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Abstract

This article compares problems and strategies cited in the services marketing literature with those reported by actual service suppliers in a study conducted by the authors. Discussion centers on several broad themes that emerge from this comparison and on guidelines for future work in services marketing.
Valarie A. Zeithaml, A. Parasuraman, &Leonard L. Berry
Problems and Strategies
Services Marketing
In
This article compares problems and strategies cited in the services marketing literature
with
those re-
ported by actual service suppliers in a study conducted by the authors. Discussion centers on several
broad themes that emerge from this comparison and on guidelines
for
future
work
in services marketing.
THREE basic assumptions pervade the growing body
of literature on services marketing. The first holds
that a number of unique characteristics-notably in-
tangibility, inseparability of production and consump-
tion, heterogeneity, and perishability-separate ser-
vices from tangible goods. The second assumption
maintains that these characteristics pose vexing prob-
lems for services marketers that are not faced by goods
marketers. The third and final assumption holds that
services marketing problems require services market-
ing
solutions-that
strategies developed from expe-
rience in goods marketing are often insufficient.
The purposes of this article are: (1) to offer a con-
ceptual framework summarizing the unique charac-
teristics of services, the problems stemming from these
characteristics, and the strategies suggested as appro-
priate to overcome the problems; (2) to report the
findings of a national survey of managers of service
firms concerning the problems they face and the mar-
keting strategies they use to overcome them; (3) to
Valarie
A.
Zeithaml
is
Assistant
Professor
of
Marketing,
A.
Parasuraman
is
Associate
Professor
of
Marketing,
and
Leonard
L.
Berry
is
Professor
of
Marketing,
Texas
A&M
University.
The
authors
gratefully
acknowl-
edge
the
contributions
made
by
Gregory
Upah
and
four
anonymous
reviewers.
Journal
of
Marketing
Vol. 49 (Spring 1985), 33-46.
compare the problems and strategies cited in the lit-
erature with those reported by managers of services
firms; and (4) to offer recommendations for the de-
velopment of services marketing thought.
Literature on Services Marketing
The rationale for a separate treatment of services mar-
keting centers on the existence of a number of char-
acteristics of services which are consistently cited in
the literature: intangibility, inseparability of produc-
tion and consumption, heterogeneity, and perishabil-
ity. Figure 1 presents a summary of the references
documenting these differences.
The fundamental difference universally cited by
authors (e.g., Bateson 1977; Berry 1980; Lovelock
1981; Rathmell 1966, 1974; Shostack 1977a) is in-
tangibility. Because services are performances, rather
than objects, they cannot be seen, felt, tasted, or
touched in the same manner in which goods can be
sensed. Intangibility, according to Bateson (1979) is
the critical goods-services distinction from which all
other differences emerge.
Inseparability
of
production and consumption in-
volves the simultaneous production and consumption
which characterizes most services. Whereas goods are
first produced, then sold and then consumed, services
are first sold, then produced and consumed simulta-
Problems
and
Strategies
in
Services
Marketing
/ 33
FIGURE 1
References Listing Unique Characteristics of Services"
r-.
r-.
CT.l
co
-
Q)
....
.
~
OJ
W
CT.l
co
r-.
CT.l
r-.
CT.l
.....
00
CT.l
Intangibility jjjjjjjjjj j j j j j j j j j j j j j j j j
Heterogeneity
(Nonstandardization) j j j j j j j j j j j j j j j j j
Characteristic Inseparability of
Cited Production and
Consumption j jjjjjjjj j j j j j j j j j j j j j j
Perishability (Cannot
be inventoried) jjj jj j j j j j
'Several authors have disputed the need for a separate treatment of services in marketing. These authors include Sonoma and
Mills (1979), Enis and Roering (1981), and Wyckham, Fitzroy, and Mandry (1975).
neously (Regan 1963). Since the customer must be
present during the production
of
many services (hair-
cuts, airplane trips), inseparability "forces the buyer
into intimate contact with the production process"
(Carmen and Langeard 1980, p. 8). Inseparability also
means that the producer and the seller are the same
entity, making only direct distribution possible in most
cases (Upah 1980) and causing marketing and pro-
duction to be highly interactive (Gronroos 1978).
Heterogeneity concerns the potential for high vari-
ability in the performance of services. The quality and
essence of a service (a medical examination, car rental,
restaurant meal) can vary from producer to producer,
from customer to customer, and from day to day. Het-
erogeneity in service output is a particular problem for
labor intensive services. "Many different employees
may be in contact with an individual customer, raising
a problem
of
consistency of behavior" (Langeard et
al. 1981, p. 16). Service performance from the same
individual may also differ: "People's performance day
in and day out fluctuates up and down. The level
of
34 /
Journal
of
Marketing,
Spring
1985
consistency that you can count on and try to com-
municate to the consumer is not a certain thing"
(Knisely 1979a, p. 58).
Perishability means that services cannot be saved
(Bessom and Jackson 1975, Thomas 1978). Motel
rooms not occupied, airline seats not purchased, and
telephone line capacity not used cannot be reclaimed.
Because services are performances that cannot be
stored, service businesses frequently find it difficult
to synchronize supply and demand. Sometimes too
much demand exists (a popular restaurant on a Sat-
urday night) and sometimes too little demand exists
(an income tax service in the summer).
The literature suggests that each unique charac-
teristic of services leads to specific problems for ser-
vice marketers and necessitates special strategies for
dealing with them. Figure 2 summarizes the problems
which frequently stem from each of the four service
characteristics. Figure 3 lists the marketing strategies
suggested in the literature to overcome these prob-
lems.
