What’s it: Consumer service is an intangible product offered to households, not to businesses. Service delivery involves service providers, e.g., company staff; equipment such as vehicle equipment, cash registers, electronic devices; physical facilities such as buildings; customer contacts; and individual service users.
Various examples of consumer service are around you. They include services provided by hotel companies, personal insurance, rail travel, education, health care, recreation, catering, tourism, finance, entertainment, and home maintenance.
We distinguish it from consumer goods, other parts of consumer products. We use consumer goods to refer to tangible products such as shoes, laptops, and smartphones. So, long story short, consumer products include consumer goods plus consumer services. Both require a different marketing approach to consumer services.
Furthermore, we also distinguish consumer service from customer service. It is the support and advice provided by the company to those who buy or use its products. An example is an after-sales service.
Difference between consumer service and consumer goods
Consumer services and consumer goods differ in many aspects, not only in terms of physical substance. So let’s discuss them one by one.
Consumer goods are intangible products. They have a physical substance, so you can see or touch them.
- It’s not for consumer service. Because it is intangible, you cannot see it or feel it. Thus, they are more difficult to assess for quality than consumer goods.
Consumers use the service as soon as it is provided. You cannot keep it for your later use. That’s because services are consumed and produced simultaneously.
- On the other hand, consumer goods can be stored and used at a later date. Their useful life varies between categories. Some items such as food and drink last less than 3 years. We call them non-durable consumer goods.
- Others last more than three years, such as furniture and electronics. We call them durable consumer goods.
- Because services cannot be stored, their prices change more quickly than consumer goods. Some companies may set prices by adjusting them to demand conditions. For example, airlines charge higher ticket prices during high demand, such as during the holiday season or for immediate flights.
Service cannot be repaired or replaced. For this reason, companies must ensure the best for each service provided, avoiding errors and consumer dissatisfaction.
- Such characteristics are different from goods. Companies can replace goods with similar goods at the same quality level. And customers will be just as satisfied. For example, they provide a channel to allow customers to exchange defective items for new ones.
Services highly depend on the quality of human resources. In addition, resources such as computers and information technology can also help provide quality services. However, they are all ultimately dependent on the staff providing the service.
Service consumes time. Delivering services requires company staff to interact with customers. And, when the staff has rendered service, it disappears permanently.
- It is different from consumer goods. When the customer has bought them and handed over the money, it doesn’t require any more interaction.
The same service cannot be repeated in the exact same way, even to the same people. It is unique. The company must give its best effort for every service provided. When satisfied every time they use the company’s services, customers place high trust in the company.
Consumers enjoy the service but cannot sell it to other parties at a later date. In other words, you cannot transfer the services you receive to someone else. Conversely, if you buy goods, you can resell them, for example, to your friends.
Difference between industrial services and consumer services
Consumer services differ from industrial services, primarily in terms of the market the company targets.
- Consumer services are provided to individuals. The company’s target is households. Examples are insurance services, hairdressing, recreation, and aviation.
- Industrial services or business services are provided to organizations or businesses. Examples are tax consulting services, marketing software services, and employee training services.
Consumer service marketing
Marketing consumer services requires a different approach than consumer goods. So, where should the company focus its decisions? Marketing experts propose an extended marketing mix or 7Ps marketing mix. They add three variables to the traditional marketing mix (product, price, place, and promotion) to accommodate services. They are people, physical evidence, and processes.
Products – Because services are unique, perishable, and intangible, it poses more challenges for companies to continue to provide the best to consumers. They must ensure satisfaction in every service provided and must be by what consumers expect.
- The company designed it with care. For example, it may require them to establish procedures, organize the places where interactions occur, and train staff to provide relatively consistent service.
Price – How difficult it is to set a price will vary between categories of consumer service. It doesn’t just involve calculating input costs such as labor, site rent, and other overheads or considering the competition.
- But, businesses must also consider other aspects such as the atmosphere. A good example is a restaurant. Customers not only come to pay for the menu but also the atmosphere provided. It affects their mood and affects their willingness to come to the restaurant.
Place – Unlike goods, delivering services does not require intermediaries such as retailers or distributors because they are consumed and produced at the same time and cannot be transferred. Therefore, having a location to provide services is strategic. Take, for example, the retail and restaurant business. They choose congested locations because it makes it easier for their customers to visit.
- Companies can also provide services through devices such as applications. For example, banks and insurance companies are launching mobile applications to make it easier for their customers to interact and use their services. It makes customers comfortable instead of visiting their office every time they want to use the service.
Promotion – It is one of the most powerful ways to differentiate a company’s offerings from competitors. There are various ways to promote services, which are relatively similar to when promoting goods. For example, consumer service companies can use advertisements on television or online media to attract audiences to use the company’s services.
People – Recruiting and training the right staff is the key to successfully marketing consumer services. Staff interacts directly with customers.
- The way they handle determines satisfaction, and ultimately, customer loyalty. It not only requires them to master what they provide but also to have interpersonal skills. For this reason, many companies invest in training their staff. In this case, staff accreditation is also required.
Process – It is about how the company delivers its services to the customers. It involves a set of activities or mechanisms by which the service is received by the customer.
- Establishing procedures or systems for delivering services is important to generate customer satisfaction. Although services are unique for each time they are provided, procedures and systems help companies provide relatively consistent services. For example, procedures define what staff should do when they meet and interact with a customer. It provides the standard.
Physical evidence – The various physical elements in which the service is being provided affect the consumer’s perception. For example, the reason consumers visit a restaurant is not only about the food menu. Elements such as how chairs, tables, music, and other physical environments are arranged and the cleanliness of the kitchen also affect their judgment.
What to read next
- Goods: Definition, Importance, Types
- Services: Definition, Examples, Characteristics, How to Measure
- Semi-finished Goods: Meaning, Examples, Calculation in GDP
- Value-Added Product: Definition and Brief Explanation
- Durable Goods: Meaning, Characteristics, Examples, And Importance
- Consumer Service: Meaning, Examples, Differences with Consumer Goods