Marketing Products Vs. Marketing Services

A couple of years back, I had written a post about marketing of services – an area that I had worked on for a year before coming to IIM Lucknow. Good to be studying a course on Services Marketing as an elective – I’m glad I opted for it!

In the first lecture on ‘Serv Mark’, Professor Rajeev Kumra laid out a very interesting principle. He introduced us to the concept of the ‘Tangibility Continuum’ where by a the tangibility of the offering increases from LOW to HIGH (as the nature of the offering changes from being a Service to being a Good), the tangibility of marketing communication decreases from HIGH to LOW. I made this graphic on Microsoft PowerPoint to translate the illustration that Professor had used on the board while explaining the concept in Class.

What it means is that a soap company (Highly Tangible Product) will use emotional appeals and feelings as the key benefits in advertising for the product. Notice that emotional appeals and feelings are not very tangible and hence, LOW on the tangibility continuum.

By contrast, an airline company which basically offers a service, and hence not something very tangible, will show the aircraft, the interiors, the comfortable leg-space, etc., which are tangible, and hence HIGH on the tangibility continuum.

The other thing that is great about such ‘tangible’ learnings is that they keep proving time and again to the non-believers that marketing, after all, is not all ‘GLOBE’ or ‘faff’, it is a set of principles which need to be identified, learnt and applied.

3 thoughts on “Marketing Products Vs. Marketing Services

  1. what about banks. banking and financial services are also intangible. but these days they use a lot of emotional atyachar in their ad, for ex. icici(hum hain na, icici prudential(jeete raho series),hdfc(na sir jhuka hai kabhi na jhukega kabhi) idbi(some relations grow deeper with time), bank of india(rishton ki jamapunji)

  2. Thanks Amit, for writing this beautiful blog on services. Although this is your blog and I am just a visitor but I am tempted to comment on Mr. Ravi comments.
    Hi Ravi, nice observation but nevertheless this does not undermine the above said fundamental. Let me elaborate it to make my point home.
    Service quality has many dimensions like tangibility, empathy, responsiveness, relability, and assurance. Customer give different weighatages to different dimensions depending on which service industry are we talking about. Advertisement (marketing communication) will be driven by these customer weightages (which ofcourse you can pick up from qualitative insights). Now, lets take your example of BFSI (banking or insurance) important dimension of services is relability (eg. 29% in auto insurance and 28% in life insurance) and assurance (19% in auto insurance and 18% in life insurance) (source: Research of Prof. Parasuraman, University of Miami, legand on service quality, cited 6018 times). Now look at these advts. punchlines/taglines: Hum hain na, rishton ki jamapunji and some relations grow deeper with time etc. all pointing to underlying assurance and relability factor (hence emotional not tangible). But basic fundamental of advertisement/positioning will still remain here, if this service quality dimension start saturating (everybody talks same thing/offers same service quality dimensions) it will pay for another banks to go for next important service quality dimension or different combination of service quality dimension and differentiate, lets say SBI says we offer you experience quality (combination of assurance and tangibility). Yes, it can give a run for money to these, private sectors banks. Hypothetically lets say SBI, says we have better assurance (public sector hence transparent and no extra charges etc.)and have best of/hughe unmatched branch network (tangibility). Voila !!!…….

    Lastly, this does not undermine the importance of use of tangibilty in service advt. (communication) for example, services industry such as; Hotels, Spa, Health Clubs, etc. major weightage is for tangibility so it will always pay to show tangibility factor (source: Lynn Shostack, Breaking free from product marketing, Journal of Marketing, cited 1019 times).
    Now ravi, you can safely call my comment as emotional atyachar 🙂

  3. Sir – Thanks a ton for sharing your insights and the journal references. As usual, your inputs are deep and to the point! 🙂

    @ Ravi: I hope this gives you deeper understanding.

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