The document summarizes several key marketing challenges of services: 1) Most services cannot be inventoried, making it difficult to manage fluctuations in demand. 2) The intangible nature of services makes quality difficult for customers to assess and the price-quality relationship is complex. 3) Services are often difficult for customers to visualize and understand prior to purchase, making the service experience risky. 4) Customers may be involved in co-producing the service, and their involvement can affect the outcome of the transaction.

1. CHALLENGES OF SERVICES
MARKETING/
MARKETING IMPLICATIONS

2.  Characteristics of services pose marketing challenges
(as well as advantages)
 According to Lovelock major marketing challenges/
implications are-
• Most services products can not be inventoried.
• That’s why fluctuations in demand are difficult to manage
• Intangible element usually dominate the value creation
Lovelock & Zeithmal

3. • Services are often difficult to visualize and
understand
• Hence, quality is difficult to for consumers to access
• Customers may be involved in co-production
• Operational inputs and outputs tend to vary more
widely
• Time factor often assumes great importance
• Distribution may take place through non physical
channels
Lovelock

4.  Zeithaml and Jo Bitner, discussed few more
marketing implications and challenges-
 Services can not be easily patented and new service concept
can be easily copied by the competitors
 The actual cost of ‘a unit of service’ is very hard to
determine, and the price-quality relationship is complex
 Since, services are often produced and consume at a same
time, mass production is difficult
 Simultaneous production and consumption makes it hard to
achieve significant economy of scale through centralization.
 Because of, simultaneous production and consumption the
customer is involved in and observe the production process
and thus may affect the out come of service transaction.
 Due to parish-ability characteristics of the services, demand
forecasting and creative planning to capacity utilization is
challenging
 Since, services can not be returned or resold, a strong recovery
strategy is needed when things go wrong
Zeithaml

5. 5
1. Most services products can not be inventoried
 Services are transitory and perishable.
 When demand exceeds capacity, customers may be
sent away disappointed of wait until later.
 When capacity exceeds demand the labor,
machines, facility remain unused and services go
waste.

6. 2. Intangible element usually dominate the value
creation
 Services can not be touched, seen, felt, smelt, heard
or tested.
 Intangibility makes it difficult to asses important
service feature in advance of use and to evaluate
the performance itself.
 The lack of easy reference point can make it hard
for customers to distinguish among competing
suppliers.

7. 7
3. Services are often difficult to visualize
and understand (Mentally Intangible)
 Services are often described as Mentally
Intangible. i.e., difficult for customers to
visualize and experience in advance of purchase.
 This makes service purchase risky.
 Mentally Intangibility often present a problem
for the first time users.

8. 4. Customers may be involved in co-production
 Many services require customers to participate
actively.
 Customers are often termed as Partial Employees.
 Use of SST’s (Self Service Technologies) has reduced
the face to face interaction between customer and
company.
 Ex- ATM, Self serving Kiosk, Shopping experience in
Big Bazar, etc.

9. 9
• Services are often difficult to visualize and
understand. Hence the quality is difficult to for consumers to
access.
• Operational inputs and outputs tend to vary more
widely.
• Time factor often assumes great importance.
• Distribution may take place through non physical
channels.
• Customers may be involved in co-production.
• People may be part of service production.
Lovelock

10. 10
 Key issues for marketers is to design, implement
and control the SST (Self Service Technologies).

11. 11
5. People may be part of service
production
 People i.e.,
 Employees
 Customers
 Others
 Well managed firms devote special care to
selection, training and motivating the people
who are involved in service production.

12. 12
 In shared service setting, other customers
should enhance the experience, not detract
from its value.

13. 13
6. Operational inputs and outputs tend to
vary more widely
 Unlike manufactured goods services cant be
produced under controlled condition and
checked for the quality standards much before
it reach to customers.


14.  Service execution often differs-
 Among employees
 Between the same employee and different
customers and
 Even from one time of the day to another
 Attitude, transaction speed, quality of performance
can vary widely. And, it is some times very hard to
shield customers from service failure

15. 15

16. Discussion
“The characteristics of services result in
challenges as well as advantages for the
managers”
(Zeithaml and Jo Bitner, P.21)