Marketing of Services

Definition, Characteristics and Classification of Services
AKTUTHEINTACTONE21 MAR 20194 COMMENTS
A service is an act or performance offered by one party to another. Although the process may be
tied to a physical product, the performance is essentially intangible and does not normally result
in ownership of any of the factors of production.
Services are economic activities that create value and provide benefits for customer’s specific
times and places, as a result of bringing about a desired change in – or on behalf of – the
recipient of the service. Service is those separately identifiable, essentially intangible activities
which provide want-satisfaction, and that are not necessarily tied to the sale of a product or
another service. To produce a service may or may not require the use of tangible goods. However
when such use is required, there is no transfer of title (permanent ownership) to these tangible
goods.
One common method of defining a service is to distinguish between the ‘core’ and ‘peripheral’
elements of that service. The ‘core’ service offering is the ‘necessary outputs of an organisation
which are intended to provide the intangible benefits customers are looking for’. Peripheral
services are those which are either ‘indispensable for the execution of the core service or
available only to improve the overall quality of the service bundle.
Services include all economic activities whose output is not a physical product or construction, is
generally consumed at the time it is produced, and provides added value in forms (such as
convenience, amusement, timeliness, comfort or health) that are essentially intangible concerns
of its first purchaser.
Examples of services are-
Transportation & public utilities, Hotels and other lodging places, Rail-road transportation,
Personal services, Local and inter-urban passenger transit, Business services, Trucking and
warehousing, Auto repair, services and garages, Water transportation, Miscellaneous repair
services, Air transportation, Motion pictures, Pipelines except natural gas, Amusement and
recreation services, Health service, Communication, Legal services, Telephone and telegraph,
Educational services, Radio and television broadcasting, Social services and membership
organizations, Electricity, Gas, Sanitary services, Miscellaneous professional services,
Wholesale trade, Private household services, Retail trade, Finance, insurance, and real estate,
Banking, Military, Credit agencies other than banks, Government enterprises Security &
commodity brokers, Local government, Real estate, Education, Holding and other investment
companies and Other services.
7 Important Characteristics of Services
(i) Perish-Ability
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.
(ii) Fluctuating Demand
Service demand has high degree of fluctuations. The changes in demand can be seasonal or by
weeks, days or even hours. Most of the services have peak demand in peak hours, normal
demand and low demand on off-period time.
(iii) Intangibility
Unlike product, service cannot be touched or sensed, tested or felt before they are availed. A
service is an abstract phenomenon.
(iv) Inseparability
Personal service cannot be separated from the individual and some personalised services are
created and consumed simultaneously.
For example hair cut is not possible without the presence of an individual. A doctor can only
treat when his patient is present.
(v) 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.
(vi) Pricing of Services
Pricing decision about services are influenced by perish-ability, fluctuation in demand and
inseparability. Quality of a service cannot be carefully standardised. Pricing of services is
dependent on demand and competition where variable pricing may be used.
(vii) Service quality is not statistically measurable
It is defined in form of reliability, responsiveness, empathy and assurance all of which are in
control of employee’s direction interacting with customers. For service, customer’s satisfaction
and delight are very important. Employees directly interacting with customers are to be very
special and important. People include internal marketing, external marketing and interactive
marketing.
Classifications of Services
In order to be able to make a clear and relevant classification of services, we would first need to
understand the concept of the word itself. Services usually refer to processes and not physical
products. To understand more, read this article on difference between goods and services. Some
services may include people whereas other services (like online services) may including objects
which are managed by people.
Examples of services which include people can be a hair salon, education, theater, restaurants,
and public transportation. On the other hand services that include objects include repairs and
maintenance, dry cleaning, banking, legal services, insurance, etc.
1. Classification of services based on Intangibility
There are objects in this world which cannot be tangibly quantified. For example – the number
of algorithms it takes to execute your banking order correctly, or the value of your life which is
forecasted by insurance agents. These services are classified on the basis of intangibility.
(i) Services directed at people’s mind: Services sold through influencing the creativity of humans
are classified on the basis of intangibility.
(ii) Services directed at intangible assets: Banking, legal services, and insurance services are
some of the services most difficult to price and quantify.
The most intangible form of service output is represented by information processing. The
customer’s involvement in this type is service is not required. Generally, customers have a
personal desire to meet face to face but there is no actual need in terms of the operational
process. Consultancy services can be an example of this type of services where the relationship
can be built or sustained on trust or telephone contact. However, it is more indicated to have a
face-to-face relationship in order to fully understand the needs of the customer.
A more general classification of services based on the type of function that is provided through
them can be as follows:
2. Business services.
3. Communication services.
4. Construction and related engineering services.
5. Distribution services.
6. Educational services.
7. Environmental services.
8. Financial services.
9. Health-related and social services.
10. Tourism and travel-related services.
11. Recreational, cultural, and sporting services.
12. Transport services.
13. Other services not included elsewhere.
Difference between Product and Services Marketing

Product Marketing
The entire process, right from the market analysis, to delivering product to the customer and
receiving feedback, is called product marketing. The process is aimed at finding out the right
market for its product and its placement in such a way that it gets good customer response. It
entails promotion and sale of a product to its target audience, i.e. prospective and existing
buyers.
Various activities involved in the product marketing involves analysis of the market,
identification of consumer demand, designing and development of product, pricing, pitching of a
new product, communicating, advertising, positioning, distributing, selling, review and feedback.
Example: Marketing for tangible objects like books, handbags, laptops, mobiles, clothes and so
on.
Service Marketing
When a person or business entity promotes services it offers to its customers or clients, it is
known as service marketing. It is aimed at providing solutions to the problems or difficulties of
the clients. It includes both business-to-business (B2B) and business-to-consumer (B2C)
marketing.
A service is an act of performing something for someone in exchange for adequate consideration.
It is intangible, consumed at the time of its production, can’t be inventoried and resold. Each
service offering is unique in itself because it cannot be repeated exactly alike, even if the service
is rendered by the same person.
Example: Marketing of professional services, beauty parlours or salon, spa, coaching centres,

health services, telecommunication, etc.
Comparison Chart
BASIS FOR COMPARISON PRODUCT MARKETING SERVICE MARKETING
Product marketing refers to the Service marketing implies the

process in which the marketing marketing of economic
Meaning activities are aligned to promote activities, offered by the
and sell a specific product for a business to its clients for
particular segment. adequate consideration.
Marketing mix 4 P’s 7 P’s
Sells Value Relationship
Who comes to whom? Products come to customers. Customers come to service.
It can be owned and resold to It is neither owned nor

Transfer
another party. transferred to another party.
Returnability Services cannot be returned

Products can be returned.
. after they are rendered
They are tangible, so customer can

They are intangible, so it is
Tangibility see and touch it, before coming to
difficult to promote services.
the buying decision.
Product and the company Service cannot be separated

Separability.
producing it, are separable from its provider.
Products cannot be customized as Services vary from person to

Customization
per requirements. person, they can be customized.
They are imagery and hence,
They are non-imagery and do
Imagery receive quick response from
not receive quick
customers.
Quality of a product can be easily Quality of service is not

Quality comparison
measured. measurable.
Key Differences between Product Marketing and Service Marketing
In the points given below, the differences between product marketing and service marketing is
elaborated:-
2. The process in which the marketing activities are aligned to promote and sell a specific product
for a particular segment is called product marketing. The marketing of economic activities, offered by
the business to its clients for adequate consideration, is known as service marketing.
3. In a product marketing, only 4 P’s of the marketing mix are applicable which are product, price,
place and promotion, but in the case of service marketing, three more P’s are added to the conventional
marketing mix, which are people, process and physical existence.
4. When a product is marketed, the company offers value, as it fulfils customer’s requirements.
Conversely, when service is marketed by a company, it offers a relationship to its clients.
5. One thing to be noted that, in product marketing, the company promotes something whose
ownership can be transferred/resold to another party. But in the case of service marketing, the
company promotes something, whose ownership can neither be transferred nor it is resold to the other
party.
6. In product marketing, products reach the buyers, as they can be transported from one place to
another through various distribution channels. Unlike service marketing, where customers come to the
services or the service provider visit customer because services cannot be transported, they are location
based.
7. Products are tangible in nature, they can be felt and touched, which make its promotion easier.
On the other hand, services are intangible, people can only experience it, and so marketing of services is
a bit difficult.
8. If the quality of a certain product is not up to the mark, or it does not fulfil the desired
requirement, it can be returned to the seller. However, it is impossible in the case of services, because
once the services are delivered, they cannot be taken back. So, the marketing of services, should be
done keeping the returnability factor in mind.
9. In product marketing, the product can be separated from its producer, and so they are durable
and can be inventoried. On the contrary, in service marketing, services can not be separated from its
source, i.e. service provider. Hence the production and consumption of services are simultaneous; they
are perishable.
10. Product offered by a company under a particular segment are standardised; they cannot be
changed or altered as per customer’s requirement. In contrast, services offered by a company are highly
variable and can be easily customised as per the requirements.
11. It is a human tendency, that we respond quickly, to what we see and it is a major pro, of product
marketing that it grabs our attention, and encourages sales. As against this, services can’t be seen it can
only be experienced and so the response it a little slow, while marketing services.
12. In product marketing, the quality of the product can be measured by making a comparison
between various products, but this is just opposite in service marketing, where the measurement of
services is not possible.
Conclusion
Whether, it’s a product marketing or a service marketing, the task is equally onerous. However,
with the former, there are some advantages such as tangibility, separability, durability,
transferability, etc. which the latter lacks, making it a bit difficult. Demonstration of product or
service is one of the best ways to promote it. Further, word of mouth also helps in marketing
them.
Paradigms in Services Marketing

4 New Service Marketing Paradigms
13. From Making Contacts to Building Assets
In the old paradigm media buying was, to a large extent, about managing reach and frequency.
Some people are easier to catch than others, so marketers needed to take care to not to contact
some too much and others too little. It wasn’t easy, especially for TV, but we knew how to do it
and do it well.
Then media fragmented, making for smaller audiences and higher premiums for anything that
could be considered “mass.” When digital media came on the scene, the banner ad became
digital analogue to the 30-second TV spot. Then ad networks, DMP’s and trading desks sprung
up and increased efficiency, but devalued eyeballs further.
Amidst the numbers games, everybody knew something was wrong and that led to the concept of
brand engagement. More metrics, such as video completions, were dredged up, but those too
have been found limited in utility. What’s emerging is the concept of value exchange in the form
of owned media assets.
Content marketing and mobile apps are not merely new methods of eyeball capture, but new
possibilities to build assets in the marketplace and increase consumer engagement. Nike+iPod is
just an early shot across the bow. The new digital battlefield will create immersive experiences
in the living room and at the point of sale.
14. From Campaigns to Platforms
Creating marketing assets in the marketplace has had an important ancillary effect. It’s
nullifying the old campaign mindset. Where marketers used to put up a series of ads until the
effectiveness decayed, they now need to build platforms that develop and mature.
30 second ads and pre-roll videos are having to share budgets with web sites, YouTube channels,
e-commerce integration and social media followings that don’t immediately disappear when the
current promotion is over.
Ads themselves are also becoming platforms, which adapt to consumers interactions. No longer
are we showing the same ad or web page to every consumer, but are tailoring the message to past
behavior. We’re broadcasting less and personalizing more.
That creates the need for an new way of working. Brands need to become authors whose stories
unfold over time. The old campaign mentality needs to be replaced by the principle of perpetual
beta, where the brand is always becoming, never being.
 From Awareness to Activation
In the old media paradigm, ads were used to promote awareness. The idea was to keep the brand
top of mind and therefore increase the likelihood of a purchase. Consumers are creatures of
habit and so are loathe to commit to unknowns, but willing to dabble in the familiar but untried.
All that is still true, but falls short. Simple awareness is a no match for the engagement and
advocacy that owned and earned media confer. A brand that relays only on broadcasting
marketing messages will find that they end up promoting the category while their competitors
pick off potential consumers with retargeting efforts.
Yet still, owned and earned media are worthless unless activated. Numbers still matter.
Regardless of how clever the execution might be, any promotion that doesn’t reach consumers in
amount significant enough to have a business impact is worthless.
Therefore, paid media’s role has significantly changed. Whereas before it was used as a
bludgeon to beat down competitors with greater share of voice, its role has shifted to activating
engagement with owned assets. Ads have become a starting point – a door to engagement if you
will. A means to an end rather than an end unto itself.
 From Transactions to Experiences
Probably the biggest paradigm shift has been the way brands interact with consumers.
Previously, the expectation was of a one-time value exchange. Brands advertised a product to
have certain features and attributes. Consumers expected them to deliver it and, if they did, they
were likely to score high on customer satisfaction studies.
Today, consumers expect brands to be partners by helping them get the maximum utility and
enjoyment out of their purchase. L’Oreal Paris, for example, created the Destination Beauty
channel on YouTube to give consumers advice on how to use their products.
Nowhere is the trend as prevalent as in retail. The prime example is the Apple Store, which has
elevated the concept to an art form. However, old economy retail brands from Macy’s to
Nieman Marcus are adapting fast. In a world where media is “always on,” people expect their
brands to be as well.
Present Marketing Environment

Marketing Environment is the combination of external and internal factors and forces which affect the
company’s ability to establish a relationship and serve its customers.
The marketing environment of a business consists of an internal and an external environment. The
internal environment is company specific and includes owners, workers, machines, materials etc. The
external environment is further divided into two components: micro & macro. The micro or the task
environment is also specific to the business but external. It consists of factors engaged in producing,
distributing, and promoting the offering. The macro or the broad environment includes larger societal
forces which affect society as a whole. The broad environment is made up of six components:
demographic, economic, physical, technological, political-legal, and social-cultural environment.
“A company’s marketing environment consists of the actors and forces outside of marketing that affect
marketing management ability to build and maintain successful relationships with target customers”. –
Philip Kotler
Components of Marketing Environment
The marketing environment is made up of the internal and external environment of the business. While
internal environment can be controlled, the business has very less or no control over the external
environment.
14. Internal Environment
The internal environment of the business includes all the forces and factors inside the organisation
which affect its marketing operations. These components can be grouped under the Five Ms of the
business, which are:
15. Men
16. Money
17. Machinery
18. Materials
19. Markets
The internal environment is under the control of the marketer and can be changed with the changing
external environment. Nevertheless, the internal marketing environment is as important for the
business as the external marketing environment. This environment includes the sales department,
marketing department, the manufacturing unit, the human resource department, etc.
 External Environment
The external environment constitutes factors and forces which are external to the business and on
which the marketer has little or no control. The external environment is of two types:
(a) Micro Environment
The micro component of the external environment is also known as the task environment. It comprises
of external forces and factors that are directly related to the business. These include suppliers, market
intermediaries, customers, partners, competitors and the public
 Suppliers include all the parties which provide resources needed by the organisation.
 Market intermediaries include parties involved in distributing the product or service of the
organisation.
 Partners are all the separate entities like advertising agencies, market research organisations,
banking and insurance companies, transportation companies, brokers, etc. which conduct business with
the organisation.
 Customers comprise of the target group of the organisation.
 Competitors are the players in the same market who targets similar customers as that of the
organisation.
 Public is made up of any other group that has an actual or potential interest or affects the
company’s ability to serve its customers.
(b) Macro Environment
The macro component of the marketing environment is also known as the broad environment. It
constitutes the external factors and forces which affect the industry as a whole but don’t have a direct
effect on the business. The macro environment can be divided into 6 parts.
(i) Demographic Environment
The demographic environment is made up of the people who constitute the market. It is characterised
as the factual investigation and segregation of the population according to their size, density, location,
age, gender, race, and occupation.
(ii) Economic Environment
The economic environment constitutes factors which influence customers’ purchasing power and
spending patterns. These factors include the GDP, GNP, interest rates, inflation, income distribution,
government funding and subsidies, and other major economic variables.
(iii) Physical Environment
The physical environment includes the natural environment in which the business operates. This
includes the climatic conditions, environmental change, accessibility to water and raw materials, natural
disasters, pollution etc.
(iv) Technological Environment
The technological environment constitutes innovation, research and development in technology,

technological alternatives, innovation inducements also technological barriers to smooth operation.
Technology is one of the biggest sources of threats and opportunities for the organisation and it is very
dynamic.
(v) Political-Legal Environment
The political & legal environment includes laws and government’s policies prevailing in the country. It
also includes other pressure groups and agencies which influence or limit the working of industry and/or
the business in the society.
(vi) Social-Cultural Environment
The social-cultural aspect of the macro environment is made up of the lifestyle, values, culture,
prejudice and beliefs of the people. This differs in different regions.
Importance of Marketing Environment
Every business, no matter how big or small, operates within the marketing environment. Its present and
future existence, profits, image, and positioning depend on its internal and external environment. The
business environment is one of the most dynamic aspects of the business. In order to operate and stay
in the market for long, one has to understand and analyze the marketing environment and its
components properly.
Essential for planning: An understanding of the external and internal environment is essential for
planning for the future. A marketer needs to be fully aware of the current scenario, dynamism, and
future predictions of the marketing environment if he wants his plans to succeed.
Understanding Customers: A thorough knowledge of the marketing environment helps marketers

acknowledge and predict what the customer actually wants. In-depth analysis of the marketing
environment reduces (and even removes) the noise between the marketer and customers and helps the
marketer to understand the consumer behaviour better.
Tapping Trends: Breaking into new markets and capitalizing on new trends requires a lot of insight about
the marketing environment. The marketer needs to research about every aspect of the environment to
create a foolproof plan.
Threats and Opportunities: A sound knowledge of the market environment often gives a first mover
advantage to the marketer as he makes sure that his business is safe from the future threats and taps
the future opportunities.
Understanding the Competitors: Every niche has different players fighting for the same spot. A better
understanding of the marketing environment allows the marketer to understand more about the
competitions and about what advantages do the competitors have over his business and vice versa.
Services Marketing Mix: Understanding the 7P’s

