Service Marketing – What is it, and Why Do Service Providers Need It?

A service is basically a transaction where no actual physical products are exchanged between the seller and the buyer. The buyer’s willingness to accept the exchange proves the advantages of such a service. The public services most often are paid for by society as a whole. Other examples of these are social services, health care and education.


There are two main types of service industries: tangible products and non-tangible goods. The tangible products are services like transport, communications, energy, etc. while non-tangible goods are raw materials used in production of the tangible products. The service sector, on the other hand, consists of both tangible products and non-tangible goods. The service industry is the largest of all the service sectors today.

One distinguishing characteristic of the intangible sector is its lower cost base. Low pricing is the biggest advantage of this type of industry. Products and processes here are intangible and not easily measured in monetary terms. Although it is argued that intangibles have a high rate of return compared with tangible goods, there is also the argument that pricing of intangibles is too low, and they would not be able to compete with other service providers.

On the other hand, there are also some arguments that service performance cannot be measured by monetary means. Some economists believe that price can be a poor substitute for the analysis of intangibles because price is merely the sum of parts. However, there are still others who believe that price alone can provide us with an insight into the value of a specific service or product. They use the analogy of the firm that makes shoes and say that the cost of a pair of shoes does not necessarily reflect the value of that service/product, because a shoe can be produced cheaply in many different ways, and it can be sold as a distinct brand under the same brand name. In this case, the price does not really describe the service/product, but it describes the price at which it can be sold.

The service business is not far from this view. It should be noted that service providers are in direct competition with service sellers. And sellers can take advantage of service marketing systems. For instance, when service providers want to increase their share of the market, they can adopt certain strategies such as promoting their own brands and services, offering special discounts to customers, or offering freebies. Service providers can also attract customers by creating intranet sites, blogs, and other media. This will make them look more professional and less like network marketers.

As you can see, marketing service and providing support to service businesses is no walk in the park, and service marketers need all the help they can get. Fortunately, there is a wide array of support tools available that service marketers can use, depending on their needs and objectives. If used effectively, these tools can help service providers build and maintain a strong and viable business while simultaneously increasing their reach into the wider market.

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