Although product has been discussed as a physical product in previous sections, product can also be services or ideas, or general intangible entities. In fact, most products are a combination of both physical product and services. This, in turn, makes it difficult to determine how much a product gains its value from tangible or intangible elements. It is important to determine the tangibility/intangibility features of a product as this evaluation will eventually determine the building of appropriate value elements with the right marketing strategy to attract and influence consumer decisions. Ifa product has more tangible than intangible features, it is defined as a “good-dominant product” (e.g., a car); otherwise it is a “service-dominant product” (such as nursing or teaching) as pictured in Fig. 3.9. But what about a cafe? Is it a good-dominant or service-dominant product? It is difficult to answer this question as services and the physical features of products can be of almost equal importance in evaluating the product and its quality.
It can be easier to evaluate the quality of physical goods such as t-shirts, jeans, etc. This, in turn, is conceptualized as “search quality,” as it is easy to assess product quality before consumption. However, because services are generally produced and consumed at the same time, it is almost impossible to assess the service’s quality unless the consumer has previous experience of the product. For example, the consumer cannot assess the quality of a meal in a restaurant unless they have eaten at the very same restaurant. This is called “experience quality” (see Fig. 3.9). On the other hand, there are some products that consumers cannot assess for quality even after purchase. A patient cannot necessarily know how well his kidney surgery went as most patients/consumers lack appropriate knowledge and experience. This is conceptualized as “credence quality.” The harder it is
Fig. 3.9 Evaluation of goods and services Source: Inspired by Zeithaml (1991)
to evaluate product and service qualities, the more important it is to develop trust-building relationships between consumer and service provider. If you are having surgery, you want to make sure that you are in the right hands. If a product/service is higher in search qualities, consumer trust in the service provider can be very limited. But, where the product/ service ranks highly on experience and credence qualities, consumers demand a trusting relationship with service providers. Trust-building communications with consumers in these situations help to eliminate the risks perceived as inherent in the tangible nature of services. Most of the time, the company’s services are directly associated with a service provider. In other words, the service provider’s (or employee’s) ability to deliver the promised service experiences successfully will determine consumer satisfaction. This, in turn, increases the importance of “internal marketing,” or additional marketing efforts targeting employees so that they can better represent the company to consumers.
Marketing success and consumer satisfaction can only be achieved by service providers who know how to utilize the intangible and tangible features of products in their marketing strategies.
Consumers will stay with the company as long as they receive exceptional (unordinary) and satisfactory treatment. In other words, satisfied consumers will remain loyal to the company. Service providers desperately need to create consumer loyalty on both attitudinal and behavioral levels by delivering satisfactory service experiences to consumers.
Research has revealed that a 5% increase in consumer loyalty in some industries may lead to an increase in profit from 25% to 85% (Reichheld and Sasser 1990). Although consumers rating the service ‘satisfactory’ feel more loyal to the service provider, the proportion jumps exponentially to a 100% loyalty level when the satisfaction is higher than that (Heskett et al. 1994). Consumers who are extremely dissatisfied with the service provider do not hesitate to voice their dissatisfaction and can create a negative attitude towards the company in the market. Thus, service providers should make every effort to create “apostle consumers” (very satisfied, thus very loyal, consumers). When consumer satisfaction is at low or medium levels, consumer loyalty can also suffer. Ultimate loyalty, or “ultimate satisfaction” and marketing success in the services market is achieved when only very satisfactory service and experience is provided to consumers. In short, a moderate level of consumer satisfaction is no longer enough in today’s digital markets where every little point of dissatisfaction can be read by millions.