Services marketing is simply strategizing your marketing for the provision of services both in the context
of a business serving a consumer and as a business serving another business. These include tax and
accounting services, the hotel industry, airlines, telecoms, hairdressers, tailors, dry cleaners, and so on.
It may also include services that are contained in what is a traditional physical product’s sales
environment, such as tech and customer support.
A service is defined as any economic activity that is not tangible, not stored, and does not result in the
transfer of ownership. It is consumed immediately where the sale is made. With this definition in mind,
the three new Ps added to the traditional marketing mix give it a lot of new depth. Since you it is not
tangible and you have to consume it as soon as you buy it, there are a few factors that determine
whether the customer walks away satisfied. These are the environment in which the service is delivered,
the process through which the service is delivered, and the person who delivers the service
The need for extension is due to high degree of direct contact between the firm and the customer, the
highly visible nature of the service production process, and simultaneous production and consumption
of services.
The 7Ps of Service Marketing
15. Product
Physical products can be inspected and tried before buying but pure services are intangible. A customer
cannot go to a showroom to see a medical operation that he is considering. This means that customers
of services suffer higher perceived risk in their decision-making process.
They do not know whether they have purchased the right service until they have used it and in some
cases like medical service and car service, they cannot be sure whether they have received the right
service long after they have consumed the service.
The three elements of the extended marketing mix—people, physical evidence and processes provide
clues about the quality of the service to the customer, and are crucial in influencing the customers’
perception of service quality.
Brand name of a service can also influence the perception of a service. It is sad that service providers do
not expend necessary resources and efforts in building strong brands. In situations where customers are
unsure of the quality of their purchases, strong brands provide an assurance to customers that the
company has a history of good quality.
Customers spend lot of time, money and effort in ascertaining the likely quality of service they propose
to buy and the providers do the same in assuring the customers of high quality of their offering. Both
parties would be greatly served if service providers build strong brands.
Customers would be less unsure of the quality that they will get. Besides promoting its service, a
provider should provide high quality of services consistently so that customers talk about it favourably.
A strong service brand is built by a combination of advertising and positive word-of- mouth publicity.
Both are necessary.
Positive word-of-mouth publicity without being supplemented with advertising will create a strong local
brand. Customers from distant locations would not be attracted to it. Advertising without being
supplemented with positive word-of-mouth publicity will create awareness but customers will still look
for affirmation from customers who have actually used the service.
For some services, trial is possible. Some hotels invite key decision makers of communities to visit their
hotels free of charge to sample the facilities and services. The hotels hope that they will recommend the
hotel to their members.
20. Promotion
The intangible elements of service are difficult to communicate. It may be difficult to represent courtesy,
hard work and customer care in an advertisement. The idea then is to use tangible cues that will help
customers understand and judge the service.
A hotel can show the building, swimming pool, friendly staff and happy customers. Testimonials from
satisfied customers can be used to communicate service benefits. Personal selling can also be effective
in services marketing because of the high perceived risk inherent in many service purchases.
A salesperson can explain details of a personal health plan can answer questions and provide
reassurance. Because of high perceived risk inherent in buying services, sales people should develop lists
of satisfied customers to be used in reference selling. Sales people need to be trained to ask for
referrals.
Customers should be asked if they know of other people or organizations that might benefit from the
service. The customer can then be used as an entry and point of reference when approaching and selling
to the new prospect. Word-of-mouth publicity is critical to success because of the experimental and
experiential nature of services. Talking to people who have visited a resort is more convincing than
reading holiday brochures.
 Price
Price is an important tool in marketing of service. Since it is often difficult to evaluate a service before
purchase, price acts as an indicator of perceived quality. For example, a patient expects a surgeon to
charge high fees, otherwise he cannot be good.
Price is also an important tool in managing demand. Bars charge higher rates in the evenings when they
expect a lot of rush. They charge lower price during daytime expecting some customers, who otherwise
would have visited in the evenings, to visit during daytime due to the lower prices. Less number of
customers have to be turned away in the evening.
Low prices can also attract new customers who cannot afford to or do not want to pay the high prices
charged in the evenings. The facility is more evenly utilized throughout the day. Matching demand and
supply is critical in services because services cannot be stored.
A less utilized facility at some part of the day or year means lost revenue which cannot be compensated.
But the price differential has to be significant to be able to shift customers, as enjoyment of some
services is closely related to the time at which they are consumed.
The experience of watching a movie in a theatre at the weekend is very different from watching it on a
weekday. People would prefer going to a hill-station in summers than at any other time of the year.
Price sensitivity is a key segmentation variable in service sector. Some customers are willing to pay a
much higher price than others. Time is often used to segment price sensitive and insensitive customers.
Long-distance phone calls are cheaper at some part of the day than others.
Some customers may be willing to pay more to get the service early or whenever they want it. It is often
debatable if a patient willing to pay more than the normal fees should be allowed access to a doctor
before another patient who has been waiting for his turn.
But it is slowly being accepted that customers who pay more can have faster access to the service. But
the discrimination has to be done in a discreet and subtle manner, especially when both set of
customers are in the same place, as it often happens in entertainment parks, where two queues of
guests move at different paces toward the rides.
 Place
Distribution channels for services are more direct. There is no storage of services. Production and
consumption is simultaneous, and hence direct contact between customer and service provider is
essential for most services. Growth for many service companies means opening new facilities in new
locations, due to simultaneous production and consumption. The evaluation of locations is a critical skill
for such services.
Expansion often means a multi-point strategy because the whole setup for service production and
marketing has to replicate. Success of many service providers has been due to their ability to choose
profitable new sites and replicating their operations at the new sites.
New technologies permit service companies to provide services without customers coming to their
facility. Information and financial services are leading this revolution. A customer can carry out
transactions with a bank through ATMs, Internet, or the phone. Information products can be widely
distributed through Internet.
But there are many other services where contact between the provider and the customer is still
essential. But service companies should be looking for an alternative to personal contact with customers
for at least a part of the service.
1. People
Service quality is inseparable from quality of service providers. The company has to set standards to
improve quality of service provided by employees and monitor their performance. Without training and
control, employees tend to be variable in their performance leading to variable service quality. Training
is crucial so that employees understand the appropriate norms of behavior.
A service provider trains its employees to identify and categorize different personality types of
customers, and to modify their behavior accordingly. Employees need to know how much discretion
they have to talk informally to customers.
They also need to control their own behavior so that they are not intrusive, noisy or immature. They
need to adopt a customer-first attitude rather than putting their own convenience and enjoyment
before those of their customers.
Employees of service organizations have to be adept in multiple roles. They have to be good in their
primary task and they have to be good in interpersonal skills. They also should have empathy to judge
the service requirement and mood of the customer, and modify their service and behavior accordingly.
A service professional has to have the combined skills of an operations man, a marketer and a human
resource manager. It is not easy to find employees with such diverse skills.
The service facility’s marketing mix should be such that it attracts customers desiring similar benefits
from the provider. The target market has to be very homogeneous and the positioning very precise.
1. Physical Evidence
Physical evidence is about the environment in which the service is delivered and it includes any tangible
goods that facilitate the performance and communication of the service. Customers look for cues to
have an idea about the likely quality of a service by inspecting the tangible evidence.
Prospective customers may peep through a restaurant window to check the appearance of the waiters,
the decor and the furnishings. The layout of a service operation has to balance the operational need for
efficiency and marketing desire for effectively serving the customer.
Service providers should research the concerns of the customer regarding the service and also find out
the cues that the customer will be searching to get an idea of that part of the service which is of concern
to him. The service provider should strengthen those cues.
1. Process
These are the procedures, mechanisms and flow of activities by which a service is delivered to
customers. Self-service cafeteria is very different from a restaurant. The company needs to research the
requirements of its customers and set its processes accordingly so that the required service is delivered.
Since requirements of customers vary widely, processes cannot be standardized.
But if a process is allowed too much flexibility, the efficiency of the facility goes down. Therefore
customer requirements should not be allowed to vary widely. Through targeting the smaller segment of
customers, variations in their requirements can be controlled.
The process is important because in some services, they are visible to customers. Sometimes the
effectiveness of a process can be compromised in the effort to make it look good to the customer. Some
patients feel good when they are extensively examined by the doctor though it may not be necessary.
Some processes in personal grooming and hair care saloons are not really required but service
professionals have to carry them out because customers have come to expect them.
Strategies for Services Marketing: Segmentation,

Targeting & Positioning, Differentiation
Marketing’s goal is to create value for customers and build profitable customer relationships in order to
capture value back afterwards. But how does the company create this customer value? The marketing
strategy addresses exactly that. It is the marketing logic by which the firm wants to create this customer
value and achieve these profitable customer relationships. But consumers are in the centre of
marketing. Therefore, we should not just establish a marketing strategy – it should be a customer-driven
marketing strategy.
First of all, the company has to know which customers it will serve. It must segment the market based
on certain criteria that are relevant to the company. Then, it has to select one or several market
segments to serve. We call these two steps segmentation and targeting. Finally, the company decides
how it is going to serve the selected customers. This involves differentiating itself from other offerings in
the market (differentiation) and aiming at a position in the market and in customers’ minds
(positioning).
In order to do so, the company must identify the total market, then divide it into smaller segments.
Next, select the most promising ones and then focus on how to serve and satisfy the customers in the
selected segments. The company should never neglect the crucial importance of centring the marketing
strategy around the customers’ needs by delivering superior value. Only then, it can survive in today’s
competitive marketplace. But before we can satisfy customers, we first have to understand their needs
and wants. Therefore, the process of establishing a marketing strategy requires thorough and careful
customer analysis.
Segmentation – Step 1 of the Marketing Strategy
Any company should know that it cannot serve all consumers in the total market – at least not profitably
and in the same way. The variety of different kinds of consumers and their needs is simply too large.
There are too many differing types of customers, characteristics, needs, wants, and behaviours. Also,
most companies can serve some segments better than others, because there is a greater fit between the
company’s strengths and the segments’ opportunities. Thus, every company should not try to focus on
the complete market. Instead, it should divide it up into small segments. This is the first step of setting
up a marketing strategy.
The market can be seen as a huge pie. But the company has only one mouth. So, it should choose the
part of the pie which appears most delicious for the company. In other words, the marketer must
determine which of all the segments offer the best opportunities. We can define market segmentation
as the process of dividing a market into distinct groups of customers who have different characteristics,
needs and behaviours and therefore require different products or marketing programmes.
Consequently, we can look at a market segment as a group of consumers responding in a similar way to
a set of marketing efforts.
Therefore, we have to group consumers, based on various variables which are relevant to the company.
These variables can be based on geographic, demographic, psychographic and behavioural factors. But
not every variable is equally useful for each company. For instance, a car manufacturer would gain little
by distinguishing between vegetarians and non-vegetarians. However, for a meat company, this may be
the most important variable in the marketing strategy.
An example for segmentation can easily be recognized in nearly every market. Let’s take a look at the
automotive industry. You will find small, economical cars for those who care mainly about price and
operating economy. But on the other side there are big, sportive cars with large engines for those who
want the best performing cars regardless of price. It would not be wise for the car manufacturer to try
to create one offering for both segments. The resulting marketing strategy would never result in
satisfying results. Instead, the company should focus on meeting the distinct needs of each individual
market segment it wants to serve.
Targeting – Step 2 of the Marketing Strategy
After having distinguished between the separate segments in a market, the company can select one or
more of these segments to enter. Before doing this blindly, each segment should be assessed.
Therefore, targeting is concerned with evaluating each segment’s attractiveness for the company and
selecting one or more segments to enter. The evaluation of segments is based on the question which
segment the company can serve best. In other words, we should concentrate on and enter those
segments in which we can generate the greatest customer value over time.
Whether a company decides to enter one or more segments may also depend on its resources. If these
are limited, it may be better served to focus on one or a few smaller segments, which we call market
niches. In the best case, the company should look for segments competitors overlook or ignore.
Alternatively, a company can decide to enter several segments. This may be based on a strong relation
between the segment in terms of resembling needs, or on the company’s widespread resources. For
instance, clothing companies often target more than only one segment: males, females, children and so
on. A large company such as a major car manufacturer might even decide to serve all market segments
by offering a complete range of products.
However, the usual case is that a company first enters a new market by serving one single segment.
Later, if that proves successful, it may add more segments to serve.
Differentiation and Positioning – Steps 3 and 4 of the Marketing Strategy
Now that we know which segments there are in the market and having chosen one or more to serve, we
have to decide on the how. How will the company differentiate its offerings for each targeted segment
and what position does it aim at in those segments? That are the last steps in setting up the marketing
strategy.
Differentiation and Positioning are strongly related and depend on each other. Positioning, which is the
process of arranging for a product to occupy a clear, distinctive and desirable place relative to
competing products in the minds of target customers, depends on the differentiation. Because through
the differentiation, which is the process of actually differentiating the product to create superior
customer value, we can achieve the desired position in customers’ minds.
Firstly, we need a plan on what position we want to achieve with our product in the minds of our target
customers. The position is the first thing a customer would think of hearing the name of the product or
the brand. This position should be chosen so that it is distinguished from competing products to the
greatest extent possible and lead to the greatest advantage in the target market. Therefore, the
company should first identify possible customer value differences which provide competitive advantages
on that the position can be built on. Should the customer think of our product as the cheapest one, or
the best one, or the nicest one? Or should the customer think it is the most sustainable and
environmentally beneficial one? This must be determined before establishing the marketing strategy.
But only promising those values is not sufficient. If the company promises greater customer value to
achieve a certain position in customers’ minds, it needs to deliver that value. The marketing strategy
means nothing without the means to carry it out. Therefore, positioning depends on differentiation, by
which we actually differ our product from competing ones so that it gives consumers more value. After
the company has chosen a desired position, it can take the steps necessary to deliver and communicate
that position to target customers by differentiation. If the desired position is to be seen as the cheapest
product in the market, the product should be differentiated by an exceptionally low price. If the desired
position is to be thought of as the highest quality product in the market, the product should be
differentiated by actually delivering that exceptional quality competing products do not offer.
Understanding Consumer Behavior

