Service Sector Management Notes

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Ch-1 Introduction to Services Marketing

Define Services
A service is an act or perIormance oIIered by one party to another. They are
economic activities that create value and provide beneIits Ior customers at speciIic times
and places as a result oI bringing desired change.
According to Sir William B "Service reIers to social eIIorts which includes the
Govt. to Iight Iive giant evils wants, disease, ignorance, squalor and illness in the
society".

Characteristics of services
Service is an act or perIormance oIIered by one party to another. They are
economic activities that create value and provide beneIits Ior customers at speciIic times
and places as a result oI bringing about a desired change in or on behalI oI the recipient
oI the service. The term service is not limited to personal services like medical services,
beauty parlors, legal services, etc. According to the marketing experts and management
thinkers the concept oI services is a wider one. The term services are deIined in a number
oI ways but not a single one is universally accepted. The distinct characteristics oI
services are mentioned below.

1. Intangibility: Services are intangible we cannot touch them are not physical
objects. According to Carman and Uhl, a consumer Ieels that he has the right and
opportunity to see, touch, hear, smell or taste the goods beIore they buy them.
This is not applicable to services. The buyer does not have any opportunity to
touch smell, and taste the services. While selling or promoting a service one has
to concentrate on the satisIaction and beneIit a consumer can derive having spent
on these services.
For e.g. An airline sells a Ilight ticket Irom A destination to B destination. Here it
is the matter' oI consumer's perception oI services than smelling it or tasting it.

2. Perishability : Services too, are perishable like labor, Service has a high degree
oI perish ability. Here the element oI time assumes a signiIicant position. II we do
not use it today, it labor iI ever. II labor stops working, it is a complete waste. It
cannot be stored. Utilized or unutilized services are an economic waste. An
unoccupied building, an unemployed person, credit unutilized, etc. are economic
waste. Services have a high level oI perish ability.

3. Inseparability: Services are generally created or supplied simultaneously. They
are inseparable. For an e.g., the entertainment industry, health experts and other
proIessionals create and oIIer their service at the same given time. Services and
their providers are associated closely and thus, not separable. Donald Cowell
Achiever`s Academy 2 www.BMS.co.in
states 'Goods are produced, sold and then consumed whereas the services are sold
and then produced and consumed'. ThereIore inseparability is an important
characteristic oI services which proves challenging to service management
industry.

4. Heterogeneity: This character oI services makes it diIIicult to set a standard Ior
any service. The quality oI services cannot be standardized. The price paid Ior a
service may either be too high or too low as is seen in the case oI the
entertainment industry and sports. The same type oI services cannot be sold to all
the consumers even iI they pay the same price. Consumers rate these services in
diIIerent ways. This is due to the diIIerence in perception oI individuals at the
level oI providers and users. Heterogeneity makes it diIIicult to establish
standards Ior the output oI service Iirm.

5. Ownership: In the sale oI goods, aIter the completion oI process, the goods are
transIerred in the name oI the buyer and he becomes the owner oI the goods. But
in the case oI services, we do not Iind this. The users have only an access to
services. They cannot own the service.
For e.g. a consumer can use personal care services or medical services or can use
a hotel room or swimming pool, however the ownership remains with the
providers.
According to Philip Kotler, "A service is an activity or beneIit that one party can
oIIer to another that is essentially intangible and does not result in the ownership
oI anything. "From this it is clear that the ownership is not aIIected in the process
oI selling the services.

6. Simultaneity: Services cannot move through channels oI distribution and cannot
be delivered to the potential customers and user. Thus, either users are brought to
the services or providers go to the user. It is right to say that services have limited
geographical area. According to Carman, "Producers oI services generally have a
small size area oI operations than do the producers oI items. largely because the
producer must to get the services or vice- versa."
When the producers approach the buyer time is taken away Irom the production
oI services and the cost oI those services is increased. On the other hand it cost
time and money Ior the buyers to come to producers directly. Here the economics
oI time and travel provide incentives to locate more service centers closer, to
prospective customer, resulting in emergence oI smaller service centers Ior e.g.
aeroplane cannot be brought to customer, etc.

7. Quality Measurement: A service sector requires another tool Ior measurement.
We can measure it in terms oI service level. It is very diIIicult to rate or quantiIy
total purchase. E.g. we can quantiIy the Iood served in a hotel but the way waiter
serves the customer or the behaviour oI the staII cannot be ignored while rating
the total process.
Hence we can determine the level oI satisIaction at which users are satisIied. Thus
the Iirm sells good atmosphere convenience oI customers, consistent quality oI
services, etc.

8. Nature of demand- Generally, the services are Iluctuating in nature. During the
peak tourist seasons there is an abnormal increase in the demand oI services.
ThereIore, while identiIying the salient Ieatures oI services one cannot ignore the
nature oI demand. E.g. tourists go to hill stations during summer season wherein
public transport utilities are used substantially. This indicates that Ilexibility is the
important Ieature oI service.

Give a brief classification of services.
The classiIication scheme developed by Christopher Lovelock represents an attempt to
address one oI the Iollowing aspects.
1. ature oI the Service Act:
The service act can be considered in two-ways:
Who or what is the direct recipient oI the service and
The tangible nature oI service.
This creates Iour classiIication possibilities shown below:

Direct Recipient of the Service
People Things
ature oI
the Service Act

Tangible actions

Intangible actions

Services directed at people's bodies
Health care
Passenger transportation
Beauty saloons
Exercise clinics
Restaurants
Haircutting
Services directed at goods and
other physical possessions:
Freight transportation
Industrial equipment repair and
maintenance.
Laundry and dry cleaning
Landscaping/lawn care
Veterinary care
Services directed at people's mind
Education
Broadcasting
InIormation services
Theatres
Museums
Services directed at intangible
assets:
Banking
Legal Services
Accounting
Securities
Insurance
Understanding the Nature of the Service Act
2. Type oI Relationship that the service organization has with its customers:
In this the prime Iactors which need consideration

Whether or not the customer has some type, oI Iormal relationship with the
provider oI service and
Whether the service itselI is provided continuously or in discrete transactions.
These considerations lend themselves to the matrix shown in the Iigure shown below:

Type of Relationship between Service Organization and its customers

Nature of Membership relationship No formal relationship
Service Delivery
Continuous delivery oI
service

Insurance
Telephone subscription
College enrollment
Banking
Trade Associations
Radio station
Police protection
Lighthouse
Public highway

Discrete transaction

Long-distance phone calls
Theatre series subscription
Commuter ticket or pass
Car rental
Mail service
Toll highway
Pay phone
Movie theater
Public transportation
Restaurant

There are advantages Ior the service provider to have customers as 'members'
whether done in a contractual sense or just by mutual agreement. By knowing personal
details about the customer, it becomes easy to contact them through direct marketing and
tailor special oIIers around those particular needs.

3. Scope Ior customization and judgment in service delivery:
Services are created as they are consumed. There is Iar more scope Ior tailoring
the service to meet the needs oI the individual customer because the customer is
oIten actually involved in the production process. As shown in the Iigure below
customization can proceed along at least two dimensions:
The extent to which the characteristics oI the service and delivery system tend
themselves to customization.
How much judgment customer contact personnel are able to exercise in deIining
the nature oI services received by individual customers.

Extent to which Service Characteristics are Customized
Extent to Which Customer High Low Contact Personnel Exercise
judgment in Meeting
Individual Customer Needs

High

Low
ProIessional services
Surgery
Taxi services
Beautician
Plumber
Education (tutorials)
Cournet restaurant
Education (large. classes)
Preventive health programs
College Iood service

Telephone service
Hotel services
Retail banking
Family restaurant
Public transportation
Routine appliance repair
Movie theater
Spectator sports
Fast-Iood restaurant

4. ature oI Demand and supply Ior the Service:
Some service industries Iace steady demand Ior their services whereas others
encounter signiIicant Iluctuations: The time perish ability oI service capacity
creates a challenge Ior the service manager. This is because services cannot be
produced and stored as inventory Ior Iuture sale. But the extent oI demand and
supply imbalances varies across service industries as shown in the Iigure below:

Extent to which Supply is Wide Narrow
Constrained

Peak demand can usually be
met without a major delay

Peak demand regularly
exceeds capacity

Electricity
atural gas
Telephone
Hospital maternity unit
Policy and Iire emergencies
Insurance
Legal services
Banking
Laundry and dry cleaning

Accounting and tax
preparation

Passenger transportation
Hotels and motels
Restaurants
Theaters
Services similar to those
above but with insuIIicient
capacity Ior their base
level oI business

hat is the Nature of Demand for the Service Relative to Supply?
The service managers may Iace serious problems while coping up with the demand
Iluctuations. However, with technological development several service companies are
using computers to help in delivery scheduling to bring about a balance between demand
and supply oI services.

5. Method oI Service Delivery:
The method by which the service is delivered to customers could be yet another
area where a change oI marketing strategy could pay dividends. The Iactors to
consider are shown in the Iigure below:

Availability of Service Outlets
ature oI Interaction between Customer Single site Multiple site
Organization and Service
Customer goes to service organization

Service organization comes to customer

Customer and service organization
transact at arm's length (mail or electronic
communication)
Theater
Barbershop
Bus service
Fast-Iood chain
Lawn care service
Pest control service
Taxi
Mail delivery
Emergency repairs
Credit card company
Local TV station
Broadcast network
Telephone company
Method of Service Delivery

Services with multiple sites have signiIicant management implications Ior ensuring
consistency and quality in oIIering oI services. Service, delivery is oI great important to
the customers overall perception oI quality services.

Distinguish between Goofs and services

GOODS SERVICE
(1) Tangible (1) Intangible
(2) Can be stored (2) Cannot be stored
(3) Homogeneous (3) Heterogeneous
(4) TransIer oI ownership (4) o transIer oI ownership
(5) Production & distribution are separated
Irom consumption
(5) Production, distribution & consumption
are simultaneous
process.
(6) Core value produced in Iactory (6) Core value produced in buyer
seller interaction.
(7) Customer do not participate in
the production process
(7) Customer participate in the production
process
(8) A Thing (8) An activity
(9) Movable (9) Immovable

Explain growth of service sector?
Services comprise a set oI economic activities like transportation, trade, tourism,
communications, banking and insurance, real estate, public administration, deIence and
so on. According to an Adrian - Payne Iour Iactors are responsible Ior growth in the
service sector. They are: demographic, social, economic and political.

1. Demographic changes: The liIe expectancy has raised which in turn, is producing
an expanding retired population. This sector has created a new demand Ior travel
and leisure, as well as Ior healthcare, nursing and liIe insurance. The need Ior
inIrastructural support services has increased due to the development oI new
towns and regions.

2. Social changes: The number oI women's in work Iorce has increased, and this has
led to traditional domestic Iunctions being perIormed outside the home. The rise
in number oI double income household has created a greater demand Ior
consumer services, including retailing, real estate and personal Iinancial services.
With the growing income, the standard oI liIe has improved. Smaller Iamilies
with double income spend ore on entertainment, travel and hospitality services.
The aspiration levels have increased due to communication and travel. As a result,
both children and adults are making new demands on learning establishments, so
that they can develop the skills needed in order to compete. In the complex and
Iast changing environment. This has opened avenues Ior knowledge and
inIormation based services.

3. Economic changes: The demand Ior communication, travel and inIormation
services has increased due to globalisation. This has been Iilled by the rapid
changes brought about by new inIormation technology. Increased specialization
within the economy has led to reliance on specialist service providers For e.g.
advertising and marketing research have now become specialist Iunctions
providing support to all the sectors oI the economy.

4. Political and legal chap : The size oI the government has grown creating a huge
inIrastructure oI service departments. With the growth in international trade, the
demand on legal and other proIessional services have increased, cutting across
national boundaries.
ManuIacturing Iirms handing over repair and maintenance, data processing,
where rousing and logistics services to specialised sources, which they earlier
used to perIorm in- house. The liberalization has also created a new avenue Ior
growth. The slow growth oI agriculture and industry and the presence oI
widespread unemployment have driven people to seek work in the inIormal
services. This is particularly true in the urban areas, where petty pavement retail
trade, transport, another is repair and service establishments have proliIerated.
Since the overall growth oI the economy is now dependent on the service
sector, the pace oI productivity growth in services becomes critically important.
ThereIore, the government is taking an initiative in the sector.

REASONS FOR THE GROWTH OF SERVICES IN INDIA:
1. Economic aIIluence: One, oI the key Iactors Ior the growth oI demand Ior
services is the economic aIIluence. According to the CAER study the size oI the
middle income consumer is raising Iast and the percentage oI the very poor
household's declining. The rural households in the upper income category is
growing at a much Iaster pace than the urban households in the corresponding
categories. The Economic liberalisation Process has had a positive impact on the
Indian households. Their income as well as their expenditure has been pushed,
creating a demand Ior many goods and services.

2. Changing Role oI Women: Traditionally the Indian woman was conIined to
household activities. But with the changing time there has been a change in the
traditional way oI thinking in the society. Women are now allowed to work. They
are employed in deIence services, police services, postal services, soItware
services, health services, hospital services, entertainment industries, Business
Process Outsourcing and so on.
The percentage oI working women has been growing rapidly. The changing role
oI women has created a market Ior a number oI product and services. Earning
women preIer to hire services in order to minimise the innumerable roles that they
are required to perIorm. The demand by woman is Iorcing service organisations to
be more innovative in their approach.

3. Cultural Changes: Change is the underlying philosophy oI culture place oI change
in Indian culture is not uniIorm. However, during the last century the Iactors oI
change are prominent. The emergence oI the nuclear Iamily system in place oI the
traditional joint Iamily system creates a demand Ior a host oI services like
education, health care, entertainment, telecommunication, transport, tourism and
so on. There has' been a marked change in the thought Processes relating to
investment, leisure time perception and so on which has created a huge demand
Ior services.

4. I.T. Revolution: For the last 15 years India'6aste,en occupying a vital position in
the area oI InIormation Technology. IT became one oI the key service businesses
oI the country. India has the largest soItware skilled population in the world. The
domestic market as well as the international market has grown substantially.
Realising the potential Ior this area many state governments have made IT as their
most, prioritized segment states such as Karnntnka, Andhra Pradesh, Madhya
Pradesh Maharashtra and Delhi have already achieved substantial progress in
InIormation Technology the In Ile years to come 'Lille IT enabled se Aces will
have a bright Iuture. The growth. oI' population, industrialisation and
indiscriminate consumptions have aIIected the, natural resources, environment
and the ecological balance. Due to this there is an imbalance oI the ecology
various service organisations have been promoted in order to take up social
marketing. Thousands oI crores oI rupees are being spent on saIeguarding the rare
animals and birds, water pollution, conservation oI oil & energy and research to
develop new technologies that can promote eIIective use oI natural resources and
saIeguard the environment.

5. Development oI Markets: During the last Iew decades the wholesaler and the
retailer population has grown in the country. Urban India has become a cluster oI
wholesaling and retailing business. In the Semi - urban areas, retailing has spread
to the nooks and corners oI the streets and in the rural areas retail business is
signiIicantly present. A new breed oI organisations, oIIering marketing services
has come up. The government also oIIers marketing services to the small-scale
agricultural Iarmers, artisans and other traditional business sectors such 'as
promotion oI regulated markets, export promotion councils, development boards
etc.

6. Market orientation: The changing competitive situation and demand supply
positions has Iorced the manuIacturing organisation to shiIt their philosophy Irom
production orientation to market orientation. Market is a service Iunction that has
been added in the organisation. The pressures in the market has Iurther Iorced the
manuIacturing organisations to have marketing research, accounting, auditing,
Iinancial management, human resource management and marketing research
divisions - all oI which are services Iunctions.

7. Health-Care Consciousness: In India, the healthcare market has grown
substantially. The increased liIe expectancy is the result oI the consciousness oI
the people regarding the health issues. The growth oI Iitness clubs, diagnostic
centres, medical counselling, health-related inIormation sites are the reIlections oI
the growing demands Ior health care services. The government as well as the
social organisations have taken up the mass campaigns in order to create
awareness among the illiterate persons and the rural population on health service.
Hence, the growth oI health related services.

8. Economic liberalisation: The economic liberalisation oI the 1991 has brought
many changes in the Indian scenario. With the Disinvestment and the
Privatisation policies the state owned monopolies in many service areas came to
an end Multinationals were permitted to enter the Indian market. Liberal lending
policies and lower interest rates motivated many people to become selI-employed.
DiIIerent sectors like Banking, Insurance, Power projects, Telecommunication,
Hospitality sector, Health Services, Entertainment, Air transport, and Courier
services witnessed intense competition, due to the entry oI multinationals. The
Ilow oI time-tested service technology Irom various parts oI the world changed
the attitude oI the Indian consumer towards sources.

9. Rampant migration: One oI the important reasons Ior the growth oI services in
India is the rampant migration oI rural to semi-urban and urban areas. Migration
to urban areas Ior the want oI jobs and livelihood has resulted in the expansion oI
cities and townships due to which businesses like real estates, rentals,
transportation and inIrastructure services are rapidly expanding.

10. Export potential: India is considered to be a Potential source Ior services. There
are a number oI services that India oIIers to various parts oI the world like
banking, insurance, transportation co data services, accounting services,
construction labour, designing, entertainment, education, health services, soItware
services and tourism. Tourism and soItware services are among the major Ioreign
exchange earners oI the country and that the growth rate is also very high as
compared to the other sectors.

11. Service tax: The growth in the service sector attracted the attention oI the
government as a tax generating source. Over the years, the number oI services
brought under service tax has increased- Service tax is levied on hotels and
restaurants, transport, storage and communications, Iinancial services, real states,
business services and social and personal services.

Explain the growing importance of services or Service constitute about 54 of G.D /
List four areas/trends which have led to this phenomenal growth.
From the Iollowing points we can Iind out the growing importance oI services:
i. There has been an increase in demand Ior the services oI proIessionally qualiIied
technicians with the establishment oI technical institutes.
ii. Communication services like entertainment, education and the right to
inIormation by the public is more important.
iii. Due to the increasing standards in education there is an increasing demand Ior
educational services. Primary, secondary, higher secondary schools, junior degree
colleges are the institutes which are in great demand. As the number oI students
goes up the demand Ior private classes, tuitions, etc. also increases.
iv. Banking services have become necessary to meet Iinancial requirements oI the
public and the national industrial sector.
v. Personal care services are essential to develop potentiality oI an individual Ior a
perIect personality and positive image.
vi. Electricity services are required Ior the beneIit oI society, industry and so on.
vii. With the increasing amount oI trade and business, done by road there has been a
demand Ior transport services which beneIits various automobile manuIacturers.
Large section oI population preIers having their own vehicles, proving a good
business proposition Ior automatic industry.
viii. The tourism industry has geared itselI to make the tourists enjoy the holiday
seasons in the places oI their choice and take them away Irom monotonous
existence oI cities.
ix. Adequate hospital services are essential Ior the well being oI the society.
x. Hospitality services work on the strategies to satisIy the business class through
their service in terms oI comIort and satisIaction. The above activities have leIt
the management scientists, proIessionals and socio-economic thinkers to analyze
and understand that managing services need attention, stay in business.
xi. As the natural resources are depleting and need Ior conservation is increasing we
see the coming oI service providers like pollution control agencies, car pools, etc.
xii. The development in inIormation, technology has given rise to services like pager
service PCOs, world wide, ProIessional requirements need a change when
technology develops and evolves; This necessitates proIiciency in the
management level by giving a boost to abilities.

