SERVICE MARKETING

BY:-
PRAVEEN PARMAR
PROFESSOR(C.M.)
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What is service ?
SERVICE IS ANY ACT OR
PERFORMANCE THAT ONE PARTY
CAN OFFER TO ANOTHER THAT IS
ESSENTIALLY INTANGIBLE AND
DOES NOT RESULT IN ANY
OWNERSHIP

-PHILIP KOTLER
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Characteristic of Service
 Intangibility
 Inseparability

 Heterogeneity

 Perishability

 Ownership

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What is Marketing ?
• Definition –It is the organization’s task is to
determine the needs, wants, and interests of
target markets and to deliver the desired
product/service more effectively and
efficiently than competitors in a way that
preserves or enhances the consumer’s and
the society’s well-being.

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Continue..
• Objective of Marketing –
• Sale
• Retain
•Refer - which is carried out by your own
customers
• Marketing when -
 Supply more Demand
 Supply less Demand
 Supply equal Demand
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 The main Steps of Marketing

R STP MM I C

R = Research
STP = Segmentation, targeting and positioning
MM = Marketing mix
I = Implementation
C = Control
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7 P’s OF SERVICE MARKETING
1. PRICE
2. PLACE
3. PRODUCT
4. PROMOTION
5. PHYSICAL EVIDENCE
6. PROCESS
7. PEOPLE
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 PRICE

 Fixed Pricing
 Differential pricing
 Discount pricing
 Diversionary pricing
 Guaranteed pricing
 High price maintenance pricing
 Offset pricing 8
 JET AIRWAYS FARE RAILWAYS FARE RAILWAY FARE
RAJADHANI SUPERFAST

SECTOR CURREN REDUCED AC I AC II AC I AC II

T FARE FARE

NDLS-ADI 4780 2462 3570 1835 2686 1421

NDLS-SBC 8710 5053 6485 3550 - 2378
NDLS-MAS 8960 3293 6065 3415 4353 2279
NDLS-GHY 6980 4110 5625 3255 - 2159
NDLS-HYB 7285 3278 3793 1991 4955 2920
NDLS-HWH 6925 2860 4540 2670 3583 1883
NDLS-TVC 11875 6685 8295 4315 - 2603
NDLS-BCT 6095 3920 4280 2485 3373 1775
NDLS-BRC 5520 2558 3610 1880 2813 1487
BCT-HWH 6855 3320 - - 4108 2153
BCT-HYB 4140 2443 - - 2286 1211
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 PASS. FARE STRUCTURE
(2001-2002)
Paise per PKM Number% Pass. Km% Revenue%
NON-SUBURBAN
AC-I 237.54
AC Sleeper 103.6 0.81 5.75 21.5
AC 3-Tier 73.2
Chair Car 62.4
Sleeper class M/E 26.2
3.1 27.8
Sleeper class Ord. 17.6 48.70
IInd class M/E 21.6 6.6 22.7
IInd class Ord. 14.4 30.6 26.10 17.6
SUBURBAN(all) 12.4 58.9 19.45 10.4
No. of Pass. Suburban – 3.0 Billion Non-Suburban 2.09 Billion
Pass. Kms. Suburban – 93 Billion Non-Suburban 400 Billion
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Ratio of Passenger Earning per
PKm to Freight Earning per TKm
1.8 1.7
1.6 1.4 1.35 1.4
1.4
1.2 1.0
1 0.85
0.8
0.6
0.33
0.4
0.2
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 PLACE (DISTRIBUTION)
• SERVICE DELIVERY POINT
• STATIONS, CITY BOOKING AGENCIES /
OUT AGENCIES / RESERVATION
CENTERS ARE OUR SALES OFFICES·

 PLACES SHOULD BE CUSTOMER FRIENDLY.

 PLACES SHOULD BE WELL MAINTAINED
 NETWORK SHOULD BE INCREASED
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 PRODUCTS

PASSENGER SERVICE PRODUCTS

 RAJDHANI / SHATABDI TRAINS
 JANSHATABDI TRAINS

 LONG DISTANCE MAIL & EXPRESS TRAINS

 UNRESERVED PASSENGERS TRAINS
 COMMUTER SUBURBAN TRAINS 13
 FREIGHT SERVICE
PRODUCTS
 BLOCK RAKES (Varieties of wagons)
 MINI RAKES (Small Traders)
 CONRAJ (High speed)
 RO –RO Scheme
 FREIGHT FORWARDER (Collection of piece meal
traffic)
 TWO POINT BLOCK RAKES
 STATION TO STATION RATES (Concessions)

