1. Definition of services with service sectors examples.

A type of economic activity that is intangible, is not stored and does not result in ownership. A

service is consumed at the point of sale. Services are one of the two key components
of economics, the other being goods.
EXAMPLE: Housekeeping, tours, nursing, and teaching.
2. Characteristics of services- Intangibility, Heterogeneity, Inseparability and Perishability (IHIP)
Intangibility: Unlike product, service cannot be touched or sensed, tested or felt before
they are availed. A service is an abstract phenomenon.
Heterogeneity: The features of service by a provider cannot be uniform or standardised. A
Doctor can charge much higher fee to a rich client and take much low from a poor patient.
Perishability: Service is highly perishable and time element has great significance in service
marketing. Service if not used in time is lost forever. Service cannot stored.
Inseparability: Personal service cannot be separated from the individual and some
personalised services are created and consumed simultaneously.

3. Moments of Truth
Moment of truth in marketing, is the moment when a customer/user interacts with a brand,
product or service to form or change an impression about that particular brand, product or
service.

4. Service Blue Print or Service Mapping

The service blueprint is a technique originally used for service design, but has also found
applications in diagnosing problems with operational efficiency. The service blueprint is an
applied process chart which shows the service delivery process from the customer's
perspective. The service blueprint has become one of the most widely used tools to manage
service operations, service design and service positioning.A simple way to think about
blueprints is as a process chart which consists of inputs, process and outputs.
Inputs (raw materials) → Process (transformation) → Outputs (finished goods)

A service blueprint is always constructed from the customer's perspective.

5. Service Blue Print Components
 Physical evidence
 Customer actions
 Frontstage or visible employee actions
 Backstage or invisible contact employee actions
 Support processes
 Lines
 Optional categories
 Come up with a customer scenario

6. QFD: Quality Function Deployment

Quality Function Deployment (QFD) is a structured approach to defining customer needs or

requirements and translating them into specific plans to produce products to meet those
needs. The “voice of the customer” is the term to describe these stated and unstated customer
needs or requirements.
7. Service Encounter

Service encounters are transactional interactions in which one person (e.g., a vendor, office
clerk, travel agent) provides a service or good (e.g., a product, an appointment, airline tickets)
to another person.
8. Tangibility Spectrum

9. Physical evidence and Service scape

Physical evidence refers to everything your customers see when interacting with your
business. This includes:
 the physical environment where you provide the product or service
 the layout or interior design
 your packaging
your branding.
 Service scape is a model that puts its onus on explaining the behavior of customers and
clients within the service environment. 

10. 7ps of Services

 Product - The Product should fit the task consumers want it for, it should work and it
should be what the consumers are expecting to get.
 Place – The product should be available from where your target consumer finds it
easiest to shop. This may be High Street, Mail Order or the more current option via e-
commerce or an online shop.
 Price – The Product should always be seen as representing good value for money.
This does not necessarily mean it should be the cheapest available; one of the main
tenets of the marketing concept is that customers are usually happy to pay a little
more for something that works really well for them.
 Promotion – Advertising, PR, Sales Promotion, Personal Selling and, in more recent
times, Social Media are all key communication tools for an organisation. These tools
should be used to put across the organisation’s message to the correct audiences  in
the manner they would most like to hear, whether it be informative or appealing to
their emotions.
 People – All companies are reliant on the people who run them from front line Sales
staff to the Managing Director. Having the right people is essential because they are
as much a part of your business offering as the products/services you are offering.
 Processes –The delivery of your service is usually done with the customer present so
how the service is delivered is once again part of what the consumer is paying for.
 Physical Evidence – Almost all services include some physical elements even if the
bulk of what the consumer is paying for is intangible. 

11. SQI (Service Quality Indicators)

SERVQUAL is based on a set of five dimensions which have been consistently ranked by
customers to be most important for service quality, regardless of service industry.

12. Tangibility Spectrum (least to high)

13. Service Delivery (Berner &Gronoos): service delivery framework (SDF) is a set of
principles, standards, policies and constraints to be used to guide the designs,
development, deployment, operation and retirement of services delivered by a service
provider with a view to offering a consistent service experience to a specific user
community in a specific business context., An SDF is the context in which a service
provider's capabilities are arranged into services.