MARKETING CHALLENGES OF SERVICES:
Managing, growing, and proIiting with both product and service businesses are
challenging tasks. But the challenges are diIIerent Irom one to the other. Listed below are
some oI the most common and diIIicult challenges oI growing and .managing consulting,
proIessional, or technology service businesses that don't necessary apply to product
businesses.

1. Clients can't see or touch services beIore they purchase them: This makes services
diIIicult to conceptualize and evaluate Irom the client perspective, creating
increased uncertainty and perception oI risk. From the Iirm's perspective, service
intangibility can make services diIIicult to promote, control quality, and set price.
2. Services are oIten produced and consumed simultaneously: This creates special
challenges in service quality management that product companies do not even
consider. Products are tested beIore they go out the door. II a product has quality
problems while in production the company can Iix them and customers are none
the wiser. Service production happens with the customer present, creating a very
diIIerent and challenging dynamic.
3. Trust is necessary: Some level oI trust in the service organization and its people
must be established beIore clients will engage services. This is as important,
sometimes more important, than the service oIIerings and their value proposition.
4. Competition is oIten not who you think: Competition Ior product companies are
other product companies. Competition Ior service companies are oIten the clients
themselves: Sure, sometimes you Iind yourselI in a competitive shootout (some
Iirms more than others), but oIten the client is asking 'should we engage this
service; at all' and 'iI so, should we just do it in-house'.
5. Brand extends beyond marketing: Brand in service businesses is about who you
are as much as what you say about yourselI. And internal brand management and
communications can be equally as vital to marketing success as are external
communication.
6. Proactive lead generation is diIIicult: Many service companies have tried, and
Iailed, at using lead generation tactics that work wonders Ior product companies.
Implemented correctly, traditional product techniques, such as direct marketing
and selling, can work Ior services, but the special dynamics oI how clients buy
services must be careIully woven into your strategy.
7. Service deliverers oIten do the selling : Many product companies have dedicated
sales Iorces. For services, the selling is oIten split between sales, marketing,
proIessional, and management staII.
8. Marketing and sales lose momentum: Most product companies have dedicated
marketers and sellers. They market and sell continuously, regardless oI the
revenue levels they generate. In many services companies the marketers and
sellers also must manage and deliver. This can oIten lead to the Services Revenue
Rollercoaster-wide swings between revenue and work overIlow, and revenue and
work drought.
9. Passion is necessary yet elusive: The more passion, spirit, hustle, and desire your
staII brings to the organization every day, the more revenue and success you will
have. The correlation between staII passion and Iinancial success is direct and
measurable

Services Marketing Environment
Features of Business Environment
1. Business environment is the sum total oI all Iactors external to the business Iirm
and that greatly inIluences their Iunctioning.
2. It covers Iactors and Iorces like customers, competitors, suppliers, government,
and the social, cultural, political, technological and legal conditions.
3. The business environment is dynamic in nature that means, it keeps on changing.
4. The changes in business environment are unpredictable. It is very diIIicult to
predict the exact nature oI Iuture happenings and the changes in economic and
social environment.
5. Business Environment diIIers Irom place to place, region to region and country to
country. Political conditions in India diIIer Irom those in Pakistan. Taste and
values cherished by people in India and China vary considerably.

Importance of Business Environment

There is a close and continuous interaction between the business and its environment.
This interaction helps in strengthening the business Iirm and using its resources more
eIIectively. As stated above, the business environment is multiIaceted, complex, and
dynamic in nature and has a Iar-reaching impact on the survival and growth oI the
business. To be more speciIic, proper understanding oI the social, political, legal and
economic environment helps the business in the Iollowing ways:

1. Determining Opportunities and Threats: The interaction between the business and
its environment would identiIy opportunities Ior and threats to the business. It
helps the business enterprises Ior meeting the challenges successIully.

2. Giving Direction Ior Growth: The interaction with the environment leads to
opening up new Irontiers oI growth Ior the business Iirms. It enables the business,
to identiIy the areas Ior growth and expansion oI their activities.

3. Continuous Learning: Environmental analysis makes the task oI managers easier
in dealing with business challenges. The managers are motivated to continuously
update their knowledge, understanding and skills to meet-the predicted changes in
realm oI business.

4. Image Building: Environmental understanding helps the business organisations in
improving their image by showing their sensitivity to the environment within
which they are working. For example, in view oI the shortage oI power, many
companies have set up Captive Power Plants (CPP) in their Iactories to meet their
own requirement oI power.

5. Meeting Competition: It help the Iirms to analyse the competitors' strategies and
Iormulate their own strategies accordingly.

6. IdentiIying Firm's Strength and Weakness : Business and Weakness: Business
environment helps to identiIy the individual strength weaknesses in view oI the
technological and global developments.

Business environment is broadly divided into two types:
i. Internal Environment and
ii. External environment

i. Internal Environment :
It relates to those Iactors which are internal to the business and are controllable. The
internal environment exercises a signiIicant inIluence on the attitudes, behaviour and
perIormance oI people. Internal environment is inIluenced by the Iollowing Iactors:

1. Goals and objectives oI the organisation: The goals and the objectives set up the
parameters within which the organisation decisions can be taken. They greatly
inIluence an ability oI an organisation to deal with its external environment.
Financial and nonIinancial targets are determined by the goals.

2. Corporate image: Every organisation enjoys an image among the employees.
Some reIer to their employers as progressive whereas others reIer to them as
Conservative. To make the business acceptable to the society, every business
must try to improve its image. Objectives based on enlightened lines certainly
help to improve corporate image.
3. Research and development Iacilities: Research and development is the strength oI
the business. it helps the business to go ahead oI the competitors by introducing
new products and improving the existing ones.
4. EIIicient manpower: A successIul business is known by its eIIicient manpower
and not by the buildings and machines. Manpower makes or breaks a business.
Due care should be taken to recruit result oriented employees.
5. Business policies: The knowledge oI internal environment and how it aIIects the
Iunctioning oI the organisation is important to understand the use oI business
policies. Broadly, policies cover Iour Iunctional areas viz. production, marketing,
Iinance and HRD. Business policies provide the broad guidelines within which an
organisation has to work. Thus policies should be comprehensive.
6. Strong Iinancial base: Business organisations must try to attain strong Iinancial
base. This helps the business to Iight uncertainty in the market. It can depend on
internal Iinancing when an external borrowing becomes costly.
7. Cordial relations: Both the employers & employees should try to maintain cordial
relations at the workplace. It is important to keep clear line oI communication.
DiIIerences and conIlicts can be settled across the table. Work environment
should attract employees to their work.
8. Value based management : Traditional measures Ior perIormance measurement
like a return on sales, a return investment or a return on net assets have become
outdated. ew measures like shareholders, views, employee morale and the work
ethics which improve the employee satisIaction are considered more important.
Value system is internal to business and diIIers Irom enterprise to enterprise.

ii. External Environment:
External environment relates to the Iactors which are external to the business
organisation. It is divided into Micro Environment and Macro Environment.

MICRO EVIROMET:
The micro environment consists oI all the Iactors in the company's immediate
environment that aIIects the perIormance oI the Company. These include the sup-pliers,
marketing intermediaries, competitors, customers and the publics. The micro-
environmental Iactors are more - intimately linked with the company than the macro
Iactors. The micro- Iorces need not necessarily aIIect all the Iorms in a particular industry
in the same way. Some oI the micro Iactors may be particular to a Iirm. When competing
Iirms in an industry have the same micro elements, the relative success oI the Iirm
depends inter alia, on their relative eIIectiveness in dealing with these elements. The
Iollowing Iactors aIIect the micro environment:

Corporate Resources:
Corporate resources include employees, Iunds, materials, machinery and management.
These resources are controllable. They can be used as per the guidelines provided by the
business policies.

Customers:
The business exists only because oI its customers. Monitoring the customers' sensitivity
is thereIore a prerequisite Ior the success oI a business- It is important to consider the
customers' likes, dislikes, needs, preIerences, buying motives and expectations. A
company may have diIIerent categories oI customers like individuals, households,
industries and other commercial establishments and government and other institutions.
Higher customer patronage brings increased proIit to the business.

Suppliers:
Supplier is an important Iorce in the micro environment oI the Iirm. Supplier, are those
people who supply inputs like raw materials and components to the Iirm. The importance
oI reliable source oI supply to the smooth Iunctioning oI the business cannot be
overlooked. Uncertainty regarding the supply or the other supply constraints oIten
compel companies to maintain high inventories leading to increased cost. It is always
advisable to, negotiate with several suppliers and not allow a single supplier to enjoy
monopoly power. The selection oI suppliers is within the control oI the management.

Competitors:
The role oI competitors is beyond the control oI the management. It is necessary to study
the competitors' policy on product, price, promotion, etc. When relevant inIormation is
collected about the competitors, it helps to strengthen business and also Iace the
competition more eIIectively. The business can proIit by exploiting the weaknesses oI the
competitors

Marketing intermediaries
The marketing intermediaries, include middlemen such as agents and merchants who help
the company Iind - customer or close sales with them. Marketing intermediaries are a
vital link between the company a the Iinal consumers. A wrong choice oI the link, may
cost the company heavily. Goods requiring demonstrations Iind the services oI
middlemen unavoidable.

Society:
Business has to serve the society. Society consists oI general public, media, government,
Iinancial institutions and organize group like trade unions, shareholders' associations etc.
Society, directly inIluences the decisions oI business.

MACRO EVIROMET

1. Economic Environment
The survival and success oI each and every business enterprise depend Iully on its
economic environment. The main Iactors that aIIect the economic environment are:
(a) Economic Conditions: The economic conditions oI a nation reIer to a set oI economic
Iactors that have great inIluence on business organisations and their operations. These
include gross domestic product, per capita income, markets Ior goods and services,
availability oI capital, Ioreign exchange reserve, growth oI Ioreign trade, strength oI
capital market etc. All these help in improving the pace oI economic growth.
(b) Economic Policies: All business activities and operations are directly inIluenced by
the economic policies Iramed by the government Irom time to time. Some oI the
important economic policies are:
Industrial policy
Fiscal policy
Monetary policy
; Foreign investment policy
; Export Import policy (Exim policy)

The government keeps on changing these policies Irom time to time in view oI the
developments taking place in the economic scenario, political expediency and the
changing requirement. Every business Iirm has to Iunction strictly within the policy
Iramework and respond to the changes therein.

Important Economic Policies
i. Industrial policy: The Industrial policy oI the government covers all those
principles, policies, rules, regulations and procedures, which direct and control the
industrial enterprises oI the country and shape the pattern oI industrial
development.
ii. Fiscal policy: It includes government policy in respect oI public expenditure,
taxation and debt.
iii. Monetary policy: It includes all those activities and interventions that aim at
smooth supply oI credit to the business and a boost to trade and industry.
iv. Foreign investment policy: This policy aims at regulating the inIlow oI Ioreign
investment in various sectors Ior speeding up industrial development and take
advantage oI the modern technology.
v. ExportImport policy (Exim policy) : It aims at increasing exports and bridge the
gap between expert and import. Through this policy, the government announces
various duties/levies. The Iocus now-a-days lies on removing barriers and
controls and lowering the custom duties.

2. Social and culture Environment
It reIers to people's attitude to work and wealth; role oI Iamily, marriage, religion
and education; ethical issues and social responsiveness oI business. The social
environment oI business includes social Iactors like customs, traditions, values, belieIs,
poverty, literacy, liIe expectancy rate etc. The social structure and the values that a
society cherishes have a considerable inIluence on the Iunctioning oI business Iirms. For
example, during Iestive seasons there is an increase in the demand Ior new clothes,
sweets, Iruits, Ilower, etc. Due to increase in literacy rate the consumers are becoming
more conscious oI the quality oI the products. Due to change in Iamily composition, more
nuclear Iamilies with single child concepts have come up. This increases the demand Ior
the diIIerent types oI household goods. It may be noted that the consumption patterns, the
dressing and living styles oI people belonging to diIIerent social structures and culture
vary signiIicantly.

3. Political Environment
This includes the political system, the government policies and attitude towards the
business community and the unionism. All these aspects have a bearing on the strategies
adopted by the business Iirms. The stability oI the government also inIluences business
and related activities to a great extent. It sends a signal oI strength, conIidence to various
interest groups and investors. Further, ideology oI the political party also inIluences the
business organisation and its operations. You may be aware that Coca-Cola, a cold drink
widely used even now, had to wind up operations in India in late seventies. Again the
trade union activities also inIluence the operation oI business enterprises. Most oI the
labour unions in India are aIIiliated to various political parties. Strikes, lockouts and
labour disputes etc. also adversely aIIect the business operations. However, with the
competitive business environment, trade unions are now showing great maturity and
started contributing positively to the success oI the business organisation and its
operations through workers participation in management.

4. Legal Environment
This reIers to set oI laws, regulations, which inIluence the business organisations and
their operations. Every business organisation has to obey, and work within, the
Iramework oI the law. The important legislations that concern the business enterprises
include :
a. Companies Act, 1956
b. Foreign Exchange Management Act, 1999
c. The Factories Act, 1948
d. Industrial Disputes Act, 1972
e. Payment oI Gratuity Act, 1972
I. Industries (Development and Regulation) Act, 1951
g. Prevention oI Food Adulteration Act, 1954
h. Essential Commodities Act, 2002
i. The Standards oI Weights and Measures Act, 1956
j. Monopolies and Restrictive Trade Practices Act, 1969
k. Trade Marks Act, 1999
l. Bureau oI indian Standards Act, 1986
m. Consumer Protection Act, 1986
n. Environment Protection Act
o. Competition Act, 2002

The Goods-service Continuum
The goods and services continuum enables marketers to see the relative goods/services
composition oI total products. A product's position on the continuum, in turn, enables
marketers to spot opportunities. At the pure goods end oI the continuum, goods that have
no related services are positioned. At the pure services end are services that are not
associated with physical products. Products that are a combination oI goods and services
Iall between the two ends. For example, goods such as Iurnaces, which require
accompanying services such as delivery and installation, are situated toward the pure
goods end. Products that involve the sale oI both goods and services, such as auto repair,
are near the center. And products that are primarily services but rely on physical
equipment, such as taxis, are located toward the pure services end.
A Iew observations oI the Continuum model can be made:

The oIIerings oI a Iirm range Irom pure goods to pure services.
Those that are mostly goods are tangible and are very easy to evaluate by the
consumer (like Iabrics, jewellery, a house etc.). A consumer Iinds it very diIIicult
to evaluate those oIIers which are mostly services because oI their intangibility
(like legal and counselling advice, medical diagnosis etc).
The range oI oIIers has diIIerent qualities in themselves and the customer looks
Ior or seeks these qualities:

Those that are mostly goods show search qualities. Customers know exactly what
they want and look Ior those Ieatures in the oIIer. Thus, an apartment hunter would look
Ior a 2bedroom-hall-kitchen property in Bandra admeasuring 900 square Ieet in car.pet
area. Or, a lady might look Ior speciIic designs in a 23-carat bangle Irom a Tanishq
outlet. Mr. Joseph looks Ior worsted, blue woollen suit material Ior himselI etc.
Thus a marketer can put the search quality Ieatures on prominent display and
make it easier Ior customers to get details or access. II the customers do not Iind these
Ieatures in their search they may become anxious and may not buy or they may go Ior
rival products where there is easier access to inIormation.
Those oIIers that are mostly services evince credence qualities There are no
tangible Ieatures Ior the customer to search Ior. He then looks Ior credo qualities in the
oIIer Reputation oI the oIIer becomes the decisive Iactor. He has very Iew other
alternatives to compare. Thus, Mrs. Manjrekar would choose only that lawyer to Iight her
divorce and custody battle who has a reputation Ior winning such court cases. A patient
would. choose his doctor or surgeon on the basis oI his reputation.
We tend to give our computers or Ior -repair on the basis oI the reputation oI the
repairman. A marketer oI such oIIers has to be doubly careIul in highlighting the
credibility oI the service provider. An actor is never called again Ior a stage play iI his
histrionic talent is in question; a doctor or surgeons whose ethical reputation is in
question right never have patients. Thus, in the product-service continuum', services can
be classiIied in three ways, under the range or degree oI tangibility - highly tangible to
highly intangible. They are:

1. Highly tangible services:
They have high degree oI tangibility. This is mainly because the services are rendered
over certain goods, e.g., car rentals. It is a service based entirely on cars. II a place had no
cars, such a service would cease to exist. For the marketer, it is both a boon and a curse.
As mentioned, car rentals exist only because cars exist. It's easy Ior the service marketer
to be persuasive and "tangibles" the oIIer. He only has to include the car in his
communication; the service concept could be easily comprehended by the consumer. In
addition, iI the car has a good brand image and is looking spick and, the car rental basks
in the reIlected glory. II the car rental mentions in its advertisements about the type oI
cars in its pool, the consumers perceive the quality oI the company accordingly.
Alternatively, iI the car breaks down during a rental service, the consumer will have a
poor impression and image oI the car rental company. He would not reason that it was the
car that broke down and Iailed and that the car rental company should really not be
blamed.
Examples oI car rental companies in India are Dial-a-Cab, in Delhi, and -Wheels-Rent-
A-Car (WRAC) oI the Bhoruka group, who also own Transport Corporation oI India, the
giant Ileet trucking enterprise. Other car rental companies are Hertz-Rent-A-Car and Avis
in the United States.

2. Service linked to tangible goods: Here the service is linked to goods, either
independently, or as part oI the marketer's oIIer. II it is the latter, the service
becomes a part oI the total product concept. This takes place when Videocon, the
home appliance company, includes repair as part oI its marketing mix. Even iI it
is not included, home appliance repair is a service that is Iorever linked to goods.
II there were no home appliances in the world, such services would be non-
existent. A whole range oI services exists in the housing sector - especially post-
construction like repair and maintenance.

3. Highly intangible services: In this classiIication under the continuum model,
service is highly intangible. The services cannot be touched, Ielt or seen, e.g.,
counselling, consultancy, psychotherapy, physiotherapy, a guest lecture, etc.

Buying Behaviour of the Service Consumer

Why does the customer buy?
The customer mostly buys goods, services, people, places,-events, organizations, ideas,
inIormation and experiences. All these generally Iall under goods 8'services. But the
oIIers that they buy can be:
High Involvement oIIers
Low involvement oIIers/Impulse oIIers

High involvement service products have the following characteristics

1. Complexity of features: II the servicer product has complex Ieatures, it will
induce anxiety in consumers. They will take more time understand service
product usage Ieature Iamiliarization as well as internalization. Thus, a SLR
(single lens reIlex) camera preIerred by proIessional photographers will induce
higher involvement Irom the consumers than box cameras with only point-and-
shoot Ieatures.

