The concept of Service Marketing is often misunderstood. This is why we devote this blog post to briefly explaining what we mean by service marketing, which by the way is not something that we came up with; the credit of it goes to researchers, foremost to Professor Christian Grönroos at Hanken school of economics who has been studying, writing, teaching and lecturing about this already since the 70’s.
Very often, service marketing is still misunderstood to merely refer to the marketing of services, i.e. of non-tangible products. This is not to say that services would not be important, to the contrary. In many industrialized countries the service(s) industry accounts for more than 70% of the the GDP (Gross Domestic Product). In companies, often more than 60% of purchases are services. Thus, marketing of services (as opposed to goods) is important. However, the concept of service marketing goes beyond this.
When looking at business transactions or business engagement from a customer’s perspective, they do not buy goods (tangible products) or services (non-tangible products), rather customers buy the benefits that goods and services provide them with. When a customer buys an offering that consists of e.g. goods, services and information, they acquire something that is beneficial for them. When buying a shovel, the service rendered can be e.g. being able to dig a hole in the ground to plant a tree. The shovel enables a more efficient way of digging a hole in the ground when e.g. compared to digging one with your bare hands. When service means supporting customers’ actions, activities and processes – when viewed from the perspective of the customer – all solutions (consisting of goods, services or combinations of these) are services: “Service is all there is” (Grönroos, 2011).