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 PROMOTION
 EACH PRODUCT FEATURES TO
BE COMMUNICATED TO CUSTOMER IN
THAT SEGMENT USING SUITABLE
MEDIA (LOT OF WEAKNESS)
 ADVERTISING
 PERSONAL SELLING
 PUBLICITY
 SALES PROMOTION
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 PHYSICAL EVIDENCE
 PERIFERAL EVIDENCE-
1. A RESERVED TICKET
2. CHEQUE BOOK
 ESSENTIAL EVIDENCE
 ACTUAL EXPERIENCE OF SERVICE

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 PROCESS
PROCESS OF PRODUCTIN AND DELIVERY OF SERVICE.
CUSTOMER INTERFACE PROCESSES SHOULD BE
COMPUTERISED, MECHANIZED, RATIONALISED AND
SIMPLIFIED.
PROCESSES EXIST ARE COMPLEX ON RAILWAYS
LIKE SOME PROCESSES ARE :
1. RESERVATION PROCESS/REFUND PROCESS/ CLAIM
PROCESS.
2. COMMUNICATION PROCESS.
3. ENTRAINING/DETRAINING PROCESS.

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 PEOPLE
 SERVICE PERSONNEL
 CUSTOMERS
1. CAREFUL SELECTION AND TRAINING
2. LAYING DOWN NORMS, RULES,
PROCEDURES FOR PERSISTENCE
PERFORMANCE
3. CONSTITANCE APPEARANCE
4. REDUCE INTERFACE – AUTOMATION-
COMPUTERISATION 18
STATUS OF MARKET SHARE OF INDIAN RAILWAY
AS PER RAILWAY BOARD’S STATUS PAPER

Year Freight Passenger

Rail Road Rail Road
1950-51 89% 11% 80% 20%

1996-97 40% 60% 20% 80%

Shift of Traffic from Rail to Road

Freight
100% Rail
80%
Freight
60% Road

40% Passenger
Rail
20%
Passenger
0% Road
1950-51 1996-97 19
 PERCENTAGE OF TRAFFIC
TRANSPORTED BY RAILWAYS
YEAR COAL I.ORE CEMENT F.GRAIN FERT. POL I&STEEL

91-92 63.9 66.1 57.0 16.4 66.6 52.9 71.9

92-93 66.2 70.6 56.2 15.2 67.8 51.1 70.81
93-94 67.9 65.3 56.1 14.5 71.7 50.7 69.38
94-95 64.98 63.66 49.52 10.79 71.56 43.67 63.71
95-96 64.97 65.15 47.45 13.76 69.15 40.16 58.30
96-97 65.95 66.68 46.42 14.85 70.23 37.47 45.38
97-98 66.37 69.72 44.93 13.51 74.58 37.52 44.04
98-99 63.99 65.63 41.80 13.38 75.77 37.66 40.90
99-00 65.67 66.97 43.42 14.78 78.6 35.96 39.70
00-01 67.67 72.93 43.10 13.57 74.17 37.49 34.44
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 STRENGTHS/OPPORTUNITIES
FOR INDIAN RAILWAYS

 A LARGE NETWORK OF 7000 STATIONS

EXISTS IN THE COUNTRY.

 A SUBSTANTIAL MARKET SHARE EXISTS,

IN PASSENGER SEGMENT. FOR A
COUNTRY OF 1000 MILLION PEOPLE WITH
LOW PURCHASING POWER RAILWAY
SYSTEM IS MORE SUITABLE.
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STRENGTHS/OPPORTUNITIES
FOR INDIAN RAILWAYS
 FOR LONG DISTANCE AND BULK SECTOR
RAILWAYS IS THE MOST ECONOMICAL
COMPARATIVELY SAFER MODE OF
TRANSPORT.
 PETROLEUM PRODUCTS PROCURED THROUGH
IMPORTS ARE VERY EXPENSIVE AND THUS
ELECTRICITY BASED RAILWAY SYSTEM WILL
ALWAYS HAVE AN EDGE ON PARAMERTERS OF
POLLUTION, ENERGY COST, ENVIRONMENTAL
FACTORS.
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WEAKNESSES / THREATS
FOR INDIAN RAILWAYS
 THE ORGANISATION IS
PRODUCTION ORIENTED.

 THERE IS OVER EMPHASIS ON

MAXIMISING PKMS, NTKMS.

