Classic brand name items have been considered material consumer goods for the longest time. However, since the service sector has become by far the most relevant economic sector, brand management has become much more relevant for service providers to generate increased sales through the brand.
Product brands focus on the material performance, while the customer benefit of a service brand lies in immaterial performances. Service brands are not limited to any sector; they exist for instance in the fields of telecommunications, financial services, tourism, and as online platforms.
The immaterial character is the typical feature of a service – we cannot look at it and touch it. Customers cannot assess its quality in advance, so the purchase risk is higher. For example, booking lodging via the community market place Airbnb is an immaterial service – and it bears a level of uncertainty. This is why experience and recommendation are even more important when it comes to services.
Services are produced and consumed simultaneously in space and/or time. So services cannot be stored, exchanged, or returned. Unlike a product, a service can only be provided when the customer is involved, as in a taxi ride or a visit to the salon.
Another feature of services is the variety of results. This is due for one to the heterogeneity of the services, for another to the variation of performances provided by human beings. For example, a customer consultation at a bank does not always lead to the same result and customer satisfaction.
Book: GOOD Business – das Denken der Gewinner von morgen