Marketing Challenges of Intangible Goods, Essay Example

Levitt (1981) introduced a new terminology of products into marketing. He stated that instead of differentiating between goods and services marketing, “we should speak of tangibles and intangibles” (Levitt, 1981, p. 95). When marketing intangible goods, it is hard to explain what the customer buys; instead; companies sell promises. The special problems related to marketing intangibles, according to Levitt (1981) is that these products are highly people-intensive. This means that the emotional tie needs to be developed with the customer, and potential buyers need to develop a “need” for the product. Further, intangible products are closely tied to delivery and service; they cannot be separated as much as in the case of tangible products.

Wolak, Kalafatis & Harris (1988) defined intangibility as a main characteristic of services. Further, like Levitt, the author also stated that they are inseparable from performance, quality, delivery. The main problem with marketing intangible goods is that they have a relatively high labor cost, while this is not usually recognized by the customer. Prices are often not justified. However, Wolak, Kalafatis & Harris (1988) also states that the services’ heterogeneity can be turned into an advantage: customizing intangible goods in order to increase the value provided for customers. Intangible goods are also perishable;  they cannot be stored or carried on as an inventory; a financial adviser might have ten appointment hours a week; if they are not used up by customers, the intangible goods are not sold, therefore, money is lost.

The above review has revealed that the best approach towards marketing intangible goods is to create a high value perception of the goods in the market, create positive messages and relationships, and to add value on the personal level through customization options.

References

Levitt, T. (1981) Marketing intangible products and product intangibles. Harvard Business Review. May-June 1981.

Wolak, R.,  Kalafatis, S.  & Harris, P. (1988) An Investigation into four characteristics of services. Journal of Empirical Generalisations in Marketing Science, Volume Three 1998