2. High price: High pries oI Service products will make consumers slow and
cautious in their decision making. This is the reason why they will debate on the
pros and cons oI consumption d service transaction costs oI a vacation, more than
they would Ior a haircut.

3. High perceived risks: A consumer perceives risk in consumption in two Iorms:
bodily harm and Iinancial loss. When Shalini goes Ior cosmetic surgery, she will
perceive higher risk in the oIIer than Ior a routine Iacial.

4. Large differences in features: II the consumers perceive that across a service
category there are large diIIerences in Ieature, then they would be highly
involved. And iI the situation is as in the home appliance industry where
consumers really don't perceive much diIIerence between products then their
involvement becomes low.

5. Large number of users: II there are a large number oI users Ior a service oIIer,
like a Iamily package tour, then there is going to be more participation and
involvement Irom all Iamily members. This is unlike when only one person is a
consumer-like Pooja deciding to take a computer course during her school
vacation.

6. Enduring product: II the service oIIer has a long liIe span or has a longer lasting
eIIect -like a time share purchase or selection oI a school Ior child - then it will
make the decision-maker highly involved.

7. Reflects self-concept of the buyer: consumers are very much aware oI their selI-
image-and either wants to maintain or change it. They do so by purchasing
products and services hoping that by doing so it will reinIorce their personality
and selI-image or help them acquire a new one. This aspect is so close to the well-
being oI consumers that they become highly involved with the purchase.

Low involvement service products have the Iollowing Ieatures:

1. Low Price
2. Less diIIerence in Ieatures
3. Simple Ieatures in the service product
4. Does not reIlect a consumer's personality
5. The products are oI mostly daily needs
6. Low brand loyalty

What are the stapes of the buying decision process?
Most oI the successIul companies research the buying decision process involved in their
category. They ask the consumer when they Iirst became acquainted with the product
category and brands, what are their brand belieIs, how involved t1Iey are with the
product, how and how satisIied they are aIter purchase.
In a typical buying process the consumer passes through Iive stages:
1. Problem Recognition: The buying process begins when the buyer recognizes
problem or need. The need can be triggered by internal or external stimuli. In the
case, a person's normal needs are hunger, thirst sex that rises to the threshold level
becomes a drive.
In the latter case, a need is aroused by external stimulus. A person passes
bakery sees Iresh toasted bread that stimulates his hunger.
Marketers need to, identiIy the circumstances that trigger a particular
need. Through marketing research the marketers can identiIy the most Irequent
stimuli that spark an interest in a product category. They can then develop
appropriate trigger consumer interest.

2. InIormation Search: An aroused consumer will be inclined to search Ior more
inIormation. The consumer inIormation sources Iall into three groups:
a. Personal Sources: Family, Iriends, neighbors, acquaintances, etc.
b. Commercial Sources: Advertising, sales persons, dealers, packaging, displays,
etc.
c. Public Sources: Mass media, consumer ratings organizations, etc.
As a result oI gathering inIormation the consumer increases his awareness
oI availability oI the service and its attributes.
In purchasing services, the customer tends to rely on the personal sources
the personal experience in using these services.

3. Evaluation oI Alternatives: The consumer evaluates the alternative services that
satisIy his needs with the available inIormation. He evaluates the distinct Ieatures
oI the service provider, quality and price. In case oI services, the available
alternatives are relatively smaller than the goods, because brand choice in services
is limited. The quality oI service can only be experienced but it is diIIicult to
compare with other service Iirms purchase inIormation oI the service cannot be
obtained.
In evaluating alternative Ior the purchase decision, the customers ranking
in order importance the Iactors that contributes towards the purchase decision. For
example, choosing a restaurant the customer considers Iactors such as Iood
quality, menu, price, atmosphere and convenience. However, the importance
attached to these Iactors may diIIer according to the purpose oI visit to the
restaurant.

4. Purchase Decision: AIter carrying out a thorough evaluation oI the various
alternatives, the customer chooses that service provider who will be able to satisIy
his needs. The purchase oI service is an experience which leads to satisIaction oI
customer needs. Production and consumption oI service is a simultaneous activity.
The service encounter involves interaction oI the service provider and the
customer. The success oI the service largely depends on the service encounter.
Hence, apart Irom motivating the staII to deliver the service, the service provider
must also be aware oI the moods and the emotions oI the customer and try to
inIluence those moods and emotions In ,a positive way. There are many Iactors
that can be used in order to inIluence moods. the Ambience, Design oI Physical
Setting, Limiting Waiting Time, Scheduling oI Customers and Motivating the
StaII who interact with the Customers.
At times the presence oI other customers during service delivery may
inIluence the service experience oI the customer Ior an example a restaurant,
resort, clubs, airlines etc.

5. Post-Purchase Behaviour: Only aIter experiencing the service, the customer will
be able to judge the quality oI service in relation to his expectations and actual
service received. The consumer will experience some level oI satisIaction or
dissatisIaction. In some like the legal services, the customer will Iind it diIIicult to
judge the service rendered -even aIter receiving the service.
The evaluation oI the service received received gets Iurther complicated
by the role played by the customer in the "'d livery process. Sometimes customers
attribute some oI the dissatisIaction with the services to their own disability to
speciIy their needs or Iailure to perIorm their part oI the service, rather than
completely blame the service provider.

Stage in Cycle Characteristics Relevance of Retailing
Bachelor Independent Young Early
stage oI career and earnings
Clothing, Car. Travel, CaIe
Entertainment
ewel Married Two incomes. Relative
independence, Present and
Iuture oriented
Furnishing Apartment,
Travel, Clothing. Durables.
Appeal to togetherness
Full est I Youngest child under 6
years. One /One and a halI
incomes, Limited
independence. Future
oriented
Goods and services geared
to child. Family oriented
items- Practicality oI items
and appeal to economy
Full est 2 Youngest child tinder 6
years, One and a halI to two
incomes. Dependent, Future
oriented
Savings, Home, Education.
Children oriented items.
Family vacations, Appeal to
comIort and luxuries
Full est 3 Youngest child at home but Education. Expensive
independent- High-income
level. Independent
Thoughts oI Retirement
durables Ior children.
Replacement and
improvement oI parents
durables. Appeal to comIort
and luxuries.
Empty est 1 o children at home.
Independent. Good income.
Thoughts oI retirement
Retirement home, Travel.
Entertainment, Luxuries.
Appeal to selI gratiIication
Empty est 2 Retirement- Limited
income. Present oriented
Travel, Recreation, Health
related items. Little interest
in luxury. Appeal to
comIort
Lonely est-I/ Sole
Survivor 1
Only one spouse alive.
Good income. Employed,
Present oriented
Immersion in jobs and
Iriends. Travel
entertainment Clothing.
Health
Lonely est II / Sole
Survivor 2
Only one spouse alive.
Limited income Retired.
Travel. Entertainment
Health related items.
Appeal to economy and
social activity

TYPES OF BUYING BEHAVIOUR:
Assael distinguished Iour types oI buying behaviour based on the degree oI buyer
involvement and the degree oI diIIerences among brands.
1. Complex Buying Behaviour: Complex buying behaviour involves a three-step
process; Iirst, the buyer develops belieIs about the product. Second, he or she
develops attitudes about the product. Third, he or she makes a thoughtIul choice.
When the customer is involved in complex buying, they are aware oI signiIicant-
diIIerences in brands. This is the case when the products are expensive, bought
Irequently risky and highly selI expressive. In this case the customer does not
know much about that category. For example, a person buying a personal
computer may not know what attributes to look Ior. Many product Ieatures carry
no meaning, unless the buyer has done some research.

2. Dissonance - Reducing Buyer Behaviour: Sometimes the consumer is highly
involved in a purchase but sees little diIIerence in brands. The purchase is
expensive, inIrequent, and risky; thereIore the consumer is highly involved. In
this case, the buyer will go around to learn what is available but will buy when he
gets a good price. AIter the purchase, the consumer might experience dissonance
that stems Irom noticing certain odd Ieatures or hearing Iavourable things about
other brands. The consumer will be alert to inIormation that supports his or her
decision. In this case, the consumer Iirst acted, then acquired new belieIs, then
ended up with a set oI attitudes. Marketing communications should supply belieIs
and evaluations that help Ieel good about his or her brand choice.

3. Habitual Buying Behaviour: There are many Products which are bought under
conditions oI low involvement and the absence oI signiIicant brand diIIerences.
Take a simple example oI salt. Consumers have little involvement in this product
category. They go to the shop and reach Ior the brand. II they keep reaching Ior
the same brand, it is out oI habit, riot strong brand loyalty. It is-evident that
consumers have low involvement with most low-cost, Irequently Purchased
Products. With these products, consumer behaviour does not pass through the
'normal sequence oI belieI, attitude and, behaviour. Consumers do not search
extensively Ior inIormation, evaluate characteristics and make decisions on which
brand to buy. Instead they are passive recipients oI inIormation the television or
print ads. The repetition oI ads creates brand Iamiliarity rather than brand
conviction. AIter making the purchase, they may not even evaluate the choice
because they are not highly involved with the product. For low involvement
products, the buying, process begins with brand belieIs Iormed by passive
learning & is Iollowed by purchase behaviour which may be Iollowed by
evaluation.

4. Variety seeking Buying Behaviour : There has some buying situation that an
characterized by low involvement but signiIicant brand diIIerences. In such cases
the consumer oIten goes into a lot oI brand switching. Take the example oI
chocolates. The consumers has some belieIs about chocolates chooses a brand oI
chocolates without much evaluation, & evaluates the -product during
consumption. ext time, the consumer may reach Ior another brand out oI a wish
Ior a diIIerent taste. In this case the brand switching occurs Ior the sake oI variety
rather than dissatisIaction.

SERVICE MARKETING TRIANGLE
According to Philip Kotler, service marketing requires both external marketing
and internal as well as interactive marketing. The three types oI marketing in service
industries are shown in the Iollowing Iigure. The right side oI the triangle shows the
external marketing (setting promises). It is the normal activity oI the Iirm to develop
price, promote and distribute the service oIIering to the customers. Any thing that is
communicated to the customer beIore service delivery is seen as a part oI external
marketing.
The leIt side oI the triangle shows the internal marketing (enabling the promise).
The internal marketing activities oI the Iirm are to train and motivate its employees to
work as a team in order to deliver the service. It emphasis on the critical role that enables
the employees to keep the promises made to the customer.

The bottom part oI the triangle describes the employee's skill in handling
customer contact. It is the real time marketing oI "moments oI truth" where the
employees directly interact with the customer in order to IulIill the promise.

%ypes of Marketing in Service Firms
All the three sides mentioned in the triangle are critical to successIul services
marketing. The service triangle also has a number oI Iundamental strategic implications:
1. The key Iactor is customer Iocus and, not Iunctions. Customer satisIaction should
be the Iunction oI the entire organisation.
2. The internal environment is reIlected in the external culture. It is directly linked to
how the staII serves the customer.
3. One who delivers the service must not only have the skill and knowledge but also
the authority to serve the customer to his satisIaction.
4. The organizational values, in relation to the service culture need to be simple,
clear and shared by all
5. During interaction the customers inIer the quality. ThereIore, it becomes
necessary to develop good delivery associated activities.

External Marketing:
The external marketing eIIorts are the traditional Iunctions oI marketing oI the
customers and make promises to the customers as to what is to be delivered. Anything
conveyed to the customer in any Iorm beIore the delivery oI service can be viewed as a
part oI external marketing Iunction.
The Iirst step towards external marketing is to make the Iirm understand what
makes a customers' want a particular type oI service and what are their expectations oI a
certain type oI service, since external marketing builds customers' expectations and
belieIs about service delivery. The external marketing then gives promises that
correspond with the personal needs oI the target group.
It becomes necessary to understand the needs oI the customer Ior the service
provider. This leads to market segmentation on a suitable basis i.e. demographic,
psychographic and wage pattern. Once the market segment is identiIied, the next task is
to Iind ways to compete in that segment.
This can be achieved by using the right marketing mix aIter taking into
consideration the external Iactors. The services planning, pricing, promotion and delivery
oI the service tend to diIIer in respect oI a customer group. The promises which the
service provider makes must highlight the reasons why the customer should choose his
particular service Irom the several service providers. The promise made should also
match with the customers' expectations oI the service.
The company conveys promises through promotion campaign, corporate image
and word oI mouth communication. It also conveys through the past experience which
the customer has had with the Iirm.
According to Zeithamal and Bitner, the customer's expectation oI the services can
be derived Irom the Iollowing sources:
i) Past Experience.
ii) Corporate image.
iii) Word oI mouth communication.
iv) Explicit service promises which are personal and non-personal statements
about the service made to the customer by service Iirms through contracts,
personal selling, advertisement, etc.
v) Implicit service promises which are related over other than explicit promise
that leads to inIerence about what service should and will be like.
vi) Care should be taken to maintain credibility while setting the promise because
a very high expectation may lead to a highly dissatisIied customer.

Internal Marketing:

According to Wood RuII, treating with equal importance, the needs oI the internal
market (employees) and external market I customers) through proactive programmes. II
the service system as well as the service staII do not support the Irontline employees, it
will not be possible to meet the promises made b the organization. Thus the employees
are the internal customers who in their job depend on others in the organization Ior
providing goods and services to external customers. Internal marketing suggests that the
Iirm should employ market research, market segmentation and traditional marketing
activities like advertising and publicity in order to attract employees.

Role of Internal Marketing:
i) The entire organisation is Iocused on customer approach as the customer
service becomes a signiIicant element.
ii) Internal marketing helps the service Iirm to compete aggressively giving the
organisation a competitive advantage.
iii) It builds corporate image by creating awareness.
iv) It highlights the role oI communication in the organisation which is very
important Ior employee motivation and excellence,
v) An open management style exists where all the employees co-operate and
there is commitment, to the highest level.

Components of Internal Marketing:
There are no speciIic or special components oI the internal marketing programme.
Any activity or Iunction that has an impact on the service mindedness and customer
conscious employees can be a part oI internal marketing programme.
However, the Iollowing components can be included as a part oI internal
marketing programme:
Human Resource activities.
Continuous interaction with the management.
Training.
; Internal mass communication and inIormation support.

What is "Moment of Truth"?
"Moment oI Truth" oI buyer and seller interaction is the core oI Gronroos model.
The actual delivery oI the promise takes place here. The employees oI the Iirm directly
interact with the customers. The concept oI moment oI truth means that this is the time
and places the service provider has the opportunity to demonstrate to the customer the
quality oI its services.
Interactive marketing takes place outside the marketing mix. It takes place at the
very moment the buyer and seller interacts. These interactions are also caIIed1qrvice
encounters. It is the skill and motivational tools employed by service personnel in,
handling the customer contacts. In this process oI interaction the customer judges the
quality 8I service delivered by the service provider.

History:
Richard orman Iirst invented the conceptual Iramework oI "MOMET OF
TRUTH". Subsequently Scandinavian Airlines adopted it as a part, oI their everyday
language, particularly aIter Jan Carizon oI SAS published book titled "Moment oI Truth".
Since then moment oI truth has become a widely used concept, a household word within
the service industry everywhere.

The Concept:
Most services are the result oI, social acts, which take place in direct contact
between the customer and service provider. Taking the metaphor Irom bull Iighting, the
customer's perceived quality is realised at the moment oI truth, where the service
provider and the customer conIront one another in the arena. At the moment they are very
much on their own. What happens then, cannot be directly inIluenced by the Iirm.
In the period oI three years Jan Carloz the president oI SAS transIormed the
company Irom a major loser to the best Airline oI the year. In this book he explains" Last
year, each one oI our 10 million customers came in contact with approximately 5 SAS
employees, and this contact lasted Ior about 15 seconds each time. Thus SAS is created in
the minds oI the customer 50 million times in a year, 15 seconds at a time. These 50
millions 'moments oI truth' are the moments when we prove to our customers that SAS is
their best alternative."
Gronroos states that the customer's perception oI service quality can be judged on
two aspects the technical and Iunctional quality.
The judgment on the basis oI technical and Iunctional qualities varies depending
on the type oI service encounter. The service can be classiIied into three categories:
1) Remote encounter: The tangible evidence oI the services becomes a primary basis
Ior judging quality as there is no human contact in service delivery. E.g. ATM
vending machines.
2) Phone encounter: Here the service quality can be judged on the basis oI how long
they had to wait Ior the phone to be attended, the tone oI voice and eIIiciency in
handling the issues.
3) Face- to- Iace encounter: When there is direct contact with the employee and
customer this type oI encounter occurs. In this situation determining the quality is
highly complex as it will be inIluenced by the behaviour oI both the customer and
employee.
In order to assess the quality services tangible cues like physical setting, equipment,
appearance oI personnel and intangible cues like attitude and behaviour oI personnel will
be considered.
Thus in the interactive marketing, service encounter or the moment oI truth is where the
value to the customer is created in the service delivery process. At this stage all the
eIIorts oI internal and external marketing will be reIlected.
On the basis oI thousand stories, Iour common themes - recovery .(aIter Iailure),
adaptability,
spontaneity, & coping - have been identiIied as the sources oI customer satisIaction/
dissatisIaction in memorable service encounter.

1. Recover: (Employees response to service delivery Iailure) the 1
st
theme includes
all themes in which there has been a Iailure oI services & the employee is
required to respond in some way to customer. The Iailure may be hotel room is -
not available, Ilight may delay or a critical error in internal documents. In these
cases employees have to response which is remembered by the customer
Iavorably.
2. Adaptabilty: (Employee response to customer needs & requests) The second
theme underlying in satisIaction/dissatisIaction is how adaptable the service
delivery system is when the customer has special needs & requests that place
demands on the process. In such cases, customer judge, service encounters quality
in the terms oI Ilexibility oI the employee & the system. Customers will be
pleased iI employees go out oI their way to accommodate their special needs &
requests. On the other hand the employee are unwilling to accommodate,
customers are angered & Irustrated.
3. Spontaneity: (Unpromptness & unsolicited employees actions) Even when there is
no service Iailure & is special request or need, customer can still service
encounters as being highly satisIied or highly dissatisIied Employee spontaneity
in delivering memorable good or poor service is the third theme. Highly satisIying
incidents represent pleasant surprises Ior the customer (special attention, being
treated like royal etc.) whereas highly dissatisIying incidents represent negative &
unacceptable employee behaviour (like rudeness, discrimination, ignoring the
customer).
4. Coping: (Employees response to problem customer) There are some customers
who will be uncooperative to the service provider & would not respect the rules &
regulations or would not care Ior other customers' inconvenience. Such type oI
customers causes their own dissatisIaction & discomIort to other customers.

Thus in the interactive marketing, service encounter or the moment oI truth is where the
value to the customer is created in the service delivery process. At this stage all the
eIIorts oI internal and external marketing will be reIlected.

Ch- 2 Key Elements of Services Marketing

Introduction:
The marketing mix concept was popularized by an American proIessor Jerome McCarthy
in terms oI 4Ps -Product, Price, Promotion and Place. The major part oI marketing aIter
considering the environmental variables is assembling and managing the marketing
variables. The most important task is to blend the 4 elements in diIIerent combination in
order to have a greater marketing impact and also to be cost eIIective. Some
modiIications in the 4Ps are required when applied to services due to some special
Ieatures oI services.