14. Critical Incidents and Critical Incidents Techniques (Dissatisfied or Delighted)

When studying services marketing, the term “critical incident” refers to a service
encounter where the customer is extremely dissatisfied with the service firm and/or its
staff.
The critical incident technique (CIT) is a research method in which the research
participant is asked to recall and describe a time when a behavior, action, or
 occurrence impacted (either positively or negatively) a specified outcome (for
example, the accomplishment of a given task).
15. Service Quality
An assessment of how well a delivered service conforms to the client's expectations.
Service business operators often assess the service quality provided to their customers
in order to improve their service, to quickly identify problems, and to better assess
client satisfaction.
16. ServQual Dimensions (five dimensions of service quality- Reliability, Responsiveness,
Assurance, Empathy and Tangibility (RRAET)
These dimensions defined by the SERVQUAL measurement instrument are as follows:

 Tangibles: appearance of physical facilities, equipment, personnel, and

communication materials.
 Reliability: ability to perform the promised service dependably and accurately.
 Responsiveness: willingness to help customers and provide prompt service.
 Assurance: knowledge and courtesy of employees and their ability to convey trust
and confidence.
 Empathy: the caring, individualized attention the firm provides its customers.
17. Search Quality, Experience Quality & Credence Quality
 Search quality conceptually captures aspects of products or services that potential
consumers can and would like to assess before they select a particular product or
service.
 Experience quality is the value of an experience to customers. It is a measure
of customer perceptions that can be applied to diverse services including areas such as
medicine, technology, travel, entertainment and hospitality.
 Credence quality is quality that is difficult for customers to evaluate even after
they have consumed a product or service. It is associated with products and services
that require special skills to evaluate or where results aren't immediately apparent.

18. Triangle of services marketing (internal, external, and interactive marketing)

External Marketing:
Companies use external marketing to make promises to customers. External marketing is
 any communication to customers (or potential customers) that happens before service
delivery starts.
Internal marketing: Internal marketing involves motivating employees to work as a
team to make customers satisfied. This is obviously true for customer service
representatives. It can equally be applied to all employees. This results in everyone, at all
levels of the organization, being empowered to deliver great customer service.
Interactive Marketing: Interactive marketing occurs when employees and customers
interact. It is here where the promises made during external marketing are either kept or
broken by employees or sub-contractors.
19. National Customer Satisfaction Index (USA)
The National Customer Satisfaction Index UK (NCSI-UK) is an economic
indicator of customer evaluations of the quality of products and services available to
household consumers in the United Kingdom.

20. Consumer Confidence Index.

The Consumer Confidence Index is a survey, administered by the Conference Board
that measures how optimistic or pessimistic consumers are regarding their expected
financial situation.

21. American Customer Satisfaction Index

The American Customer Satisfaction Index (ACSI) is an economic indicator
that measures the satisfaction of consumers across the U.S. economy. ACSI data show
that certain sectors, industries and companies have consistently high customer
satisfaction, while others are almost always below average (with the National ACSI
score reflecting the average). The service sector industries, which involve more
human intervention in the consumption process, tend to perform below average.

22. Customer Perception and factors effecting customer perceptions

Customer perception definition: “Marketing concept that encompasses a customer's
impression, awareness, or consciousness about a company or its offerings.” When a
customer sees advertisements, promotions, customer reviews, social media feedback,
etc. relating to a product, they develop an impression about the product.
Factors effecting customer perceptions
 Service Quality. This is extremely important because customers who have a
negative experience with a company's customer service center rarely return to
make additional purchases in the future.
 Reputation.
 Customer Experience
 Consistency
 Value
23. Customer expectation and factors effecting customer expectations

Customer expectation encompasses everything that a customer expects from a

product, service or organization. Customer expectations are created in the minds of
customers based upon their individual experiences and what they have learned,
combined with their pre-existing experience and knowledge.
24. Customer satisfaction and customer delight
Customer satisfaction is defined as a measurement that determines how happy
customers are with a company's products, services, and capabilities. Customer
satisfaction information, including surveys and ratings, can help a company determine
how to best improve or changes its products and services. Customer delight is
surprising a customer by exceeding his or her expectations and thus creating a positive
emotional reaction. This emotional reaction leads to word of mouth.
25. Relationship Marketing
Relationship marketing is a facet of customer relationship management ( CRM) that
focuses on customer loyalty and long-term customer engagement rather than shorter-
term goals like customer acquisition and individual sales. The goal of relationship
marketing (or customer relationship marketing) is to create strong, even emotional,
customer connections to a brand that can lead to on-going business, free word-of-
mouth promotion and information from customers that can generate leads.

