Define Services. Explain the characteristics of services.

How can you differentiate

between goods and services?

“ A service is an act of performance that one party can offer to another that is
essentially intangible and does not result in the ownership of anything. Its
production may or may not be tied to a physical product.” - Philip Kotler

Service is a integral part of human life in modern day. It combine the activities
which are non-physical, intangible & does not result in ownership.It is based on
relationship and value. 
A service is an act, deed, performance or a rendering offered by one person to
another.
Services Marketing stands for the marketing of services as against substantial
products. Services are genetically, are absorbed simultaneously at the time of their
production, cannot be stored, saved or resold once they have been used and
service offerings are unique and cannot be exactly repeated even by the same
service provider.
Services include a wide range varying from education, transportation, hospitality,
finance, real estates, accounting, banking, insurance, taxation, consultancy, health
care etc. These services are together called the services sector or the tertiary sector.

It may be food to a hungry person, water to a thirsty person, medical services to an

ailing person, education to a student, loan to a farmer, transport to a consumer,
communication aid to two persons who want to share a thought, pleasure or pain.

As in covid 19 also
In the digital era most of the things are shifting towards services as prior we buy
books which where in the form of goods but now we are purchasing online digital or
audio book which is totally intangible in a form of service.
1. Intangibility:- Services are intangible and do not have a physical existence,
which means people cannot, touch or see services. This is most defining
feature of a service and that which primarily differentiates it from a product.
 Example-

2. Inseparability: This refers to the fact that services are generated and
consumed within the same time frame. Services cannot be separated from
the service provider.

Example-

3. Variability: There can be a lot of differences in service experience with

customers and employees when they interact during the service delivery. The
quality of the service may vary depending on who provides it, as well as when
and how it is provided.

Example-

4. Perishability: Services cannot be stored or inventoried. As services are

performances they cannot be stored. Services perish as soon as they are
used. A buyer cannot save the massage experience bought from a service
provider. Services last for a specific time and cannot be stored like a product
for later use.

Example-

5. Lack of ownership and transferability – A physical product like a Television

can be owned and transferred to another owner. But a haircut service bought
from a barber cannot be owned and transferred to another buyer.

Example-

6. Simultaneity- Services cannot move through channels of distribution and

cannot be delivered to the potential customers and user. Either users are
brought to the services or providers go to the user. It is right to say that
services have limited geographical area.

Example-
Whereas goods are first produced, and then stored, and finally sold and consumed,
services are first sold, then produced and consumed simultaneously. For the
production of many services 
Write in detail about 7 P's of services marketing with suitable example. And explain
service flower ?

1. Product

In case of services, the ‘product’ is intangible, heterogeneous and perishable. If you

want to market your service successfully the first step is to define what it is you’re
actually selling. It must be more customized & could easily be adjusted and tailored
to each purchaser.  Hence particular care has to be taken in designing the service
offering.

2. Pricing

Pricing is an important element of successful marketing. Pricing should be done

after proper analysis as if you Charge too much, you might struggle to find
customers, pricing too low may end up selling yourself short as well as earning a
reputation for being cheap. Getting the balance right can be tricky & should be
focused on. There are number of things which must be considered while pricing any
services like market rates, your level of expertise and the benefit to the client as
well as your overheads, paying employees and any other expenses.
5. People

: People are a defining factor in a service delivery process, since a service is

inseparable from the person providing it. Thus, a restaurant is known as much for
its food as for the service provided by its staff. The same is true of banks and
department stores. Consequently, customer service training for staff has become a
top priority for many organizations today.

In Booms and Bitner’s service marketing mix, ‘people’ include people who are
directly or indirectly involved in the trade of the product or service. These are
mainly customer contact employees (contact centre employees, representatives,
account managers, etc.), customers, personnel and management. It is mainly the
customer contact employees who are the face of the organization and they
translate the quality into a service. They are the ‘service’ providers on account of
their occupation or entrepreneurship. They include for instance stylists, hair
dressers, coaches, trainers, gardeners, lawyers, contact centre employees, etc. They
deliver a physical service with a visible result

Physical Evidence

The physical evidence within the service marketing mix refers to an environment in
which a service comes about from an interaction between an employee and a
customer which is combined with a tangible commodity. The physical evidence
includes a representation of a service for instance brochures, company stationery,
business cards, reports, company website, etc. A good example is a hotel. The
design, furnishing, lighting and decoration of a hotel as well as the appearance and
the attitudes of the employees have a certain influence on the quality of the service
and customer experience. For example for a theme park, restaurant, or school, its
‘service scape’ or the environment in which the service takes places (service
setting) is of crucial importance when it concerns communicating about the service
and the positive influencing of customer experience.
) Process

Service process is the way in which a service is delivered to the end customer. Lets
take the example of two very good companies – Mcdonalds and Fedex. Both the
companies thrive on their quick service and the reason they can do that is their
confidence on their processes.

On top of it, the demand of these services is such that they have to deliver optimally
without a loss in quality. Thus the process of a service company in delivering its
product is of utmost importance. It is also a critical component in the service
blueprint, wherein before establishing the service, the company defines exactly
what should be the process of the service product reaching the end customer.

2) Place

Place in case of services determine where is the service product going to be located.

