketing tasks and perceptions.
Expanded Services Marketing Mixdesign lever
The set of controllable design levers a service firm manipulates including product, price, place, promotion plus participants, physical evidence, and process of service assembly, used to define and deliver the service and influence buyer responses.
Contact Personnel and Service Encounter Qualitybehavioral pattern
The competence, attitude, and interpersonal behavior of customer-contact employees who are perceived by customers as part of the service product and who personally sell, deliver, and embody the service during the encounter.
Perceived Service Quality and Riskpsychological state
The customer's psychological evaluation of the service experience including perceived quality, consistency, and perceived risk arising from intangibility and inability to trial before purchase, formed through expectations and the actual encounter.
Benefit Segment Fitdesign lever
The degree to which the service offering and its promotion match the specific bundle of benefits sought by an identified target segment, as opposed to relying on demographic descriptors alone, driving patronage intentions.
Demand and Capacity Managementdesign lever
The firm's ability to smooth fluctuating demand to match perishable, non-inventoriable service capacity through pricing, scheduling, reservations, and communications so that capacity is neither wasted nor overwhelmed.
Marketing-Operations Integrationcontextual condition
The organizational structuring that gives marketing access to and influence over service delivery, including field general managers and matrix structures, so marketing considerations are balanced against operational ones in the service outlet.
Customer Satisfaction and Patronageoutcome metric
The outcome reflecting customer satisfaction, retention, repeat usage, positive word of mouth, and selection or switching decisions that result from the cumulative service experience and perceived quality.
Service Firm Competitive Performanceoutcome metric
The firm-level outcome of market share, profitability, and competitive positioning achieved by effectively marketing services in a deregulated and increasingly competitive environment.
How they connect
- service intangibility → influences expanded marketing mix
- service intangibility → influences perceived service quality
- expanded marketing mix → predicts contact personnel quality
- contact personnel quality → predicts perceived service quality
- perceived service quality → predicts customer satisfaction patronage
- benefit segmentation fit → moderates customer satisfaction patronage
- demand capacity balance → influences perceived service quality
- marketing operations integration → moderates contact personnel quality
- customer satisfaction patronage → predicts competitive performance
A candidate measure
Marketing of services — derived measurement candidates
Service Intangibility and Inseparability
tangibility rating; simultaneity index; service-type classification
self-report suitability: medium
Expanded Services Marketing Mix
marketing-mix audit score; physical-evidence quality index
self-report suitability: medium
Contact Personnel and Service Encounter Quality
encounter satisfaction rating; mystery-shopper score; complaint counts
self-report suitability: high
Perceived Service Quality and Risk
perceived-quality scale; perceived-risk scale; problem-impact score
self-report suitability: high
Benefit Segment Fit
benefit-importance scores; discriminant classification accuracy
self-report suitability: high
Demand and Capacity Management
capacity utilization rate; peak/off-peak ratio; wait time
self-report suitability: medium
Marketing-Operations Integration
org-structure index; perceived marketing support score
self-report suitability: medium
Customer Satisfaction and Patronage
satisfaction index; retention rate; referral rate
self-report suitability: high
Service Firm Competitive Performance
market share; profitability; deposit/account share
self-report suitability: low
The story
The reader A marketing academic or service-firm executive who wants to market intangible services as effectively as goods marketers market products.
External problem
The marketer cannot easily define, standardize, promote, or control an intangible service that is produced and consumed simultaneously.
Internal problem
They feel less respected, less supported, and uncertain about whether their hard-won goods-marketing skills even transfer to services.
Philosophical problem
It is simply wrong to assume services can be managed with frameworks built for tangible, inventoriable goods produced out of the customer's sight.
The plan
- Recognize the generic and contextual differences between services and goods.
- Conceptualize the offering as a bundle of benefits perceived by the buyer.
- Adopt an expanded marketing mix that adds participants, physical evidence, and process.
- Integrate marketing with operations and train all contact personnel as marketers.
- Use benefit and behavioral segmentation and manage demand to match capacity.
Success
- Consistent, customer-oriented service delivery that satisfies and retains customers.
- Marketing earns equal status with operations and stronger management support.
- Differentiated positioning and profitable segments through benefit-based strategy.
At stake
- Misapplied packaged-goods strategies that fail in service contexts.
- Poor quality control, customer dissatisfaction, and negative word of mouth.
- Marketing remains peripheral, under-resourced, and unable to compete after deregulation.