Consumer behavior covers a broad variety of consumers based on diversity in age, sex, culture, taste,
preference, educational level, income level, etc. Consumer behavior can be defined as “the decision
process and physical activity engaged in evaluating, acquiring, using or disposing of goods and services.”
With all of the diversity to the surplus of goods and services offered to us, and the freedom of choices,
one may speculate how individual marketers actually reach us with their highly definite marketing
messages. Understanding consumer behavior helps in identifying whom to target, how to target, when
to reach them, and what message is to be given to them to reach the target audience to buy the
product.
The study of Consumer Behavior helps in understanding how individuals make decisions to spend their
available resources like time, money, and effort while purchasing goods and services. It is a subject that
explains the basic questions that a normal consumer faces − what to buy, why to buy, when to buy,
where to buy from, how often to buy, and how they use it.
Marketing strategies and tactics are normally based on explicit and implicit beliefs about consumer
behavior. Decisions based on explicit assumptions and sound theory and research are more likely to be
successful than the decisions based solely on implicit intuition.
Knowledge of consumer behavior can be an important competitive advantage while formulating

marketing strategies. It can greatly reduce the odds of bad decisions and market failures. The principles
of consumer behavior are useful in many areas of marketing, some of which are listed below:
Analyzing Market Opportunity
Consumer behavior helps in identifying the unfulfilled needs and wants of consumers. This requires
scanning the trends and conditions operating in the market area, customer’s lifestyles, income levels
and growing influences.
Selecting Target Market
The scanning and evaluating of market opportunities helps in identifying different consumer segments
with different and exceptional wants and needs. Identifying these groups, learning how to make buying
decisions enables the marketer to design products or services as per the requirements.
Example − Consumer studies show that many existing and potential shampoo users did not want to buy
shampoo packs priced at Rs 100 or more. They would rather prefer a low price packet/sPouch
containing sufficient quantity for one or two washes. This resulted in companies introducing shampoo
sachets at a minimal price which has provided unbelievable returns and the trick paid off wonderfully
well.
Services Vis-A-Vis goods
COMPARISON
GOODS
SERVICES
Meaning
Goods are the material items that can be seen, touched or felt and are ready for sale to the customers.
Services are amenities, facilities, benefits or help provided by other people.
Nature
Tangible
Intangible
Transfer of ownership
Yes
No
Evaluation
Very simple and easy
Complicated
Return
Goods can be returned.
Services cannot be returned back once they are provided.
Separable
Yes, goods can be separated from the seller.
No, services cannot be separated from the service provider.
Variability
Identical
Diversified
Storage
Goods can be stored for use in future or multiple use.
Services cannot be stored.
Production and Consumption
There is a time lag between production and consumption of goods.
Production and Consumption of goods occurs simultaneously.
Goods
Goods refer to the tangible consumable products, articles, commodities that are offered by the
companies to the customers in exchange for money. They are the items that have physical
characteristics, i.e. shape, appearance, size, weight, etc. It is capable of satisfying human wants by
providing them utility. Some items are made for one-time use by the consumer while some can
repeatedly be used.
Goods are the products which are traded on the market. There is a time gap in the production,
distribution, and consumption of goods. When the buyer purchases goods and pays the price, the
ownership is passed from seller to buyer.
Products are manufactured in batches, which produces identical units. In this way, a particular product
offered by the company will have the same specifications and characteristics all over the market.
Example: Books, pen, bottles, bags, etc.
Services
Services are the intangible economic product that is provided by a person on the other person’s
demand. It is an activity carried out for someone else.
They can only be delivered at a particular moment, and hence they are perishable in nature. They lack
physical identity. Services cannot be distinguished from the service provider. The point of sale is the
basis for consumption of services. Services cannot be owned but can only be utilized. You can
understand this by an example: If you buy a ticket for watching a movie at the multiplex, it doesn’t mean
that you purchased the multiplex, but you have paid the price of availing services.
Service receiver should fully participate when the service is provided. Evaluation of services is a
relatively tough task because different service providers offer the same services but charges a different
amount. It may be due to the method they provide services is different or the parameters they consider
in valuing their services vary.
Example: Postal services, banking, insurance, transport, communication, etc.
Key Differences between Goods and Services
The basic differences between goods and services are mentioned below:
16. Goods are the material items that the customers are ready to purchase for a price. Services are
the amenities, benefits or facilities provided by the other persons.
17. Goods are tangible items i.e. they can be seen or touched whereas services are intangible items.
18. When the buyer purchases the goods by paying the consideration, the ownership of goods
moves from the seller to the buyer. Conversely, the ownership of services is non-transferable.
19. The evaluation of services is difficult because every service provider has a different approach of
carrying out services, so it is hard to judge whose services are better than the other as compared to
goods.
20. Goods can be returned to or exchanged with the seller, but it is not possible to return or
exchange services, once they are provided.
21. Goods can be distinguished from the seller. On the other hand, services and service provider are
inseparable.
22. A particular product will remain same regarding physical characteristics and specifications, but
services can never remain same.
23. Goods can be stored for future use, but services are time bound, i.e. if not availed in the given
time, then it cannot be stored.
24. First of all the goods are produced, then they are traded and finally consumed, whereas services
are produced and consumed at the same time.
CONCLUSION
Generally, companies keep a stock of goods with itself to fulfill an urgent requirement of goods. It also
keeps track of the quantity of goods at the beginning and the end. In contrast to services are delivered
as per the request of the customer itself. In short, the production of services depends on the customer’s
demand. Both are subject to tax like Value Added Tax (VAT) is levied on goods while service tax on
services provided.
Sometimes products offered by the companies in such a way that it ‘s hard to segregate goods and
services like in the case of a restaurant, you pay for the food you eat as well as for the add-on services of
the waiters, chef, watchman and so on.
Consumer Behavior in Services

Consumer behavior includes the processes and motives that drive consumer buying activities.
Consumers typically make purchases in a systematic way, with the time frame and nature of the process
dependent on the type of purchase. The standard consumer buying process with a service has some
specific differences from a product-based purchase situation.
Need Discovery
The first step in the consumer decision-making process is need discovery. This stage is where a
consumer realizes he has a functional or emotional need or want. In engaging in a service scenario,
consumers recognize several common needs. One is expertise. A consumer might hire a plumber or
electrician for their service expertise, for instance. Time savings, more valuable ways to spend time and
simply not liking to perform a certain activity are among needs or motives for a service purchase.
Information Search
The second phase of the buying process is information search. During this stage, the buyer looks for
information and evaluates providers on certain criteria. Services are intangible, so buyers often need to
consult company websites and talk with sales reps to evaluate options. Additionally, services are often
highly involved purchases for buyers because of the costs and importance. To get someone to hire your
roofing company, you must provide significant information about the value of your materials and service
relative to competitors.
Proof Devices
Buyers typically want to see proof of benefits before making a product or service purchase. With
products, you can show buyers how the product works and demonstrate the benefits. With intangible
services, you can’t. You can, however, provide customer testimonials emphasizing the quality, reliability
and value of your service. It is also important to connect with customers’ emotions by communicating
the value of your expertise or the time that you save them.
Post-Purchase Evaluation
Following a purchase, customers compare what they experience with what they expected. This point
makes follow-up and follow-through on commitments important to customer satisfaction, repeat
business and referrals. What makes a service experience distinct is that the people that provide it are
especially key to the customer’s perception of the experience. Getting customer feedback on the quality
of service provided by all employees involved in the sale and delivery of the service is helpful in making
any necessary improvements.
Customer Expectations and Perceptions of Services-

Evaluation of Services
An organization that understands customer expectations and is able to fulfill them to the best of its
ability is the one that succeeds in the competitive world of marketing. Fulfilling customer expectations
leads to satisfaction and exceeding expectations in terms of service delivery results in delight. However,
when a customer expects superior service and his experience is otherwise, he feels dissatisfied.
Dissatisfaction of customers may result in several adverse effects such as spread of negative word of
mouth. Hence, it is important for a firm to promise only what they can deliver in order to abstain from
having dissatisfied customers.
Expectations of service
People form expectations of the services they are about to avail based on their own prior experience,
familiarity or past experiences of near and dear ones. Perceptions are affected by expectations.
Examples of expectations and perceptions:
25. A student who has taken admission in a reputed University and has heard of the high quality
education being offered by it shall probably perceive the institute in the same manner once he starts
studying there.
26. A girl who has been told how horrifying a horror movie is will probably perceive it the same way
when she watches it.
27. A boy who goes to a salon for a haircut shall probably like the services offered if the salon has
previously been praised by his friends.
Perceptions of Service
Perception, in general, is defined as a process through which people select organized stimuli and
interpret it such that it frames a meaningful picture. Perceptions vary from one person to the other. For
marketers, perception of customers is more important than reality since customers make purchases on
the basis of their perceptions.
For example, people perceive Dominos to deliver their pizzas in 30 minutes. This is because they have
positioned their product and services in that manner. Adhering to promises and fulfilling them helps in
building brand image.
Perceived Quality of Services
A service may deliver high quality in reality, however it is not necessary that the quality of service
offered is perceived as superior by the consumer. Perceived quality of the service shall be dependent on
various cues that may be classified as extrinsic or intrinsic cues. It is difficult to gauge the quality of
service being availed since it is intangible and perishable.
At times, there exists a gap between what the customer expects and what he receives. This is best
explained by the framework called Gaps Model. The larger the gap between expectations and
perceptions, more is the dissatisfaction. Hence, it is in a marketer’s best interest that he narrows the gap
to the maximum extent possible to be able to fulfill the customer’s expectations.
The SERVQUAL scale is used for measuring the “gaps” that exist between the expectations of the
consumer and his perceptions of service availed. The measurement of these distances between
expectations and perceptions, called gaps, is done based on two major factors:
21. Outcomes
These depend on the reliability of services being delivered to the consumer. For example, whether or
not a flight you took helped you reach the desired destination.
 Processes
These predominantly focus on how desired core services were delivered. This includes aspects like
assurance and empathy. For example, the behavior of flight attendants while dealing with you in the
flight.
Processes aid companies and service houses in not only meeting, but exceeding customer expectations.
For example, the core service of Amazon is to sell varied products and brands. However, what helps it
succeed in a competitive market is the superior “processes” that it follows, like timely and reliable
delivery of products. One can also track the ordered product while in transit. All of this contributes
immensely in increasing the brand loyalty of existing customers and also in customer acquisition.
New Service Development Process

Professors Zeithaml, Bitner, Gremler and Pandit, have published the stages of new service development
from various sources in their book entitled “Services Marketing” in 2008.
Stage 1: Business Strategy Review
At this stage we must review and understand the vision, mission, values and strategic orientation of our
company. The vision of transporting goods, i.e., cargo service would be different from the vision of
transporting mail, i.e., courier service. In 1997, Michael Treacy and Fred Wiersema have written about
three value disciplines that companies must choose from.
These include:
(i) The operationally excellent firm, which is efficient and delivers services at the lowest cost to the
customer,
(ii) The product/service leader, i.e., offering innovative services under a strong brand.
(iii) The customer intimate firm, that excels in customer attention and customer service.
Next, we must understand the strategic orientation that our company has decided to take to excel in the
marketplace. A strategy is essentially a means to reaching business goals that our company has decided
for itself. Generic strategies are game plans for operating and surviving in the marketplace. Michael
Porter has written about three generic strategies in 1980.
Stage 2: Developing New Service Strategy
We must decide the strategy that our company would like to take to grow in the marketplace and align
new service development in that direction. These include
(i) Intensive growth
(ii) Integrative growth
(iii) Diversification
For intensive growth, the company would strive to increase market share for its current services in the
current market or develop and launch new services in existing markets or take current services to new
markets. These strategies are depicted in the matrix . A company can increase its market share by
changing the style of operations and enhancing its customer intimacy, for instance. Ordinarily, service
businesses choose to grow by taking their current services to new markets, i.e., new countries and cities
and adapt the offering to the preferences of the customers in the new market. You may have noticed
how McDonald’s opened its outlets in various cities in India, one after another. On the other hand, post
offices in India started providing fixed deposit services and passport related services in the same
markets where they were offering postal services. Similarly, a customs agent may launch courier services
in the city where they are located, as an example of growing their business by offering new services in
existing markets.
Stage 3: Idea Generation
The third stage of new service development is that of idea generation. This stage requires a formal
department to be set up in our company. The activities in this stage would include conducting idea
generation exercises like brainstorming and focus group discussion with customers, observing customers
in different situations wherein they receive the same benefit through similar or ernative services and
learning about the services provided by competitors. The company must also place suggestion boxes
and institute suggestion reward schemes to attract suggestions from their employees. Listening to
customers is the best way to receive ideas, not only for improvements in the current services offering,
but also for entirely new services. The idea must align with the new service strategy; otherwise the idea
must be dropped or shelved. It must also undergo preliminary evaluation regarding the potential market
for the benefit that customers are willing to receive from the service. We must keep in mind that the
quantum of investments starts increasing rapidly from this point onwards for developing each idea.
Unless the idea has clear potential, it must be dropped, otherwise the company will face further losses if
the idea is allowed to be developed further and is dropped at a later stage due to lack of feasibility.
Stage 4: Service Concept Development
An idea that appears feasible and profitable is taken up for development of the service concept. The
service concept is the description of the service in terms of the value it will provide customers, the form
and function of the service, the type and level of experience that customers are likely to receive from
the service, and the outcome of the service. The concept is developed by involving customers, service
personnel, service managers, suppliers and other professionals such that it is acceptable to all and
everybody agree that it is likely to provide much needed benefits to the customers. The service concept
is tested with customers and employees and is dropped if it is not found to offer substantial benefits to
customers in comparison to existing alternate methods by which customers can satisfy their need.
Stage 5: Developing the Business Case
It is ensured that it will be possible to deliver the services in a manner acceptable to customers, the
customers are willing to purchase the service, and the service remains profitable with a three-year
ROI/ROCE that is greater than the prevailing bank interest rate. If the service does not seem to be
profitable, it must be dropped without incurring any further cost in developing the concept further. The
profitable business case is then developed for approval of the management and representatives of the
shareholders and investors.
Stage 6: Service Development and Testing
Once the business case for the service has been approved, it is taken up for development of the actual
service. The blueprint of the services is further developed and the service prototype is tested with actual
customers. For example, a bank can test new ideas by reorganizing current branches for the test period
and observing and collecting data from actual customers about the benefits of the new idea. One bank
found that installing TVs with CNN channel reduced the perceived waiting time for the customers and
then the same was taken up for implementation in big branches. In this way all new concepts are tested
and those ideas that do not provide substantial benefits to customers are promptly dropped.
Stage 7: Market Testing
Once the service prototypes have been tested, these are put together for a pilot test. Alternative
marketing mix elements or 7Ps options are tested at this stage. At first, the pilot service is offered to the
employees of the organisation and their feedback is collected. The service is then modified according to
the feedback received and is offered to actual customers for a short period and their feedback collected.
The feedback is analysed for effecting further modifications in the service and tying up any loose ends. If
the service passes the market testing phase and it is found that customers are enthusiastic about the
new service and the service is estimated to generate profits, the service development is taken to the
next stage.
Stage 8: Commercialisation
The plan for rolling out the new service is then drawn up. It is usually rolled out in a phased manner by
opening it up in the least risky markets and then quickly spreading it to other markets if the feedback is
favourable. Commercialisation has two important objectives. The first objective is to elicit the support of
the large number of service personnel who are going to deliver the services. At this stage the new
service is marketed to the employees of the organisation as a new smart offering that generates profits
and bonuses for the organisation. The second objective is to monitor the service throughout the period
that customers purchase and use the service. Every interaction at the moment of truth and every detail
is monitored and feedback collected from the customers as to whether the latter’s needs are being
fulfilled, whether they are deriving benefits from the service and are satisfied and what modifications
they would like to be made in the service. The service is constantly modified based on the feedback
collected. Customers’ comfort with the price and other marketing mix elements is thoroughly ensured
by the service manager and adjustment and improvements are continuously made so that customers
feel a compelling need to purchase the service.
Stage 9: Post-launch evaluation
The service is reviewed for performance according to a pre-planned period of review. Customers,
employees, the market and the context keep changing with time. It is important to effect necessary
changes periodically in the service in line with the changes in the above dimensions. The service
blueprint comes in handy at this stage. It is also inspected for alternate ways to gain further efficiency
and pass on part of the benefits so accrued to the customers and part of the same to the organisation.
Customers and employees are requested for new ideas for this new service and same are incorporated
to be able to provide the latest to the customers and to remain ahead of competitors in the
marketplace.
New Service Characteristics
Since services are intangible, it has to have 4 basic characteristics:
28. It must be objective, not subjective