FIGURE
2
Unique
Service Features
and
Resulting
Marketing
Problems
2. Cannot protect services through
patents.
3. Cannot readily display or
communicate services.
Unique Service Features Resulting Marketing Problems Selected References Citing Problems
1. Services cannot be stored. Bateson (1977), Berry (1980), Langeard
et al. (1981), Sasser (1976)
Eiglier and Langeard (1975, 1976),
Judd
(1968)
Rathmell (1974)
Intangibility
4. Prices are difficult to set. Dearden (1978), Lovelock (1981), Thomas
(1978)
1. Consumer involved in production. Booms and
Nyquist
(1981)
2. Other consumers involved in Bateson (1977), George (1977),
Inseparability production. Gronroos (1978)
3. Centralized mass production of Sasser et al. (1978), Upah (1980)
services difficult.
Heterogeneity 1. Standardization and quality control Berry (1980), Booms and Bitner (1981)
difficult to achieve.
Perishability 1. Services cannot be inventoried. Bateson (1977), Sasser (1976)
FIGURE
3
Suggested
Marketing
Strategies
for
Problems
Stemming
from
Unique
Service
Features
Unique Service Features Marketing Strategies to Solve Problems References Citing Strategies
Bessom and Jackson (1975), Fisk (1981),
Zeithaml (1981)
Davis, Guiltinan, and Jones (1979),
George and Berry (1981)
Judd (1968), Knisely (1979a), Thomas
(1978), Uhl and Upah (1980)
Beard and Hoyle (1976), Dearden (1978)
5. Use cost accounting to help set
prices.
6. Engage in post-purchase
communications.
2. Use personal sources more than
non personal sources.
3. Simulate or stimulate word-of-mouth
communications.
4. Create strong organizational image.
1. Stress tangible cues. Berry (1980), Booms and Bitner (1982),
George and Berry (1981), Shostack
(1977a)
Donnelly (1980), Johnson (1969)
Intangibility
Inseparability
1. Emphasize selection and training
of
public contact personnel.
2. Manage consumers.
3. Use multisite locations.
Berry (1981), Davidson (1978), George
(1977), Gronroos (1978)
Lovelock (1981)
Carman arid Langeard (1980), Langeard
et al. (1981), Upah (1980)
Heterogeneity
1. Industrialize service."
2. Customize service.
Levitt (1972, 1976)
Bell (1981), Berry (1980), Johnson (1981),
Regan (1963), Sasser and Arbeit (1978)
Perishability
1. Use strategies to cope
with
fluctuating demand.
2. Make simultaneous adjustments in
demand and capacity to achieve a
closer match between the
two.
Lovelock (1981)
Sasser (1976)
"Levitt suggests specific techniques to substitute organized preplanned systems for individual service operations (e.g., a travel
agency could offer prepackaged vacation tours to obviate the need for the selling, tailoring, and haggling involved in custom i-
zation). This strategy is the opposite of customization.
Problems
and
Strategies
in
Services
Marketing
/ 35
The Study
The literature review (Figures 2 and 3) provided a ba-
sis for developing the questionnaire used in a mail
survey of 1,000 service firms. This survey was con-
ducted to determine (1) the extent to which problems
reported to be associated with services actually pre-
sented problems for the sample firms, and (2) the de-
gree to which sample firms used the suggested mar-
keting strategies to overcome the problems.
The Sample
A random sample of 1,000 service firms was selected
from Dun and Bradstreet's Million Dollar Directory
(Dun and Bradstreet 1982). A questionnaire and cover
letter were mailed to the president of each firm. A
follow-up letter and second questionnaire were mailed
to nonrespondents three weeks later. Of the original
1,000 questionnaires, 323 (32.3%) were returned and
usable. Table 1 shows the results of chi-square anal-
yses performed to determine whether significant dif-
ferences existed between respondent and nonrespon-
dent firms in terms of distribution of SIC codes, sales
revenue, and number of employees. The tests re-
vealed no significant differences between the two
groups on any of the three dimensions, suggesting that
nonresponse bias was negligible.
Almost 70% of the respondents filling out the
questionnaire held top management positions such as
CEO, President, and Vice President, while the rest
held titles such as Marketing Manager, Marketing Di-
rector, and General Manager.
The Questionnaire
The questionnaire contained three sections. The first
section included items classifying service businesses:
geographic scope of operations, primary customer
group, need for customer's physical presence (Love-
lock 1980), and duration of benefits (Lovelock 1980).
The second section listed eight items capturing the es-
sence of what the literature suggests are difficulties
unique to services (shown in Figure 2): (1) services
cannot be stored; (2) services cannot be transported;
(3) services cannot be mass produced; (4) services
cannot be protected by patents; (5) service quality is
difficult to control; (6) service costs are difficult to
calculate; (7) demand for services fluctuates; and (8)
consumers themselves are involved during the service
production process. In this section, respondents were
asked to indicate on a scale of 1 (no problem at all)
to 5 (major problem) the extent to which they believed
each item created difficulties in their firms. Part three
listed statements concerning business practices and
strategies (see Figure 3) which are frequently cited in
the literature as solutions to service related problems.
Respondents indicated the extent to which each state-
36 /
Journal
of
Marketing,
Spring
1985
ment applied to their firm on a scale ranging from 1
(does not apply to our firm) to 5 (definitely applies to
our firm).
