Service marketing

By :- Sachin
MBA 3rd sem.
What is service ?
A SERVICE is the action of doing something for
someone or something. It is largely intangible (i.e. not
material). A product is tangible (i.e. material) since
you can touch it and own it.
 A SERVICE tends to be an experience that is
consumed at the point where it is purchased, and
cannot be owned since is quickly perishes. A person
could go to a café one day and have excellent service,
and then return the next day and have a poor
experience.
Definition of Service
Dictionary definition :- the action of serving,
helping, or benefiting, conduct tending to welfare or
advantage of another.

Acc. To Bessom :- “ for the consumer, services are

activities offered for sale that provide valuable benefits
or satisfaction; activities that he can not perform
himself or that he choose not to perform by himself”.
 Characteristics of a Service
 Lack of ownership :- we can only experience it,
For example, an engineer may service your air-
conditioning, but you do not own the service, the
engineer or his equipment.
 Intangibility:- service cannot have a real, physical
presence as does a product.
 Inseparability:- Services cannot be separated from
the service providers. A product when produced can
be taken away from the producer.
 Variability- since the human involvement of service
provision means that no two services will be
completely identical.

 Perishibility:- Services last a specific time and cannot

be stored like a product for later use.
For example If travelling by train, coach or air the
service will only last the duration of the journey.
How is it different from product?
Physical Goods Services
Tangible Intangible
Homogeneous Heterogeneous
A thing A activity process
Core value produced in Core value produced in
factory buyer – seller interaction
Can be kept in stock Cannot be kept in store
Transfer of ownership No transfer of ownership
Production and distribution Production ,distribution
are separated from and consumption are
consumption simultaneous process
Role of service sector in Indian economy
India has fifteenth rank in services output.
Providing 23% employment of the total workforce in
the country.
Various services under this sector are:_
Constructions Trade Hospitality
Transport Food and beverage services,
communication, Social and personal services,
insurance , financing etc.
Service sector contribution to indian
economy
Service sector contribute to indian GDP around 56%
in 2009.
Service sector contribution is increasing rapidly as
information and communication technology enabled
service(ITES) from india won the confidence of many
global corporations, wanting to lower their operational
costs through process outsourcing.
reason being india has large pool of highly-skilled and
educated workers available at relatively lower cost.
Cont…
Indian GDP –Trend Of Growth Rate

1960-1980 : 3.5%
1980-1990 : 5.4%
1990-2000 : 4.4%
2000-2009 : 6.4%
Contribution of Various Sectors in GDP
In the Indian GDP for 1990-1991 are as follows:

Agriculture: - 32%
Industry: - 27%
Service Sector: - 41%

In the Indian GDP for 2005-2006 are as follows:

Agriculture: - 20%
Industry: - 26%
Service Sector: - 54%

In the Indian GDP for 2007-2008 are as follows:

Agriculture: - 17%
Industry: - 29%
Service Sector: - 54%
Classification of services
Classifications can be done on following
basis:
• Classification by Industry
• Classification by Target Effect
• Skill level of service provider (Professional/
Nonprofessional)
• Labor intensiveness (People-based/Equipment-
based)
• Degree of customer contact (High / Low)
• Goal of the service provider (Profit /Nonprofit)
Classification By Industry
 Entertainment industry
 Education
 Telecommunications
 Finance & Insurance
 Transportation
 Public utilities
 Government services
 Health
 Hospitability Industry
 Business services
 Telecommunications
 Trading
Classification By Target Effect
 Based on Degree Of Customer Involvement:

1. People Processing: Services aimed at physical care e.g. Healthcare,

clinics, restaurant, hospitals, hair stylists, fitness centers

2. Mental Stimulus Processing: Services aimed at mind of customer

e.g. Education, information, entertainment, consulting,
psychotherapy

3. Possession Processing: Services aimed at physical possession &

tangible assets e.g. repair & maintenance, laundry, repair services,
landscaping, house cleaning services

4. Information Processing : Services for intangible assets e.g. Banking,

legal consultation, brokerage, financial services.
Skill level of service provider

• Teacher

• Doctor

• Engineer

• Accountant
labor intensiveness

Mechanic

Electrician

Labor

Plumber

Artisan
Degree of customer contact

High Degree (Every day) – TV channels, mobile etc.

Moderate Degree (Regular) – Teacher, Barber,

washer man etc.

Low Degree ( Occasional ) – Priest, Doctors etc.

Thank you