26. Customer Relationship Management (CRM)

Customer relationship management (CRM) is a technology for managing all your
company’s relationships and interactions with customers and potential customers. The
goal is simple: Improve business relationships. A CRM system helps companies stay
connected to customers, streamline processes, and improve profitability.
27. Know Your Customer (KYC)
Know your customer or know your client (KYC) guidelines in financial services
requires that professionals make an effort to verify the identity, suitability, and risks
involved with maintaining a business relationship. The procedures fit within the
broader scope of a bank's Anti-Money Laundering (AML) policy.
KYC” refers to the steps taken by a financial institution (or business) to: Establish
customer identity
  Customer Identification Program (CIP)
 Customer Due Diligence.
 Ongoing Monitoring.

28. Life time value of customers (LTVC)

Lifetime Value of customer is the present value of the future cash flows or the value
of business attributed to the customer during his or her entire relationship with the
company.
29. Customer acquisition
Customer acquisition refers to gaining new consumers. Customer acquisition
management refers to the set of methodologies and systems for managing customer
prospects and inquiries that are generated by a variety of marketing techniques. Some
successful customer acquisition strategies include customer referrals, customer loyalty
programs, and the like. One way to think about customer acquisition management is
to consider it the link between advertising and customer relationship management, as
it is the critical connection that facilitates the acquisition of targeted customers in an
effective way.
30. Customer Retention strategies
 Customer retention is the collection of activities a business uses to increase the
number of repeat customers and to increase the profitability of each existing
customer.
 Customer retention strategies enable you to both provide and extract more
value from your existing customer base. You want to ensure the customers
you worked so hard to acquire stay with you, have a great customer
experience, and continue to get value from your products.

31. Customer enhancement

Customer Experience Enhancement means looking at each step in the
customer experience to determine how to manage the experience at each customer
touch point. Just as important, it means evaluating the transitions between touch
points.
32. Customer Defection
Customer defection is a common term for the loss of a customer to a
competitor. There are several common reasons that customers leave: Brand Value. A
decline in your brand value. Customer Defection is when customers take their
business to competitor’s when they feel that their needs or wants are not met or if
they encounter breakdown.
33. Types of customer complaints
The Most Common Types of Customer Complaints, and How to Handle Them

 The Meek Customer.

 The Aggressive Customer.
 The High Roller Customer.
 The Rip-Off Customer.
 The Chronic Complainer Customer
34 .Complaint as a Gift.
A Complaint Is a Gift provides a great means for explaining how a company can
provide service excellence and handle complaints through improved customer
relationships, which ultimately will increase revenue and satisfaction.”

35 .Service Recovery
Service recovery is a company's resolution of a problem from a dissatisfied customer,
converting them into a loyal customer. It is the action a service provider takes in
response to service failure.
The 4 basic steps to customer service recovery

 Apologize. Go beyond an apology, and ask for forgiveness, a genuine one, that
is.
 Review. Before solving the problem, you should make a collaborative review of
it with the help of the complainant.
 Fix and follow up. This crucial step is where the action really starts to take place.
 Document.

36. Service Recovery Strategies

Service recovery involves those actions designed to resolve problems, alter negative
attitudes of dissatisfied consumers and to ultimately retain these customers. The study
examined that service recovery strategies (apology, compensation) impact on the
customer satisfaction.
37. Service Recovery Paradox
 It’s a proven fact that customers can often be more loyal to your business after they
have experienced a service failure, than if it had never happened in the first place. ‘If
there is a positive disconfirmation, that is, if perceptions of service recovery
performance are greater than expectations, a paradox might emerge (secondary
satisfaction becomes greater than prefailure satisfaction). Otherwise, in the case of a
negative disconfirmation, there is a double negative effect, as service failure is
followed by a flawed recovery.”

