Scope of Service Marketing

SCOPE OF SERVICE MARKETING

A service business is one where the perceived value of the offering to the buyer is determined more by the service rendered than the product offered. In this way the nature and scope of services pose different challenges for managers in service businesses. Such businesses include those that provide an almost entirely intangible offering, such as legal services, health care and cleaning services and businesses that offer both services and products such as restaurants and retail outlets.

The definition and scope of the service concept is wide and can mean any or all the following: Table 1.1: Scope of services

(a). Service as an organization: It is the entire business or not-for-profit structure that resides within the service sector. For example, a restaurant, an insurance company a charity.

 (b). Service as core product: The commercial outputs of a service organization such as a bank  account, an insurance policy or a holiday.

 (c). Service as product augmentation: any peripheral activity designed to enhance the delivery of a core product. For example, provision of a courtesy car, complimentary coffee at the hairdresser.

 (d). Service as product support: Any product or customer-oriented activity that takes place after the point of delivery. For example, monitoring activities, a repair service, up-dating facilities.

 (e). Service as an act that is service as a mode of behavior such as helping out and giving advice.

However from a market or consumer point of view the relative importance of different components of

the service offering can range vastly from one customer to another. So a service must be considered from the point of view of many types of customers. For example, two people may pay the same amount for a service but may be paying for different aspects of the service. A business person may dine regularly in an expensive, upmarket restaurant because of the convenience to their place of work and the perceived status of entertaining guests there. Other customers of the same restaurant may eat there regularly because of the excellent food, modern décor and menu choice.