29. It must be precise, not vague.
30. It must be fact driven, not opinion driven.
31. It must be methodological, not philosophical.
Customer Defined Service Standards

Customer Service Standards
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.
Sales and assistance after the sale is just one aspect of a company’s customer service standards.
A thorough set of standards must address the company’s customer service policies and practices
at all key points of contact with the customer. Customer service is an essential component of a
company’s business. Whether the company sells its products to individual consumers or to other
businesses, the importance of customer service to the company and its brand development efforts
is the same.
Customer Service and the Buyer’s Journey
The buyer’s journey is a conceptual framework for thinking about your customer’s full range of
experiences or contacts with your company. While the precise contours and points of contact will
vary depending on the company and what it does or sells, generally it will consist of at least
these three stages:
(i) Awareness: The customer becomes aware of a problem or a need, and has the desire to solve
it or fill it.
(ii) Consideration: The customer thinks about possible solutions and options available for solving
that problem or filling that need.
(iii) Decision: The customer makes a purchasing decision and buys one of the products or
solutions he has considered in stage two.
Customer service should ideally cover each of these stages, as well as the post-purchase phase.
In one sense, marketing is the art of helping customers move more rapidly and easily from one
stage to the next.
Customer service serves as a support for people at every stage along the way, and beyond. Far
from simply helping people who have already purchased to use the product more effectively,
customer service is there to support both prospective and existing customers as they consider,
evaluate, purchase and use a company’s products and services.
It may mean offering additional information about the need or perceived problem in the
awareness stage, or stage one. In stage two, it could mean providing more detailed information
about the lifespan of the product or service cycle and how it can help resolve the problem.
Finally, in stage three, the decision-making phase, it usually revolves around assistance with the
transaction itself or some aspect such as shipping and returns.
By crafting customer service standards to govern interactions with consumers at every possible
point along the buyer’s journey, a company expertly crafts the specific experience it wants its
customers to enjoy. Maintaining this sense of proactive design helps a business turn prospects
and leads into loyal customers and brand ambassadors.
Importance of Service Standards
Taking the time and effort to formalize customer service standards is an important exercise for
companies to undertake. The process of developing those standards and guidelines helps the
company solidify its thinking about how it relates to its market and further enhance its brand.
Adopting formal customer service standards and communicating those standards to all
employees who have any contact with customers is essential for the company’s workers,
especially those filling roles that are explicitly devoted to the customer and technical service
functions.
Additionally, adopting formal customer service standards helps the company in scripting the
buyer’s journey. Furthermore, standardized customer service helps the company by ensuring the
maximum positive response from the maximum number of customers.
A positive, enjoyable customer experience during a person’s first transaction with a company
will often bring that customer back for future purchases. For most companies, from an economic
standpoint, it makes much more sense to retain an existing customer than to acquire a new one. It
could be up to 25 times more costly to gain a new customer than to keep an existing one.
Demand and Capacity Management
Originally two strategies were suggested for managing demand and capacity: the first would involve
adjusting capacity to match demand (defined as ‘chasing demand’) and the second, altering demand to
match available capacity (known as ‘level capacity’).
32. Adjusting capacity to match demand
(i) Extend the opening hours – This is not an option open to all service organizations. Where it is possible
it is likely to occur only when demand levels are regarded as particularly excessive.
(ii) Encourage employees to work harder – The requirement here is usually that of processing more
customers per hour or per day. Although a mark of efficiency (more output from existing staff), service
quality for customers may deteriorate.
(iii) Cross-train employees – Enables organizations to operate with fewer staff. Instead of being confined
to handling few responsibilities staff are equipped to manage a variety of tasks and activities. It amounts
to a move in the direction of job enlargement and some might say job enrichment, increasing employee
motivation, satisfaction and morale. Not all employees will welcome it, particularly where there is seen
to be little increase in commensurate rewards. The type of service and the organizational culture will be
two prominent factors that need to be taken into account prior to such a move.
(iv) Recruiting part-time employees – This is an option low in cost and potentially one that can be
achieved quickly. Organizations should, of course, ensure that part-time employees be given the same
support and encouragement as given to full-time staff.
(v) Add facilities – Usually in the form of table, chairs or other equipment. Just how much scope there is
for this will depend on the initial configuration and layout designed to communicate a specific
atmosphere and/or level of service. Adding facilities may change both.
(vi) Hire or share facilities or equipment – May be in the form of additional physical space or vehicles
required either on a temporary or recurring basis. Using customers as productive resources – up to this
point all attempts at adjusting capacity have involved manipulating internal resources and assets.
However some have suggested that organizations should regard customers as ‘partial employees’ and
make a contribution to productive capacity.
(vii) Outsourcing – For small to medium-sized organizations, in particular, calling on outside assistance is

a valuable option in trying to meet market demand. Typical areas for outsourcing are technological and
marketing support, employee recruitment and training, and Web development. Large organizations also
outsource. Consider the recent case of British Airways and the outsourcing of its inflight catering to Gate
Gourmet. Competitive pressures in the airline industry had forced this move. Unfortunately, the
demand for lower costs led to industrial action by Gate Gourmet employees. The above options, then,
are aimed at increasing capacity to absorb demand.
However, for service organizations there will inevitably be periods of time where capacity is under-
utilized. Such a situation will remain so if attempts to encourage demand during these periods prove
unsuccessful. It has been suggested that slack time be used ‘productively as a time to train new
employees, do maintenance on the equipment, clean the premises, prepare for the next peak and give
the workers some relief from the frantic pace of the peak periods’.
22. Altering demand to match available capacity
Whereas capacity management is a response to demand, demand management is an attempt to shift

demand. Given the relative inflexibility of capacity organizations may seek to smooth demand by
reducing the variability and fluctuation of existing patterns. Organizations can turn to the marketing mix
for stimulating demand during periods of spare capacity or shifting demand during periods where
capacity is operating at or near maximum. Of the ‘4 Ps’ price and, to a lesser extent, place, offer the
most potential in this area.
(i) Manipulate price – This will be discussed in more detail in the following section on ‘Revenue
Management’. The central role of price is to discourage too many customers from using the service
during ‘peak demand’ periods and encourage more customers to select ‘off-peak’ periods. On price
alone this strategy will only work if enough customers can be attracted by the lower prices available
during low demand periods. Leisure, hospitality and transportation services would appear suited to this
approach. However this strategy of price differentiation is, it is argued, not without risk. Customers may
become acclimatized to the lower prices and expect them whenever the service is used. Equally there is
risk to the organization’s image in that lower prices may attract undesirable customers. This would be
particularly relevant for a service that regards itself as more upmarket or exclusive.
(ii) Offer a mobile service – For a number of reasons consumers have welcomed the emergence of
mobile services where the provider takes the service to the customer rather than or in addition to the
customer having to visit the provider in some fixed location. Libraries have used this approach for many
years, the service being particularly valued by the disabled and those living in remote locations. Other
services that have found mobility an effective method of managing demand include breakdown and
maintenance, blood donation and catering.
(iii) Communicating with customers – The provision of information as to when demand is, or is likely to
be, high appears to be a strategy not well adopted by service organizations. In particular for customers
in our ‘call centre society’ it can be especially frustrating. Waiting is a feature of modern day society and
will be addressed later in the chapter.
(iv) Changing the service offer – For most organizations this is not an option. What they offer remains
fixed. Where services with a sizeable facility like hotels experience significant seasonal fluctuations
however, action may be taken to encourage varied usage of the facility when capacity is under-utilized.
Delivering Services: Role of Employees and Customers in

Service Delivery
You will recall that, services are produced by employees and consumed by customers simultaneously.
Hence, customers must know the role that they would be expected to play at a particular service facility.
They must be educated and trained, if necessary, to play appropriate roles at the service outlet, so that
they can get the benefit of the service. Most customers learn their roles while growing up in life.
However, they may not know the best role that they can play at a new service facility.
Take the case of customers waiting to receive medicines at a hospital pharmacy. Ordinarily, customers
would submit their request for medicines and wait anxiously at the deliver counter for their medicines.
In case there are many people waiting for their medicines, each person has to stand for a long time to
receive their medicines. Few chairs might be placed near the counter for the patients to wait, but they
might not consider being seated, rather they would stand anxiously around the counter to check that
their request receives due priority, other people do not get their medicines out of turn, and the
pharmacy employees do not delay delivering their medicines out of plain laziness. This situation used to
take place at a hospital pharmacy and is commonly encountered in most hospital pharmacies.

Role of customers in service delivery
Service delivery for customers can be seen in a factory. The place the service is produced and is
consumed interacting with the employees and other customers. E.g in a classroom or in a training
situation, students (customers) are sitting in the factory interacting with the instructor and other
students as they consume the educational services.
Since these customers are present during the service production, customers can contribute to or detract
from the successful delivery of the service and to their own satisfaction.
Importance of customers in service delivery
Customer participation at some level is inevitable in service delivery. Services are actions or
performances, typically produced and consumed simultaneously. In many situations employees,
customers and even others in the service environment interact to produce the ultimate service
outcome. As the customers receiving the service participates in the service delivery process. He or she
can contribute to the gap through appropriate or inappropriate, effective or ineffective, productive or
unproductive behaviors.
Customers who are unprepared in terms of what they want to order can soak up the customer service
representative’s time as they seek advice. Similarly, shoppers who are not prepared with their credit
cards can “put the representative on hold”. While they search for their credit cards or go to another
room or even out of their cars to get them. Meanwhile, other customers and calls are left unattended,
causing longer wait times and potential dissatisfaction.
Customer’s Roles
(i) Customers as a productive process
Service customers are referred to as “partial employees” of the organization. They are human resources
who contribute to the organization’s productive capacity. In other words, if customers contribute effort,
time or other resources to the service production process, they should be considered as part of the
organization.
(ii) Customers as quality contributors to service delivery and satisfaction
Another role customers play in service delivery is that of the contributor to their own satisfaction and
the ultimate quality of the services they receive. Customers may care little that they have increased the
productivity of the organization through their participation. But they likely care a great deal about
whether their needs are fulfilled. Effective customer participation can increase the likelihood of service
delivery that their needs are met and that benefits the customer seeks are attained. Services such as
health care, education, personal fitness, and weight loss, where the service outcome is highly dependent
on the customers participation. In such services unless the customers perform their roles effectively, the
desired service outcomes cannot be achieved.
(iii) Customers as competitors

A final role played by service customers is that of a potential competitor. If self-service customers can be
viewed as resources of the firm, or as “partial employees,” self-service customers in some cases. They
can partially perform the service or the entire service for themselves and may not need the provider at
all.
Customers thus in that sense are competitors of the companies that supply the service. Whether to
produce a service for themselves (internal exchange). E.g. child care, home maintenance i.e. have
someone else provide home services for them (external exchange) is a common dilemma for consumers.
Similar internal versus external exchange decisions are made by organizations. Firms frequently choose
to outsource service activities such as payroll, data processing, research, accounting, maintenance, and
facilities management. They find that it is advantageous to focus on their core businesses and leave
these essential support services to others with greater expertise. Alternatively, a firm may decide to stop
purchasing services externally and bring the service production process in-house.
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Role of Intermediaries
Delivery of services through intermediaries
Nowadays, many services are delivered by intermediaries. Two service marketers are involved in indirect
distribution; the service principal and the service deliverer. The service principal is the originator and the
service deliverer is the intermediary. The service principal is the entity which creates the service
concept. The service deliverer is the entity which deals with the customers during the execution of the
service. Thus, in the indirect channel, both the service supplier and the intermediaries play an important
role.
Role of service intermediaries in indirect distribution
Service intermediaries discharge many important functions for the service principal.
33. Service intermediaries co-produce the service and make the service available to customers at a
place and time of their choice, thus fulfilling the promises made by the service firms to customers.
34. The Franchisee uses the process developed by the service principal and renders satisfying
service to customers.
35. Service intermediaries also make service locally available.
36. Intermediaries act as multiple service principals. Intermediaries such as travel agents and
insurance agents provide retailing function to customers.
37. In many financial or professional services, intermediaries build a relationship based on trust
which is essential in a complex service offering.
38. Services are intangibles and perishables and inventories do not exist. Therefore, service
distribution focuses on identifying ways to bring the customer and principal together. Service
intermediaries such as franchisees agents, brokers, etc., act as a connecting link between the service
firm and customers.
39. Service intermediaries deliver services according to the specifications of the principals.
40. Service intermediaries are in direct contact with the customers. So, they are in a position to
determine the way customers perceive the quality of the service.
41. Service intermediaries advise the customers on the choice of the service which satisfies their
needs.
42. Intermediaries provide after sales support to the customers. For example, an insurance agent
guides the policy holder in making a claim and goes through the procedural formalities in connection
with that claim.
43. An intermediary, as a co-producer of a service shares the risks of providing services by
contributing their own capital to acquire the equipment needed for the delivery of service.
44. A service provider sells only his own services. But consumers prefer to buy service from an
intermediary who offers a wide variety of services including these offered by competing service
principals. The advantage of intermediaries is that they offer different services at one location.
1. Intermediaries relieve the service principal from the botheration of making

huge investment on his own. As intermediaries operate at different places, a service
principal can invest his funds in core services.
Service Process
Customers of service organization obtain benefits and satisfactions from the services themselves and
from how those services are delivered. The way in which service systems operate is crucial. Service
systems which operate efficiently and effectively can give marketing management considerable
marketing leverage and promotional advantage. It is clear that a smooth running service operation
offers competitive advantages, particularly where differentiation between service products may be
minimal.
In service systems the marketing implications of operational performance are so important that the two
functions have to co-operate. In services, marketing must be just as involved with the operational
aspects of performance as operations managers; that is, with the ‘how’ and the ‘process’ of service
delivery.
Classification of services operating systems
Services operating systems may be classified in a number of ways.
Two considered here for illustrative purposes are according to:
45. The type of process