The best place to open up a petrol pump is on the highway or in the city. A place
where there is minimum traffic is a wrong location to start a petrol pump. Similarly
a software company will be better placed in a business hub with a lot of companies
nearby rather than being placed in a town or rural area. Read more about the role
of business locations or Place element.

Since service delivery is concurrent with its production and cannot be stored or
transported, the location of the service product assumes importance. Service
providers have to give special thought as to where the service is provided. A fine
dining restaurant is better located in a busy, upscale market as opposed to the
outskirts of a city. A holiday resort is better situated in the countryside away from
the rush and noise of a cit

3) Promotion

Promotions have become a critical factor in the service marketing mix. Services are
easy to be duplicated and hence it is generally the brand which sets a service apart
from its counterpart. You will find a lot of banks and telecom companies promoting
themselves rigorously.
Since a service offering can be easily replicated, promotion becomes crucial in
differentiating a service offering in the mind of the consumer. Service providers
offering identical services such as airlines or banks and insurance companies invest
heavily in advertising their services. This is crucial in attracting customers in a
segment where the services providers have nearly identical offerings.

https://www.coursehero.com/file/p2v24bq/5-The-Flower-of-Service-Core-plus-
Supplementary-Services-Core-Information/

Customers appreciate some flexibility in a businesswhen they make special

requests. They expect itwhen not everything goesaccording to planCore

Service Flower

Flower of service is a visual framework for understanding the supplementary

service elements that surround and add value to the core product.

introduced by Christopher Lovelock

distinguishes between facilitating and enhancing supplementary services. These

different supplementary services can be classified into eight petals.

the dimensions of the flower of services appeared to be influential on the

satisfaction of customers which included (Information, Order Taking, Consultation,
Hospitality, Billing Payment) while two dimensions were found to be not influential
(Exception , Safe Keeping).
Information,

To obtain full value from any service experience, customers need relevant
information New customers and prospects are especially information hungry.

Customer needs may include directions to the physical location where the product
is sold (or details of how to order it by telephone or Web site), service hours, prices,
and usage instructions. Further information, sometimes required by law, could
include conditions of sale and use, warnings, reminders, and notification of
changes.

Finally, customers may want documentation of what has already taken place, such
as confirmation of reservations, receipts and tickets, and monthly summaries of
account activity. Companies should make sure the information they provide is both
timely and accurate; if it's not, customers may be annoyed or inconvenienced

Order Taking,

Once customers are ready to buy, companies must have effective supplementary
service processes in place to handle applications, orders, and reservations. The
process of order taking should be polite, fast, and accurate so that customers do
not waste time and endure unnecessary mental or physical effort. Banks, insurance
companies, and utilities require prospective customers to go through an
application process designed to gather relevant information and to screen out
those who do not meet basic enrollment criteria (like a bad credit record or serious
health problems)

Consultation,

Consultation

Consultation is an enhancing supplementary service that involves a dialog to

identify customer requirements and develop a personalized solution. provides
examples of several supplementary services in the consultation category. At its
simplest, consultation consists of immediate advice from a knowledgeable service
person in response to the request:

Hospitality,

Billing Payment

Exception ,

Safe Keeping

What are the main approaches adopted while pricing the services? Explain the
factors affecting pricing decision of services?

The money claimed against the offered product or service in the market is called
price. In other words the value exchanged for use of the benefits of a certain
product or service by the customers is called price of that product or service. Price
may take the following forms.

Service pricing strategies refer to the different methods services businesses use to
price their services.
Cost based pricing-

Price = Direct costs + Overhead costs + Profit margin

It refers to a pricing method in which some percentage of desired profit margins is

added to the cost of the product to obtain the final price.The service organization
computes the cost of services by summing up material, labor and overhead
expenses and adds a percentage of profit. It is also called cost-plus pricing.

Mark up pricing:- In mark up pricing, the selling price is fixed by adding a margin to
the cost price of the product. Which makes the price of service higher based on the
assumption that demand cannot be known accurately but costs are known. The
objective of following mark up pricing is to maximize profits in the short and
medium run.

Absorption cost pricing:- it is called as full cost pricing method where various
components of manufacturing such as variable costs, fixed costs, selling and
administering the service are worked out. All these costs are added and required
margin of profit is also included.

Marginal cost pricing:-the basic objective here is maximizing the contribution

towards fixed cost. It is a flexible approach for realizing fixed costs through different
service products.

Competition based pricing:- Competition-based pricing refers to a method in which

an organization considers the prices of competitors’ service to set the prices of its
own service or products. The organization may charge higher, lower, or equal prices
as compared to the prices of its competitors.

-aviation industry
Value based pricing:- Demand-based pricing or value based refers to a pricing
method in which the price of a service or product is finalized according to its
demand. If the demand of a service or product is more, an organization prefers to
set high prices for products to gain profit; whereas, if the demand of a service or
product is less, the low prices are charged to attract the customers.

-travel industries

factors affecting pricing decision of services

Internal factors are those factors that are related to the internal environment of the
business.

Marketing Objectives & Marketing Mix Strategies

Those businesses that have kept clear objectives feel convenience in setting an
effective price for their products or services, because their prices are built on the
ground of stated objectives.