The Student Room Group
Reply 1
Here is my explanation.

Services are something intangible and in a sense requires the consumer to assess the value of the service offered, in this sense there is no direct and comprehensible formulae for detecting how much the consumer will value a service offered. The firm attemting to sell the service may spend huge amounts on offered service but there is no real relation between money spend and consumer valuation of the service offered, although it would be wrong to say that no relation exist, the actual relation is just much harder to assess in advance.

By over-simplifying matters a bit you could say that product marketing rely on the physical appearance of the product like its design, function, presentation and appearance. All of these things can also be said to related to how consumers perceive the product, but the relation between spending more on product marketing and product sales are easier to detect and evaluate for the firm focussed on product marketing. The reason is that the consumer is able to relate much easier to physical things than something as intangible as services.

The relation between cost and effect of marketing products and service, must be something like: Marketing services require spending more money than necessary compared to marketing products since consumer valuation of service is much harder to assess than for products, because services is an intangible.

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