46. The degree of contact
(1) The type of process
Three types of processes of relevance to service organization are:
(a) Line operations
(b) Job shop operations
(c) Intermittent operations
(a) Line Operations: In a line operation there is an arranged sequence of operations or activities
undertaken. The service is produced by following this sequence. In manufacturing, an assembly line for
domestic appliances typifies this type of process; in services, a self-service restaurant typifies this
process.
(b) Job Shop Operations: A job shop operation produces a variety of services using different
combinations and sequences of activities. The services can be tailored to meet varying customer needs
and to provide a bespoke service. Restaurants and professional services are examples of job shop
operations. While flexibility is a key advantage of this type of system it may suffer from being more
difficult to schedule, from being more difficult to substitute capital for labour in the system and from
being more difficult to calculate the capacity of the system.
(c) Intermittent Operations: Intermittent operations refer to service projects which are one off or only
infrequently repeated. Examples include the construction of new service facilities, the design of an
advertising campaign, and the installation of a large computer or the making of a major film. The scale of
such projects makes their management a complex task. Such projects provide an appropriate field for
the ready transfer of many project control and scheduling techniques like Critical Path Analysis. The
scale and infrequency of these projects make them different in kind from line and job shop operations.
(2) The Degree of Contact
Managing service operations with a high level of customer contact with the service delivery process
presents different challenges compared with those systems where there is a low level of customer
contact. The amount of customer contact has an effect on may of the decisions operations managers
have to make. These kinds of systems (high contact or low contact) have an effect upon service
operations and have implications for managers of service systems.
Some of these are:
(a) High contact systems are more difficult to control since the customer can make an input to the
process or even disrupt the process.
(b) In high contact systems the customer can affect the timing of demand and it is more difficult to
balance the capacity of the system to meet demands placed upon it.
(c) Workers in high contact systems can have a great influence upon the customers’ view of the service
provided.
(d) In high contact systems production scheduling is more difficult.
(e) It may be more difficult to rationalize high contact systems (e.g. by substituting technology).
(f) It may be beneficial to separate high contact and low contact elements of a service system and
encourage staff specialization in these different functions because of the varying skills required.
Both of the schemes outlined are useful ways of classifying service systems for operational purposes.
Both however imply that the sequence of operations involved in the service process can be made
explicit to enable the systems to be categorized according to degree of contact. One step that service
managers can take to understand their process of service delivery is to flow chart the system and the
interactions with customers within that system.
Service Blue Printing

Service blueprints are diagrams that visualize organizational processes in order to optimize how a
business delivers a user experience. They are the primary tool used in service design.
A service blueprint is an operational planning tool that provides guidance on how a service will be
provided, specifying the physical evidence, staff actions, and support systems / infrastructure needed to
deliver the service across its different channels. For example, to plan how you will loan devices to users,
a service blueprint would help determine how this would happen at a service desk, what kinds of
maintenance and support activities were needed behind the scenes, how users would learn about
what’s available, how it would be checked in and out, and by what means users would be trained on
how to use the device.
Service Blueprints may take different forms – some more graphic than others – but should show the
different means/channels through with services are delivered and show the physical evidence of the
service, front line staff actions, behind the scene staff actions, and support systems. They are completed
using an iterative process – taking a first pass that considers findings from personas, journey maps, and
location planning and then coming back to the blueprint to refine it over time. Often blueprints raise
questions that cannot be readily answered and so need to be prototyped; for instance by acting out an
interaction or mocking up a product. Generally, one blueprint should be created for each core service,
according to the right level of detail for each.
Effective service blueprinting follows five key high-level steps:
(i) Find support: Build a core cross disciplinary team and establish stakeholder support.
(ii) Define the goal: Define the scope and align on the goal of the blueprinting initiative.
(iii) Gather research: Gather research from customers, employees, and stakeholders using a variety of
methods.
(iv) Map the blueprint: Use this research to fill in a low-fidelity blueprint.
(v) Refine and distribute: Add additional content and refine towards a high-fidelity blueprint that can be
distributed amongst clients and stakeholders.
5-Step Framework for Service Blueprinting
1. Find Support
Level-set and educate on service blueprinting. First, pull together a cross disciplinary team that has
responsibility for a portion of the service and establish stakeholder support for the blueprinting
initiative. Support can come from a manager, executives, or clients.
2. Define the goal
Choose a scope and focus. Identify one scenario (your scope) and its corresponding customer. Decide
how granular the blueprint will be, as well as which direct business goal it will address. While an as-is
blueprint gives insight into an existing service, a to-be blueprint gives you the opportunity to explore
future services that do not currently exist.
3. Gather Research
Unlike customer-journey mapping where a lot of external research is required, service blueprinting is
comprised of primarily internal research.
(a) Gather customer research: Begin by gathering research that informs a baseline of customer actions
(or, in other words, the steps and interactions that customers perform while interacting with a service to
reach a particular goal). Customer actions can be derived from an existing customer-journey map.
(b) Gather internal research: Choose a minimum of two research methods that put you in direct line of
observation with employees. Use a multipronged approach — select and combine multiple methods in
order to reveal insights from different angles and job roles:
47. Employee interviews

48. Direct observation
49. Contextual inquiry
50. Diary studies
4. Map the blueprint
(a) Set up: It’s useful to organize a short workshop session (2–4 hours) to do steps 4 and 5. This helps
create a shared understanding amongst your team of allies and ensures that the blueprint remains
collaborative and unbiased. If all workshop participants are in the same physical location, set up by
hanging three oversized sticky notes on the wall side by side. Each member should have a pad of post-
its. The result of the workshop will be a low-fidelity version of an initial blueprint.
While any mapping method is collaborative at its core, blueprinting can still be done individually. If this
is the case, be sure to share your blueprint with stakeholders and peers early and often.
(b) Map customer actions: In a service blueprint, customer actions are depicted in sequence, from start
to finish. A customer-journey map is an ideal starting point for this step. Do note that a blueprint’s focus
is the employee experience, not the customer’s experience, thus this portion does not need to be a fully
baked customer-journey map — rather, you can include only the user touchpoints and parallel actions.
(c) Map employees’ frontstage and backstage actions: This step is the core of a service-blueprint
mapping. It is easiest to start with frontstage actions and move downward in columns, following them
with backstage actions. Inputs should be pulled from real employee accounts, and validated through
internal research.
(d) Map support processes and evidence: Add the process that employees rely on to effectively interact
with the customer. These processes are the activities involving all employees within the company,
including those who don’t typically interact directly with customers. These support processes need to
happen in order to deliver the service. Clearly, service quality is often impacted by these below-the-line
interaction activities.
Layer in the evidence at each customer’s action step. Work your way through the first 5 steps and ask
“what props and places are encountered along the way?” Remember to include evidence that occurs
frontstage and backstage.
5. Refine and Distribute
Refine by adding any other contextual details as needed. These details include time, arrows, metrics,
and regulations.
The blueprint itself is simply a tool that will help you communicate your understanding of the internal
organization processes in an engaging way. At this point, you need to create a visual narrative that will
convey the journey and its critical moments, pain points, and redundancies.
A good way to implement this step is to have another workshop with your core team. Having built
context and common ground throughout your mapping process, bring them back together and evolve
the blueprint into a high-fidelity format.
Physical Evidence
The objective of our service business is to attract customers and ensure that they are able to satisfy their
needs while enjoying the service experience. They would like to spend their money if they perceive that
they have received net benefit from our company. If they are satisfied with the service, they would
repurchase our services and refer our services to others.
Roles played by Physical Environment
The physical environment affects customers and employees, i.e. anybody who uses it. It can play various
roles as discussed in the following sections:
51. Package: The physical evidence of a service plays a role similar to that of product packaging, it
wraps the service and communicates its characteristics to the customer. A clean, safe servicescape
conveys the image of a superior quality service to the customers and makes them feel proud of being
associated with the service, i.e., it enhances the image benefits received by the customer.
52. Facilitator: A hindrance-free layout of the servicescape can enhance employee performance and
customer satisfaction. Physical evidence like comfortable chairs in the seating area matches the
requirements of customers thereby enhancing the perception of the quality of service in their minds.
53. Socialiser: The servicescape helps customers and employees socialize and interact with each
other and among themselves as services are mainly delivered through interactions during the moments
of truth. The physical evidence also sets the mood for the service, a cheerful mood at entertainment
services, a professional mood around offices and calm, relaxing ambience in healthcare establishments.
54. Differentiator: The physical evidence can help to differentiate and position a service for a
particular segment of customers when designed according to their tastes and preferences including
what they are willing to pay for. For instance, the physical evidence for a high-priced upper class area
would be enhanced and differentiated from a low-priced lower class area in any service setting or
among similar services.
Employees would mainly serve the customer. It is important that they feel comfortable at our
servicescape. This would help them feel like staying till they complete their duty and do additional
innovation for the benefit of the customers and our organisation in the long term.
As we know very well by now, services are primarily delivered through interactions between and among
employees and customers.
In order that the above desirable behaviour can take place effectively and efficiently, it is important that
they receive the right cues from the environment that can elicit the right internal responses within
customers and employees. The responses would be of three types, cognitive, emotional and
physiological. The right environment would give them desirable cues. For instance, a clean and
organized office would convey a sense of efficiency to customers and employees alike. High quality,
working equipment would give assurance to customers that their problems would be flawlessly satisfied
at the service outlet. Similarly, the availability of efficient working equipment gives service providers the
opportunity for doing a good job of their service. The physical evidence, like presence and placement of
chairs gives meaning to the space and indicates the category or segment of customers who are likely to
receive the service in those surroundings. These are the cognitive responses of the physical evidence of
service.
Lighting, music, decor, air temperature and freshness make up the ambience of the servicescape which
is aided by sparkling surroundings and equipment. This gives a positive mood and attitude to customers
and service providers. On the other hand, a poorly-lit, damp servicescape quickly conveys a negative
attitude of the service provider and elicits negative emotional response from the customers.
Above cognitions and emotions give rise to physiological responses like pain or comfort. The placement
of physical facilities gives them direction for movement and rest. On the whole, customers and
employees feel fit and comfortable at the service facility. These responses give employees an
opportunity to provide flawless service to customers that they can be proud of. Similarly, customers are
able to negotiate their way in the service facility and have their needs satisfied in the enabling
atmosphere.
Hence, it is clear that the appropriate physical evidence, consistent with the service concept and the
brand image, elicits positive cognitions, emotions and physiological responses from customers and
service providers. This enables the production and consumption of services thereby leading to fulfilment
of customers’ and organisations’ goals.
Design and Maintenance of Physical Facilities
We have understood by now that physical evidence is an important aspect of our service, which cannot
be ignored. Accordingly, we have to employ architects, interior designers and merchandise designers to
design physical features that are consistent with our service concept and conveys the value, form and
function, outcome and the nature of experience that customers are to receive from the servicescape.
More importantly, they must match the preferences of our customers, yet provide slightly more than
what our customer segment would have ordinarily expected from the facility. You may have noted how
various elements of the physical evidence of Jet Ariways are blue in colour while those are red in colour
for Kingfisher Airlines. These elements are consistent with the logo and masthead and reflect the value
and nature of experience that each airline has promised to deliver.
The physical evidence should have elements of surprise, joy, interest and captivation inbuilt in them, in
order to be perceived to be slightly beyond the expectations of the customers and delight them.
Elements of the physical evidence, particularly the servicescape, are costly and cannot be redone again
and again without making large outlays. Hence it has to be executed correctly the first time itself.
Every bit of the physical environment that is likely to affect employees, customers and visitors must be
identified in the service blueprint. Alternative designs for these facilities must be evaluated and the right
one must be executed with care. The opinion of customer representative, service personnel, service
managers, stockholders, collaborators and visitors must be taken and a consensus arrived at while
selecting an appropriate design.
This procedure will also help the service providers and their collaborators to get involved and invest
interest and time in the development of the facility while feeling a sense of ownership for the same.
Care must be taken to involve as many of the above people as possible in decisions related to the
smallest details of the servicescape, so that the very best is obtained without requirements for later
replacement and rework.
Once the service is in operation, much attention must be given to the maintenance of the facility in
order to keep it spick and span and in working order. All unused, non-working and damaged objects
should be removed without delay and replaced with new components.
We must remember that visitors to our facility will quickly get used to the physical evidence in our
service facility. In order to maintain their interest in the company and to give them a feel of a renewing
firm, the servicescape should be modernised and updated beyond the expectations of customers.
It is a challenge to implement what customers could be suggesting later on, before they can expect it.
This can keep our customers interested in our organisation and patronise the same. Interesting
elements of the servicescape can become a matter of special attraction and customers would speak
about it to others while intentionally or unintentionally promoting the firm and its services to them.
Pricing of Services: Pricing Considerations and