Results
For the sample as a whole, mean scores (on a 1 to 5
scale) were calculated for each problem area, business
practice, and strategy.' In addition, mean scores across
categories under each of the four service classification
variables (e.g., geographic scope
of
operations) were
examined using a one-way ANOVA model. The gen-
eral linear model (GLM) procedure of the
SAS
statis-
tical package was employed for this purpose (SAS In-
stitute 1983). Significant ANOVA results were further
investigated using Duncan's multiple range test to
identify the categories of firms that differed signifi-
cantly in terms of their mean scores.
Problem Areas
Table 2 reports the means of the respondents' percep-
tions concerning the extent to which service charac-
teristics presented problems in their firms. The table
also isolates significant differences in perceptions
of
problem areas among different types of service firms.
Judging from the average responses of all firms, ser-
vice suppliers did not consider the eight problems to
be of major concern to them. Only one problem area
("The demand for services fluctuates") received a mean
score exceeding the midpoint on the 5-point scale. Two
problem areas ("Services cannot be stored" and "Ser-
vices cannot be protected by patents") received ex-
tremely low average responses, indicating that most
managers felt them to be of little or no problem in
their firms. The remaining problem areas received av-
erage scores below the midpoint
of
the scales. The
low average scores were further supported by low per-
centages of respondents reporting that the problems
apply to their firms (indicated by respondents' check-
ing a 4 or 5 on the problem items). While 47% of the
respondents viewed demand fluctuation as a problem,
less than one-quarter perceived any of the remaining
seven problems as relevant to their firms (see final
column of Table 2). One possible explanation for low
scores on these problem areas is that service firms may
be dealing with them effectively and therefore do not
perceive them to be troublesome.
A few significant differences in perceptions
of
problem areas surfaced among the types of service
firms. However, only some of these differences oc-
JAil of these scales were anchored at their end points (i.e., I and
5) with the descriptive phrases mentioned earlier. Other points along
the scales were not labeled. Subjects were simply instructed to circle
the number along the continuum on each scale that came closest to
their perception of the statement's relevance to their firm.
TABLE 1
Profile of Respondents and Nonrespondents
Percentage of
Number of Employees: Respondents Nonrespondents
Fewer than 25
25-49
50-99
100-199
200-499
500 and over
Not available
18
14
15
13
13
20
7
100
(base =323)
10.96; df =6. No significant difference between respondents and nonrespondents.
Percentage of
27
13
17
12
12
13
6
100
(base =677)
Annual Sales Revenue: Respondents Nonrespondents
Less than $1 million
$1
million-less
than $5 million
$5
million-less
than $10 million
$10
million-less
than $50 million
$50 million and over
not available
9
13
10
23
11
34
100
(base =323)
x
2=9.81; df =5. No significant difference between respondents and non respondents.
14
17
9
15
9
36
100
(base =677)
SIC Groupings":
15, 16, 17
42,44,45
48,49
60
60
61
61
62,65,67
70
72
73
75, 76
78, 79
miscellaneous
Construction
Transportation
Utilities
Banking: State banks
Banking: National banks
Savings and loans
Nonbank credit agencies
Brokerage firms
Hotels &lodging places
Personal services
Business services
Repair services
Recreation
Respondents
6
5
4
16
7
4
3
9
8
3
17
5
6
7
100
(base =323)
Percentage of
Nonrespondents
8
5
4
13
6
3
3
15
8
1
16
4
9
5
100
(base =677)
x
2=15.38; df =13. No significant difference between respondents and nonrespondents.
'Categories shown in the table are collapsed categories to ensure adequate cell sizes for the chi-square analysis. However, to
provide more specificity, industries from which at least
two
firms responded are further detailed
below:
Contractors: general
contractors, heavy construction; Transportation:
motor
freight, air transport; Utilities: telephone, electric, gas; Brokerage Firms:
securities brokers, holding &investment companies, real estate agencies, insurance carriers; Personal Services: power laundries,
linen supply &cleaning services, beauty salons &barber shops, photographic services; Business Services: advertising' agencies,
credit reporting services, janitorial &cleaning services, computer
programming/data
processing services, equipment rental &leas-
ing services, consulting firms, photofinishing laboratories; Recreation: amusement parks, public
golf
courses,
audio/video
enter-
tainment, membership sports and recreation clubs.
curred on items that had large enough overall mean
scores to warrant discussion of the differences. The
inability to mass produce services appeared to affect
businesses serving institutional customers more than
those serving individual customers. Costs of services
appear to be more difficult to calculate as the duration
of benefits increases. Associating direct and indirect
costs with the provision of a service evidently be-
comes less precise and more difficult as the service
extends over a longer time period. Quality control dif-
ficulties were more salient to nonlocal than to local
firms, possibly because nonlocal firms generally op-
Problems
and
Strategies
in
Services
Marketing
/ 37
TABLE 2
Significant Differences in Perceptions
of
Problem Areas
among
Types
of
Service Firrns"
Need
for
Percent-
Customer's
age of
Primary
Customer
Group
Geographic Spread
Duration
of Benefits Presence Firms
Check-
Individual
Institutional
Statewide-
Imme-
Short-
Long- Me- All ing a 4
Problem Areas Customers Customers
Both
Local Regional Natl. IntI.
diate
term term
High
dium
Low
Firms or 5
Services cannot be 2.15b1.55c1.85
b.
c1.87 16
stored. (1.36)
Services cannot be 1.65 9
transported. (1.17)
Quality of services 2.22b2.60c2.92c2.53b.
c2.52 20
difficult to control (1.07)
Services cannot be 2.01b2.41c1.83b2.13 19
"mass
pro- (1.32)
duced."
Services cannot be 1.64b2.09c2.08
b.
c1.78b1.66b2.07b2.27c1.89 16
protected by pat- (1.35)
ents.
