| Products, Services, and Brands: Building Customer Value 237

Chapter 8 | Products, Services, and Brands: Building Customer Value 237

FIGURE | 8.3 Intangibility

Inseparability

Four Service Characteristics

Services cannot be seen,

Services cannot be

tasted, felt, heard, or

separated from their

providers Although services are “products” in a general

smelled before purchase

sense, they have special characteristics and

Services

marketing needs. The biggest differences come from the fact that services are essentially intangible and that they are created through

Variability

Perishability

direct interactions with customers. Think about your experiences with an airline

Services cannot be stored versus Nike or Apple.

Quality of services depends

on who provides them and

for later sale or use

when, where, and how

in which the service organization presents its customers with organized, honest evidence of its capabilities. The Mayo Clinic practices good evidence management: 21

When it comes to hospitals, it’s very hard for the average patient to judge the quality of the “product.” You can’t try it on, you can’t return it if you don’t like it, and you need an advanced degree to understand it. And so, when we’re considering a medical facil- ity, most of us unconsciously turn into detectives, looking for evidence of competence, caring, and integrity. The Mayo Clinic doesn’t leave that evidence to chance. By care- fully managing a set of visual and experiential clues, both inside and outside the clinic, the Mayo Clinic offers patients and their families concrete evidence of its strengths and

Service inseparability

values.

Services are produced and consumed at Inside, staff is trained to act in a way that clearly signals Mayo Clinic’s patient-first the same time and cannot be separated

focus. “My doctor calls me at home to check on how I am doing,” marvels one patient. from their providers.

“She wants to work with what is best for my schedule.” The clinic’s physical facilities also send the right signals. They’ve been carefully designed to offer a place of refuge, convey caring and respect, and sig- nal competence. Looking for external confirmation? Go online and hear directly from those who’ve been to the clinic or work there. The Mayo Clinic now uses social net- working—everything from blogs to Facebook and YouTube—to enhance the patient experience. For exam- ple, on the Sharing Mayo Clinic blog (http://sharing .mayoclinic.org), patients and their families retell their Mayo experiences, and Mayo employees offer behind-the- scenes views. The result? Exceptionally positive word of mouth and abiding customer loyalty have allowed the Mayo Clinic to build what is arguably the most powerful brand in health care with very little advertising. “The qual- ity of the [patient] experience is key,” says Dr. Thoraf Sundt,

a heart surgeon and chair of Mayo’s marketing committee. Physical goods are produced, then stored, later sold, and

still later consumed. In contrast, services are first sold and then produced and consumed at the same time. In services market-

ing, the service provider is the product. Service inseparabil-

ity means that services cannot be separated from their providers, whether the providers are people or machines. If a service employee provides the service, then the employee be- comes a part of the service. Because the customer is also pres-

By providing customers with organized, honest evidence of its capabilities, the Mayo Clinic has built one of the most powerful

ent as the service is produced, provider-customer interaction is a

brands in healthcare. Its Sharing Mayo Clinic blog lets you hear

special feature of services marketing. Both the provider and

directly from those who have been to the clinic or work there.

the customer affect the service outcome.

238 Part Three | Designing a Customer-Driven Strategy and Mix

Service variability

Service variability means that the quality of services depends on who provides them

The quality of services may vary greatly as well as when, where, and how they are provided. For example, some hotels—say, depending on who provides them and

Marriott—have reputations for providing better service than others. Still, within a given when, where, and how. Marriott hotel, one registration-counter employee may be cheerful and efficient, whereas

another standing just a few feet away may be unpleasant and slow. Even the quality of a single Marriott employee’s service varies according to his or her energy and frame of mind at the time of each customer encounter.

Service perishability

Service perishability means that services cannot be stored for later sale or use. Some

Services cannot be stored for later sale doctors charge patients for missed appointments because the service value existed only at or use.

that point and disappeared when the patient did not show up. The perishability of services is not a problem when demand is steady. However, when demand fluctuates, service firms often have difficult problems. For example, because of rush-hour demand, public transporta- tion companies have to own much more equipment than they would if demand were even throughout the day. Thus, service firms often design strategies for producing a better match between demand and supply. Hotels and resorts charge lower prices in the off-season to at- tract more guests. And restaurants hire part-time employees to serve during peak periods.