Elements of Service Marketing Mix: (7ps of Service Marketing-Mix)
The service marketing mix consists oI the Iollowing variables:

PRODUCT
In the words oI Philip Kotler, "a product is anything that can be oIIered to market Ior
attention, acquisition use or consumption that satisIy a want or need. It includes physical
objects (TV), service (banking), person (political person), place (holiday resort),
organization (Red Cross) and idea (aid awareness). "
Characteristics of Products (Tangible To Intangible)


Conceptualization of the Service Concept:
Conceptualization oI the services product was described by Donald Cowell in Iour steps.
They are:

1) Customer BeneIit Concept: The customer is the starting point in manuIacturing or
developing goods or services. The Customer purchases the services because-it
oIIers him certain beneIits. In buying the customers are not buying the goods or
services but instead they are buying certain beneIits and values. It must be noted
that when a customer's buys medicine he buys hope, when he goes on a tour he,
buys pleasure not tour and so on. It becomes necessary Ior the service provider to
spell the customers-beneIits concept Iirst. The customers look Ior the beneIits
rather than the product's Ieatures.
2) Service Concept: The service concept takes the customer-beneIit concept and
translates them in order determine the aim and intention oI the organization. The
service concept is based on the idea that the actual services oIIered could be
divided into a number oI levels that may relate to the' customer's need, his
satisIaction and beneIits. Hence, while planning the market oIIer, the service
provider should make an analysis oI various levels oI product. These are:
3) Core service beneIit level : This level consist oI the basic service product i.e. the
beneIit the customer is really buying. The core products are essentially those
products that deIine what kind oI business they are in. For an example, the hotel
industry or in the hospital business, the core products are indispensable to any
business. The core service level provides the platIorm Ior the development oI
other peripheral levels.
4) The expected service level: This level reIlects the standard required or expected
by the customer to satisIy their needs and wants. It is the minimum set oI
expectations a customer has about a product or service which the marketer must
strive to satisIy. II the service oIIer Iails at this level it will mean immediate
dissatisIaction. It is the minimum set oI expectation that a customer has about the
product or services which the marketer must strive to satisIy. II the service oIIer
Iails at this level iI will means immediate dissatisIaction.
5) The augmented level: It includes the Iundamental services and beneIits that
distinguish the company's oIIer Irom the competitor's oIIer. This product is
basically a Iormal product with some ancillary beneIits or extra Ieatures attached
to it. These value additions are made in order to make the service more attractive
to customers. The service provider should make continuous eIIorts to search Ior
Iurther Ieatures and beneIits in order to add to their oIIer According to Helen
WoodruII, "augmented services is the way in lavish the service provider Iine
tunes the marketing mix to diIIerentiate their services and naked it stand out Irom
the competitors,"
6) Potential level: The potential product Iocuses on the Iuture. When a product
exceeds the augmented level it comes as a pleasant surprise to their customer and
he is delighted leading to his loyalty towards the product. For an example, the
customer will be delighted to receive a special discount on his next visit, iI his bill
exceeds a particular amount.

Service Product (Levels of Products):

Inputs oI
Healthcare
Core
Product
Expected Service Augmented Product
Industry
Hospitals

Medical
SoItware

Medical
Insurance

Quality
Treatment

SoItware

Covering
Risk
O ClearI Facilities,
O QualiIied StaII and
O Doctors,
O Quality Health Care
reasonable rates
O EIIicient tools Ior specialized
Operations and Surgeries,
O Range oI Rooms
O Third Party Services

O Expert Advice,
O Installation Package/Kit,
O Prompt Result,
O Tested and recommended
O Error Free,
O User Friendly, Validity
Security Privacy.

O Choice Available,
O Reasonable Rates.
O Health Education &
Training
O In-house Medical
Facility,
O Hostel Facility
O Blood Donation Centre,
O Research & Laboratory,
O Special Wards Ior VIPs
O Visiting Consultant,
O Internationally
recognized doctors.
O Webcam connectivity,
O Interconnectivity,
O Acceptable widely,
O Doorstep delivery,
O Intimation on new
updates.

O Smart Cards
O DiIIerent Schemes

1) Services OIIer and Service Package: Service oIIer is the element that makes up
the total service package. It includes both tangible and intangible components oI
service. The service package includes all decisions involving the essential concept
oI the service and the range oI service provided. Christian Gronroos describes
services package as a bundle oI diIIerent services tangible and intangible together
which Iorm the total product.
2) Service Delivery System: The service delivery system spells the service that is
provided to the customer. It represents interaction between the service provider
and the customer and between the customer and the service Iacility. The service
delivery system is a careIully designed blueprint which describes how the services
will be rendered to the customer.

Service Life Cycle :


The diIIerent stages in the liIe cycle oI a product and services are more or less similar and
have common characteristics. They are as Iollows:
1. Introduction: At this stage the service is new as it is just launched its usage rate
will be low. The production cost is high but the sales being smaller the revenue is
low. Until the growth .stage the service provider mostly operate Irom one
location.
2. Growth: There is a rapid increase in the sales at this stage. The sales increase at an
increasing rate as the consumers see the beneIits. In using the service. Promotion
is Iocused in order to attract new users and retain repeat customers. The Iirm may
even improve service quality and add some new Ieatures to attract the customers.
3. Maturity: The product/services enter the stage oI maturity as the rate oI growth
slows down. Here the sales are still increasing but increasing at a decreasing rate.
The sales touch their peak and then it saturates. At that level Ior a longer period oI
time. There is intense competition at this stage and the Iirm in order to keep its
market share may modiIy and improve the service quality.
4. Decline: The usage rate oI services diminishes with the technological
advancement and changing consumer tastes. The service provider uses diIIerent
strategies at this stage. Some Iirms withdraw Iorm the current service and switch
over to new ventures with better opportunities. Some retain the services in order
to cater to the needs oI a Iew loyal customers but still diversiIy to other services.

Service Flower (Core and supplementary services)

PRICING IN SERVICES
Price is a signiIicant element oI the marketing mix because it is the only element
that produces revenue whereas the other elements produce cost. Price reIlects the value
attached to the service by the service provide- and it must correspond with the customer's
perception oI value. Pricing is a dynamic tool Ior meeting competition. It is the art oI
translating into quantitative terms the value oI the product or a unit oI a service to
customer. Service providers oIIer a range oI service at diIIerent price levels to cater to the
needs oI diIIerent target segments that may have diIIerent levels oI purchasing power.
For an example, airline oIIers business class as well as economy class travel. They also
vary the price oI the product in order to address the problems arising out oI demand and
capacity constraints.
For managing demand they oIIer diIIerent prices to customers buying the services
at diIIerent point oI time, with lower prices being charged in the slack periods.

Objective of Pricing:
Survival.
Growth.
Maximize proIit.
; Maximize Market share.
; Leadership in service quality.
; Stimulating patronage.

Factors Affecting Pricing Decisions:
The Iactors aIIecting pricing decision may be classiIied as internal Iactors which are
controllable and external Iactors that stem Irom external environment.
Internal Factors:
i) Organizational Iactors: It reIers to the internal arrangement Ior decision making.
ii) Marketing mix Elements: Which includes the service oIIering the promotion,
.people; process and physical evidence are important in determining the value Ior
money aspect in the service sector.
iii) Positioning
iv) Service cost: Pricing policy should cover at least the basic cost.
External Factors:
i) Competition: This is more relevant it) case oI homogenous services like laundry,
vending 1 machines etc.
ii) Demand: The demand may vary Ior a number oI reasons.
iii) Regulatory Iactors: In many oI the services the prices are either administered &
controlled e.g. post & telegraph, banking, railways and education.

Special Issues of Pricing in a Service Sector:
A service marketer has to consider the Iollowing issues regarding pricing methods and
policies to be adopted.
(i) Intangibility (ii) Perishability (iii) Customer participation.
(iv) Controllability (v) Variability

Methods of Pricing in Services:

1) Cost based pricing: It is also called as cost-plus pricing. Under this method the
company determines les the cost oI service delivery as well as a pre-determined
rate oI proIit in order to arrive at a price. It is necessary to-, analyze all costs
accurately and diIIerentiate between Iixed and variable costs in order to use cost
as the basis Ior pricing decisions. In the service industries it is complicated to
identiIy and trace the cost to the particular oIIering. This method oI pricing is
widely used in catering services and by advertising agencies.
2) Demand based pricing : In this method oI pricing the cost is not considered but
the serve provider allows the demand to determine the price. Demand based
pricing is generally us where the services are price sensitive. The consumer
perception oI the value oI the service quality varies. ThereIore successIul demand
based pricing is based on eIIective segmentation oI market to achieve the
maximum price Irom the segment.
3) Competition based pricing: Homogeneous services that are standards without
specie service attributes are the best examples oI competition based pricing. In
this method oI pricing the price is determined on the basis oI competitor's price.
Price under such situations may be used to gain short-term competitive advantage
over rival

Pricing Strategy:

1) ew Service Pricing Strategy: While launching a new service there are two
alternative pricing strategies.
O Skimming Strategy: In this the services are introduced at a high price. It is assume
that the customers are more concerned about obtaining a quality service rather
than cost oI the service. As the demand Ior the services Ialls, the price level is
reduced e.g. mobile phones, computers, etc.
O Penetration Pricing:
In this, the new services are priced low. The prices are kept low t stimulate trial and
thereby ensure customer loyalty. Low pricing is possible when the services are sensitive
to price and it is possible to achieve economies oI large scale operations by operating at
large volumes. The penetration pricing begins with a low price but it increases in the
growth stage. The increase is usually associated with additional services that are oIIered.

2) DiIIerential Pricing/Market Segmentation Pricing: DiIIerent market segments
may show diIIerent price elasticity oI demand. The pricing strategy adopted to
successIully cater t these groups is known as discriminatory pricing on the basis
oI market segmentation. It may be done on the Iollowing basis.
O DiIIerent time oI consumption.
O DiIIerent point oI consumption.
O Group oI buyers.

3) Service-Mix Pricing: In this, the Iirms with multiple service oIIering that' are
more oIten interrelated may adopt this strategy. It may resort to
i) Captive service:
ii) In captive service strategy the customer has no choice but to get attritional service
oIIer Irom the service provider along with the core service.
iii) Competing services:
iv) In this the service Iirm competes with its own oIIering.
v) Optional additional service:
In this the service provider gives an option, to the customer to purchase the optional
services along with the core services.

4) Price Bundling: It means pricing and selling the services as a group rather than an
individual oIIering. In this the service Iirm will be able to sell all the products in the
service line. E.g. Health clubs.

5) Relationship Pricing: In this type oI pricing the liIetime value oI the customer is
taken into account. The main objective is to encourage customer loyalty by rewarding it.
John Winkler has rightly stated that pricing can never be an automatic or impersonal
process-, it cannot be reduced to a mathematical or accounting Iormula. It is an elusive
art. T11 more you examine the market, the better you judge the value oI what you want
to oIIer.

6) Competitors Pricing: Services which are very price sensitive and where the core
beneIits sought are largely similar, competition-oriented pricing occurs Irequently.
Organizations that operate on competition-oriented pricing strategies will try to inIluence
the consumer preIerence through elements oI marketing mix such as service quality.

7) Marginal Pricing: It is based on the concept oI marginal cost and is particularly
relevant Ior service industry. The marginal cost is the cost oI last unit oI output and may
be very low. For an example, in case oI passenger airline with a capacity oI 100 seats
empty seats will not be preIerred instead they can be Iilled with passengers paying
reduced ticket prices -because any way the Iuel cost, maintenance, staIIing cost so on are
made Ior 100 seats. Carry empty seats means carrying loss.

COMMUNICATION MIX
The word 'promotion is derived Irom the Latin word 'promovere', meaning 'an attempt to
shiIt the attention oI people Irom one end oI the spectrum (disinterest) to the other
(interest)'. Service marketers have used this marketing tool to great advantage in
positioning their service, adding tangibility and value to their oIIer. Promotion is used
only as a temporary tool and is communication oriented. Promotion consists oI the
Iollowing major areas oI marketing:
Advertising
Public relations
Sales promotion
Personal selling
Word oI mouth
Direct mail
These areas are called the promotion mix or the communication mix. The service
marketer can use a blend oI all oI these to achieve his communication and other goals.
The choice oI the communication or the promotion blend would depend on whether the
advertiser wants to increase awareness, changes opinions, alter attitudes, use high degree
oI persuasion, etc. The advertiser or the service Iirm also has to take decisions on the
choice oI media, which would depend on the target audience and the reach oI the medium
(circulation and viewership/readership)'

Comprehensive Communication Programme and Model
Word 'communication' is derived Irom the Latin word communicoi, meaning 'to share'.
Communication needs an objective that the service marketer must set and achieve.
Following are the components oI the communication programme:
1. IdentiIy the target audience or receivers;
2. Determine the promotion objectives;
3. Develop the message
4. Select the communication mix or the promotion blend-,
5. Select the media vehicle;
6. Set up systems Ior Ieedback and Ieed Iorward'

1. Identify the target audience or receivers: Although this would have been done
in the market segmentation process, a more detailed picture oI the target audience
would be required Ior speciIic promotions. For example, a high-priced hospital
would have chosen the upper income group through segmentation. But now Ior
promotion it would require to address people who are interested in the treatment
oI, say, cancer or heart, diseases or plain cosmetic surgery. Its message,
Promotions and media choices would be decided accordingly, i.e., tailormade Ior
this select audience.

2. Determine the promotion objectives: Every communication has an objective
and the success oI the communication programme depends on how the marketer
has been able to clearly perceive his objectives and integrate the components. The
service marketer has three promotional goals: to inIorm, to peruade and to remind.
Some oI the objectives Ior a service marketer are:
4 ReinIorce positioning,
4 Develop brand image;
4 Make customers aware oI the oIIer, its attributes and beneIits,
4 Persuade customers to buy the oIIer,
4 Continually remind customers about the service through remembrance
exercises.

3. Develop the message: There are many models Ior describing the customer
responses. One simplest and widely used is the AIDA model, developed by E.K.
strong and is illustrated below:

According to this model, the service consumer moves through various stages in sequence.
The customer is Iirst aware oI the service brand, which will generate interest & then
desire in the oIIer. Once the desire is present, the customer is motivated or 'driven' to
purchase the service product. The whole sequence grinds to a halt even iI one oI the tasks
is unachieved. This implies that without even basic consumer awareness, the service
marketer cannot hope Ior any sales.

The message Iormulation will depend upon which oI these AIDA sequence tasks is to be
achieved. Message development is guided by the encoding process, which involves the
consideration oI issues:
O Message content - what to say',
O Message structure - how to say it logically,
O Message style - creating a strong presence; and
O Message source - which should develop it.
The service communication has Iour choices in encoding: words, symbols, pictures and
images.
4. Select the communication mix or the promotion blend: The communication
could have personal interaction (one-to-one) or impersonal messages (one-way).
Personal communication consists oI personal selling (insurance advisors making a
presentation customers), word oI mouth (publicity and public relations exercises
Ior a restaurant or Ior a movie like Devdas), & interaction during service delivery
(like inside a retail bank). I m personal communication consists oI mass
communications like advertising in newspapers, TV, outdoor advertising, point oI
sale, leaIlets and brochures, and the service environment or the services cape
itselI.

5. Select the media Vehicle: The media vehicle is selected by eIIectiveness &
eIIiciency with which it reaches the messages to the target audience. This
message also guides the media vehicle: iI the message is personal, then mass
media cannot be used. What becomes eIIective are letters (on paper or through e-
mails), personal interaction, etc. this is where media analysis would be required
Ior its audience proIile & viewers reading or media habits.

6. Set up system for feedback & feedforward: The communication should
undertake two important exercises to make its present & Iuture messages
eIIective:
Feedback is a kind oI pre-test undertaken beIore the message has been broadcast to
ensure the message will be received.
FeedIorward is a kind oI post-test undertaken aIter the message has been broadcast to
ensure the message was received.
The issue oI promotion blends like whether to use public relations more than advertising
etc. have to be clariIied by by the service marketer. The decision is guided by the
Iollowing Iactors Ior their deIIerential impact ability on the communication mixes:
O Service is Ior proIit or not-Ior-proIit.
O Constrains oI ethics exist in some services, like hospitals, healthcare and with
doctors.
O Competitive intensity is high or low.
O The geographic spread is large or small.
O The custom within a speciIic service sector dictates promotional practice.
O Managers are sophisticated or not.

Guidelines for services Communication
W. R. George and L. Berry have identiIied six guidelines that can be used Ior promoting
services. They are mostly applicable to all service sectors, with the exception to some Iew
due to the variable nature oI services.

1) Provide Clues to Tangibles the Service OIIer: We can easily pick up tangible
clues in case, oI goods. Services have a major intangible component in them and
so it is diIIicult Ior the customers to pick up tangible clues. Though services are
intangible, they still have tangible components. The customers generally use these
as a substitute to evaluate various service alternatives. The tangible clues reduce
the risk and eliminate the uncertainties associated with a service not known to the
customer

2) Maintain Communications Continuity: It is imperative to maintain continuity in
communication Ior achieving diIIerentiation and to portray a uniIying and
consistent theme over a period oI time. Continuous advertising and publicity will
enable the customer to get strongly attached to the theme.

3) Direct Advertising to Employees: The rapport that an air hostess can maintain
with the passenger can greatly inIluence the quality perception oI the passengers.
There are certain services which are labor intensive and involve greater server -
customer interaction,' In such a type oI service the service quality provided is
largely dependent on the quality oI the person who serves. The service Iirm has to
market the Iirm to its own employees Iirst who in turn gain conIidence in the
product they have to sell to the customers.

4) Use oI Word oI Mouth Publicity: In proIessional services like doctors, lawyers,
teachers, hair dressers, schools, colleges, etc. word oI mouth publicity that have
already experienced the service holds weight age in attracting prospective
customers.

5) Promising a Service which can be delivered: A realistic service promise should be
made which enables the service Iirm to regularly meet the customers'
expectations. This wills mimicries the service quality gap and keeps the
customer's happy and satisIied.

6) Make the Service Easy to Understand: Due to the intangible nature oI the services
it is generally diIIicult to comprehend what exactly constitutes the oIIer oI a
service Iirm. The various tools used Ior promotion are -
i) Advertising ii) Sales Promotion iii)Personal Selling
iv) Word oI mouth v) Public relation vi) Publicity
vii) Sponsorship viii) Direct Marketing

DISTRIBUTION
The importance oI 'place' or location and distribution as part oI a marketing mix is
due to the Iact that it Iacilitates accessibility to the service oIIer. It is the most mysterious
oI all elements oI the marketing mixes. While all other marketing mix variables (service
product, price and promotion) create or enhance demand, place or distribution is the only
one that satisIies demand.
The inseparability oI services makes it imperative Ior both the service provider
and the customer to meet to complete the service transactions and to create service
beneIits. In other words, service cannot be produced by one person in one place and be
distributed by someone else in some other place. A service, by extension, cannot be
produced in a place where the cost is lower and delivered to another place where the
demand is higher. This is the Iundamental diIIerence .between goods and services that
aIIect distribution strategies. All location strategies should be directed to make the
encounter possible, place is especially important to the service marketer because the oIIer
cannot be stored (intangibility and perishability) and the oIIer has to be produced and
consumed at the same time in the service location, and outlets, The normal decisions oI
locations and channel are:
O How to deliver the service to the customer?
O Where and when should the delivery oI service take place?
O What roles do intermediaries or middlemen have to play in the service delivery
process?
O How can a marketer juggle the delivery oI the tangible and intangible components
oI a service oIIer?
For the service consumer, the Iirst two oI the above-mentioned decisions themselves
become the most important perceived beneIits.