Costs of providing 2.33 b2.44
b,c
2.76c2.59 23
services are diffi- (1.25)
cult to calculate.
Customers
them-
2.13 12
selves are in- (1.15)
valved during the
production of
services.
The demand for 3.27 47
services fluc- (1.29)
tuates.
Sample Size 125 129 52 100 76 74 49 87 47 173 73 125 114 323
'Numbers are mean values on a 5-point
scale,
on which the higher the value, the more a
characteristic
applies to a firm; numbers within
parentheses
in the
second
last
column are standard deviations; numbers in the last column are percentages.
b.cMeans
with the same
superscripts
are not significantly different.
Means
with different
superscripts
are significantly different.
erate a greater number of units that are more dispersed
geographically. Nevertheless, quality must be care-
fully guarded because a bad experience in one outlet
can affect business in other outlets.
An important finding is the absence of significant
differences across different types of firms on the prob-
lem area that had the highest mean score
(3.27)-"the
demand for service fluctuates." Perception of demand
fluctuation as a somewhat serious problem is appar-
ently universal.
Practices/Strategies
Table 3 summarizes the extent to which various busi-
ness practices and strategies are used to overcome
problems associated with services across all firms and
in different types of firms. These practices and strat-
egies have been cited in the services marketing liter-
ature as particularly appropriate for service firms.
Pricing. Average responses across all firms show
that cost-oriented pricing strategies are used more than
competition- and demand-oriented pricing strategies.
Basing prices on what it costs to provide the service
had a higher mean (3.78) than either basing prices on
what competition charges (mean of 2.99) or on what
the market is willing to pay (mean of 2.90). Consis-
tent with these averages are the percentages of re-
spondents checking a 4 or 5 on the scales (indicating
that the strategy applies to their firm): 63% base prices
on costs whereas a much lower percentage base price
38 /
Journal
of
Marketing,
Spring
1985
on competition (36%) and market willingness to pay
(36%). Although service costs may be difficult to cal-
culate (according to the literature and, to some extent,
the findings of this study), service companies are ap-
parently making estimates of costs to be sure that they
are covered. Competition-oriented pricing, although
simpler, may not provide assurance of covering costs.
Demand-oriented pricing may be as difficult to im-
plement as cost-oriented pricing and does not guar-
antee that costs will be covered.
Consistent with the relative popularity of cost-ori-
ented pricing, the use of cost accounting systems ap-
pears to be moderately widespread (mean of 3.28).
The only significant difference in pricing strategies
among types of firms involves the use of cost ac-
counting systems: local firms use the systems signif-
icantly less than do statewide-regional firms, probably
because these firms tend to be smaller and less so-
phisticated.
Advertising. The data pertaining to advertising in-
dicate significant differences in usage of advertising
among types of service firms. As is usually the case
with goods firms, service firms with institutional cus-
tomers reported that advertising is not as important to
their marketing programs as firms marketing to con-
sumers. Moreover, institutional firms report signifi-
cantly lower usage of television and newspaper ad-
vertising, which tend to be consumer media. Firms
which require the customer's physical presence during
TABLE 3
Significant Differences in Usage of Business Strategies
among
Types
of
Service Firms"
Need
for
Percent-
Customer's
age of
Primary Customer Group Geographic Spread Duration of Benefits Presence Firms
Check-
Individual
Institutional
Statewide-
Imme-
Short-
Long- Me- All
ing
a4
Business Practices Customers Customers Both Local Regional Nat!. Inti.
diate
term
term
High
dium
Low
Firms or 5
Pricing .
Base prices on 3.78 63
what it costs (1.27)
us
Base prices on 2.99 36
what competi- (1.22)
tion charges
Base prices on 2.90 36
what market is (1.37)
willing to pay
Use a cost ac- 3.02b3.65' 3.19b.' 3.48 b.' 3.28 51
counting sys- (1.49)
tem
Advertising and
Word of Mouth
Advertising is an 3.55b2.69' 3.59 b3.57b3.08 b.'
3.02'
3.66 b3.29b2.60' 3.20 45
important part (1.45)
of marketing
program
Television adver- 1.90 b1.42' 1.59b., 1.95b1.59b.' 1.48' 1.88b1.74 b1.38' 1.65 12
tising is
impor-
(1.20)
tant part
Newspaper ad- 3.23b1.75' 3.20 b3.31b2.47' 2.05' 2.02' 3.07b2.69b.' 2.31' 3.01 b2.84 b2.06' 2.61 35
vertising is im- (1.57)
portant part
Direct mail adver- 2.82 34
tising is
impor-
(1.43)
tant part
Specific effort to 3.99b4.00 b2.60' 3.86 68
encourage cus- (1.30)
tomers to tell
others about
service
Personal Selling
Do a lot of per- 3.84 67
sonal selling of (1.44)
services
Contact cus- 2.81b3.93' 3.17b2.72 b3.38' 3.81"d 4.32d3.35 50
tomers after (1.45)
purchase
Carefully choose 3.98b4.31' 3.89b3.94 b4.06b4.12b4.52' 4.11 76
personnel
who
(1.01)
interact with
consumers
Train personnel 4.08 73
to interact well (1.03)
Institutional Image
Much of market- 3.78 67
ing geared to (1.29)
projecting spe-
cific company
image
Have customer 3.53b3.23b.' 2.98' 3.24 50
contact em- (1.46)
ployees
dressed in a
certain way to
achieve image
Design facilities 3.63b3.01' 3.64 b3.78b3.04' 3.15' 3.29' 3.66 b3.02' 3.30b.' 3.74 b3.49 b2.98' 3.37 53
to achieve spe- (1.44)
cific marketing
or image objec-
tives
Quality Control
Formal system 3.34b3.80' 3.37 b3.17' 3.57b3.88b3.87b3.54 55
for controlling (1.25)
quality
Marketing
Orientation
Regularly collect 3.23b3.97' 3.36b3.20b3.70' 3.72' 4.21 d3.60 59
information (1.28)
about customer
needs
Problems
and
Strateaies
in
Services
Marketina
/ 39
TABLE 3 (continued)
Need
for
Percent-
Customer's age of
Primary Customer Group Geographic Spread Duration of Benefits Presence Firms
Check-
Individual Institutional Statewide- Imme- Short- Long- Me- All ing a 4
Business Practices Customers Customers Both Local Regional Natl. Inti. diate
term term
High
dium
Low
Firms or 5
Marketing activi- 3.45b
3.89'
3.36 b3.32 b
3.70' 3.83' 3.88'
3.75 b
3.38'
3.84 b3.62 59
ties are based (1.19)
on knowledge
about cus-
tomers
Firm activities are 3.70b4.22'
4.09'
4.23' 4.34b
3.78'
4.06b4.00 72
coordinated to (1.06)
ensure cus-
tomer satisfac-
tion
Chief marketing 4.34 84
executive par- (1.05)
ticipates in top
management
decisions
Willing to pro- 3.23b4.01' 3.40 b3.29 3.49b.'