38. Service Guarantee

As per the dictionary definition ‘service guarantee’ as defined, “an assurance
of the quality of or length of use to be expected from product offered for sale, often
with a promise of reimbursement.” A guarantee is a particular type of recovery tool.
Although guarantees are relatively common for manufactured products, they have
only recently been used for services.
Types of Service Guarantees
Further, previous research has identified four types of service guarantees:
(i) Specific,
(ii) Unconditional,

(iii) Implicit and

(iv) Internal.

36 Stages in New Service Development

These models generally consist of the following seven steps:
(1) Formulation of new product/service development strategy;
(2) Idea generation;
(3) Screening and evaluation;
(4) Business analysis;
(5) Concept development;
(6) Concept testing; and
(7) Commercialization.

37 Customer Defined Service Standards (CDSS)

  Customer service standards are a company's rules or guidelines that inform
and shape the customer's relationship with the business at every step
throughout the customer experience.
 Customer service standards are a set of policies and expectations that have
been created and adopted by a company. The standards cover all the points of
contact the business may have with the customer. In a sense, they are the
expectations or rules for conduct in any customer transaction and how you
want customers to feel about their experience with your company. After all,
customers buy based on emotions rather than logic or reason. Exceptional
customer care inspires future purchasing behavior more than data and facts.

38 One Time Fixes

One time fixes are technology, policy or procedure changes that,when instituted
address customer requirements.
A Type of Company-Defined standards that are Technology, Policy, or procedure
changes that, when instituted, address customer requirement. A service standard
should be linked to an operational performance target or the frequency to which the
organization expects to meet the service standard.

39 Hard Service Standards & Soft Service Standards

 Hard services standards are the things that can be counted, timed, or observed
through audits (time, numbers of events).
 Soft standards are the opinion-based measures that cannot be observed and
must be collected by talking to customers (perceptions, beliefs).
43. Customer as Partial Employee
 A partial employee is defined as a customer who temporarily. Participates in
the service delivery process, contributing resources to the service.
 Customers not only bring expectations and needs but also need to have
relevant service production competencies.
 For the relationship to last, both parties need to cooperate with each other.

44 The customer who complains is your friend.”

A friend is someone who tells you when something is wrong. A customer
complaint is that friend. A complaint is not a problem. A complaint is an
opportunity to improve, to better train your staff, to audit your products and
processes, to better service your customers.
 Gives you the opportunity to build customer loyalty.
 Allows you to better under your customers’ needs
 Identify key areas of improvement
 Gives you the chance to exceed expectations

45 "A complaint is a gift."

 Complaints policy and guidelines based on “complaint welcoming” culture.
 Complaints data base to maximize complaints capture
 Complaint handling training, including empathy and conflict handling trained-
front line staff and induction training.
 Target response and resolution times.
 Regular complaints reporting.
 46 Customer is the King!
It is true that Customers are considered to be the King of the market. This holds true in
today's market scenario; Customer relies on Quality: You cannot give anything to your
customer; for retaining them, you need to lure them with the quality product.

47 Customer is always right?

The phrase the customer is always right is an ideal that many stores try to adhere to as
their customer service policy. It means that if the customer is unhappy about a product,
the business will try to fix the problem and make the customer happy. 1 The Customer
is Always Right Meaning.

48 Zone of Tolerance
The zone‐of‐tolerance (ZOT) is an innovative concept that has attracted recent attention
in the services marketing domain. The ZOT represents a range of service performance
that a customer considers satisfactory, which recognizes multiple expectation standards,
specifically adequate and desired expectations.