Strategies
Once we have designed and developed the service product and its delivery, we would have to decide
how to price the service for earning revenue from it. Price setting consists of six steps as described in the
following sections:
55. Selecting the pricing objective
Two major objectives of pricing are market penetration or market skimming. In case it is easy for
competitors to emulate our business, it is advisable to go for market penetration, which means
increasing the market share. This involves selling the services at a price that most customers are willing
to pay. On the other hand, if the service has lot of high-technology components and cannot be easily
emulated by new competitors, the marketer can go for price skimming, that is selling the services at a
high price and slowly bring down the prices as competitors emerge. Businesses may also have a survival
objective in the short run, i.e. they would like to earn the operating costs at the time being in order to
establish the business firmly in the market, before raising prices later on. Another pricing objective could
be price-quality leadership in which the marketer provides superior quality services at affordable prices
which would be difficult for competitors to match.
23. Determining price elasticity of demand
At the next stage, the demand for the service at various price levels is elicited through customer surveys
in which customers may be asked to choose price options at which they would be willing to purchase
the service. A better way of pricing various levels of services is through a marketing research technique
called conjoint analysis. As part of this analysis, customers are asked to rank several sets of services with
different alternatives and price levels. Through statistical analysis of the data, the part worth of various
options and prices are found out and the most-preferred service-price combination is identified. The
price that customers are willing to pay, form the price ceiling, i.e. the company cannot offer its services
at a price above the price ceiling.
 Estimating costs
The cost of providing the service is estimated through a technique called activity based costing (ABC) in
which the cost of performing various activities for delivering the service is calculated in order to arrive at
the total cost of providing the service. The cost will form the price floor, i.e. the minimum price that
should be requested from customers to make the business viable.
 Analysing competitors’ costs, prices and offers
The price charged by competitors for similar and alternative services are found out as these prices form
the reference price with which customers are likely to compare the price of the new service. The
benefits offered by the competitors and our company are also compared. Once it is ascertained that our
service is superior to that of the competitors, the price of the service can be calculated as the cost of
alternative services plus the additional value provided by extra benefits provided by our service. Thus,
competitors’ prices help to modulate the price of our services based on what the customers are
accustomed to pay for similar services, or the cost of alternative ways of fulfilling their needs.
2. Selecting a pricing method
Based on the cost of delivery and competitive prices, several price points for the new service can be
determined. Then the demand for each price point is established and the breakeven demand is
calculated. Once, we are sure that a certain demand can be met; the price can be fixed for attracting
that level of demand. It is now ascertained that the demand-price combination would be capable of
achieving breakeven. The sale of services for the next three years is estimated and the profit is
calculated. This will help us calculate the return on investment and to match the estimated return on
investment with the returns expected in line with what the industry receives in general. It is checked
that the returns are higher than the prevailing bank interest rate.
One special method of pricing is called target costing. In this method, the price that customers are
willing to pay is ascertained from customer surveys and service delivery process is modified in order to
ensure that the service can be delivered at a cost and price that will result in expected returns for the
business.
An important method of pricing that is widely advocated is called value pricing. True economic value
(TEV) is the sum of the price of the alternative means of satisfying the need and any cost savings in the
hands of the customer, less, the cost of receiving the new service. Theoretically, the customer would
gain even when he/she pays the value price for the new service compared to consuming the alternate
service. However, the price is then modulated as per what customers are willing to pay for the service
and is fixed at that level.
2. Selecting the final price
The final price is selected by keeping in mind that the price and other ‘P’s of the services marketing mix
must be consistent with the service concept. Low-quality-high-price or high-quality-low-price services
would be inconsistent whereas a price in tune with the quality of the service, the affordability and
willingness of customers to pay the price, substantial demand at the price which can be easily fulfilled by
the service provider, and, a price in tune with prices of competitive and comparable offerings would be
perceived to be a consistent price. The price should be such that our target market is able to purchase
the services, our collaborators can make a profit and our competitors can continue to offer their services
to their target customers at their price points. It is important to ensure that the price of our service is
consistent with the value it provides to customers.
Revenue Management
Revenue Management is concerned with optimising financial results and is especially popular in
industries like hospitality, which must contend with high fixed costs and a perishable inventory. For
example, hotels have a certain number of rooms and fixed costs which must be met, regardless of how
many rooms are sold. In such industries, revenue management is employed in an effort to predict
demand and optimise inventory and price availability. When utilised correctly, this will ultimately result
in higher revenue.
In order to understand revenue management, we must first define it. Within the hotel industry, the
widely accepted definition is: “Selling the right room, to the right client, at the right moment, for the
right price, through the right distribution channel, with the best cost efficiency”.
It involves the use of performance data and analytics, which serve to help hotel owners to more
accurately predict demand and other consumer behaviours. This, in turn, allows them to make more
sensible decisions regarding pricing and distribution, in order to maximise revenue and, therefore,
profit.
As a concept, revenue management actually began in the airline industry, where companies found ways
to anticipate consumer demand in order to introduce dynamic pricing. However, it is applicable in any
industry where different customers are willing to pay different prices for the same product, where there
are only a certain amount of that product to be sold, and where that product must be sold before a
certain point in time.
To carry out effective revenue management, a business must also have some way of forecasting demand
and consumer spending habits, so that informed adjustments can be made. For instance, hotels can use
past data, existing bookings, weather forecasts, and other industry data to inform their revenue
management strategy.
Why is Revenue Management Important?
For hotel owners, hotel revenue management provides the ability to make the most out of a perishable
inventory of hotel rooms, allowing them to maximise the amount of money the business generates.
Essentially, it allows decision makers to make informed, data-driven choices, rather than relying on
instincts or guesswork.
Hotels, like many other businesses, have fixed costs, which need to be paid regardless of how many
rooms are sold and regardless of how much money is generated from guests. Therefore, through a
revenue management strategy, hotel owners can ensure their costs are met and their prices and
services are dynamically optimised.
Necessary Conditions for Revenue Management
In order for a business to employ a revenue management strategy effectively, a number of conditions
must be in place.
These conditions are as follows:
56. Different customers must be willing to pay different prices for the same service or commodity;
57. The business must be some ability to predict the changing levels of demand ahead of time;
58. Only a fixed amount of resources are available to be sold at any given time;
59. A perishable inventory e.g. after a certain point, the resources can no longer be sold.
Role of Advertising
Advertisements play a major role in business. The business world is competitive, and advertising is used
to introduce a business, build a brand and position a company, product or service against the
competition. Advertising delivers strategic messaging and elevates awareness within the given market.
Several advertising media are used to deliver the advertisement to the market.
Advertising Media
Businesses can access audiences by advertising via a variety of media. Radio, television, print and digital
are the big outlets for advertisers. Numerous creative options also exist, such as gas pump ads, ads in
bathrooms and other eye-catching media. Radio, television and print are considered traditional media,
whereas digital covers everything online. Within the digital space, ads arrive via streaming radio and
television, paid search, social advertising and display or banner ads. All of these media enable a business
to deliver their advertisements and to measure response and sales increases as a result of the ad. Some
digital media offer extremely granular data to measure not only the response but also how those
respondents behave. This data is then used to improve the selling platform to increase conversions
based on successful behavioral traits.
Brand Awareness
Advertising drives brand awareness and builds trust with potential customers. Simply seeing your
business name more often than you see that of the competition will help in the long run. As an example,
many Fortune 500 brand advertisements do not focus on their product. They buy so much exposure that
simply pushing their logo and name has a positive return. Partnering with non-profits in advertisements
is another method of increasing awareness and positive associations. Even donating to local
organizations that show your brand on their media in return, is a form of positive brand association and
unintentional advertising.
Influence Buyer Decisions
The major influence of advertisements on business is the ability to influence buyer decisions and drive
purchases. Advertisers introduce their product or service in a credible and influential manner to educate
their potential customers. Unless a business has a high-traffic physical location, advertising is required to
simply let potential customers know they exist. In addition, advertisements can educate about a product
or service, make consumers aware of pricing or challenge the competition by showing how their
features are more beneficial.
B2C and B2B
Advertising happens on two levels. Business-to-consumer advertising is selling a product directly to the
public, whereas business-to-business sells among various business. The advertising processes are more
aggressive in the B2C world, whereas B2B advertising focuses heavily on sales and education. An
example of B2B business is a credit-card processing machine or POS system that’s sold to retail stores.
Personal Selling
Personal selling can be termed as the oral presentation given by the salesperson to one or more

than one consumers face to face to sell the product or service. Personal selling is a highly
peculiar form of promotion. It is mostly two-way communication, which not only involves a
particular individual but also social behavior.
The intention is to deliver the right product to the right customers. Depending upon the
complexity of product, personal selling plays an important role. Industries manufacturing
technical products like laptops, computers, digital phone, gadgets, etc., likely depend on personal
selling as compared to the other manufactures.
The reason behind this is to explain the features of the product, tackle the customer queries and
provide the best customer service. The competition in the market has increased today and
therefore the importance of the salesperson in the organization.
Salespersons are also called salesman or salesgirl or sales representative and their payment is
made as the commission to push the product in the market by motivating the customer through
oral conversation.
The consumer wants all kinds of goods and services in the market but lack of interest keeps them
away from making decisions or purchasing products. This is where the salesman needs to act as a
catalyst and explain the product or service to the customer. He/she should motivate the customer
by giving a presentation and he may sometimes act as a consultant. This helps the consumer to
make a decision.
In case of technical products, the salesperson plays a more vital role as compared to the
promotions. It becomes difficult for the customers to make decision while purchasing high value
products with complex nature. The salesperson helps the customers by making personal contact
with them and making them understand the quality and utility of the product.
Objectives of Personal Selling
Personal selling contributes in achieving the long-term objectives for the organization.
The following are some of the objectives of personal selling:
 To do the complete selling job when there are no other components in promotional mix
 To provide service to the existing customers and try to maintain contacts with the present
customers
 Identify and find new prospective customers
 Promote the products to increase sales
 Provide the information to the customers regarding the change in product line
 Provide assistance to the customers to help in decision-making
 Provide technical advice to customers for complex products
 Gather the data in relation to market and provide it to company’s management
The reason behind setting personal selling objectives is to make decision on sales policies and
personal selling strategies, which helps in promoting the product. The objectives are set for long-
term, as it becomes the important element for qualitative personal selling objectives.
The objectives can also be quantitative if they are short-term and it could be adjusted from one
promotional period to another. The quantitative personal selling objective is related to sales
volume objective. Hence, the sales volume objective should also be explained.
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Sales Promotion
Sales Promotion is one of the elements of the promotional mix. (The primary elements in the
promotional mix are advertising, personal selling, direct marketing and publicity/public
relations). Sales promotion uses both media and non-media marketing communications for a pre-
determined, limited time to increase consumer demand, stimulate market demand or improve
product availability. Examples include contests, coupons, freebies, and loss leaders, point of
purchase displays, premiums, prizes, product samples, and rebates.
Sales promotions can be directed at either the customer, sales staff, or distribution channel
members (such as retailers). Sales promotions targeted at the consumer are called consumer sales
promotions. Sales promotions targeted at retailers and wholesale are called trade sales
promotions.
Sales promotion includes several communications activities that attempt to provide added value
or incentives to consumers, wholesalers, retailers, or other organizational customers to stimulate
immediate sales. These efforts can attempt to stimulate product interest, trial, or purchase.
Examples of devices used in sales promotion include coupons, samples, premiums, point-of-
purchase (POP) displays, contests, rebates, and sweepstakes.
Sales promotion is implemented to attract new customers, to hold present customers, to

counteract competition, and to take advantage of opportunities that are revealed by market
research. It is made up of activities, both outside and inside activities, to enhance company sales.
Outside sales promotion activities include advertising, publicity, public relations activities, and
special sales events. Inside sales promotion activities include window displays, product and
promotional material display and promotional programs such as premium awards and contests.
Advantages of Sales Promotions
The main advantages in using sales promotional activity, either alone or to support mainstream
marketing activity and communications, are:
(i) Very flexible and adaptable in terms of tackling specific problems or supporting mainstream
marketing communications Bata national or local level
(ii) Capable of specific action through specific focus and structure
(iii) Relatively short lead times to design and implement (compared with media communications)
(iv) Often more easy to monitor the effect or tangible results
(v) Economical and cost saving, possibly with economies of scale
(vi) Can be adapted to large and small markets, major or minor products or brands.
11 Important Techniques of Sales Promotion
1. Rebate
Under it in order to clear the excess stock, products are offered at some reduced price. For
example, giving a rebate by a car manufacturer to the tune of 12,000/- for a limited period of
time.
2. Discount
Under this method, the customers are offered products on less than the listed price. For example,
giving a discount of 30% on the sale of Liberty Shoes. Similarly giving a discount of 50% + 40%
by the KOUTONS.
3. Refunds
Under this method, some part of the price of an article is refunded to the customer on showing
proof of purchase. For example, refunding an amount of 5/- on showing the empty packet of the
product priced 100/-.
4. Product Combination
Under this method, along with the main product some other product is offered to the customer as
a gift. The following are some of the examples:
5. Quantity Gift
Under this method, some extra quantity of the main product is passed on as a gift to the
customers. For example, 25% extra toothpaste in a packet of 200 gm tooth paste. Similarly, a
free gift of one RICH LOOK shirt on the purchase of two shirts.
6. Instant Draw and Assigned Gift
Under this method, a customer is asked to scratch a card on the purchase of a product and the
name of the product is inscribed thereupon which is immediately offered to the customer as a
gift. For example, on buying a car when the card is scratched such gifts are offered – TV,
Refrigerator, Computer, Mixer, Dinner Set, Wristwatch, T-shirt, Iron Press, etc.
7. Lucky Draw
Under this method, the customers of a particular product are offered gifts on a fixed date and the
winners are decided by the draw of lots. While purchasing the product, the customers are given a
coupon with a specific number printed on it.
On the basis of this number alone the buyer claims to have won the gift. For example, ‘Buy a
bathing soap and get a gold coin’ offer can be used under this method.
8. Usable Benefits
Under this method, coupons are distributed among the consumers on behalf of the producer.
Coupon is a kind of certificate telling that the product mentioned therein can be obtained at
special discount.
It means that if a customer has a coupon of some product he will get the discount mentioned
therein whenever he buys it. Possession of a coupon motivates the consumer to buy the product,
even when he has no need of it.
Such coupons are published in newspapers and magazines. Some companies distribute coupons
among its shareholders. Sellers collect the coupons from the customers and get the payment from
the company that issues the same.
9. Full Finance @ 0%
Under this method, the product is sold and money received in installment at 0% rate of interest.
The seller determines the number of installments in which the price of the product will be
recovered from the customer. No interest is charged on these installments.
10. Samples or Sampling
Under this method, the producer distributes free samples of his product among the consumers.
Sales representatives distribute these samples from door-to-door.
This method is used mostly in case of products of daily-use, e.g., Washing Powder, Tea,
Toothpaste, etc. Thus, the consumers willy-nilly make use of free sample. If it satisfies them,
they buy it and in this way sales are increased.
11. Contests
Some producers organize contests with a view to popularizing their products. Consumers taking
part in the contest are asked to answer some very simple questions on a form and forward the
same to the company. The blank form is made available to that consumer who buys the product
first.
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Publicity and Public Relations

Publicity
Publicity is defined as the way of disseminating information to the public at large, through
media. It can be in the form of news, stories, event information or write-ups, that creates
awareness and credibility in the people regarding a brand, product or the company offering them.
Publicity aims at spreading the information or news, to the maximum number of people, in
minimum time. It is a non-paid form of communication, which is not under the control of the
company. It can be a positive review regarding a product, i.e. mobile, television, refrigerator, etc.
given by a satisfied customer, or information published in the newspaper regarding the quality-
rich services provided by a company, or it can be a simple word of mouth, etc.
In a nutshell, publicity has nothing to do with the company’s sales; it is all about creating
awareness in general public through editorial or unbiased comments concerning a product.
Public Relations
Public Relations can be understood as the strategic management tool, which helps an
organization to communicate with the public. Here, ‘public’ means the group of people that have
an interest in or impact on a company’s ability to achieve business objectives. It is not only
concerned with getting public attention, but it also aims at reaching the goals of the organization,
by communicating the message to the target audience. It includes press releases, crisis
management, social media engagement, etc.
Public Relations is all about maintaining the positive image of the company in the eyes of the
public and developing strong relationships with them. It encompasses a range of programs
organised by the company to promote its product and services. There are many companies,
which have public relations department, which looks after the attitude of the appropriate public
and also spread information to them, to increase the goodwill.
The functions performed by the public relations department include press relations, corporate
communications, counselling, product publicity, etc.
Key Differences between Publicity and Public Relations
The difference between publicity and public relations can be drawn clearly on the following
grounds:
60. Publicity can be described as public visibility, wherein news or information is communicated to
the general public so as to build credibility or awareness in them, with the help of a channel, i.e. mass
media. On the other extreme, the term public relations, as the name suggest, is a strategic management
tool, that aims to create a company’s positive image in the eyes of the public.
61. While publicity is not under the control of the company, public relations is fully under the
company’s control.
62. Publicity can be positive or negative, in the sense that it can be positive or negative feedback
regarding the product or service concerning a product given by the customer or controversial news
about the company. Conversely, public relations is always positive, because it is strategised and
managed by the public relations department of the company.
63. Publicity is free of cost; as it is made by the third party. As against, in case of public relations, the
company incurs money to organize events, sponsor programs, third-party endorsement, etc.
64. Publicity involves, gaining the attention of the media, that communicates any information or
news, regarding a product, service, person, organization, etc. so as to create awareness in people. In
contrast, public relations seek to attract the target audience, for the purpose of boosting the company’s
sales.
By and large, publicity and public relations are different from one another, as in publicity is
when someone or something is being noticed by the media, and people are informed about it.
Unlike, public relations, is all about taking such steps, to maintain a good relationship with the
interested public, which includes customers, government, shareholders, creditors, suppliers,
government, etc.
Service Quality and Measurement