3.93'
3.84' 3.59 60
duce customer- (1.47)
designed ser-
vices for clients
When a customer 2.70 31
is dissatisfied, (1.50)
redo service
Sample size 125 129 52 103 76 74 49 87 47 173 73 125 114 323
'Numbers are mean values On a5-point scale on which the higher the value. the more a characteristic applies to a
firm;
numbers
within
parentheses in the second last
column are standard deviations; numbers in the last column are percentages.
b.'.dMeans with same superscripts are not significantly different. Means
with
different superscripts are significantly different.
service delivery report that advertising is more appro-
priate (and use both television and newspaper adver-
tising more) than those where the customer can ini-
tiate or terminate the service transaction at a distance.
Firms marketing services where benefits are im-
mediate (hotels) use television and newspaper adver-
tising more than those where benefits endure for a long
time (landscaping firms). A possible explanation for
this finding is that services with enduring benefits (a
college education) are more expensive and require more
involvement by the buyer. In these cases, advertising
in the newspaper and on television is less likely to
trigger a purchase than with lower priced, lower in-
volvement purchases where benefits are immediate (a
restaurant meal).
For the sample as a whole, direct mail and news-
paper appear to be more important advertising media
than television. While 35% of the respondents indi-
cate that newspaper is important and 34% indicate that
direct mail is important, only 12% claim that televi-
sion is an important part of their marketing programs
(see final column of Table 3). Television's advertising
strengths-which
include demonstration as well as
sight, sound, and motion
benefits-may
be less ap-
propriate for services because of their intangibility.
Unless a service is associated with relevant tangibles
(the equipment in a health club), the service firm may
have little to demonstrate. Television, generally the
most expensive medium, may also not be feasible for
many service firms.
40 /
Journal
of
Marketing,
Spring
1985
Respondent firms report attempts to encourage
word-of-mouth advertising, a finding consistent with
the emphasis placed upon this activity in the literature
(Bessomand Jackson 1975; Davis, Guiltinan, and Jones
1979; Fisk 1981). The average response of 3.86 on
the item, "We make a specific effort to encourage our
customers to tell other people about our service," in-
dicates that many service firms place a high degree of
importance on word-of-mouth communications. Sixty-
eight percent of the respondents checked a 4 or 5 on
this item.
Personal selling. Average scores for all firms on
the usage of personal selling and image creating strat-
egies reveal particular emphasis in these areas. Over-
all, respondent firms appear to choose carefully their
customer contact personnel (4.11) and to train them
to interact well with customers (4.08). These high av-
erages are consistent with high percentages of re-
spondents checking a 4 or 5 on these items: 76% re-
port careful selection of personnel and 73% report
training them in interaction skills. Firms that sell to
institutional customers report greater care in choosing
personnel (4.31) than firms selling to individual cus-
tomers (3.98), perhaps because there is frequently more
riding on each sale to institutional customers. Also,
international firms indicate greater care in selecting
personnel than firms which operate at local, regional-
statewide, or national levels. This result may be due
to the large number of people many international firms
employ, necessitating more sophisticated hiring prac-
tices.
Institutional image. Overall, firms appear to em-
phasize designing facilities to achieve specific mar-
keting or image objectives (3.57), dressing customer
contact personnel in a certain way (3.24), and gearing
much of their marketing to projecting a specific com-
pany image (3.78). Differences among types of firms
surfaced mainly in terms of facilities design; on this
item, significant differences occurred in all four clas-
sifications. As might be expected, service firms which
emphasize facilities design most are those the con-
sumer visits: firms whose primary customer group is
individual customers (travel agencies), whose geo-
graphic scope is local (haircutting salons), whose ben-
efits are immediate (child care centers), and whose
need for the customer's presence is high (health spas).
Customer orientation. Items meant to reflect the
degree of customer orientation of respondent firms drew
mixed responses. High mean scores on items such as
coordinating activities to ensure customer satisfaction
(4.00) and involving marketing executives in top
management decisions (4.34) indicate marketing sen-
sitivity. However, lower scores obtained on other
marketing orientation items, such as performing the
service over if the customer is dissatisfied (2.70), re-
veal less sensitivity to customer needs.