What is a distribution channel - especially in services?
A distribution channel consists oI a set oI people or Iirms who are intrinsically
involved in the transIer oI goods or services Irom the producer to the end user. The end
user could either be an individual consumer or an industrial consumer. A channel oI
distribution includes the producer oI the goods and services, the consumer oI the same
and a series oI middlemen like wholesalers, dealers, retailers, agents etc. The channel Ior
any oIIer is extended to the last person or institution that buys it without making any
changes in the Iorm oI the oIIer. II there is any change in the Iorm oI the oIIer, then there
will be another channel oI distribution. In, services distribution the oIIer has to be
produced and consumed at the same time in the place oI oIIer (outlet).

Why should service firms use intermediaries?
a) Specializations: In services, the oIIer is produced and consumed in one place, and
it is mostly intangible, the question oI distribution problems is not very acute-,
the-service transaction itselI and its quality is the main issue. In the production
and distribution oI services, the wide variety Iound in the Specializations in the
case oI goods is absent. Service Iirms have a diIIerent kind oI dilemma: own its
outlets or get the distribution done through Iranchisees'. Most major decision, are
one-time decisions unlike in goods distribution. Only services like retailing that
have higher tangibility content will Iace the same complexity in distribution as
Iaced by goods manuIacturer.

b) Customer Utility: Customers require choices in their preIerences and this was
oIIered to them by retailers through varieties & assortments. This way, the
customers could compare the merchandise and choose the best buy according to
their judgment. The intangibility oI services might have reduced the scope oI
consumers to compare the oIIer Ieatures, but nevertheless encouraged enquiries
and clariIications Irom at the distribution outlet.

c) Complexity: When any business - be it goods or services - is small, it is easier to
manage it. This includes the complete marketing mix as well as the environment'
But as any business grows, so does its complexity. To Iacilitate the exchanges oI
goods and services there arose an urgent requirement oI complex systems Ior each
type oI goods and delivering them to the consumers.

d) Distance: With the strategic decision oI a Iirm to extend its geographical reach Ior
its goods and services, there developed a gap between the producer and the end-
user. This could only be Iilled by middlemen and intermediaries. SOTC/Kuoni,
the innovative package tour company is a classic example in services. Mumbai
based, it yearned Ior a wider customer base and took the help oI intermediaries to
achieve its goal. Thus Frequent Travels, a travel agency was initially roped in to
be its representative in Madhya Pradesh. But SOTC went on to have its own
outlet at indore, catering to its package tours. 1CICI Home Finance Company
takes the help oI Mumbai based, Unique Finance and Maximus Finance, amongst
others to do its marketing.

PEOPLE
In service business, the service provider reIlects the organization realities. It is
through the interaction with the staII, that the customer Irom an opinion oI the
organization. A service Iirm may have the latest equipment and all the Iacilities but yet it
may not be able to provide satisIactory customer service due to lack oI interpersonal
relationship between the service provider and the customer. In such cases the customer
develops a negative attitude towards the organization. It is thereIore, necessary that the
service marketer should develop a high level oI interpersonal skill and customer oriented
attitude in the employee.

Types of Service Personnel:
In any type oI service the customer comes direct in contact with the service
provider and thereIore is classiIied Iurther:

1) Customer Contact Employee: These contact employees are very important
because they represent the organization and can directly inIluence the customer
satisIaction. The degree oI the personnel customer contacts varies so we have:
i) High contact personnel: They are required when the physical presence and
interaction oI the customer with the employees is Ior a longer time like
hospitals, educational institutions, restaurants etc.
ii) Low contact personnel: They are required when the physical presence and
interaction with the customer is Ior a lesser time, example, retailing, post
oIIice etc.
iii) Skilled and proIessional: E.g. Doctors, lawyers, chartered accountants,
engineers etc.
iv) on proIessionals: E.g. Courier delivery boys, waiters, helpers etc.

2) on-contact employees: Those employees who contribute to the service delivery
but do not come in contact with the customers are called non-contact employees.
They are actually support personnel. They possess high technical skill and are
highly competent in their work.

The technical support personnel operate at the back stage and are not visible to the
customer Developing Customer Conscious Employee.

Service Profit chain model

The Gallup model as shown in the Iigure above describes the path between the individual
contribution oI every employee and ultimate result oI increase in the company value

Service Quality and Employee Behaviour
The 5 dimension oI service quality are directly inIluenced by the service employee.
(RATER)
1) Reliability: Delivering the service as promised is oIten totally within the control
oI Irontline employees. Even in case oI automated service such as ATMs, vending
machine, support personnel are critical to make sure all system are working
properly.
2) Assurance: Service quality dependent on employee ability to communication their
creditability and to inspire trust and conIidence.
3) Tangible: Employee appearance and dress are important aspect oI tangible
dimension oI quality along with other Iactor like service -decor etc
4) Empathy: Organisation can deliver caring and individual attention to customer
only through employee. Empathy implies that employee will pay attention, listen,
adapt and be Ilexible in delivering what individual customer needs.
5) Responsiveness: Frontline employees oIten directly inIluence customer
perception oI responsiveness through their willing to help and their promptness in
serving customer.

PHYSICAL EVIDENCE
Generally a service transaction involves the interaction oI the service provider with the
customer in a service environment. Services like hotel services and hospitals are
delivered in physical environment created by the service Iirm. Physical evidence is
termed as the social environment along with the tangible cues. Zeithaml & Bitner deIines
physical evidence as lithe environment in which the service is delivered and where the
Iirm and customer interact; and any tangible commodities that Iacilitate perIormance
communication oI the service".

Physical Evidence includes all the eIIorts taken by the service provider to tangibilise their
services, they include:
1) Physical Facilities: On the basis oI physical evidence like building, Iurniture,
equipment, stationery etc the potential customers Iorms an impression about the
service organization. Physical evidence include essential evidence and peripheral
evidence. Essential evidence are the technical Iacilities without which the service
delivery is not possible e.g. air-craIt in the airline services. Essential evidence is
integral to the service oIIerings. In every services. the quality and Standard oI the
essential evidence will be oI major inIluence in the customer' purchase decision.
Peripheral evidence can actually change hands during the service transaction, they
- stationery, brochures etc. Though services can be perIormed without these items,
still they used to enhance the corporate image. Examples oI physical evidences
that could be included Ior a Iast Iood restaurant:
Physical Evidences InIerences
i) Food -Taste, smell, presentation etc.
ii) Seating -ComIort, layout, availability.
iii) Overall appearance -Cleanliness, decor, lighting, attractiveness.
iv) Facilities -Payphones, toilets, children amusement.
v) Service delivery -EIIicient, prompt
vi) Atmosphere -Friendly, Cold, i1ndiIIU-rE'F1t.
vii) Accessibility -Location oI entrances, car parking.
2) Physical Environment: Another Iactor inIluencing consumer expectations oI
service quality and satisIaction is the physical setting or the service environment
within which the service takes place. The important elements oI physical settings
are:
i) Ambience-. The ambience oI the physical setting includes temperature,
lighting, noise, music, scent and color. All these Iactors aIIect the way the
people think, Ieel and respond to a particular, service setting. The most
comIortable source oI light is the natural light. In the absence oI natural light
artiIicial light is needed. DiIIerent types oI lights create diIIerent types oI
atmosphere. For an example, low levels oI lighting are associated with
romantic setting, well lit passages create a Ieeling oI saIety and so on. OIten
color and lighting are used in conjunction. Colors create diIIerent Ieelings-,
some colors have a soothing Ieeling while some have disturbing Ieelings.
Green and blue are cool colors whereas red, orange and yellow are warm
colors. Temperature and humidity also aIIect the comIort oI the customer and
employees. It aIIects the eIIiciency directly.
ii) Space: People need space around them to Ieel comIortable. Ease oI access,
good visibility, proximity oI linked services will help to make the customer
Ieel comIortable. The service provider should not expect the customer to share
their space with others as it will lead to increase in stress levels or make them
Ieel uncomIortable. This will create a negative impact on their perception oI
the service received.
iii) Decor & ArtiIacts-, Decor: Signs, symbols and artiIacts are the important
components oI decor. Signs represent the Iirst encounter the customer ahs
with the service Iirm. It inIluences the Iirst impression. Sign can be used as
labels Ior directional purpose e a. parking, entrance and exit, to communicate
rules oI Behaviour e.g. no smoking. Symbols are used to judge the expertise
oI the service provider. CertiIicates hanged on the wall are symbols oI
achievement and may provide reassurance to the customer. In the same way
photographs on walls and personal objects displayed in the service
environment can all communicate symbolic meaning and create a good
impression
ArtiIacts: The style oI the decor can generally create an impression oI cheap,
serious, cheerIul and expensive-, ArtiIacts like original oil painting may
indicate success,

3) Social Settings: The appearance oI the service personnel is the major aspect oI the
social setting that inIluences the consumer's attitude about the service personnel.
The concept oI appearance shows whether the employees appear to be Iriendly
and approachable, caring, proIessional and conIident.
As a marketing mix element, physical evidence can be used as Iacilitator,
socialize, diIIerentia tore shaping Iirst impression and build corporate image and
identity.

SERVICE PROCESS
The service process reIers to how a service is provided or delivered to a customer.
Delivery system is a creative process. it begins with a service concept and strategy to
provide a service. In order to achieve these objectives, various alternatives must be
analyzed and identiIied beIore a decision is made. Designing a service process involves
issues such as location Iacility, design and layout Ior eIIective design and layout Ior
eIIective customer and work Ilow, procedure and job deIinitions Ior service providers,
extent oI customer involvement, measures to ensure service quality, equipment selection
and adequate service capacity.
According to C. Lovelock there are 7 operational issues, which have to be considered
while designing the service quality process.
In order to achieve economies oI scale and perIorm consistently the operation
people would preIer to process in a batch while the marketing would preIer to
cater to individuals so that the customer Ieels as being treated specially.
The decisions on designs and Iacility layout should satisIy the objectives oI both
Operational people are interested to improve the productivity as the cost oI
production per unit will reduce.
; Operation people want a standardized service since it keeps the cost lower and is
easy Ior implementation. On the other hand the marketing people preIer
customization to match customers' needs.
; Manage the queues in such a way that it is possible to use the available space.
; Operational employees Ieel that the job design should minimize error and
standardize tasks, making eIIicient use oI approach.
; The operational personnel lie to manage capacity in such a way that wasteIul
under-utilization will not take place.

Planning
The Iollowing strategic decisions and design elements must be considered in the Service
planning process.
1. Basic Technological Decision.
2. Conversion/Materials Decision.
3. SpeciIic Equipment Decision.
4. Process Flow Decision:
Blue prints.
Flow charts.
Front and back OIIice.
; Layouts.
; Benchmarks.
5) People Decision.

MARKET SEGMENTATION
Market segmentation is a process oI dividing a heterogeneous market into homogenous
subunits; concept that was Iirst developed by a Wendell R. Smith in a paper in 1956.1t is
deIined as dividing a market into distinct groups oI buyers with diIIerent needs,
.characteristics, or behaviour who might require separate services. A market was
analyzed Ior its nature and composition, and was clubbed under groups oI similar needs
and other characteristics. Customers inside a grouping had similar preIerences & traits,
two diIIerent groups had diIIerent preIerences and traits. Each oI these grouping was
called a segment, & the process was known as market segmentation.

Requirements for Effective Segmentation
O Measurable and obtainable: Size, purchasing power, and characteristics oI
segments
O Accessible: The segments should be eIIectively reached and served. For example,
questions like this keep cropping up. Will it be possible Ior us to communicate
and serve the people oI the orth-East iI and when we open our branch there?"
O Substantial and viable: The segment chosen should be large and proIitable. It
should be cost-eIIective Ior the service marketer to address the segment.
O Intensity in competition: More the intensity oI competition, less attractive is the
segment.
O Actionable: II the segments are attractive &have the potential Ior proIit making,
then eIIective marketing programmes can be designed. IIT Iound that the
Chinese market had huge potential and designed innovative marketing
programmes to serve that market.
O DiIIerentiable: The segments should be distinct Irom each other, behaving and
responding diIIerently. Or else, the process becomes like UndiIIerentiated
Marketing.

Bases for Segmenting the Service Consumer
The service marketer can segment the market according to consumer characteristics &
consumer responses.
Consumer characteristics indicate who buys:
O Geo-demographic (e.g., political - state, districts, blocks-, region - urban or rural-,
geographic orth, South. East, 'West)
O Demographic (e.g' age, gender, marital status, education, Iamily size, Iamily liIe
cycle, etc.)
O Socio-economic (e.g., income, social class, occupation)
O Culture (e.g., liIestyles, religion, language, ethnic origin & culture)

MARKET POSITIONING
The segment chosen in market segmentation is to be targeted Ior customer acquisition
and retention. For this to be successIul, customers have to be persuaded that the service
oIIer is unique in Ieatures, value and beneIits. The oIIer, thus, has to be positioned in
their minds to enable them to recognize-the oIIer as distinct Irom the crowd and to be
persuaded that the oIIer is the best oIIer Ior them. Positioning is a battle Ior the
consumer's mindshare. "The empires oI the Iuture are the empires oI the mind", said
\Winston Churchill.

Four Principles of Positioning:
O A service Iirm must position itselI in the target segment's mind.
O The position should be singular, with one simple' consistent message'
O The position must set the service Iirm and the service product apart.
O A service Iirm cannot be all things to all people-, should Iocus on certain
segments'

Process of Market Positioning

Stage 1: Identity Key Product Characteristics
The service marketer should make eIIorts to Iind out which oI the oIIer's Ieatures and
characteristics do consumers desire, and value most, when they make a decision to buy.
Some kind oI weighting should be put on these Ieatures. The Ieatures could be both
tangible (colour, size, design) and intangible (guarantees, reputation, experience, quality,
etc').

Stage 2: Draw a Perceptual Map
With the weights oI diIIerent Ieatures, a perceptual map is drawn. This is an extremely
useIul tool to visually depict what the consumers think oI available brands -with their
Ieatures. A perceptual map consists oI a grid on two axes, with product attributes on each
oI them. Thus, brands are spread over the grid, giving indication what the marker
perceives oI the brands vis-a-vis others. Clusters oI brands in one area or brand standing
alone in another area will give the service marketer an indication oI the intensity oI
competition as well as the distinctiveness or lack oI it oI the brands. The marketer also
gets glimpses oI gaps in the market, Ior exploitation.

Stage 3: Decide on a Competitive Strategy
AIter the perceptual map has been drawn, the decision to be taken is either oI the two:
O To compete head-on, or
O Get away Irom the competition
DiIIerent players take diIIerent positions in the grid. Some are competing head-on while
others preIer to be alone. A new entrant decides on the segment to compete in and iI there
is a cluster' as with Shopper's Stop, Cross roads/P i ram yd, Globus and West Side, then
they have to compete head-on. The other choice could be the lower quadrants where there
is an absence oI competition.

Stage 4: Design Product Attributes and Associated Imagery
To help the targeted customer identiIy the services and their beneIits, the marketer
designs service product Ieatures and associated images are designed. They will include
brand name, slogan, advertising themes, price levels, and distribution outlets. Thus with
marketing mixes, the service marketer is able to position his oIIer in the minds oI the
consumer.

Stage 5: Sustain a Competitive Advantage
A service marketer gets a decisive competitive advantage iI he is able to set his oIIer
apart Irom those oI the rest oI the competition - in the eyes oI the target customer.
Success will breed imitators, and the service marketer will then have to spend time and
resources to ward them oII' But this competitive advantage has to be sustained, and can
only be done by keeping in touch with the customer and knowing his needs.


STRATEGIES FOR MANAGING CAPACITY & DEMAND
The demand may be too high or too low. When demand is too high the capacity can be
altered by:
i) Stretching time, labour, Iacilities and equipments.
ii) Cross train the employees.
iii) Request over-time Irom employees.
iv) Rent or share Iacilities.
v) Hire part-time employees.
vi) Subcontract or outsource service.

When the demand is too low, the capacity can be altered by:
i) PerIorming maintenance, renovations.
ii) Schedule vacations.
iii) Schedule employee training.
iv) Lay-oII employees.

a. Customers' Involvement: By converting certain operations to selI-service like
buIIets at restaurant and Iast Iood joints the Iirm can divert its own personnel to
other Iunctions. SelI-service Iirm lose a certain measure oI control over service
quality when the customers are asked to perIorm key Iunctions.

b. Using Part-time Employees-, Part-time help can supplement regular employees
when the peaks oI activity are persistent and ' predictable. A ready part-time
labour pool is available Irom college students and others who are interested In
.supplementing their primary source oI income. Another source is oII duty
personnel placed on stand-by. Hospitals and Airlines oIten pay their personnel to
be on stand-by. They are there to be ready Ior work iI needed.

c. Cross Training Employees: Some services consist oI various operations. At times
when one operation is busy the other operation may be idle. Cross training
employees to do the tasks in various operations creates Ilexible capacity to meet
demand. For an example, we see at supermarkets when the queues develop at the
cash registers, the managers call on stockers to operate registers until the queues
reduce. In the same way during slack periods some oI the cashiers are busy
stocking shelves.

d. ModiIy or Move Facilities and Equipments: Sometimes it may be possible to
modiIy the existing capacity to meet the demand Iluctuations. For an example, the
new Boeing 777 aircraIt is so Ilexible that it can be reconIigured within hours to
accommodate extra numbers oI seats allocated to one, two or three classes. Thus
the plane can be quickly modiIied to match the demand arising Irom diIIerent
market segments.

e. Sharing Capacity: A large investment in equipment and Iacilities exist in a service
delivery system. At the time oI underutilization, it may be possible to Iind other
use Ior the capacity. An airline is a good example. At the small airports, airlines
share the same baggage handling equipments, ground personnel etc. It is a
common practice Ior some airlines to lease their aircraIt to other airlines during
the oII season.

I. Stretch Existing Capacity: In order to match the demand th,~ riqtinn r-~7m~7irjtv
oI resources can be expanded. Under such circumstances no new resources are
added but people, Iacilities and equipments are asked to work harder so that
demand can be met.

g. Schedule 'Down Time' during low demand: II during the peak period, people,
equipment and Iacilities are being used at maximum capacity then it is necessary
to schedule repairs, maintenance and renovations during oII periods. For
employees vacations and trainings can also be arranged during this period.