Every customer has an ideal expectation of the service they want to receive when they go to a
restaurant or store. Service quality measures how well a service is delivered, compared to customer
expectations. Businesses that meet or exceed expectations are considered to have high service quality.
Let’s say you go to a fast food restaurant for dinner, where you can reasonably expect to receive your
food within five minutes of ordering. After you get your drink and find a table, your order is called,
minutes earlier than you had expected! You would probably consider this to be high service quality
9 Practical Methods for Measuring Service Quality
65. SERVQUAL
This is the most common method for measuring the subjective elements of service quality. Through a
survey, you ask your customers to rate the delivered service compared to their expectations.
Its questions cover what SERVQUAL claims are the 5 elements of service quality:
24. Reliability – The ability to deliver the promised service in a consistent and accurate manner.
25. Assurance – The knowledge level and politeness of the employees and to what extend they
create trust and confidence.
26. Tangibles – The appearance; of e.g. the building, website, equipment and employees.
27. Empathy – To what extend the employees care and give individual attention.
28. Responsiveness – How willing the employees are to offer a speedy service.
 Mystery Shopping
This is a popular technique used for retail stores, hotels, and restaurants, but works for any other service
as well. It consists out of hiring an ‘undercover customer’ to test your service quality – or putting on a
fake moustache and going yourself, of course.
The undercover agent then assesses the service based on a number of criteria, for example those
provided by SERVQUAL. This offers more insights than simply observing how your employees work.
Which will probably be outstanding — as long as their boss is around.
 Post Service Rating
This is the practice of asking customers to rate the service right after it’s been delivered.
With Userlike’s live chat, for example, you can set the chat window to change into a service rating view
once it closes. The customers make their rating, perhaps share some explanatory feedback, and close
the chat.
Something similar is done with ticket systems like Help Scout, where you can rate the service response
from your email inbox.
It’s also done in phone support. The service rep asks whether you’re satisfied with her service delivery,
or you’re asked to stay on the line to complete an automatic survey. The latter version is so annoying,
though, that it kind of destroys the entire service experience.
3. Follow-Up Survey
With this method you ask your customers to rate your service quality through an email survey – for
example via Google Forms. It has a couple advantages over the post-service rating.
For one, it gives your customer the time and space for more detailed responses. You can send a
SERVQUAL type of survey, with multiple questions instead of one. That’d be terribly annoying in a post-
service rating.
It also provides a more holistic overview of your service. Instead of a case-by-case assessment, the
follow-up survey measures your customers’ overall opinion of your service.
It’s also a useful technique if you didn’t have the post service rating in place yet and want a quick
overview of the state of your service quality.
But there are plenty of downsides as well. Such as the fact that the average inbox already looks more
like a jungle than a French garden. Nobody’s waiting for more emails – especially those that demand
your time.
With a follow-up survey, the service experience will also be less fresh. Your customers might have
forgotten about it entirely, or they could confuse it with another experience.
And last but not least: to send an email survey, you must first know their emails.
3. In-App Survey
With an in-app survey, the questions are asked while the visitor is on the website or in the app, instead
of after the service or via email. It can be one simple question – e.g. ‘how would you rate our service’ –
or it could be a couple of questions.
2. Customer Effort Score (CES)
This metric was proposed in an influential Harvard Business Review article. In it, they argue that while
many companies aim to ‘delight’ the customer – to exceed service expectations – it’s more likely for a
customer to punish companies for bad service than it is for them to reward companies for good service.
While the costs of exceeding service expectations are high, they show that the payoffs are marginal.
Instead of delighting our customers, so the authors argue, we should make it as easy as possible for
them to have their problems solved. That’s what they found had the biggest positive impact on the
customer experience, and what they propose measuring.
1. Social Media Monitoring
This method has been gaining momentum with the rise of social media. For many people, social media
serve as an outlet. A place where they can unleash their frustrations and be heard.
And because of that, they are the perfect place to hear the unfiltered opinions of your customers – if
you have the right tools. Facebook and Twitter are obvious choices, but also review platforms like
TripAdvisor or Yelp can be very relevant. Buffer suggests to ask your social media followers for feedback
on your service quality.
Two great tools to track who’s talking about you are Mention and Google Alerts.
2. Documentation Analysis
With this qualitative approach you read or listen to your respectively written or recorded service
records. You’ll definitely want to go through the documentation of low-rated service deliveries, but it
can also be interesting to read through the documentation of service agents that always rank high.
The hurdle with the method isn’t in the analysis, but in the documentation. For live chat and email
support it’s rather easy, but for phone support it requires an annoying voice at the start of the call: “This
call could be recorded for quality measurement”.
1. Objective Service Metrics
These stats deliver the objective, quantitative analysis of your service. These metrics aren’t enough to
judge the quality of your service by themselves, but they play a crucial role in showing you the areas you
should improve in.
 Volume per channel. This tracks the amount of inquiries per channel. When combined with other
metrics, like those covering efficiency or customer satisfaction, it allows you to decide which channels to
promote or cut down.
 First response time. This metric tracks how quickly a customer receives a response on her inquiry. This
doesn’t mean their issue are solved, but it’s the first sign of life – notifying them that they’ve been
heard.
 Response time. This is the total average of time between responses. So let’s say your email ticket was
resolved with 4 responses, with respective response times of 10, 20, 5, and 7 minutes. Your response
time is 10.5 minutes. Concerning reply times, most people reaching out via email expect a response
within 24 hours; for social channels it’s 60 minutes. Phone and live chat require an immediate response,
under 2 minutes.
 First contact resolution ratio. Divide the number of issues that’s resolved through a single response by
the number that required more responses. Forrester research showed that first contact resolutions are
an important customer satisfaction factor for 73% of customers.
 Replies per ticket. This shows how many replies your service team needs on average to close a ticket. It’s
a measure of efficiency and customer effort.
 Backlog Inflow/Outflow. This is the number of cases submitted compared to the number of cases closed.
A growing number indicates that you’ll have to expand your service team.
 Customer Success Ratio. A good service doesn’t mean your customers always finds what they want. But
keeping track of the number that found what they looked for versus those that didn’t, can show
whether your customers have the right ideas about your offerings.
 ‘Handovers’ per issue. This tracks how many different service reps are involved per issue. Especially in
phone support, where repeating the issue is necessary, customers hate HBR identified it as one of the
four most common service complaints.
 Things Gone Wrong. The number of complaints/failures per customer inquiry. It helps you identify
products, departments, or service agents that need some ‘fixing’.
 Instant Service / Queueing Ratio. Nobody likes to wait. Instant service is the best service. This metric
keeps track of the ratio of customers that were served instantly versus those that had to wait. The
higher the ratio, the better your service.
 Average Queueing Waiting Time. The average time that queued customers have to wait to be served.
 Queueing Hang-ups. How many customers quit the queueing process. These count as a lost service
opportunity.
 Problem Resolution Time. The average time before an issue is resolved.
 Minutes Spent Per Call. This can give you insight on who are your most efficient operators.
Complaint Handling
When a customer feels strongly enough that his or her expectations have not been met, he or she may
make a complaint.
A complaint is when a customer brings a problem to the attention of the organisation and expects some
redress, probably over and above simply supplying the original product or service that was the cause of
the complaint.
Complaints are often used by regulators as one measure of the success of the organisation’s customer
service.
“Complainants” are defined as customers who have had a recent problem, and have told a member of
staff about it. They have not necessarily lodged a formal complaint, and their issue may or may not be
captured in an organisation’s complaints tracking system. The research also covers ‘silent sufferers’ –
customers who have a problem but do not report it to the organisation in question. In the research we
examine the different reasons why these customers do not make a complaint even though they are
dissatisfied, and the impact on their subsequent satisfaction.
The 5 rules of complaints handling for organisations
66. Have a strategic plan
Have a clear, flexible welcoming and open policy on complaints. A complaint is a gift when a customer
gives up their time to help you improve your organisation.
29. Train your staff and management in complaints handling
Give them confidence to tackle the difficult customers and support in their actions. Excellent complaint
handling isn’t easy and can sometimes be stressful and feel unrewarding. Confirm its importance in
providing great customer service.
 Give complaining enough priority and authority
Staff should be aware that complaints are a top priority item for your operation, and anyone who deals
with them must have sufficient authority to resolve them completely.
 Ensure that you can process complaints from all sources
There are 4 main ways to complain – in person, by telephone, by mail, by email/internet. Your
organisation must be able to handle all of these efficiently.
4. Set up processes to log and analyse all complaints and share with everyone
You can learn a lot about problems with internal processes, training, specific employees/managers, and
product for free.
10 processes and actions for setting up your complaints handling

4. Thank the customer for complaining
Say that you are sorry that the problem has happened. This is not an admission of guilt and it does
demonstrate respect for the customer.
3. Put yourself in the place of the customer
This will instantly give you an advantage, as you not only will have more empathy with the customer, but
also you know your business better than them and so can hopefully see the solution quicker.
2. Start with the view that the customer has a valid point, not that he/she are trying to rip you off
It is true that there are some professional complainers, but they are in the minority. if you are a local
store, you probably know them anyway. Accepting the customer may well have a point can trigger ideas
for an acceptable resolution.
3. Get all the facts first
Let the customer give you all of the information. This will help you fully understand the situation and, if
the customer is emotional, this will give them time to calm down. Don’t offer the complainant a free gift
straight away. It’s very tempting to give the customer a gift, or vouchers. In many cases it is good
service, but too often it is done instead of solving the problem, which can lead to more complaints about
the same thing because it hasn’t been fixed.
2. Correct the mistake
All of the other suggestions are pointless if you don’t fix the problem. Make sure that your definition of
the right fix is the same as the customer’s.
 Learn from every complaint
Fix the process: Train staff in the issue and eliminate the fault. Wherever possible let the complaining
customer know that they have helped you resolve a problem. They’ll come back again and again and will
probably spread the word.
 Minimise reasons for complaints
Do you have a continuous improvement culture? Do you check customer (and employee) satisfaction
regularly? Do you check the quality of the goods sold in your organisation?It costs at least 5 times as
much to gain a new customer than keep an existing one, and takes 56 days on average. Keeping this
complaining customer should be the top priority, and at these cost ratios you can afford to be generous
in your time and effort.
2. Always respond
In person complainers hopefully always get dealt with, but make sure that everyone who complains on
the telephone, by letter, or by E-mail gets a rapid and appropriate response.
3. Listen to your staff
They nearly always care about your company and doing a good job and are much closer to the
customers than you are. Ask their views regularly and make changes when they are sensible. Make sure
their complaints are handled too.
4. Lead by example
It’s not that your staff don’t listen to what you say, it’s that they do listen, so make sure that you are
always setting the right example, and giving complaints your personal priority. Reward good complaints
handling.
Recovery Management
In any given context of business services, service failure is inevitable as all services conforms to
characteristic of service; Intangible, heterogeneity, Simultaneous production & consumption and
perishablility. No two service encounters are precisely alike, hence increases discrepancy from each
service encounters.
A service failure is usually described as service performance that falls below customer’s expectations
which will have adverse effects on their satisfaction level for service encounters.
Therefore, a service recovery involves taking proactive and reactive actions by the service organization
to get things right for the affected customers following a service failure. In order to conduct an effective
service recovery from the perspective of organization, they must understand the implications of service
recovery and take specific set of actions to conduct effective service recovery tactics and strategies.
Service Recovery Strategies
When a service failure occurs, service recovery strategies will be needed to be implemented by service
organizations. This long-term strategy will be embedded as part of organization’s overall service
strategy. Service recovery is about the combination of a variety of strategies to solve the specific context
of the problem. The proposed eight strategies by Zeithaml et al. are:
The first strategy is to make the service fail-safe by doing it right the first time. It avoids negativities of
failures and it is the most important dimension of service quality. In order to achieve that, there must be
a top management commitment and a positive firm culture of ‘zero defection’ and appreciate
‘relationship value of customers’ to uphold the standards of service without blindly adopting the Total
Quality Management from the product perspective.
The second strategy is to encourage and track complaints. According to research, almost 50% of
customers encountered problems by do not complain. This segment will have a higher chance of
switching to competitor as organization has no control over it. Encouraging complaint is healthy and it
will allow organization to learn. Tracking complaints will ensure no complaints are left out. Technology
can be used to aid in handling of complaints.
The third strategy is to act quickly. Complaining customers want quick responses and do not want to be
ping-pong around different employees, which will seem to be shirking responsibilities. Even when full
resolution is likely to take longer, fast acknowledgement is required to appease them. There is positive
correlation between fast service recovery with satisfaction and loyalty.
The fourth strategy is to provide adequate explanations. This allows customers to understand why the
failure occurred. According to attribution theory, customer will understand and appreciate what is going
on and they will be more forgiving. The content and the style of the delivery must be suitable to the
affected customers subjectively
The fifth strategy is to treat customers fairly. They want justice in their complaint-handling process,
which involves procedure (speed, convenience, follow-up etc), interaction (behavior of service
representatives) and outcome. Therefore it is important that the process be handled properly to return
them the justice they seek. Recent research indicates that justice considerations have a large impact on
how customers evaluate firm’s recovery effort. Therefore, if they do not perceive themselves being just,
they will rate the recovery badly even when it is perfectly done. (Tax and Brown 2000)
The sixth strategy is to cultivate relationship with customers. Long term relationship will allow
customers to be more forgiving and open to the recovery process. Cultivation of strong relationship can
provide an important buffer to service firms when failures occur. The biggest challenge would be to
restore their confidence and trust again.
The seventh strategy is to learn from recovery experience. Organizations can learn through using tools
to help evaluate experiences. They can use blueprinting, control charts, fishbone diagram (cause and
effect diagram) to use those acquired knowledge in their recovery effort. The last strategy is to learn
from lost customers through market research and get into the root cause analysis of why they left.
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Service Guarantees
A service guarantee is a marketing tool service firms have increasingly been using to reduce consumer
risk perceptions, signal quality, differentiate a service offering, and to institutionalize and professionalize
their internal management of customer complaint and service recovery. By delivering service
guarantees, companies entitle customers with one or more forms of compensation, namely easy-to-
claim replacement, refund or credit, under the circumstances of service delivery failure. Conditions are
often put on these compensations; however, some companies provide them unconditionally
Features of a Good Guarantee
(i) Easy to Collect: The remedy should be supplied immediately. For example, a dis-satisfied customer at
Hampton Inn should receive an immediate credit for the price of the dissatisfying service. The customer
should not have to drive across town to obtain payment, nor should the customer have to fill out a
laborious form or accumulate a tedious amount of documentation.
(ii) Easy to Invoke: Let us consider the Hampton Inn guarantee, for example – Suppose the customer’s
air conditioning did not work on a hot summer night, and the problem could not be rectified, in spite of
bringing it to the management’s attention. For the guarantee to be effective, management should make
that night free, without waiting for the customer to ask. If it evident that the customer is dissatisfied,
and the problem has not been solved, then management should invoke the guarantee itself.
In most cases, management does not really trust the guarantee, and, therefore, puts up barriers to
invoking it. Management may be concerned about loss of revenues, which may be linked to
management compensation. This creates a natural tension between the intended corporate culture, as
desired by top management, and the actual corporate culture, as implemented by middle management,
may be the front line. Counteracting an employee’s natural reluctance to invoke or carry out the
guarantee requires careful training.
(iii) Easy to Understand: If the customer does not understand the guarantee, then that customer will not
see any benefit. For maximum effectiveness, the guarantee should be specific. For example, Domino’s
pizza guaranteed delivery in 30 minutes. That is much better than guaranteeing “fast delivery,” which is
hard to pin down. Be specific.
(iv) Meaningful: The guarantee must be about things that customers care about. A fast-food restaurant
guaranteeing 10-minute service at lunch will probably do better than one guaranteeing to address
customers by their first name. This is because fast service at lunch is important to fast-food customers,
whereas personal familiarity is not.
(v) Unconditional: If a guarantee applies only to left-handed people on Friday in a leap year when there
is a full moon, few customers will be very interested. By comparison, consider the Hampton Inn
guarantee. It says simply, “If you’re not completely satisfied, we don’t expect you to pay.
This is unconditional and you don’t need to be a lawyer to understand it. A guarantee loses power as
conditions are placed on it. Consider the Lufthansa on-time guarantee, for example. The conditions
exempted 95% of the cases to which it might be applied, reducing its effectiveness by at least that
percentage.
Benefits of Service Guarantee
(i) Sets Clear Standards for the Organisation: It prompts the company to clearly define what it expects of
its employees and to communicate that to them. The guarantee gives employees service-oriented goals
that can quickly align employee behaviours around customer strategies.
(ii) Forces the Company to Focus on its Customers: To develop a meaningful guarantee, the company
must know what is important to its customers — what they expect and value. In many cases
“satisfaction” is guaranteed, but in order for the guarantee to work effectively, the company must
clearly understand what satisfaction means for its customers (what they value and expect).
(iii) A Good Service Guarantee Studies the Impact on Employee Morale and Loyalty: A Guarantee
generates pride among employees. Through feedback from the guarantee, improvements can be made
in the service that benefits customers, and indirectly employees.
(iv) Immediate and Relevant Feedback from Customers: It provides an incentive for cu
stomers to
complain and, thereby, provides more representative feedback to the company than simply relying on
the relatively few customers who typically voice their concerns. The guarantee communicates to
customers that they have the right to complain.
(v) Reduces their Sense of Risk and Builds Confidence in the Organisation for Customers: Because
services are intangible and often highly personal or ego involving, customers seek information and cues
that will help reduce their sense of uncertainty.
Types of Service Guarantees
Further, previous research has identified four types of service guarantees:
(i) Specific
(ii) Unconditional
(iii) Implicit and
(iv) Internal
(i) A Specific Guarantee: Signals firm commitment on specific attribute performance such as delivery
time or price. Specific guarantees allow customers to evaluate service by disconfirming attribute
performance expectations. From the firm’s perspective, a specific guarantee can serve not only as a
benchmark to guide employee efforts and firm process design, but also as a performance measure.
However, the narrow focus on some attributes may not be highly valued or appreciated by a
heterogeneous customer base, although it may appeal to certain segments.
(ii) An Unconditional Guarantee: Promises performance on all aspects of service, and “in its pure form,
promises complete customer satisfaction, and at a minimum, a full refund or complete, no cost problem
resolution for the payout.” Unconditional guarantees require a slightly different firm approach since
variables that determine customer satisfaction such as effect and cognitive evaluations of attribute
performance (Oliver) are not within the firm’s control.
Implementation of unconditional guarantees requires firms to focus efforts on managing customer