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 WEAKNESSES / THREATS
FOR INDIAN RAILWAYS
 MARKETING IS PERIPHERAL ACTIVITY
AND COMMERCIAL DEPARTMENT IS
BASICALLY ENGAGED IN SELLING
BUSINESS ONLY

 CUSTOMER FOCUS IS MISSING AND

CUSTOMER SATISFACTION IS NOT AN
ORGANISATIONAL MISSION.
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 WEAKNESSES / THREATS
FOR INDIAN RAILWAYS
 INDIAN RAILWAYS IS LOOSING ITS
MARKET SHARE IN PASSENGER
AND FREIGHT BUSINESS.

 THERE IS CAPACITY CONSTRAINT -

HOW TO BALANCE DEMAND
AGAINST AVAILABLE CAPACITY.

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 WHAT SHOULD BE THE MARKETING
STRATEGY FOR INDIAN RAILWAYS ?

 MARKETING KEY ISSUE

 (PRODUCTION LED ORGANISATION —
CUSTOMER LED ORGANISATION)
 CUSTOMER SATISFACTION SHOULD
BE MAIN ORGANISATIONAL MISSION.
 FOCUS ON SERVICE PRODUCTS
(BUSINESS PLAN FOR EACH
PRODUCT).
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 WHAT SHOULD BE THE MARKETING
STRATEGY FOR INDIAN RAILWAYS ?
 TQM IN ALL PROCESSES.
 COMPUTERISATION OF CUSTOMER
INTERFACE AREAS(TICKETING,
INFORMATION SYSTEM, REFUND
ETC.)
 DYNAMIC RATING & MARKET
RELATED PRICING.

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 WHAT SHOULD BE THE MARKETING
STRATEGY FOR INDIAN RAILWAYS ?
 DEMAND MANAGEMENT / STAGGERING
STRATEGY.(IN CAPACITY CONSTRAINT
SITUATIONS)

 TRAINING OF FRONTLINE STAFF IN

CUSTOMER CARE / COURTESY.

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 WHAT SHOULD BE THE MARKETING
STRATEGY FOR INDIAN RAILWAYS ?

1. INTERNAL MARKETING - TRAIN AND MOTIVATE THE

EMPLOYEES TO SERVE CUSTOMERS WELL

2. INTERACTIVE MARKETING - EMPLOYEE’S SKILL IN

SERVING THE CLIENT

We Treat Our Employees The Way We Want Them to Treat

Our Guests”

“A Knowledgeable, Satisfied Employee Is Our Best Marketing

Agent”

SATISFYING BOTH EMPLOYEES AND CUSTOMERS

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 WHAT SHOULD BE THE MARKETING
STRATEGY FOR INDIAN RAILWAYS ?

 FORWARD / BACKWARD / HORIZONTAL

INTEGRATION.(STRATEGIC
ALLIANCE WITH OTHER MODES)
 DEVELOP DEMAND FORECASTING
MODELS, LONG RANGE DECISION
SUPPORT SYSTEMS, COSTING
MODELS, SYSTEMS FOR GATHERING
COMMERCIAL INTELLIGENCE
(OUTSMART COMPETITORS). 32
 WHAT SHOULD BE THE MARKETING
STRATEGY FOR INDIAN RAILWAYS ?

 LOBBY WITH GOVERNMENT / OPINION

MAKERS/ PLANNING COMMISSION FOR
EVEN PLAYING FIELD FOR
INVESTMENT IN RAILWAY PROJECTS
(SOCIAL COST BENEFIT ANALYSIS
DATA SHOULD PROMOTE RAILWAY AS
BETTER CHOICE FOR TRANSPORT
INFRASTRUCTURE).

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SERVICE RECOVERY
 IMPROVE THE AFTER SALE SERVICE
 ADMIT & APOLOGISE
 RECTIFY
 COMPENSATE

 MINOR PERFORMANCE LAPSES NEEDS

MONITORING

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 MARKETING STRATEGY
FOR INDIAN RAILWAYS
TO CONCLUDE :-
DESIGN, DEVELOP, DELIVER
APPROPRIATE “SERVICE PRODUCT”
QUICKLY AND MODIFY / EXTEND THE
PRODUCTS AS PER NEEDS AND WANTS
OF CUSTOMERS.

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38
 References
1. Services Marketing by Lovelock
2. The Essence of Services Marketing by
Adrian Payne
3. The Marketing Management - An Asian
Perspective by Philip Kotler
4. The Principles of Marketing by Philip
Kotler
5. The marketing of services by Donal &
Cowell 39