Strategies for managing demand to match capacity:
1. Partitioning the Demand: The demand Ior services is oIten grouped into random
arrivals and planned arrivals. For an e.g. at a doctor's clinic the walk-in patients
arriving are more than those with appointments. Appointment can be controlled.
But walk-in demand is uncontrollable.
We oIten Iind that the inIlow oI patients is higher on weekdays than weekend.
ThereIore, in order to level demand a partition can be created as, keep
appointments in the latter part oI the week i.e. weekends and only walk-in patients
on weekdays.
2. Vary the service oIIering: Depending on the seasons oI the year, day oI the week,
or time oI the day, we can change the nature oI the service oIIering. For an
example, accounting Iirms Iocus on tax preparations and general activities late in
the year and until April when the taxes are due. During the other times oI the year
they can Iocus on auditing and other general consulting activities.
Care should be taken in implementing strategies to change the service oIIerings as
change may easily imply and require alterations in other marketing variables such
as promotion pricing and staIIing in order to match the new oIIerings. Until and
unless these new additional marketing mix variables are altered eIIectively to
support the oIIering the strategy may not work.
3. Developing Complementary Services: Complementary services are basically
oIIered in order to occupy waiting customers. The Indian Restaurants have
discovered the beneIits oI complementary services by adding a bar to the
Restaurant. The customers can enjoy Iood and drinks separately as well as
together.
4. Promoting oII-peak Demand: During oII-seasons holiday resorts use their
premises as retreat location Ior business or proIessional groups. In the same way
in order to encourage long distance dialing the Telephone companies oIIer lower
rates at night.
5. Pricing Incentives: In order to smoothen the demand on the service process, prices
can be raised during peak times and lower, at non-peak times. Movies have
matinee special and hotels oIIers lowest rates during weekends.
6. Communicate with the Customers: Another way Ior shiIting demand is to
communicate with the customers and let them know the peak demand period so
that they can choose to use the services at alternative times and avoids crowding.
7. ModiIy Timing and location oI service delivery: Extending working hours and
working on weekends can meet the customer's demand. Another strategy may
also work by moving the service to a new location in order to meet the demands
oI the customers.
8. Advertising and Sales promotion: Advertising and sales promotion can be used to
emphasize diIIerent service beneIits during diIIerent period i.e. peak and slow
period. Advertising messages can also be used to remind customers about the
peak demand times and promotional oIIers during the oII-season.

Strategies when demand and capacity cannot be matched:
1. Reservations and Appointments: Examples: Airlines, Railways, Health Care, and
Hospitals, Doctors, etc
2. Waiting Lines
3. Triage -Means Sorting: Example: Emergency rooms are given on the basis oI
critical and not in order oI arrival.
4. Delaying Service Delivery: ext day or next week or until capacity becomes
available.

Demand Patterns
Demand Pattern by Market Segments:
Disaggregation oI demand by market segmentation is possible iI an organisation has
detailed records on customer transactions or the analysis may reveal that the demand
Irom one segment is predictable whereas the demand is relatively random Irom another
segment, For an example, Ior a bank the current account holders may come daily at
predictable time whereas savings account holders may visit the bank at random intervals.

Random Demand Fluctuations:
Random variations in demand are there in every kind oI services. For an example, health
related events like heart attacks and birth or death all increase the demand Ior hospital
services but the level oI demand generally cannot be determined in advance. in the same
way natural disasters Such, as Iloods, Iires, droughts, earthquakes, etc. can dramatically
increase the need Ior services such, as health care, insurance, telecommunication etc.

Predictable Cycles:
Variations in demand can be caused by many Iactors. Some are predictable -while some
are not. Tourism services have peak periods at certain holidays and at weekend days.
Generally one or more causes can be identiIied when there exist a predictable pattern.

Charting Demand Pattern:
Those organisations which have computerized customer inIormation systems can do the
charting demand over relevant periods. II seasonality is a suspected problem then
graphing should be done Ior data Irom the past year.
Some oI the basic types oI demand curves are as Iollows:

Managing Constraints on Capacity:
Demand cannot be controlled perIectly. EIIicient management oI resources needs that the
Iirm should consider the changing capacity by increasing it to meet higher demand and
contract it when the demand is low. Depending on the type oI service, service Iirms are
Iaced with various constraints.
1. Time: In case oI some services, the primary constraint on service production is
time. For an example, 'a consultant, a lawyer or a hairdresser all sell their time.
The proIits are lost iI their time is not used productively. In the same way time
cannot be created iI there is excess demand.
Time is a major constraint Irom the point oI view oI individual service
provider. Time capacity can be increased by operating Ior longer hours. This
cannot be an option iI the time does not match the customer's needs. Its capacity
can also be increased by shortening the length oI the time in serving the customer.
Time can be saved by using the slack demand time Ior repairs and
maintenance, since the Iunctions oI repairs and maintenance has to be perIormed
sometimes or the other: However, iI they are kept away Irom peak demand
periods, the overall productivity will be improved. E.g. legal, consulting,
accounting, medical.
2. Labour: In the case oI labour intensive unit the number oI service providers is
large. Here, labour or staIIing levels can be the primary capacity constraint. A law
Iirm, consulting Iirm or a repair maintenance contractor all Iare the same problem.
At certain times the demand Ior their organisations' services cannot be met as the
staII is already operating at peak capacity. In some cases it is easier to hire and
Iire. But it can be costly iI the employees require extensive training in order to
provide service. This can be avoided by imply increasing the working hours oI the
regular staII at the time oI high demand and paying overtime.
The capacity oI the workIorce can be made more Ilexible through
extensive cross training This enables the employees to perIorm several diIIerent
jobs It is also possible to increase the productivity and hence work capacity. E.g.
Law Iirms, accounting Iirms, consulting Iirms, health clinics.
3. Equipment: Equipment may be critical constraints Ior service Iirms. In case oI,
transportation, the trucks or the planes required to service demand may have
capacity limitations. Especially during Iestivals, summer and winter vacations the
delivery service providers are Iaced with this problem. Telecommunication
companies Iace equipment constraints when everyone wants to use the telephone
lines at the time oI peak hours.
The use oI productivity enhancement tools can increase the capacity oI
Iixed work Iorce. They can be kept Iree Irom doing repetitive task. Example,
Banks have built ATMs, manuIacturers oI sophisticated computers and electronic
products have build selI diagnostic components, into their products in order to
avoid sending costly engineers into the Iield to carry out routine analysis. In many
kinds oI Iirms computers automate ordering and billing activities and keep track
oI customer's purchase history. This has transIormed operations perIormed by the
clerical staII. E.g. Delivery services, telecommunication, utilities, health club.
4. Facilities: Most oI the service Iirms are Iaced with the problem oI limited
Iacilities. Education institutions like schools and colleges are constrained by the
number oI rooms and the number oI seats in each class, restaurant capacity is
restricted to the number oI tables and seats available, Airlines are limited by the
number oI seats in the aircraIt and so on.
Physical Iacilities are very diIIicult to adjust. Adding a building or a room
or an aircraIt tends to increase the capacity but then it will add to the cost.
However, a service Iirm with a multiple outlet may be able to accommodate
excess demand at one unit by sending the extras to another unit. Temporary
renting is another solution. E.g. Hotels, restaurants, hospitals, airlines, schools and
theatres.
BRANDING OF SERVICES
A brand can be deIined as 'a name, term, symbol or design or a combination oI them
which is intended to identiIy the goods and services oI one seller and to diIIerentiate
them Irom those oI competitors. In case oI services, branding is still in its inIancy. The
importance oI branding is expected to rise due to the Iollowing reasons:
i) Services itselI does not oIIer unique tangible beneIits, brand development
tangibilises the service.
ii) It is cheaper to retain customers than to attract new ones.
iii) The new service development assumes greater importance.
Brand Awareness
Brand awareness is the ability oI the consumer to recognize and recall that a service
brand is an intrinsic part oI the oIIer category. Service brands Iall into the Iive categories
according, to how much (or less) the consumer is aware oI them. Some brands are not
known at all by the customers, while brand awareness exists Ior some. At a higher plane,
there are oIIers that have brand acceptability and those that enjoy a high degree oI brand
preIerence.


Ch-3 Service Quality

What are the SERVICE GAPS?
Gap 1: The Knowledge Gap: DiIIerence between consumer expectations and the
management perceptions oI consumer expectations. This gap can be narrowed through
adequate research programmes.
Gap 2: The Standard Gap: DiIIerence between management perceptions oI consumer
expectations and service quality speciIications. This gap can be closed by standardizing
service delivery process wherever possible and also setting right organizational goals.
Gap 3: The Delivery Gap: DiIIerence between service quality speciIications and the
service actually delivered. This gap can be eliminated by providing the employees with
adequate support system and better human resource policies and programmes and
improving teamwork.
Gap 4: The Internal Communication Gap: DiIIerence between service delivery and what
is communicated about the service to the consumers. This gap can be eliminated through
eIIicient and eIIective communication system and also by not giving Ialse promises to
customers that leads to higher expectations.
Gap 5: The Perception Gap: DiIIerence between the perceived service and expected
service. This gap depends on the size and directions oI the Iirst Iour gaps associated with
the delivery oI service quality.
3y bridging gaps 1 4, automatically gap 5 can be closed. The gap analysis is useIul in
setting priorities Ior actions in order to improve the company's image in the eyes oI the
customers.

What are the causes of Gaps in Service Quality?
The assessment oI quality takes place in the customer's mind simultaneously as services
are created and delivered. The custor-ner's level oI satisIaction is largely inIluenced by
the diIIerence between customer's expectation and perception oI service perIormance.
Whom the delivered service is perceived to be better than expected, the outcome is that
the customer is satisIied and vice-versa.
The Gap between expected service and delivered services has its origin at diIIerent
points:

Gap 1: Customers Expectation:
It is simply not known what the customers expect. The intangible nature oI service makes
it diIIicult to deIine customer expectations quantitatively.
Even the customer sometimes is not articulate enough to explain as to what are his/her
speciIic expectations.
It is also observed that some service quality dimensions are diIIicult to quality.
As a result, marketers have to depend upon their own judgment, which sometimes is at a
variance with the customer expectations

Gap 2: Management Perception of Customers Expectation:
The customer expectation needs to be translated into appropriate perIormance standards.
Many a time a service Iirm has a good idea as to what customers expect but Iail to
develop them into appropriate service speciIications. There are many reasons responsible
Ior iI. Inadequate commitment to quality lack oI inclination to speciIy quality standards
and measure quality. Perception oI unIeasibility, perception that services cannot be
standardized etc.
Gap 3: Service Delivery:
This reIl6cts variation oI the actual perIormance Irom the standard perIormance i.e.
Iailure to conIorm to established standards. It occurs when the employees are unable to or
unwilling to perIorm at desired level. Role ambiguity, role conIlict, poor employee-job
Iit, lack oI training, absence oI proper motivation system etc may be the reasons Ior it.
Gap 4: External Marketing Communication:
A service companies external communication eIIorts i.e. advertising, publicity, personal
selling and public relations may over-promise and that logically results into this gap to
occur, The marketers Iind it very hard to resist the temptation oI making big promises.
Otherwise they know that iI they don't make tall promises their appeal to the customers
won't be that exciting and the entire promotion exercise may be reduced to any.
Gap 5: Actual Service Performance (As perceived by the customers):
This Gap occurs when the customer's perception oI delivered service is at variance with
the expected service. The customer's experience oI the service is conIlict upon many
Iactors and some times the service may need customer's expectations and yet perceived
otherwise. The key to providing good service quality is meeting and exceeding
customer's expectations.
This gap is the end result earlier Iour gaps.

How to measure service Quality?
Or
What are the Dimensions / Determinants of Quality?
It reIers to the process quality as judged by the consumers during a service delivery and
the quality oI output judged aIter a service is perIormed.
Berry, Parasuram and Zeithaml conducted an extensive research in service quality and
identiIied 10 criteria used by consumers in evaluating service quality as shown in the
Iigure below:

Ten Dimensions of Service Quality

Dimension and Definition Examples of Specific Questions Realised by Customers
Tangibles: Appearance oI
Physical Iacilities, equipment,
personnel and communication
materials.
O Are the bank's Iacilities attractive?
O Is my stockbroker dressed appropriately?
O Is my credit card statement easy to understand?
O So the tools used by the repair person look modern?
Reliability: Ability to perIorm
The promised service
dependably and accurately.
O When a loan oIIicer says they will call me back in 15
O minutes, does she do so?
O Does the stockbroker Iollow my exact instructions to
buy or sell?
O Is my credit card statement Iree oI errors?
O Is my washing machine repaired right the Iirst time?
Responsiveness: Willingness
to help customers and provide
prompt service.
O When there is a problem with my bank statement, does
the bank resolve the problem quickly?
O Is my stockbroker willing to answer my questions?
uestions?
O Are changes Ior returned merchandise credited to my
account promptly?
O Is the repair Iirm willing to give me a speciIic time
when the repair person will show up?
Competence: Possession oI
The required skills and
Knowledge to perIorm the
service.
O Is the bank teller able to process my transactions
without Iumbling around?
O Does my brokerage Iirm have the research capabilities
to accurately track market developments?
O When I call my credit card company, is the person
enabled to answer my questions?
O Does the repair person appear to know what he is
doing?
Courtesy: Politeness, respect,
consideration and Iriendliness
oI contact personnel.
O Does the bank teller have a pleasant demeanor?
O Does my broker reIrain Irom acting busy or being rude
when I ask questions?
O Are the telephone operators in the credit card company
consistently polite when answering my calls?
O Does the repair person take oII his muddy shoes beIore
stepping on my carpet?
Credibility: Trustworthiness,
believability, honesty oI the
service provider.
O Does the bank have a good reputation?
O Does my broker reIrain Irom pressuring me to buy?
O Are the interest rates/Iees charged by my credit card
O company consistent with the services provided?
O Does the repair Iirm guarantee its services?
Security: Freedom Irom
danger, risk or doubt.
O Is it saIe Ior me to use the bank's automatic teller
machines?
O Does my brokerage Iirm know where my stock
certiIicate is?
O Is my credit card saIe Irom unauthorized use?
O Can I be conIident that the repair job was done
properly?
Access: Approachability and
ease oI contact,
O How easy it is Ior me to talk to senior bank oIIicials
when I have a problem?
O Is it easy to get through to my broker over the
telephone?
O Does the credit card company have a 24-hour, toll-Iree
telephone number?
O Is the repair service Iacility conveniently located?
Communication: Keeping
customers inIormed in a
language they can understand
and listening to them.
O Can the loan oIIicer explain clearly the various changes
related to the mortgage loan?
O Does my broker avoid using technical jargon?
O When I call my credit card company, are they
willing to listen to me?
O Does the repair Iirm call when they are unable to keep a
scheduled repair appointment?
Understanding the Customer:
Making the eIIort to know
customers and their needs.
O Does someone in my bank recognize me as a regular
customer?
O Does my broker try to determine what my speciIic
Iinancial objectives are?
O Is the credit limit set by my credit card company
consistent with what I can aIIord (i.e. neither too high
nor too low)?
O is the repair Iirm willing to be Ilexible
enough to accommodate me schedule?

It was Iound that there was a high degree oI correlation between most oI these variables.
They
are consolidated into Iive broad dimensions.
1. Tangibles: Tangibles are those Iactors which the consumer can Ieel, hear and
touch. Tangible are used while assessing the physical qualities and beIore the
service is experienced. For an example, you would not like to be served by an
unclean waiter with dirty uniIorm and perhaps you would never visit such a
restaurant again.
2. Responsiveness: It reIers to the willingness to help customers and provide prompt
service. Responsiveness is an important dimension Ior those customers who
require some extra service over and above that is usually provided.
3. Empathy: It means the power oI understanding the customer's Ieelings and needs
that enables the server to take care oI the customer and provide personal attention.
It is described as human touch.
4. Assurance: It means that the knowledge which the provider possesses enables him
to perIorm the services competently. It also includes courtesy aspects such as
politeness and respect Ior customers.'
5. Reliability: It is the capacity to deliver the promised service accurately on time.
The milkman who delivers milk on a regular basis in time is reliable.

Productivity and quality
Productivity relates to how inputs are transIormed into outputs that are valued by
customers. Improving productivity keeps costs under control Quality reIers to the degree
to which a service satisIies customers by meeting their needs, wants and expectations.
Service quality helps in product diIIerentiation and building customer loyalty. Invest in
quality proIitably i.e. by considering incremental cost and incremental revenue.

What do you mean by service recovery?
Service recovery is a term used Ior systematic eIIorts by a Iirm in order to correct the
problem Iollowing a service Iailure, and to retain a customer's goodwill. Service recovery
eIIorts play a crucial role in achieving or restoring customer satisIaction. In every
organisation, things may occur that have a negative impact on its relationship with
customers. The true test oI a Iirms, commitment to satisIaction and service quality isn't in
advertising promises or the decor and ambience oI its oIIice but in the way it responds
when things go wrong.jor the customer.
EIIective service recovery requires thoughtIul procedures Ior resolving problems
and handling disgruntled customers. It is critical Ior Iirms to have eIIective recovery
stralegies, because even a single service problem can destroy a customers' conIiderTce, in
tvIirm under the Iollowing conditions:
i) The Iailure is totally outrageous.
ii) The problem Iits a pattern oI Iailure rather than .being'ah isolated incident.
iii) The recovery eIIorts are weak, serving to: compound the original problem rather
than correct it.
Some complaints are made while service, deliqery (s still taking place, while
others are made aIter the Iact. In both instances, how the complaint is handled may
determine whether the customer remains with the Iirm or seeks new; suppliers in the
Iuture. The advantage oI getting real time complaints is that there nay still be a chance to
correct the situation beIore service delivery is complete.

The downside oI real time compliant (Irom an employee perspective), is that they
can be de-motivating. Dealing with them in real time can also interIere with service
delivery. The real diIIiculty Ior employees is that they oIten lack the authority and the
tools to resolve customer problems, especially, when comes to arranging alternatives at
companies' expense or authorizing compensbtionon the spot. When complaints are made
aIter the Iact, the options Ior recovery are more limited. In this case, the Iirm can
apologize, repeat the service to achieve the desired solution or oIIer some other Iorms oI
compensations.