Analysis revealed a number of differences be-
tween types of firms. Nonlocal firms, perhaps due to
greater resources at their disposal, seem more inclined
to research customer needs than local firms. Institu-
tional firms also seem more inclined to do customer
research than consumer firms. This finding may be
explained by the long-term relationships that need to
be cultivated with institutional customers, but it is
contrary to studies in goods marketing, indicating that
consumer firms are more prone to conduct customer
research than institutional firms (see, for example,
Cooper and Little 1977, McNamara 1972). In gen-
eral, service firms serving institutional customers ap-
pear to be more marketing oriented than service firms
serving end consumers.
Strategies to cope with fluctuating demand. Table
4 presents average responses for all firms concerning
the use of strategies to cope with fluctuating demand
as well as differences among types of firms. Strategies
for peak demand periods which apply most to the
sample firms include hiring extra part-time employees
(3.55), having employees work overtime (3.54), and
cross-training employees (3.73). Peak-time strategies
which apply least to respondent firms include letting
work fall behind (1.62), taking care of regular cus-
tomers
first and allowing other customers to wait (1.68),
turning
away business (1.68), and subcontracting work
to others (1.95). These inferences are confirmed by
the percentages of firms checking a 4 or 5 on each
item (final column of Table 4).
The most prominent strategy for responding to pe-
riods of low demand involved trying to increase busi-
ness by calling on customers (3.47). A surprising
finding is that many service firms apparently do not
reduce prices to increase business during slow pe-
riods:
offering price reductions scored below 2.0. Only
17% of the respondents checked 4 or 5 on this item,
indicating that a minority of firms use the strategy.
Nor is new service development a prominent strategy:
offering different services to use resources during slow
periods scored just above 2.0.
Considerable variation in usage of strategies to cope
with fluctuating demand existed between firms serv-
ing end consumers and firms serving institutional cus-
tomers. Consumer firms scored higher than institu-
tional firms on only two strategies: differential sched-
uling of employees and education of customers to use
services during nonpeak times. Firms serving insti-
tutional customers, on the other hand, had signifi-
cantly higher usage scores on eight strategies. Insti-
tutional firms, which typically have sales forces,
showed sharply greater usage of the strategy, "Try to
increase business by calling on customers," than con-
sumer firms. Institutional firms also reported signifi-
cantly higher usage of several employee hiring and
scheduling strategies: letting employees work over-
time, hiring extra full-time employees, and laying off
employees. Finally, institutional firms reported sig-
nificantly higher usage of strategies such as turning
away business, taking care of regular customers and
allowing others to wait, seeking subcontract work
during slow times, and offering different services to
use resources during slow periods. While mean scores
for these last four strategies were low, the data overall
suggest that institutional firms use a more varied rep-
ertoire of strategies to cope with fluctuating demand
than do consumer firms.
Strategies to synchronize supply and demand var-
ied most by geographic scope of operations with usage
of 12 of the 19 strategies showing significant differ-
ences across categories. National firms appeared to
make the greatest use of the strategies, scoring higher
than firms in other categories on seven of the strate-
gies (i.e., differential scheduling of existing employ-
ees, taking care of regular customers and allowing
others to wait, cross-training employees, offering price
reductions, increasing advertising, turning away busi-
ness, and calling on customers). Size and sophisti-
cation of national firms most likely account for their
higher usage of strategies to cope with the problem of
fluctuating demand.
A number of significant differences were also re-
vealed in terms of duration of benefits (usage of the
strategies was generally highest in the immediate ben-
Problems
and
Strategies
in
Services
Marketing
/ 41
TABLE 4
Significant
Differences in Usage of Strategies
to
Cope
with
Fluctuating
Demand"
Need
for
Percent-
age of
Customer's
Firms
Strategies to Cope Primary Customer
Group
Geographic Spread Duration of Benefits Presence Check-
with
Fluctuating Individual Institutional Statewide-
Imme-
Short-
Long- Me- All
ing
a 4
Demand Customers Customers Both Local Regional Nat!. Inti. diate
term term
High
dium
Low
Firms or 5
Periods of High
Demand
Hire extra full-time 2.55 b3.12' 2.62b., 2.16b3.37' 2.96' 3.23' 3.13b2.50' 2.85b., 2.79 37
employees (1.61)
Hire extra part-time 3.96 b4.35b3.42' 3.72 63
employees (1.44)
Use differential 3.75b3.20' 3.75 b3.40b., 3.73' 3.90' 3.05b4.00 b3.09' 4.11b4.03 b3.33' 3.43c3.55 60
scheduling of ex- 11.52)
isting employees
during peak
times
Have employees 3.26b4.00' 3.24b2.97b3.66' 4.05' 4.10' 3.54 55
work
overtime 11.38)
Subcontract
work
1.95 18
to others 11.41)
Let
work
fall be- 1.62 6
hind 10.93)
Take care of regu- 1.47b1.99' 1.53b1.47b1.85' 1.92' 1.65b.' 1.68 9
lar customers 11.09)
and allow others
to wait
Turn away business 1.48b2.00' 1.39b1.33b1.85' 1.92' 1.88' 2.00b1.47' 1.70b.c1.68 11
11.171
Cross-train employ- 3.84b3.75b3.90b3.22' 3.73 60
ees to perform 11.26)
other tasks
Educate customers 2.54b1.99' 2.78 b2.38 22
to use service 11.37)
during nonpeak
times
Offer incentives to 2.75b1.69' 1.62' 2.69b1.61' 1.81 c1.97 18
customers using 11.38)
service duri ng
nonpeak times
Periods of Low
Demand
Layoff
employees 2.51b2.96' 2.04b1.88b2.97' 3.08' 3.14' 3.00b2.88b.' 2.35' 2.60 32
(1.56)
Use differential 3.72b3.88 b2.77' 3.69b3.03 c
3.18'
3.22 50
scheduling of ex- 11.51)
isting employees
during slow
times
Use employees to 2.99 39
perform nonvital 11.38)
tasks during
slow
times
Offer price reduc- 1.50b2.05' 2.47' 2.05' 2.27b1.80' 1.59' 2.66 b1.72c
1.~
1.94 17
tions (1.40)
Increase advertising 1.99b2.46' 2.58' 2.28b.' 2.61b2.10' 2.15' 2.75b
2.12'
2.09'
2.70 20
11.34)
Try to increase 2.88b4.13' 3.35b2.96b3.63' 4.00' 3.72' 3.34b., 3.27b
3.79'
3.47 57
business by call- 11.52)
ing on customers
Seek subcontract 1.49b2.07' 1.48b1.35b1.90'·d 1.73bd2.33' 1.72 14
work
during slow 11.20)
times
Offer different ser- 1.94b2.38' 1.75b1.74b1.97b.' 2.42,·d 2.60d2.08 19
vices to use re- 11.37)
sources during
slow periods
Sample size 125 129 52 100 76 74 49 87 47 173 73 125 114 323
'Numbers
are mean values on a5-point scale, on
which
the higher the value the more a characteristic applies to a
firm.
