Marketing products and services...It's the same, right?
This area in marketing is often misunderstood; there is often a 'copy and paste' type approach to strategy as a whole. However, there needs to be a rethink to cater for the differences in the customer's evaluation processes.
Generally speaking, it is harder for consumers to evaluate services than goods. This is because services are intangible and non standardised. For example, there are many features that we can research when buying, say, a new fridge; we can look at the size and the individual specifications to help decide whether it's right for us. Alternatively, when considering a service such as which barber to use, the tangible indicators of quality are much less obvious.
Here then highlights the importance for you to adopt an alternative approach if you are marketing a service in order to provide their target customers with the information that they need to feel confident enough to make a purchase.
Here are 6 implications to consider when marketing your products and services to help inform your marketing strategy:
1) Information Search
When purchasing both products and services, we often look for information from personal sources (e.g. friends or experts), which is what makes social proof such an important part of your content strategy.
However, consumers typically rely on this source of information more heavily and there are a number of reasons why this may be the case. First of all,
looking for the information when purchasing products, it is
2) Criteria for Evaluating Quality
Consumers are limited by the number of cues they have to make a purchase with services. This is due to the intangible element to services - their details are much less obvious.
Let's look at this in more detail. Products can have a number of aspects that can help consumers make a purchase such as the colours, shape, feel, package, logo etc. In contrast, sometimes all consumer have to go off is the price and the physical facilities which house the service.
3) Perception of Alternatives
The consumer's evoked set of alternatives is smaller with services than products. There are a couple of key reasons behind this:
1) Differences in retailing
Products are typically displayed next to other products that are similar - you only have to head to any supermarket to see how competitive the shelves are! Services rarely have this difficulty and with the help of technology can locate a single service
2) Less competition
Consumers are much less likely to find the same service in a confined geographically area - not close enough for it to be a key factor anyway (remember, people are often very lazy and speed is a high priority factor!). Alternatively, using the same example of supermarkets, there are likely to be a surplus of them available and therefore be much more competitive for marketers.
4) Innovation Diffusion (The Speed to Purchase New Products/Services)
The rate of diffusion of an innovation depends on the consumer's perceptions of the innovation with regard to five characteristics:
Relative Advantage
Compatibility
Communicability
Divisibility
Complexity
Consumers tend to adopt new products much faster than new services. This is because services are generally grouped together by their function - their benefits are less communicable, less divisible, more complex, and probably less compatible than products.
5) Perceived Risk
Research shows that levels of perceived risk tend to be much higher in services than in products. There can be a number of reason behind this but in it's most simplistic form, it is much harder for consumers to evaluate services - they are intangible, non-standardised, and are usually sold without without warranties or guarantees.
Using an example of the purchase decision behind using the same hairdresser; even though a person may have used the same hairdresser many times before there will always be the recurring uncertainty about the outcome and consequences each time the service is purchased.
6) Brand Loyalty
The degree to which consumers are committed to particular brands of products of services depends on five key factors:
1) The cost of changing brands
2) The availability of substitutes
3) The perceived risk associated with the purchase
4) The degree to which they have obtained the dissatisfaction
Typically, this analysis is much more difficult in services and therefore brand loyalty tends to be higher in services than products.
7) Attribution of Dissatisfaction
There is no getting away from the importance of the quality of your product or service. However, what might surprise you is how the levels of dissatisfaction vary between the two when the consumer doesn't quite get what they expected from their purchase.
More often than not, consumers are more likely to attribute their dissatisfaction (whatever that reason may be) to a number of sources companied to purchasing products, which is a more simply disgruntlement. This is due to the level of the consumer's involvement in the relative purchases.
A good way of explaining this is by using the same earlier example of purchasing a typical service, say a hairdresser. In this particularly example, the consumer is likely to have explained exactly what they wanted as an outcome and with this, have very little control over the quality from this point. For this reason, if disappointed, the consumer is likely to blame the hairdresser (perhaps because of the lack of skill shown), or themselves, (perhaps because of choosing that particularly hairdresser).
In contrast, with products a consumer's main form of participation is the act of the purchase. Because of this, the consumer is still likely to hold some frustration over making a poor decision but ultimately holds the producer responsible for product performance. It helps that products usually come with warranties and guarantees in the dilution of this comparative frustration.
We hope that you found this useful! ​
To find out more about how we can help take your business to the next level through social media marketing, get in touch via the contact form on our website.
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