What are the guidelines for effective problem resolution?
Or
How to Handle Complaints?
1. Admit mistakes, but don't be deIensive: Acting deIensively may suggest that the
organisation has something to hide or is reluctant to Iully explore the situation.
2. Act Iast-, II the complaint is made during the service delivery, then Time is oI the
essence to achieve a Iull recovery. When complaints are made aIter the Iact, many
companies have established policies oI responding within 24 hours or sooner.
Even when Iull resolution is likely to be longer, Iast acknowledgement remains
very important.
3. Don't argue with customers: The goal should be to gather Iact, to reach a mutually
acceptable solution, not to win a debate or prove that the customer is an idiot.
Arguing gets in the way oI listening and seldom diIIuses anger.
4. Show that you understand the problem Irom each customer's point oI view:
Seeing situations through the customer eyes is the only way to understand what
they think has gone wrong and why they are upset. Service personnel should
avoid jumping to conclusions with their own interpretation.
5. Give customers the beneIit oI the doubt: All the customers may not be truthIul,
and also not all complaints are justiIied. But customers should be treated as
though they have a valid complaint until clear evidence to the contrary emerges. II
a lot oI money is at stake, like insurance claims or lawsuits, a Iull investigation is
warranted. II the amount involved is small, it may not be worth to reIund or
compensate. But it's a good idea to check records to see iI there is a past history oI
dubious complaints by the same customer.
6. Acknowledge the customer's Ieelings: Acknowledge the Ieelings oI the customers
tactIully Ior example," I can understand why you are upset. This action helps to
build rapport, which is the Iirst step in building a bruised relationship.
7. ClariIy the steps needed to solve the problems: When instant solutions are not
possible, telling customers how the organisation plans to proceed, shows that
corrective action is being taken. It also sets expectations about the time involved.
8. Keep customers inIormed oI the progress: obody likes being leIt in the dark.
Uncertainty breeds, anxiety and stress. People tend to be more accepting oI
disruptions, iI they know what is going on, and receive progress reports.
9. Consider compensation: When customers do not receive the service outcomes that
debate Ior or have suIIered serious inconveniences or loss oI time and money,
because the service, Iailed, either a monetary payment or an oIIer oI equivalent
service in kind, is appropriate. This type oI recovery strategy may also reduce the
risk oI legal action by an angry customer. Service guarantees oIten lax out in
advance, what such compensation will be and the Iirm should ensure that all
guarantees are met.
10. Preserving to regain customers goodwill When customers have been disappointed,
one oI the biggest challenges is to restore their conIidence and preserve the
relationship Ior the Iuture. Perseverance may be required to deIuse customers'
anger and to convince them that actions are being taken to avoid a recurrence oI
the problem. Truly exceptional recovery eIIorts can be extremely eIIective in
building loyalty and reIerrals.

Taking care oI customers require that the Iirm also take care oI its own employees.
Managers need to recognise that handling complaints about service Iailures and
attempting service recovery can be stressIul Ior the employees, especially when they get
treated abusively Ior problems over which they have no control. Compounding the stress
are policies that implies in Ilexible, bureaucratic procedures, rather than empowered
customer --contact personnel to handle recovery situations as they see Iit. Service Iirm
needs to develop internal service recovery strategies, designed to help employees recover
Irom negative Ieelings that they may become the target oI employee anger and
dissatisIaction.

Similarly, management must ensure that the Iirm employs a suIIicient number oI well-
trained and motivated employees. so that good service is provided in the Iirst place, plus
prompt and eIIective recovery is done when things go wrong. Companies with a good
reputation Ior customer care cannot aIIord to become complacent.


Ch- 4 Services Management

Service Mapping or Flowcharting
Flowcharting can be applied to any type oI services when a management needs to gain, a
better understanding oI how the service is created and delivered. It is also known as
service mapping when portraying an existing situation and service blueprinting , when
planning a new or revised process and prescribing how it ought to Iunction.

Service Blue Print
A service blue print is a Ilowchart oI the service process. It is a picture oI a service
system. It conveys the service concept by showing the service at an overview level. It
shows how each job or department Iunctions in relation to the service as a whole.

Benchmarkinq: Advantages and Methodology
Benchmarking is a process used in management and particularly strategic management,
in which organizations evaluate various aspects oI their processes in relation to best
practice, usually within their own sector. This then allows organizations to develop plans
on how to adopt such best practice, usually with the aim oI increasing some aspect oI
perIormance. Benchmarking may be a one-oII event, but is oIten treated as a continuous
process in which organizations continually seek to challenge their practices.
Benchmarking in simplistic terms is the process where you compare your process with
that oI a betterprocess and try to improve the standard oI the process you Iollow to
improve quality oI the system, product, and services etc. A process similar to
benchmarking is also used in technical product testing and in land surveying. See the
article benchmark Ior these applications.

Advantages of benchmarking:
Benchmarking is a powerIul management tool because it overcomes" paradigm."
Paradigm Blindness can be summed up as the mode oI thinking, "The way we do it is the
best because this is the way we've always done it." Benchmarking opens organizations to
new methods, ideas and tools to improve their eIIectiveness. It helps crack through
resistance to change by demonstrating other: methods oI solving problems than the one
currently employed, and demonstrating that they work, because they are being used by
others.

Collaborative benchmarking
Benchmarking, originally invented as a Iormal process by Rank Xerox, is usually carried
out by individual companies. Sometimes it may be carried out collaboratively by groups
oI companies (e.g. subsidiaries oI a multinational in diIIerent countries). One example is
that oI the Dutch municipally-owned water supply companies, which have carried out a
voluntary collaborative benchmarking process since 1997 through their industry
association.

Procedure
There is no single benchmarking process that has been universally adopted. The wide
appeal and acceptance oI benchmarking has led to various benchmarking methodologies
emerging. The most prominent methodology is the 12 stage methodology by Robert
Camp (who wrote the Iirst book on benchmarking in 1989.

The following is an example of a typical shorter version of the methodology:
IdentiIy your problem areas - Because benchmarking can be applied to any business
process or Iunction a range oI research techniques may be required. They include:
inIormal conversations with customers, employees, or suppliers, exploratory research
techniques such as Iocus groups, or in-depth marketing research, quantitative research,
surveys, questionnaires, re engineering analysis, process mapping, quality control
variance reports, or Iinancial ratio analysis. BeIore embarking on comparison with other
organizations it essential that you know your own organization's Iunction, process; base
lining perIormance provides a point against which improvement eIIort can be measured.

IdentiIy other industries that have similar processes For instance iI one were interested
in improving hand oIIs in addiction treatment s/he would try to identiIy other Iields that
also have hand oII challenges. These could include air traIIic control, cell phone
switching between towers, transIer oI patients Irom surgery to recovery rooms.

IdentiIy organizations that are leaders in these areas Look Ior the very best in any
industry and in any country. Consult customers, suppliers, Iinancial analysts, trade
associations, and magazines to determine which companies are worthy oI study.
Survey companies Ior measures and practices Companies target speciIic business
processes using detailed surveys oI measures and practices used to identiIy business
process alternatives and leading companies. Surveys are typically masked to protect
conIidential data by neutral associations and consultants.
Visit the "best practice" companies to identiIy leading edge practices - Companies
typically agree to mutually exchange inIormation beneIicial to all parties in a
benchmarking group and share the results within the group.
Implement new and improved business practices Take the leading edge practices and
develop implementation plans which include identiIication oI speciIic opportunities,
Iunding the project and selling the ideas to the organization Ior the purpose oI gaining
demonstrated value Irom the process.

Blueprinting
The service encounter is diIIicult to describe with accuracy and thereIore there is a lot oI
subjectivity in its analysis. This inconsistency (variability) prevents quality measurement.
This has given rise to many methodologies in service encounter analysis and
measurements which seek to 'map' the service process. With such a 'map' and 'scripts', it
is possible to be systematic in the encounter analysis This process is called 'blueprinting'.
Blueprinting has given rise to other methodologies like 'servuction'.
To Iacilitate maximum satisIaction to the customers, more inputs were added to the
service delivery. Service evolved Irom very simple steps to complex processes, & there
arose a need Ior the marketer to get a bird's eye view oI the whole process. Blueprinting
is Ilowcharting oI service operation.
Blueprinting would prevent the manager Irom learning by costly trial and error. It
(blueprinting) also enables marketing managers to understand the parts oI the operating
system that are visible to the consumer and hence parts oI the servuction system. In the
servuction sysrem, it is very diIIicult to identiIy components oI an individual Iirm. Worse
Iirms underestimate the sensitivity oI points oI contact. Service Iirms are now starting to
realize the importance oI the Iirst call and its potential Ior generating revenues. They are
setting up '24 x 7 x 365 call centres to be manned by eIIicient and alert call handlers. The
providers are adequately enabled by training, and computer Iacilities Ior all enquiry data
access and customer and product details the service providers are trained to pick up the
phone on the Iirst ring.

Service Ilowcharts allow managers to better understand servuction Processes. Designing
the process becomes the key to product design. In the design stage, it is ensured that the
visible part oI operations is supported by invisible processes. Flowcharts seek to identiIy
the Iollowing:
O The time it takes to move Irom one process to another;
O The costs involved with each process step;
O The amount oI inventory build-up at each process step;
O The bottlenecks in the system.
A customer blueprint has three core elements:
O IdentiIication oI all those Iunctions that are essential to deliver a service along
with the appropriate personnel with requisite responsibility, authority and
accountability.
O The relationships amongst diIIerent Iunctions oI service components are
explained by graphics and charts. The relationshio, is based on time and sequence
with each other. For a hotel, the sequence oI housekeeping in relation to reception
and registration has to be elaborated with a speciIic time interval.
O Setting up oI standards Ior each Iunction with tolerance levels and variance Irom
standards' These tolerances Ior variance should not adversely aIIect the service
quality adversely.

Steps in Designing a Blueprint
1. IdentiIy the process to be blueprinted: This implies again that it would be
impossible to blueprint the complete processes oI the service provider in one
Iormat. The individual processes are to be identiIied Ior blueprinting. The
summation oI such processes would give the whole picture to the manager. Each
process would by itselI be an issue, and particular problem identiIication and
appropriate solution Iormulation would be easier.
2. Map process Irom the custorner's point oI view: Through this method, the
customer's comIort zones can be identiIied. Processes can be modiIied iI it is
Iound that customers are not very comIortable with certain sequences. Consumers
possess purchasing scripts that guide their thinking and behaviour during service
encounters. The blueprint development process identiIies steps where the system
can go awry. Process involves speciIying the timeIrame oI service execution.
3. Draw line oI interaction: The line oI visibility and the line oI interaction have to
be drawn clearly. The areas oI interaction aIIect service experience the most.
4. Draw the line oI visibility: These are processes in zones that are visible to the
customers and in which the customer is most likely to participate. There are also
the invisible zones which consist oI processes and interactions that are necessary
Ior servicing the customer but are hidden Irom his view. In a bank, this would
include checking the credit-worthiness oI clients, processing oI documents,
dispatch section operations, etc.
5. Map process Irom customer contact person's view, distinguishing visible activities
Irom those that are invisible.
6. Draw line oI internal interaction.
7. Link customer and contact person activities to needed support Iunctions.

Target Marketing
Target Marketing recognizes that diIIerent groups oI customers have diIIerent needs and
might also desire diIIerent core beneIits Irom the same service. It sought the diIIerent
needs and preIerences oI the consumers and instead oI trying to satisIy them with the
same type oI services, the Iirm designed complete marketing programmes Ior each oI
these sub-groups.

Benefits of Target Marketing
O The market size is large and the service Iirm may not have suIIicient resources to
address it, neither would it perhaps want to do so.
O Customers are scattered all over the geographical spread, making it practically
impossible to reach every potential buyer. Targeting was Iar more cost-eIIective.
O Competitors are enrrenched, making entry and survival diIIicult' ThereIore,
smaller Iirms can seek niche or specialized markets.
O Customer requirements Irom the service vary widely'. Targeting a segment or two
- to the exclusion oI the rest - increases the chances oI meeting most oI customers'
demands.
O It generated customer loyalty.

Franchising :
Franchising is the most common type oI distributor in the services and accounts Ior most
oI the retail sales. According to the International Franchise Association oI America, "A
Iranchise operation is a contractual relationship between the Iranchiser and the Iranchisee
in which the Iranchiser oIIers or is obligated to maintain a continuing interest in the
business oI the Iranchisee in such areas as know-hold and training, where in the
Iranchisee operates under a common trade name Iormat and/or procedure Owned and
controlled by the Iranchiser and in which the Iranchisee has or will make a substantial
capital investment in his business Irom his own resources.

Location of Franchisee.
The Iranchisee should be located at convenient and accessible places. The Iollowing
Iactors inIluence the choice oI Iranchise location:
Area oI potential demand
Competition in the area.
Requirement oI space
; Presence oI another Iranchisee oI the same Iirm.
; Other physical needs oI the Iirm.

Benefits of Franchisee:
To the Franchiser:
Franchisees are selI-motivator.
They share business risk.
They have a thorough although knowledge oI the local market.
; They maintain consistency in quality.
; Franchiser gets wider distribution network.
To the Franchisee:
Obtain ready-made business.
Reduction oI risk.
BeneIit oI training and counseling and advice on local promotion oI business.

Franchising in India with Examples:
As the service economy grows in the country, opportunities Ior Iranchising are going to
be plentiIul. The Iranchisers in the product market like Titan, Raymond, Bata or Reebok
are well known. More names will be added to this list as Iranchising is catching on in
service industries like in education I. T. kids, IIT, Aptech; Healthcare - Arvindlal;
Entertainment - AMF, Bumswick; Specialty Iood services -Subway, CaIe CoIIee day and
Personal grooming -Personal Point, VLCC.

I. T. kids: Business concept: education through computers.
umbers planned: 300 in one year
Company investment: Rs. 37 crores (in next one year)
Franchisee investment: Rs. 12 -15 lakhs
Chennai based computer Iirm with the novel concept oI educating children aged between
4 to 14 years through computers. The curriculum is divided into several modules and
gives a good chance oI retaining the customers Ior many years. To include trials I.T. kids
plans short duration programmes during summer vacations. As it is a niche market I.T.
kids rely on Iranchising. They have rolled out swiItly and grab the Iirst mover advantage.

CaIe CoIIee day - Business concept'. coIIee caIes
umbers planned: 100 by 2001
Company investment: Rs. 5 crores
Franchisee investment: about Rs. 40 lakhs
The Rs. 200 crore Bangalore based Amalgamated Bean CoIIee, India's largest coIIee
chain has set up a chain oI caIes that mirror the successIul day oIIers a variety oI coIIee
blends and also a limited menu oI snacks like sandwiches and pastries.


CASE STUDY

NOV: 2001
The three morning Ilights scheduled to leave Mumbai Ior Delhi at 6.30, 8.e0 and 8.45
a.m. were delayed due to Iog in Delhi. The Iirst two were rescheduled Ior 9.15 a.m. in the
hope that by then the weather would improve. At 8.30 a.m. the passengers were asked to
proceed Ior security check and await departure call. An announcement at 8.50 a.m.
requested passengers on the second Ilight who were waiting in the lounge on the ground
level to board the aircraIt. Those who were booked Ior the Iirst, waiting on the Iirst Iloor
lounge heard this announcement. Anticipating a similar announcement Ior them, they
moved gradually to the gate. The movement oI the staII through the aerobridge and to the
telephones gave the impression that something was wrong. But the gate did not open. At
about 9.15 one oI the staII was asked the reasons Ior the delay. He replied rudely that
they would be boarding within Iive minutes. At 9.30 a.m. another traIIic assistant also
said within Iive minutes. The passengers were getting restive. When the same answer was
given by another assistant, the passengers got inIuriated. They also Ielt that the staII was
not doing their duty and that the delay was avoidable. Within another Iive minutes they
were asked to board the aircraIt. When all were seated, the pilot announced that the
weather in Delhi was still bad, and that the next report was expected aIter 30 minutes and
the breakIast would be served on board. From the air hostess, the passengers came to
know the passengers oI the second Ilight were also boarding only then This incident
could have been communicated periodically. The announcement about boarding the Ilight
was misleading. The traIIic assistants perhaps themselves did not know the real situation
when they had said Iive minutes. This situation Iurther aggravated by Iurther delay due to
late arrival oI a politician who was also travelling to Delhi. The parting greetings were
given to the passengers "Hope you enjoyed the Flight" just beIore landing at Delhi. As iI
this was not enough, the passengers had to wait Ior one more hour Ior luggage clearance.
Questions:
Which were the critical interactions and which were not?
Did all the airline staII and the passengers exhibit technical and interactive skills?
Elaborate.
What were the reasons Ior the delay at both the airports?
; What steps could have been taken to rectiIy the situation as a service recovery
strategy?
; What kind oI an image did the parting remarks convey to the passenger? II you
were the passenger, how would you perceive the quality oI services rendered by
the airline?

NOV: 2002
On checking into a 5 Star Hotel in Bangalore recently, Anand was impressed by the
courtesy extended to the visitor in the Iront oIIice polite, Iriendly and eIIicient. The
checking in card was Iilled and ready, just waiting to be signed. He walked upto the room
and his bag arrived at the time. A Iew minutes later, the bearer came in with a welcome
drink which was "on the house". It was certainly an excellent start.
Later when he settled down, he discovered that there was no table lamp in the room and
this made it diIIicult to read. The press button Ior the shower did not work, so one had to
bend down and keep it pressed right through a shower. The wash basin became easily
clogged and was virtually unusable. A complaint was made to the housekeeping
department and they said they would certainly attend to it. ormally it happened Ior a
whole day.
The next day, a complaint was given to the Reception desk. They said they would surely
look into it. In the evening it was discovered that only the basin had been attended to, but
the Iloor was littered with some screws and nails lying in a pool oI dirty water. Another
complaint was lodged the Iollowing morning at the Reception desk, but again it remained
unattended to by the evening. But the unkindest cut oI all was inIlicted the Iollowing
morning when the girl at the Reception desk (who was new recruit, perhaps wrongly
selected and obviously inadequately trained) crowed in her most pleasantly sarcastic
manner: "Good morning, Mr. Anand, any Iurther complaints today? I am all ears!"
At that moment, the hotel lost a customer. The back room services rendered by the Hotel
were poor and she compounded the problem with poor Iront oIIice service. She had
Iorgotten or perhaps never been taught that in the marketing oI a service, the Iocus is not
just on delivering goods, but on satisIying the reasonable expectations oI paying
customer.
Questions:
What were the moments oI truth (indicate various interactions).
Highlight the critical and non-critical incidents.
Which were the supplementary/peripheral services missing in the hotel? JustiIy
their importance.
; What steps could have been taken to resolve the problem eIIectively?

NOV: 2003
The passengers were through with their Iinal security check and were boarding the
aircraIt The LOTUS Airlines personnel were awaiting the arrival oI a V.I.P. to clear the
take oII. Finally the V.I.P arrived halI an hour late and went directly Ior the security
check. During the check the security personnel came across weapon with live cartilages.
He was requested not to carry the weapon with live cartilages. He was requested not to
carry the weapon on Ilight. However the V.I.P. reIused to part with the weapon Ior
personal security. When he was asked Ior the license, he said he was not carrying it. The
security personnel reIused to give permission to the V.I.P. to board the aircraIt .This led
to heated argument and in rage 'Lille V.I.P. threw one oI the security staII across the
Iloor.
This Iurther delayed the Ilight. The passengers were very restless since they were in the
aircraIt last 1 hours. To top it up they were not allowed to leave the aircraIt Ior security
purpose.
Questions:
In this case, where do the service gaps exist and how would you close the gaps?
Elaborate the importance oI "People" in airline services?
As service provider how would you manage this kind oI service encounter? What
is a service encounter?
; What would you do when prevention Iails and damage is done?

