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Challenges Faced In Service Marketing Industry

Service Marketing Mix and Challenges faced by the service Industry Assignment / Homework Help
Service Marketing Mix

The service marketing mix comprises of the following 7 'p's
  • Product
  • Price
  • Place
  • Promotion
  • People
  • Process
  • Physical Evidence
The last three P's deserve a special mention here:


Any service industry depends heavily upon its staff and people. The presence and use of appropriate staff is the backbone of a service industry. If a service industry wants to create a niche for itself it has to focus on recruiting the right staff and training them appropriately. Training should essentially include activities that enhance interpersonal skills. Along with this the right attitude, aptitude and service knowledge goes a long way in creating consumer satisfaction.


Process is the set of steps taken by a service organisation in delivering a particular service to its customer. An example can be a customer walking in to Mc Donald's and ordering a meal. The meal is delivered within 5 minutes. The steps followed by the service provider for providing its service so efficiently is the process being followed by it.

Physical Evidence

Physical evidence refers to the place where service is being delivered. The customer creates his opinion about the service organisation based on how he finds the place or the physical evidence. Factors which are always looked for in a restaurant for example are cleanliness, promptness and friendly attitude. Physical evidence is an essential part of the marketing mix for the service industry. The mere sight of the place or the appearance of the physical evidence forms the backbone of the customer's opinion making.

The term 'service' can be defined as an act of doing something for someone. Service is by far non-material and an intangible entity. So a service can easily be distinguished from a product which can be held and owned. Service cannot be owned as it is consumed at the point of purchase.

Challenges faced by the Service Industry

It is a challenging task to manage a service or product industry. These challenges however are different and unique for each industry. Some of the challenges that are faced while managing, growing and making profit from a service industry are discussed below, these factors do not readily apply to the product industry.
  • Services are intangible and so customers cannot see or hold them before they buy it. Buyers are therefore uncertain about the quality of service and feel they are taking a risk. The buyer is unable to conceptualize and evaluate a service from beforehand. From the seller's perspective he finds it challenging to promote, control quality and set the price of the service he is provide. Unlike products the intangible nature of service causes difficulties to both client and the firm.

  • Defining and improving quality in the service industry is a major challenge. Unlike products very often services are produced and consumed simultaneously. As a result service quality management faces challenges that the product industry never ever comes across. In the product industry the manufacturer gets ample opportunity to test his products before they reach the market. In case of a quality issue the problem is taken care of during the quality check and customer satisfaction is taken care of. However during service production the customer is right in front. To guarantee customer satisfaction in this scenario is a major challenge.

  • In case of the service industry the customer first needs to develop trust in the service organization before he buys their services. The client often gives more importance to the amount of faith he has on the service organization than the services being offered and their value proposition.

  • Service industry faces competition not only from fellow service industry but also from their clients who often question themselves whether or not they should engage a service at all!

  • Most of the product companies have dedicated sales staff while in the service industry the service deliverers often do the selling. Coordinating marketing, operations and human resource efforts is a tedious task.

  • Passion works for the service industry. More the passion, spirit and desire among the service staff more is the revenue generation and success generated every day. There is a direct correlation between staff passion and financial success and similarly lack of passion leads to failure in the service industry. Staffs need to be constantly motivated and efforts have to make to sustain employee commitment.

  • While testing new services is a constant challenge communicating about these services simultaneously is also not easy.

  • Setting prices does not come easily for service industry.

  • Standardization versus personalization is another major issue the service industry has to face.

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