49 Gaps Model of Service Quality

The five gaps that organizations should measure, manage and minimize:

 Gap 1 is the distance between what customers expect and what managers think
they expect - Clearly survey research is a key way to narrow this gap.
 Gap 2 is between management perception and the actual specification of the
customer experience - Managers need to make sure the organization is defining the
level of service they believe is needed.
 Gap 3 is from the experience specification to the delivery of the experience -
Managers need to audit the customer experience that their organization currently
delivers in order to make sure it lives up to the spec.
 Gap 4 is the gap between the delivery of the customer experience and what is
communicated to customers - All too often organizations exaggerate what will be
provided to customers, or discuss the best case rather than the likely case, raising
customer expectations and harming customer perceptions.
 Finally, Gap 5 is the gap between a customer's perception of the experience and
the customer's expectation of the service - Customers' expectations have been
shaped by word of mouth, their personal needs and their own past experiences.

50. Service Culture

A service culture exists when you motivate the employees in your organization to take a
customer-centric approach to their regular duties and work activities. Sales and service
employees put customer needs first when presenting solutions and providing support.
51. The Perception Gap
52. SSTs (Self Service Technologies)
Self-Service Technologies (SSTs) are technological interfaces allowing customers to
produce services independent of involvement of direct service employee. [1] Self-
Service technologies are replacing many face-to-face service interactions with the intention to
make service transactions more accurate, convenient and faster. Examples: Automatic Teller
machines (ATMs), Self pumping at gas stations, Self-ticket purchasing on the Internet and
Self-check-out at hotels and libraries are typical examples of self service technologies.
53. Jay Customers
Customer who intentionally act in a thoughtless or abusive manner, causing problem for
the company (Lovelock). 7 Types of Jay-customers
The Thief: " No intention of paying " Shoplifting " Stolen Credit cards " Sneaking into
movies !
The Cheat: " Fake insurance Claims " Wardrobing " 100% Satisfaction guaranteed
The Belligerent: " Angry drunk people " Customer service calls " Air rage
The Rule Breaker: " No Shirts, no shoes, no service " Reckless Skiers " Roller coasters
The Vandal: " Graffiti " Cigarette burns " Broken property
The Family Feuder: " Fight with own family " Food fights " Fights with other customers
The deadbeat-:" Delay payment " “I’ll pay tomorrow”
The term Jay-customer is derived from Jaywalkers in the U.K., for those who walk across the
street irresponsibly.

54. Service Audit

Customer service audits uncover what your company and employees are doing well and
help identify areas of opportunity to improve the customer service experience. A third-party
audit provides an unbiased experience that may not be the same as what happen “when the
bosses are watching.”

55. Return on Quality

An internal management approach that evaluates the financial return of investments in quality.

56. Segmentation, Targeting and Positioning (STP Strategy)

The processes of segmentation, targeting and positioning are parts of a chronological order
for market segmentation.
 Segmentation comprises identifying the market to be segmented; identification,
selection, and application of bases to be used in that segmentation; and development of
profiles.
 Targeting is the process of identifying the most attractive segments from the
segmentation stage, usually the ones most profitable for the business.
 Positioning is the final process, and is the more business-orientated stage, where the
business must assess its competitive advantage and position itself in the consumer's
minds to be the more attractive option in these categories.

57.Integrated Marketing Communication

Integrated Marketing Communications (IMC) is a concept under which a company carefully

integrates and coordinates its many communications channels to deliver a clear and consistent
message. It aims to ensure the consistency of the message and the complementary use of
media. IMC is an integration of all marketing tools, approaches and resources within a
company which maximizes impact on the consumer mind resulting in maximum profit at
minimum cost. It uses several innovative ways to ensure that the customer gets the right
message at the right place and right time.

58. Advertising
Advertising is a marketing tactic involving paying for space to promote a product, service,
or cause. The actual promotional messages are called advertisements, or ads for short. The
goal of advertising is to reach people most likely to be willing to pay for a company's
products or services and entice them to buy.

59. Personal selling

Personal selling is where businesses use people (the "sales force") to sell the product
after meeting face-to-face with the customer. The sellers promote the product through their
attitude, appearance and specialist product knowledge. They aim to inform and encourage the
customer to buy, or at least trial the product.
60. Public Relations
Public relations is a strategic communication process that builds mutually beneficial
relationships between organizations and their publics. Public relations can also be defined as
the practice of managing communication between an organization and its publics.
Public relations functions are designed to help build trust and credibility with groups that
are important to your organization. They help raise awareness about your organization as well
as give it a chance to define, control and distribute its message to those both inside and
outside your company.