The marketing of services 595
reflecting the fact that products cannot be
classified into dichotomous goods and services
categories to begin with.
Traditionally, the most common basis for
classifying services has been the type of activity
that is performed. Statistics record service
activities under headings such as banking,
shipping and hotels, based largely on similarity
of production methods.
Production-based classification systems
are not particularly useful for marketers. A
single production sector can cover a very
diverse range of activities with quite different
marketing needs. Small guest-houses and inter-
national hotels may fall within the same sector,
but their marketing needs are very different.
The marketing needs of a particular produc-
tion-based sub-sector may share more in com-
mon with another unrelated sub-sector rather
than other areas within its own sector. Market-
ers should be more interested in identifying
sub-sectors in terms of similarity of marketing
requirements. In this way, the provision of
banking services may have quite a lot in
common with telecommunication services in
terms of the processes by which customers
make purchase decisions, methods of pricing
and promotional strategies, for example.
The following sections identify some of the
more commonly used bases for classifying
services. It should be noted that many of these
bases derive from the five fundamental charac-
teristics of services, which were noted earlier.
Degree of intangibility
Intangibility goes to the heart of most defini-
tions of services. It was noted earlier that
intangibility has consequences for the way in
which buyers perceive risk in a purchase
decision. The task of providing evidence that a
service will deliver its promises becomes more
difficult where the service is highly intangible.
As a classification device, degree of intangibil-
ity has many uses and this will be returned to
later in the context of the management of the
marketing mix.
Producer versus consumer services
Consumer services are provided for individuals
who use up the service for their own enjoyment
or benefit. No further economic benefit results
from the consumption of the service. By con-
trast, producer services are bought by a business
in order that it can produce something else of
economic benefit. An industrial cleaning com-
pany may sell cleaning services to an airport
operator in order that the latter can sell the
services of clean terminal buildings to airline
operators and their customers.
Many services are provided simultane-
ously to both consumer and producer markets.
Here, the challenge is to adapt the marketing
programme to meet the differing needs of each
group of users (for example, airlines provide a
basically similar service to both consumer and
producer markets, but the marketing pro-
gramme may emphasize low price for the
former and greater flexibility for the latter).The status of the service within the
total product offer
Given that most products are a combination of
goods and service elements, the service ele-
ments can contribute to the total product offer
in a number of ways. Many services exist to
add value to the total product offer, like a goods
manufacturer which augments its core tangible
product with additional service benefits, such
as after-sales warranties. Sometimes, the serv-
ice is sold as a separate product that customers
purchase to add value to their own goods (for
example, a car valeting service is purchased to
add to the resale value of a used car). A further
group of services may add value to a product
more fundamentally by making it available in
the first place. Distribution services can facili-
tate delivery of a tangible good from the point
of production to the place where it is required
by the consumer. Financial services can provide
the means through credit arrangements, which
allow tangible goods to be bought (for example,
mortgages facilitate house purchase).