Numbers
within
parentheses in the second last
column are standard deviations; numbers in the last column are percentages.
b.'.dMeans with the same superscript are not significantly different. Means with different superscripts are significantly different.
efits category) and need for customers' presence (firms significant differences occurred, companies that had
which directly interact with the consumer use the a high need for the customer's presence outscored the
strategies more). In seven of the eight strategies where other two categories in usage of strategies to syn-
42 /
Journal
of
Marketing,
Spring
1985
chronize supply and demand. These findings are per-
haps as one would expect them to
be-the
need to
match supply with demand is more urgent when cus-
tomers are at the service site, waiting to be served (in
a bank or restaurant) than when the customers' phys-
ical presence is not critical and the service benefits
endure over a longer period (architectural services).
Discussion
This article presented a conceptual framework of
problems and strategies in services marketing that de-
rive from four unique characteristics of services: in-
tangibility, inseparability, heterogeneity, and perish-
ability. The framework is based on a review of the
growing body of literature in services marketing. The
article also reported findings from a national survey
of service firms concerning problems they face and
strategies they use. Presenting the literature review and
survey data in one article affords the opportunity to
compare points of emphasis in the
literature-much
of which is nonempirical at this stage in its devel-
opment-with
the input of a cross-section of service
companies.
Differences Among Service Firms
One conclusion that can be drawn from the findings
is that important differences exist among service firms,
not just between service firms and goods firms. The
existing literature is dominated by discussions of the
differences between goods marketing and services
marketing. Much less has been written about the dif-
ferences among service firms. In this study, respon-
dent companies were classified four different ways:
by primary customer group, geographic spread, du-
ration of benefits to the customer, and need for the
customer's presence during service production. As the
data reveal, many significant differences surfaced
among service firms when classified according to these
criteria, especially with respect to usage of practices
and strategies.
As an illustration, firms marketing to institutional
customers differ from firms marketing to end con-
sumers in several important ways. Consistent with
goods marketing practice, advertising appears to be a
less important part of institutional firms' marketing
programs. However, somewhat at odds with what we
know about goods marketing practices, institutional
firms seem to be more marketing oriented: they are
more apt to contact customers after purchase to ensure
satisfaction, to choose carefully the personnel who in-
teract with customers, and to regularly collect infor-
mation about customer needs. One possible explana-
tion for this difference is that customers are
fewer-
and each customer spends
more-in
the institutional
market than in the end consumer market. Institutional
firms are also more aggressive in responding to low
demand periods (by being more inclined to call on
customers to try to increase business) as well as high
demand periods (by being more likely to let employ-
ees work overtime).
While it is useful to generalize about the charac-
teristics of services and service businesses, it appears
to be equally important to recognize that differences
exist among various services and among the firms that
market them. While possible explanations for the dif-
ferences revealed by the study have been offered, re-
search investigating the causes and consequences of
such differences is needed. Lovelock (1983) has pro-
vided a rich conceptual foundation for such research
efforts.
Services Marketing Problems
Another conclusion to be drawn from the research is
that the services marketing literature corresponds more
closely with the practices and strategies used by sam-
ple firms than with the problems they face. Eight op-
erations or marketing problems associated with the
characteristics of services were identified from the
services marketing literature. Only one of the eight
problem areas ("The demand for services fluctuates")
received an average score above the midpoint on the
scale. Four of the eight items were just below or just
above the 2.0 mark, indicating that they were not per-
ceived to be troublesome.
A discrepancy exists between what the literature
suggests would be the case and what respondents to
the present study claim is the case. One explanation
for this discrepancy is that service firms have inter-
nalized these problems and are dealing with them suc-
cessfully by using the very strategies suggested in the
literature to be appropriate. That there were, by and
large, higher overall scores for the business practice
and strategy items than for the problem items on the
questionnaire lends credence to this explanation. If this
explanation is valid, many of the problems cited in
the literature could be less critical than other areas which
were not investigated (e.g., difficulty in developing
new services, difficulty in evaluating profitability,
difficulty in motivating public contact personnel, etc.).
