SERVICE

MARKETING

Marketing
Subject:
Management
 Introduction to Service
 A service is an intangible product
involving a deed, performance, or an
effort that cannot be physically
possessed.

Characteristics of Service:
1. Intangibility
2. Inseparability
3. Perishability
4. Heterogeneity
Intangibility
You cannot hold or
touch a service unlike
a product.
However, the experience
consumers obtain
from the service has
an impact on how they
will perceive it. What
do consumers
perceive from
customer service? The
location, and the inner
presentation of where
they are purchasing
Inseparability
A product when
produced can be taken
away from the
producer.
But Services cannot be
separated from the
service providers. For
instance, the service
provided by a waiter in
a restaurant is all a
part of the service
production process
and is inseparable. The
 Perishibility
Services last a
specific time and
cannot be stored
like a product for
later use.
If travelling by train
or air the service
will only last the
duration of the
journey. The
service is
developed and
 Heterogeneity
It is very difficult to make
each service experience
identical.
If travelling by plane the
service quality may differ
from the first time you
travelled by that airline to
the second. A concert
performed by a group on
two nights may differ in
some ways as it is very
difficult to standardize
every dance move.
Systems and procedures are
put into place to make
 The Service Industry
Transportation services
Communication services
Financial services (banking, insurance,
real estate etc.)
Tourism services
Health services
Auto repair services
Business services
Legal services
Government services
Education
 Service marketing
• Starbucks CEO Howard Schultz
quoted- “customer always comes
in second-employees matter
more”
• The idea is that happy
employees will unleash their
enthusiasm on customer,
creating even greater customer
satisfaction.
Type of service marketing
Three kinds of
service
marketing
exists-
• Internal:
Company to
employees
• External:
Company to
customers
 External Marketing:
It is a promise a company makes to a customer
about the service and its delivery. External
marketing uses all the elements of
communicating and reaching the customers
through advertising, sales promotion, selling,
merchandising and all.

 Internal Marketing:
It is all about applying marketing concepts to
your own employees. You should be able to
first convince or market your concept to your
own employees and enable them to deliver
the service of the customers. For this it is
important to identify and fulfill your internal
customers i.e. employee needs. Internal
marketing is thus a key to meeting the
promises made through interactive
Marketing mix for
services
•Process

•People

•Physical
Evidence
 7 Ps
of The
Banking Sector
 Product Mix
It includes all different product lines a
company offers to its customers.

SAVINGS • CREDIT CARDS

ACCOUNT Rewards
• ATM Network
Dial-A-Draft
• 7-Day Banking
Credit Limit Increase
• Telebanking
24-Hour ATMs
• iConnect-
Internet Banking Concession on
Personal Remittances
Overdraft Facility,
 PRICE MIX
It is nothing but the interest rates
charged by the different banks.

ATM Card Issue Free – 2 ATM cards issued

free if it joint account
Add – on Card RS. 100 – Beyond 2 cards

Duplicate Card Rs. 100

 Other General Charges
Current Account Savings Account

Transaction NIL NIL

Charges
Charges for issue of NIL NIL
Cheques book

Issue of duplicate Rs. 25 per page Rs. 25 per page

statement
Account closure Rs.100 Rs.100
 Place Mix
It is the location analysis for banks branches.
Some of the factors affecting the location
analysis
The Tradeare :-
Area
Population Characteristics
Commercial Structure
Proximity to other
convenient Outlets
Real Estate Rates
Proximity to Public
Transportation
Location of Competition
 Promotion mix
It is making the customer more and more
aware of the services and benefits provided
by the banks.
Different ways of promotion are :-
Public Relations
Personal Selling
Sales Promotion
Word-of-mouth Promotion
Telemarketing
 PROCESS
• The process mix constitutes the overall
procedure involved in using the services
offered by the bank. A process should be
such that the customer is easily able to
understand and easy to follow.
• Let’s take for example the process for
application for a car loan.
Now this mainly involves 3 things.
 Producing of proper documents
5.Filling up of application form
6.Paying for the initial down payment.
Process cont…..
The smaller and simpler the procedure, the
better
the process, and the customer will be more
satisfied.
It Refers to the systems used to assist the
organisation in delivering the service.

For example:- Banks that send out Credit

Cards automatically when their customers
old one has expired again require an
efficient process to identify expiry dates
and renewal. An efficient service that
Physical evidence
• Physical evidence is the overall
layout of the place i.e. how the
entire bank has been designed.
Physical evidence refers to all those
factors that help make the process
much easier and smoother.
• For example, in case of a bank, the
physical evidence would be the
placement of the customer service
executive’s desk, or the location of
the place for depositing cheques.
The more the bank does to make
the service easier
 People
An essential ingredient to any service
provision is the use of appropriate staff
and people. Recruiting the right staff and
training them appropriately in the delivery
of their service is essential if the
organization wants to obtain a form of
competitive advantage.
Consumers make judgments and deliver
perceptions of the service based on the
employees they interact with. Staff should
have the appropriate interpersonal skills,
aptitude, and service knowledge to
provide the service that consumers are
paying for. Many British organizations aim
to apply for the Investors In People
The service-profit chain
 Ethics In Service Marketing
Various ethical issues and concerns:
• Aggressive promotions through
telemarketing and personal selling

• Invasion of customer’s privacy

• Misleading claims backed by poor service

performance
 Managing Service quality
• Gap between management
perceptions and consumer
expectations
• Gap between management
perceptions and service quality
specifications
• Gap between service quality
specifications and service delivery
• Gap between service delivery and
external communication
 Determinants of service
quality
• Reliability – delivering on promises
• Responsiveness – willing to help
• Assurance – inspiring trust and
confidence
• Empathy – individualising customers
• Tangibles- physical representation
 Managing Service
Productivity
• Giving quality service is an expensive
business
• Not every consumer is willing to pay
extra for service quality
• Service providers would have to find
their optimum service quality/cost
ratios
• Making services obsolete by product
innovations