NOV: 2004
Krishnan was delighted to get a phone call one evening Irom the Iinance company,
saying that the new car that had been launched only a month back was ready Ior delivery.
The appointment was Iixed Ior next morning at 10. Krishnan and his Iamily reached the
show room promptly at 10, hoping to collect the vehicle beIore the inauspicious "rahu
kalam" began at 12. When he entered the showroom, nobody, not even the receptionist
asked him who he was and what he wanted. AIter standing around Ior sometimes, he
asked a gentleman who was walking past, whether he would be attended to. He was told
to wait. An empty chair was pointed out him. The rest oI the Iamily had to stand. AIter a
Iew minutes, a young lady came with a Iile, and all small smiles, asked whether he had
brought the balance money? "What balance "asked Krishnan? I was, told that all
payments had been made and I can take the car this morning". The lady went to check.
AS Krishnan was waiting, another well-dressed person, all smiles again, came and asked
whether he would like to select accessories Irom the list, which were two Iull pages. "Let
me get the car Iirst", shouted Krishnan. The original Lady returned all smiles again,
conIirming that no payments were due and handed him the papers. One was an insurance
receipt. Krishnan wanted to know what insurance cover had been taken. "This is the
insurance cover," the lady said, "Yes what kind oI cover", Krishnan wanted to know. She
went back to check again and conIirmed that it was a comprehensive cover. Krishnan was
then required to go to the workshop, where, aIter more delay and paper work, he got the
car at 12.30 pm.
Questions:
IdentiIy the Service Gaps in this case and how would you rectiIy the same?
Explain the "core" and "supplementary" products in the context oI above case.
How do you Iind the "people" Iactor in the above case? What skills, according to
you, are lacking in them?
; As a show room manager what service recovery measures would you take?

NOV: 2005
The computerized reservation system in Mumbai was closed on 10" January, 1988. The
soItware was being upgraded Ior better service. On the day, manual systems were put into
operation, but only to attend to needs oI passengers leaving by trains up to 12 noon on the
11`h A person, who was booked on the train leaving at 7 a.m. on the 12", could not avail
oI the manual Iacilities Ior cancellation. !I he had done so, he would have lost Rs. 30 as
cancellation charges. He could only cancel his ticket on the 11th, and as per rules, he
would loose 25. But when he went to cancel it on that day, the cancellation charges
would go upto 50 oI the cost oI the ticket. He pleaded with the local oIIicers to certiIy
on the ticket that he |lad come to cancel it, and that he could make a separate claim Ior
reIund later but this could not be done, as per rules. Only the ticket collector on the train
was authorised to endorse on the ticket the Iact oI non-utilization. obody could help,
beyond stating the rules, "The procedure and their helplessness.
Questions:
Discuss this case with the help oI, the cause & eIIect analysis.
What is "Ilower oI service"? Bring out the deIormed petals in this case.
List out the critical and non critical incidents.

NOV: 2006
Kool Travels Pvt. Ltd., a Holiday Company has been arranging regular holiday tours to
Rajasthan. Kool Travels had regular arrangements with Maharaja Hotels Ior
accommodation oI their tourists in Jaipur.
In December, 2005 Mr. Tejas and his Iamily booked a Rajasthan Tour Package with Kool
Travels and checked into Maharaja Hotel in the room allocated to him and his Iamily.
However Mr.Tejas did not like the room and decided to register his complaint about the
room. In the meantime his wiIe, Pooja, switched on the television and was greeted by a
screen with Maharaja Hotel Customer Survey. Using the remote control, Mr. Tejas
punched in his evaluation. To his surprise within two minutes oI the receiving the
electronic communication, the Hotel Manager called him to say that because the Hotel
was entirely booked this being a busy season, the room could not be exchanged, however
the Guest could expect a Hospitality GiIt Irom the Hote! Ior his inconvenience.
The next day a garden Iacing room was available and the Hotel Manager oIIered the
same to Mr. Tejas iI he wished to shiIt. Mr. Tejas declined and told the Manager that he
and his Iamily were quite comIortable in the present room.
Questions:
Give your opinion about expected level oI expected level oI service in the case.
Analyse the service recovery in the case.
What would be the eIIect oI this incident on the Kool Travels?
; Why do you Ieel Mr. Tejas declined to change his room?

NOV: 2007
Dear Customer Service Manager,
Through the XYZ Travel Agency, my wiIe and I booked round trip Iirst class seats on the
Iollowing Dorby Airlines Ilights on the dates indicated:
1
st
July DBA 3072 Mumbai to Heathrow
1
st
July DBA 86 Heathrow to Munich
21
st
July DBA 87 Munich the Heathrow
21
st
July DBA 3073 Heathrow to Mumbai.
In addition, we had booked domestic Ilights between Udaipur-Mumbai and back Ior the
respective dates on another airline.
The out bound Ilights 3072 and 86 seemed pleasant enough at the beginning. However,
mid Ilight on 86, we discovered that we had been poisoned on Ilight 3072, apparently by
the chicken sandwich that was served in Iirst class that day. My wiIe was so ill dying to
get to the restroom to throw up, she passed out cold, hitting her head and we discovered
over the next Iew days, apparently damaging her back. In addition to the nausea and
diarrhea, she had a large knot on her head and headaches Iar several days. Her lower back
has been in constant pain ever since. I, too, was very ill Ior several days. A nice start Ior a
vacation: But it gets worse.
During the long layover between Ilights at Heathrow, there was a tremendous rainstorm,
and our baggage apparently was leIt out in it, a situation that we discovered when we
arrived at our Iirst nights lodging and discovered oI our clothing was dripping wet. In
addition, Iour art prints that we were bringing as giIts Ior our Iriends were ruined.
The return Ilights were better only in that we did not get poisoned; instead we did not get
Ied! We had to ask Ior drinks-, the meals ran out and we were given no choice but an
overdone piece oI stale meat, with tomato-sauce on it. Given our previous experience
with the Iood, we decided not to eat.
Flights 87 was delayed in boarding by two hours, due to the "slowness in cleaning the
aircraIts and late arrival oI the crew" we were told. Also, thanks to heavy rainstorm that
hit Heathrow again, our Ilight take oII was Iurther delayed-, all oI which could have been
avoided, iI the plane had taken oII beIore the rainstorm had started, as scheduled, had the
crew and the cleaning done their jobs on time.
Due to the excess delay at Heathrow, Ilight 87 was very late and we could not make our
connection Irom Mumbai to Udaipur. As it turned out we would have barely been able to
make it iI the Ilight has been on time because Dorby Airlines had changed not only the
Ilight numbers but also the Ilight times on the Heathrow - Mumbai leg oI our journey-
AD WE WERE EVER OTIFIED OF THIS CHAGE UTIL WE ARRIVED AT
THE AIRPORT. As Iirst class passengers we have been treated as cattle!
In Disgust,
J. D'Souza
Questions:
What are services? What are critical incidences in this case?
What according to you are the causes Ior poor service deliver in this case?
Discuss the core and supplementary service in this case.
; What is service recovery? How would you design a complaint handing process?


NOV: 2008
The success oI the package holiday Iirm Club Med in becoming a household name in the
holiday business is no accident. Everyone at Club Med, Irom the C.E.O. to the kitchen
porter, is committed to the ideal oI customer satisIaction through every element oI the
package. Every member oI the staII is aware that guests are coming to experience a
combination oI the resort location, the excellent Iacilities and the all-important element oI
personal interaction. Guests come Ior a total experience not just to have a Iew days away
Irom home and work.
Club Meds success can be attributed to the creative inclusive packages it has developed
all combining the basic mix oI location, Iacilities and personal interaction. A typical Club
Med inclusive packago is comprised oI three meals a day, beer or wine with lunch arid
dinner a swimming pool and gymnasium, sailing, kayaking, snorkeling, tennis, water
exercise, rock climbing, archery, aerobics, volleyball, basket ball, table tennis, billiards,
picnics, evening entertainment and dancing a night club and conIerence Iacilities.
Club Med oIIers diIIerent holiday plans a budget plan, a moderate plan, and a deluxe
plan Irom which customers can choose in accordance with their expectations and
expenditure. Within these categories they oIIer various packages primarily Ior couples,
packages primarily Ior singles and packages primarily Ior Iamilies. The Iamily package
incorporates sub packages selected by parents Ior their children according to age kids
club. Petit club, Mini club and Baby/nursery club. With these various packages, Club
Med oIIers not merely a holiday, but a hassle Iree vacation package.
In the 1970s and 1980s Club Med was in vogue as "the" holiday destination Ior many
single people in Europe. As these customers grow older, got married, and began having
children, their needs changed. In response, Club Med extended its services and packages-
thereby successIully maintaining the loyalty oI its original customers many years.
Using various specialized packages, Club Med has maintained its basic customer's base
while simultaneously extending its market demand to other customer groups.
Questions:
Explain the product / services oIIered by Club Med.
Explain the market segmentation oI Club Med.
Explain the importance oI team work in service sector.
;


SERVICE SECTOR MANAGEMENT

INDEX
NO. CHAPTER PAGE NO.

1.

Introduction oI Services Marketing

1

2.

Key Elements oI Services Marketing

31

3.

Service Quality

61

4.

Services Management

70

5.

Case Study

76

004, Ground Flr., Vyas Apartment, Panchrishi Chs., Sant Namdev Path, Near Gograswadi Gate, Dombivli (E) Dist Thane,Contact : 9820339236 ,
9987761430 , 8097133892

P's OI Service Sector Management

Sr.
o.
Sector Product Place Price Promotion Physical
Evidence
People Process
1 Roadway
(Public Utility
Services)
Tar road,
Medians,
Pavement
Cities, Towns,
village, Forests,
Toll gates
Material ,
Wages,
Salary,
Survey
Publicity,
Word-oI-Mouth
Promotion,
Public Relation
Signs,
Milestone, Road
Roller
Committees,
Govt.dept.
traIIic police,
Engineer,
Labour
Digging, Laying,
Repair, Rolling,
Purchasing,
Contracting,
2 Railway
(Public Utility
Services)
Coaches,
Tracks,
Signals,
Bridges,
Tickets
Station Travel Class,
Distance
traveled,
Luggage
Advertising,
Publicity,
Word-oI
mouth
promotion ,
Public Relation
Tracks, Signals,
Station Stalls,
Trains
Driver, Guards,
Railway Police,
Maintenance
staII, Station
Master
Routing,
Ticketing,
Repair,
Truck Laying ,
Transporting etc
3 Postal and
Courier
( Public Utility
Services)
Letter, Cards,
Stamps,
Saving,
Scheme, Post
boxes, Mail
Bags
Post OIIice,
Post Box,
Collection
centers, Door
receipt
Distance ,
Weight,
ationality,
Speed Size
Advertising,
Publicity,
Word-oI
mouth
promotion ,
Public Relation
Letter, Packets,
Parcels, Mail
Van, Document,
Receipt, Post
Box, Stamp
seal, Pin codes
etc
Government
service,
Postman,
Delivery boy,
Booking staII,
Logistic staII etc
Enquiries,
Booking,
Transportation,
Documentation,
Etc
4 Fire Control
( Public Utility
Service)
Fire Engine,
Helmets,
Clothing
Wherever Iire
erupts e.g.
Houses,
OIIices, Forests
Free service
Ior
public which
is
indirectly
collected Irom
tax
Advertising,
Publicity,
Word-oI
mouth
promotion ,
Public Relation
Fire engine, Iirst
aid kits, hoses,
water, Iire prooI
clothing, cranes
Iire station
Trauma care
personnel,
driver, Iire -
Iighter
Training, Iire
Iighting, Medical
aid, Counseling,
SaIety education
9987761430 , 8097133892
5 Civil Aviation
(Public Utility
Service)
Airplanes,
Tickets,
Magazines,
Skyshoping
Airport Distance
Traveled,
Travel class,
Schemes
Advertising,
Publicity,
Word-oI
mouth
promotion ,
Public
Relation,
Broadcasting
Airplanes,
Airport,
Tarmacs,
Radars, Control
Tower,
Aerobridges,
Passengers,
Cargo,
Conveyors
Pilots, Cabin
Crew, Caterer,
Administrative
staII,
Techniques,
Engineer,
Security, Helper
Ticketing,
Boarding,
Transporting,
Hospitality,
Booking,
Announcement
Etc
6 Electricity
( Public Utility
Services)
Meter,
transIormer,
switch boards,
Distribution
tower and lines,
energy, Iuses
Homes, OIIices,
Factories,
Commercial
Establishments,
ManuIacturing,
Agriculture,
Medical Centers
Industrial
consumption,
Domestic
consumption,
Subsidies
Advertising,
Publicity,
Word-oI
mouth
promotion ,
Public Relation
Transmission
tower, grids,
transIormer,
meters, Iuses,
lines, generating
station, meter
reading cards,
Bills
Electricity
boards,
technician,
administrative
staII
Generation,
Supply,
Metering,
Billing,
Collection,
Repairs,
Emergency calls,
Installation
7 Service
Telecommuni
cation
(Public Utility
Service)
Telephone,
Telegraph, Fax,
Internet ,
Intranet
Telecom center
Home,
Workplace,
Private operator
Distance ,
Time
oI the day,
Duration
Service
charges
Advertising,
Publicity,
Word-oI
mouth
promotion ,
Public Relation
Directories,
Bills,
Telecom
equipment
Yellow colors
display board
Operators,
Service
Personnel
Machine
Operation,
Billing,
Collection
8 Service:
Health Care
Diagnostic and
Surgical
equipment,
First aid kits,
Medicines
Clinic, Hospital,
Camps
Length oI stay,
Level oI illness,
type oI room,
specialist, Tests
required
Advertising,
Publicity,
Word-oI
mouth
promotion ,
Public Relation
Hospital,
Intensive care,
Wards, Medical
shop
ambulance,
Mortuary,
Emergency
Doctors,
urses, Para
medicines,
Pharmacists,
Specialists
Testing, Surgery,
First Aid,
Physical
examination,
Catering,
Laundry
9987761430 , 8097133892
9 Service:
Tourism
Cottage, Pubs,
Restaurant,
Shops,
Accommodatio
n
: 5 1 star
Hill station,
Beaches,
Palaces, Places
oI workship,
Heritage sites
Distance,
Accommodati
on, Food,
Drinks,
Guides, Entry
Iees
Advertising,
Publicity,
Word-oI
mouth
promotion ,
Public Relation
Monument,
Leisure centers,
Healing
Location,
Historic places,
Monument
Tour operator,
Government,
Travel agent,
Tourist guide,
Training,
Guiding,
Explaining,
Preserving,
Documentation
10 Service:
Hotel
(Hospitality
Service)
Reception,
Rooms, Areas,
Entertainment,
Shopping,
Personal care,
Parks,
Swimming
pools
ear airport,
Bus Stand,
Railway station,
Ports, Tourism
spots,
Shopping
areas, Place oI
workship
Occupancy
periods, star
category,
room
capacity, Air
conditions,
Location,
Room
service, taxes
Advertising,
Publicity,
word-oI
mouth
promotion ,
Public
Relation,
Telemarketing
Broadcasting
TariII cards,
Menu cards,
Interior
decoration,
Furnishing,
House Keeping,
Display board,
lighting, Valets
House keeping
staII, Bill boy,
Receptionist
staII, CheIs,
Waiter,
Administrative
staII
House keeping,
Food Preparation
check- in & out,
Foreign
exchange, Room
service, Meeting
arrangement
11 Service
Travel
(Hospitality
Services)
Luxury,
Express, Point-
in-point,
Ordinary
Service, Light
& heavy
vehicles
Tourist places,
Business
Establishment,
Personal Visits,
Airport, Station
Distance
traveled, hours
traveled, Ilat
rates, drivers
tips, luggage,
Iuel
consumed,
Advertising,
Publicity, Word-
oI mouth
promotion ,
Public Relation
Telemarketing ,
Broadcasting
Vehicle,
booking
oIIice, tariIIs,
brochures,
mobile displays
Drivers,
Maintenance
staII, booking
staII, PRO.
Liaison oIIicers
Booking,
vehicles
purchase,
marketing,
billing,
collection,
documentation
12 Service:
Insurance
( Financial
Service)
Policies- whole
liIe, ordinary,
limited,
payment,
convertible,
Marriage,
Accident etc
Branches,
oIIices, home
Premium, rate
oI
death, rate oI
interest,
expenses
incurred
Advertising,
Publicity, Word-
oI mouth
promotion ,
Public Relation
Telemarketing
Broadcasting
Brochure,
leaIlet,
environment,
people,
currency,
client, interior,
decoration
Brokers, agents,
company staII
Application,
veriIication,
sanction, receipt
9987761430 , 8097133892
13 Service:
Advertising
Agency
(ProIessional
Service)
Media
campaign,
layouts,
accounts,
video,
audio tapes
Agency oIIices,
client oIIices,
other meeting
venues
Media involved,
target audience,
time, no. oI
persons,
physical work
Advertising,
Publicity, Word-
oI -- mouth
promotion ,
Public Relation
Photographs,
brochures,
printouts, logo,
trademarks,
brand names
Editors,
copywriter,
creative
thinkers, artists,
media personnel
Layout,
copywriting ,
typography,
photo
setting
14 Service:
Banking
( Financial
Service)
Deposits, letter
oI credit,
Ioreign
currency,
consultancy,
merchant,
banking
Branches,
branch and oII-
site ATM's,
online banking

Interest,
commission,
dividend,
shares, bonds,
non
perIorming,

Advertising,
Publicity, Word-
oI mouth
promotion ,
Public Relation

StaII, cheque
book, currency
receipt,
application
Iorm, counters,
ATM's, credit
cards,

StaII, agent ,
auditors, board
oI directors,
trade union,
Reserve Bank oI
India

Canvassing,
application,
veriIication,
sanctioning,
delivering,
documentation,

15 Service
Entertainment
( Film
Marketing)
Camera, Iilters,
lights, reIlectors,
clap boards,
Iilms, cable,
liquids, make-up
kits, animators
Studios, movie
theaters, Iilms
cities, dubbing
theaters, labs,
recording
theaters,
Salary, wages,
signing amount,
location, rental,
shooting period,
costumes,
special eIIects
Advertising,
Publicity, Word-
oI -- mouth
promotion ,
Public Relation
Telemarketing ,
Broadcasting
Vans, generator,
lights, studios,
theaters, tickets,
hoarding,
crowds,
copyrights,
Art director,
artistic,
audiographers,
designer,
choreographers,
suppliers,
technicians
Editing, Directing,
choreographer,
stunts, music,
production, acting
Iinancing, casting
scripting, dubbing,
mixing,
16 Service
Green
Marketing
Healthcare,
pollution,
abatement
equipment,
bucket oI
earthworms to
improve soil
quality oI garden
atural
environment
Environment
Iriendly raw
materials,
cleaner process
and technology,
compiling with
new green law
Advertising,
publicity, word
oI mouth
promotion,
public relation,
broadcasting
Raw material,
energy
eIIiciency,
waste pollution,
packaging,
liIespan,
reusability ,
recyclables
Environmentalist
Activities,
scientists,
conservation list
educationalist
Preserving,
educating,
documentation,
canvassing,
researching
9987761430 , 8097133892

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