It
is also possible that service managers may not have
fully grasped the significance of what they were being
asked in one or more of the problem statements (e.g.,
managers may not think in terms of protection in the
form of patents but still may be concerned about com-
petitors copying their services). The services market-
ing literature may need to recognize and analyze ad-
ditional problem areas that may be particularly
troublesome to service firms. Researchers testing
managerial perceptions may also need to translate the
conceptual problem statements into language more
appropriate to service managers.
Problems
and
Strategies
in
Services
Marketing
/ 43
Implications for Further Research
Numerous implications for researchers interested in
services marketing arise from the findings reported in
this article. Some of the more intriguing implications
are as follows:
1. The services marketing literature tends to be
characterized by empirical research within cer-
tain service industries (for example, banking
and health care) and by conceptual work across
service industries. It is perhaps this combina-
tion that has contributed to the glossing over
in the literature of many differences between
types of service firms found in our study. A
research priority in services marketing is em-
pirical study that transcends specific industries
and tests service marketing concepts.
2. For reasons suggested earlier, this research study
did not for the most part uncover the critical
problems facing most service businesses today.
What are these problems? How are they chang-
ing due to environmental, competitive, and other
conditions? How do they differ for various types
of service firms? The services marketing lit-
erature needs to focus on the most critical
problems facing service firms if it is to be of
maximum value.
3. Of the eight problem areas investigated, fluc-
tuation in demand was considered to be most
troublesome by the sample. This would seem
to be a fertile area for additional research. The
data presented in Table 4 reveal that the sample
companies used some but not all of the listed
strategies for coping with demand fluctuations.
Why are some strategies more useful than oth-
ers? How does their effectiveness vary among
different types of services? Are other useful
strategies overlooked in the literature?
4. The literature suggests that word-of-mouth
communications are critical because services
are intangible and heterogeneous in nature. The
data indicate that sample firms make specific
efforts to encourage word-of-mouth commu-
nications. What strategies are available to ser-
vice firms attempting to increase word-of-mouth
communications? What guidelines and advice
can be offered in connection with these various
strategies? Are certain strategies more appro-
priate for certain types of service businesses?
Additional research into these and related ques-
tions would be helpful.
5. Also suggested in the literature (Kotler 1973,
Lovelock et al.
1981)-and
corroborated by this
study-is
the importance of institutional image
and the use of tangible cues like physical facili-
ties and personnel appearance to enhance it.
44 /
Journal
of
Marketing,
Spring
1985
Additional investigation of such issues as the
use of employee uniforms, the role of archi-
tecture in the marketing mix, and the nature
and building of corporate image would be use-
ful to many service companies.
6. The emphasis placed on selection and training
of service firm personnel in the literature, and
by respondents in the study, raised provocative
issues about marketing organization. Should the
marketing department control employee train-
ing? Does the entire human resources function
belong in marketing? Conversely, would it be
more appropriate in certain service firms to
consider field managers as the chief "market-
ers" and decentralize marketing rather than add
functions to a central staff (Gronroos 1983)?
These and other issues touching on employee
performance and marketing's role in facilitat-
ing it are worthy of much additional work.
7. An unexpected finding of this study is that ser-
vice firms dealing with institutional customers
are more marketing oriented than firms dealing
with the end consumer: they are more apt to
contact customers after purchase to ensure sat-
isfaction' to choose carefully the personnel who
interact with customers, and to regularly col-
lect information about customer needs. Why is
this finding different from what we would ex-
pect based on our knowledge of goods firms?
What aspects of services lead to this reversal
in the importance of marketing orientation?
Conclusion
Services marketing is becoming a recognized and ac-
cepted subset of the marketing discipline. Given the
growth of the service sector in economies throughout
the world, and the almost universal belief by scholars
working in this area that services marketing is in cer-
tain key respects different from goods marketing, the
rapid growth of service marketing literature in recent
years is not surprising. An acceleration of academic
interest and research activity in services marketing in
the years immediately ahead is to be expected and is
necessary because far more questions than answers exist
at this time. Implied by the set of research implica-
tions reviewed above is the need for researchers to
think broadly about researchable issues and to be will-
ing to work in areas not normally classified as "mar-
keting" (e.g., human resources management and fa-
cilities design). A need exists for services marketing
research to enter a new phase of empirical work that
integrates various disciplines and various service in-
dustries.
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... Objetivo Autor Proveer herramientas que permitan medir la calidad percibida, la cual a su vez permite segmentar el mercado en grupos, de acuerdo con las expectativas que tienen acerca de un mismo servicio. (Zeithaml et al., 1985;Zeithaml et al., 2002) Convertir a los usuarios actuales, aspirantes y potenciales, en usuarios a largo plazo, y así crear una posición educacional que sea atractiva al público y pueda mejorar las percepciones. (Sanz et al., 2017) El modelo MIGME permite posibilitar el progreso de la oferta académica de las instituciones, de tal manera que se pueda ajustar a las necesidades de la sociedad y del sector productivo. ...
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... This perspective developed as a critique of assimilation perspective that failed to take into consideration service specific characteristics. Research appropriating demarcation perspective sees services as distinct from products, often adopting the IHIP model -intangibility, heterogeneity, inseparability, and perishability-as a primary way of distinguishing between the two (Zeithaml, Parasuraman and Berry, 1985). By putting a greater focus on service specific characteristics, this perspective approaches innovation as a relational phenomenon where customer-firm dyad is put into focus during new service development process (Edvardsson and Olson, 1996). ...
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