interactions instead of specific service attributes. The distinction between specific or overall
(unconditional) performance is important as it defines the scope of the marketing effort required to
communicate and support the guarantee, and has widely different implications for service guarantee
design and management.
(iii) Implicit Guarantee: As the term suggests, it is an unwritten, unspoken guarantee that establishes an
understanding between the firm and its customers. Customers may infer that an implicit guarantee is in
place when a firm has an outstanding reputation for service quality. The focus of an implicit guarantee is
customer satisfaction. Previous research suggests that customers are more likely to rely on explicit firm
promises instead of implicit cues to make inferences about the firm.
(iv) An Internal Guarantee: It is “a promise or commitment by one part of the organization to another to
deliver its products or services in a specified way or incur a meaningful penalty, monetary or otherwise.”
Since implicit guarantees are unconditional guarantees (without formal expression of explicit
commitment) and the focus of internal guarantees is limited to coordinating functions and employees,
the subsequent discussion includes only specific and unconditional guarantees.
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Role of CRM
67. Scaling with the business efficiently
Sometimes, a business’s adoption of a CRM comes out of necessity. Rapid growth can make
manual CRMs—sometimes nothing more than spreadsheets or email folders—appear
inadequate. Many of these handcrafted systems offer minimum viability for five or ten customers
but have decreasing efficiency as a business grows.
A cloud-based CRM supports business growth without requiring continual reinvestment in

software or hardware. It also avoids the guesswork of exactly what capacity or features a
business may need. The ability to upgrade (or downgrade) as circumstances change lowers the
risk a business faces by adopting a CRM.
Furthermore, a CRM that is in use by hundreds or thousands of businesses likely has the ready
functionality to meet emerging business demands. Without adoption of a CRM, businesses may
continually need to develop new functionality for an internally managed system as the company
changes.
30. Sharing data in real time with all team members
In customer service, data sharing can mean more than just open access to customer information.
In fully integrated systems—such as those that pair a CRM with computer telephony integration
(CTI)—representatives gain instant access to a full customer record as soon as an interaction
begins.
This real-time access can expedite the handling of customer issues and reduce the total amount
of time spent with each customer. For example, a CRM can show a complete history of customer
interactions, which may include notes from previous calls in which a customer sought a
resolution for an ongoing issue. The representative can quickly address the outstanding item
without requiring the customer to repeat the entire history. That access can reduce customer
frustration and enable representatives to handle more customers in the same amount of time.
For customer service representatives that also have a role in sales, CRMs have an even larger
role. A comprehensive CRM may include a list of marketing materials received by a customer,
which can provide insight into consumer interest and existing knowledge. Additionally, a CRM
can improve information transfer between remote sales staff and in-house customer service
representatives.
The seamless data transfer keeps representatives informed while also improving a prospect’s
perception of a company’s overall management. Both benefits have the potential to increase sales
and boost revenue.
 Automating data entry for consistent, accurate information
The value of data sharing depends largely on the quality of data obtained. A complete set of
notes from a previous call may not be valuable if the content is disorganized or key dates are
missing. Without automated data entry, a busy sales representative may neglect to log a critical
sales call. Alternatively, a burdensome requirement for manual data entry may lower staff
morale. It may also waste valuable time that may be better spent building rapport through face-
to-face interactions.
An integrated CRM can automate many aspects of data entry to provide a clearer, more complete
picture of client interactions. The increased clarity provides representatives with more
confidence about the data in front of them and eases the burden of data maintenance.
The automation of data entry has benefits beyond the immediate improvements to
representative/client interactions. A standardized set of data points is key for customer service
managers to gain actionable insights from CRM analytics.
 Using analytics to verify processes and increase accountability
An automated data entry system for a CRM provides the raw material for business analytics. For
managers working with dozens or even hundreds of representatives, the data from a CRM
provides critical visibility into which practices should be standardized.
It can also help boost adoption by offering a data-backed rationale for behavior changes among
staff. A supporting dataset can make managers more influential with entrenched staff and garner
support among new hires to adopt an internal strategy for client interactions. It may also allow
managers to give team members liberty to test or experiment new methodologies, with the
resultant data able to define success.
Thus, these analytics insights can bolster accountability within a customer service center and
throughout an organization. Just as data can be used to improve the performance of individual
representatives, managers can also use data to show progress to executives or request changes to
staffing or procedures.
At the very least, the added accountability can help show the value of an online customer support
center. Basic data points like ‘calls handled’ or ‘sales completed’ are clear markers of utility. In
an ideal scenario, analytics data and increased accountability will also reduce costs.
5. Reducing costs to make customer service more efficient
A reduction in costs is one of the great benefits of a CRM. The improved data organization and
consistency builds efficiency into customer service interactions, and analytics can verify and
further these initial gains.
The reduced costs don’t necessarily mean a smaller or less significant department, either. A more
efficient customer service center may be able to redistribute resources to improve technology,
training, or compensation—all of which may also increase employee satisfaction and retention.
Of course, reduced costs are only one-half of the equation. A CRM also has the potential to
increase revenue, either through more sales or enhanced client retention. A high-quality customer
service experience—assisted by a CRM—can help deliver more consistent, informed messaging
to potential clients.
Are cost reductions or profit increases really possible through the adoption of a CRM? Resultant
analytics should go a long way toward proving the business case.
What to Expect from a CRM for Customer Service
For businesses in which customer support services are vital, a CRM can push and pull data from
multiple areas of the business to streamline communication within an organization and make
client interactions more effective.
A CRM can also lead to more data, better quality data, and increased access to data by relevant
team members. Customer service managers monitoring and reviewing metrics from a CRM can
use those figures to implement data-driven solutions that improve the performance of customer
service departments.
Finally, dedicated use of a CRM throughout a business can help achieve cost savings and
increase profits; benefits that impact everyone involved—representatives, managers, and
executives.
The Gaps Model Of Service Quality

The SERVQUAL Model (also called Gaps model) is an empiric model by Zeithaml, Parasuraman and Berry
to compare service quality performance with customer service quality needs. It is used to do a gap
analysis of an organization’s service quality performance against the service quality needs of its
customers.That’s why it’s also called the GAP model.
It takes into account the perceptions of customers of the relative importance of service attributes. This
allows an organization to prioritize.
There are five core components of service quality:

68. Tangibles: physical facilities, equipment, staff appearance, etc.
69. Reliability: ability to perform service dependably and accurately.
70. Responsiveness: willingness to help and respond to customer need.
71. Assurance: ability of staff to inspire confidence and trust.
72. Empathy: the extent to which caring individualized service is given.
The four themes that were identified by the SERVQUAL developers were numbered and labelled as:
31. Consumer expectation – Management perception gap (Gap 1)
Management may have inaccurate perceptions of what consumers (actually) expect. The reason for this
gap is lack of proper market/customer focus. The presence of a marketing department does not
automatically guarantee market focus. It requires the appropriate management processes, market
analysis tools and attitude.
 Service Quality Specification gap (Gap 2)
There may be an inability on the part of the management to translate customer expectations into
service quality specifications. This gap relates to aspects of service design.
 Service delivery gap (Gap 3)
Guidelines for service delivery do not guarantee high-quality service delivery or performance. There are
several reasons for this. These include: lack of sufficient support for the frontline staff, process
problems, or frontline/contact staff performance variability.
6. External communication gap (Gap 4)
Consumer expectations are fashioned by the external communications of an organization. A realistic

expectation will normally promote a more positive perception of service quality. A service organization
must ensure that its marketing and promotion material accurately describes the service offering and the
way it is delivered
5. These four gaps cause a fifth gap (Gap 5)
which is the difference between customer expectations and perceptions of the service actually received
Perceived quality of service depends on the size and direction of Gap 5, which in turn depends on the
nature of the gaps associated with marketing, design and delivery of services.So,Gap 5 is the product of
gaps 1, 2, 3 and 4. If these four gaps, all of which are located below the line that separates the customer
from the company, are closed then gap 5 will close.
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Understanding of Current Trends in Service Industries:

Financial
TOP 6 TRENDS IN FINANCIAL SERVICES INDUSTRY
73. The Boom of Big Data
Big data has almost made the pandemonium break lose in the field of data science. Data science,
business intelligence, and business analytics have penetrated in almost all areas. This has played
a pivotal role in redefining the way data is used. The management of finance industry is looking
out for professionals who are well equipped with the knowledge of business analytics. Rather, it
is a golden period for Business Analytics professionals, who will witness a sudden increase in
their demand. With the ease in the collection of data of consumers and their transactions in
addition to the development of techniques to use this information to build potential clients, the
financial services industry is certainly up for a big change.
This sea wave of change is sure to bring a huge demand for business analytics professionals.
32. Start-ups in India
Not to mention in India has witnessed an extension in the start-up industry deals by leaps and
bounds. The recent government also declared financial assistance for start-ups. You will see
many ideas lined up for investors and the financial services industry has much to do in this case.
With rising start-ups who need investments, there is a need for finance modeling professionals
who will develop financial models to interpret the financial viability of the projects.
 Outsourcing
Most Indian companies, acknowledging the increasing costs of setting up head offices in top
cities such as Mumbai, Delhi, Bangalore, etc., have decided to outsource their KPO activities to
Tier II and Tier III cities such as Pune, Jaipur, etc. Overcrowding of resources in Tier I cities has
induced the companies to set up centers in other cities, thereby increasing the employment
opportunities in these areas.
This proves there are growing employment opportunities for finance professionals in Tier II and
Tier III cities.
 NPAs
The threat of NPAs (Non-Performing Assets) has given birth to effective debt payment since the
attitude of MNCs is slowly changing these days. Companies no longer keep the attitude of
looking at debts as a primary source of funds or involve in siphoning of funds. This can serve as
a big booster to honest entrepreneurs and discourage defaults in payments.
Considering the change, there is bound to be increasing demand for credit analysts and project
finance experts who will evaluate the credibility and financial viability of the firm.
7. IFRS
With the much ado about IFRS, it has finally started making its impact in the financial
accounting of Indian companies. While voluntary adoption has already begun, some companies
have come under the ambit of compulsory adoption since 1st April 2016. This has necessitated
the demand of IFRS professionals who can guide into a successful change in the financial
accounting.
6. Payment Banks
Payment banks are redefining traditional banking since it is possible for them to reach out as
many rural areas who’ve never availed formal banking services. With more and more payment
banks getting licenses from the RBI, this move has become widely popular. The big names in
this industry include Paytm, Vodafone M-Pesa, National Securities Depositary, etc.
Payment Banks will ensure that even rural areas are availing facilities of formal banking
services, which in turn, will ensure that there is an increase in demand for support and finance
professionals.
The Indian economy is making its mark on the global map. That is the reason many MNCs are
opening up their units in India or outsourcing their activities to India. The Internet has already
created a revolution and the financial service industry is making its mark. Let’s see what 2016 is
going to bring in for us in the finance sector.
Current Trends of Hospitality in Service Industries

In any business, a solid marketing strategy is critical to building a brand, attracting new customers and
maintaining loyalty. The hospitality industry is no different. Because customer loyalty is key, marketing
managers and executives devote a lot of time and resources to building brand awareness and creating
ongoing, interconnected campaigns. These marketing efforts usually include both print and digital
collateral that target former guests while also attracting new clientele. However, this particular industry
has a unique set of challenges that must be overcome. Understanding the importance of marketing in
the hospitality industry can help you get ahead and stand out in the competitive job market.
The Basics
Hospitality sales are different from consumer goods sales because marketers must sell tangible as well
as intangible products. In many cases this means that they are marketing services rather than goods,
and success hinges on creating the right feeling in the consumer. For example, a resort will want to
cultivate a relaxing, fun atmosphere that is recognizable to customers and inspires those same feelings
in the consumer.
Because the hospitality industry is mostly made up of tourism and other experiential services, a
consistent brand identity is also very important. Marketers want to ensure that brand recognition exists
so that customers will use their services again and again. Repeat customers bring in a sizeable portion of
revenue, so marketing strategy must be split between maintaining relationships with past customers
while seeking out new ones.
Strategies for Success
Companies in the hospitality industry use various methods to develop and maintain an effective
marketing plan. The following are some of the general strategies that marketers use for brand success.
Research
Customers choose hotels and other hospitality services for a variety of reasons. From location to
facilities and perks, companies have to be sure that they’re providing what buyers are looking for. The
role of marketers is to identify what factors make customers choose a particular hospitality service, and
this requires extensive research. By speaking to current and former guests, monitoring customer
reviews on websites, reviewing industry data and more, marketing professionals learn what makes a
hospitality service stand out, as well as how it can be improved.
Awareness
If potential customers don’t know about a service, they can’t purchase it. That’s where brand awareness
comes in. Marketers make sure information on hotels, resorts and restaurants is easy to find and up-to-
date. They can do this by buying ad space on relevant travel sites, creating an engaging website and
collaborating with other, noncompeting hospitality services in the same market.
Promotion
Another smart strategy for attracting customers is to run promotions during certain times of the year,
usually when business is slower. Introducing incentives and offering incentives are just some of the ways
that marketing professionals achieve this. Have you purchased a Groupon for a spa weekend? That’s
promotion at work.
Relationships
To ensure high levels of repeat business, good customer relationships are vital. Not only do repeat
customers usually promote a service through word-of-mouth and social media, but they also create a
stable revenue base. One way to build relationships is through customer loyalty programs, which reward
customers who regularly use a particular hospitality service.
Current Trends in Health Services

Professional Referral Marketing
A reliable and continuing stream of inbound patient referrals from other medical, dental or other
professional sources is the lifeblood of many specialty providers. And whether it’s a primary or
secondary channel, professional referral sources can’t be taken for granted. Doctor referrals do
not happen by magic or simply because you are a good provider. Success requires a written plan
and an unfailing system to preserve and grow the flow of professional referrals.
Internet Marketing
From websites and social media tools, to patient portals and mobile apps, online marketing is a
mainstream channel for marketing, advertising and public relations. Exactly how you use the
muscle of the digital freeway can be highly effective and profitable, or a huge waste of time and
money.
Branding
This is all about standing out from the crowd in a positive way, and it includes virtually
everything you do. A powerful, differentiating brand for your healthcare business is part of your
reputation. Meaningful and effective branding does not occur without a deliberate effort to shape
and express the right message at the right time.
Internal Marketing
This heading includes all the ways and means that you communicate with people who already
know you, primarily present and previous patients. Depending on the nature of your practice or
situation, this influential audience can be a rich resource for referrals, additional services,
testimonials and/or word-of-mouth advertising.
External Marketing
These are the media that reach prospective patients that don’t know you. Advertising in
newspapers, radio, television, billboards and the like target an audience that needs to know that
you provide an answer for their healthcare need. There’s little margin for error in an external
media budget that is expected to produce a measurable return-on-investment.
Public Relations
This heading includes, among other things, planning and generating healthcare publicity and free
press exposure, such as newspaper articles or broadcast interviews. The end results look easy,
and it can be a positive and powerful influence. But “free press” typically results from careful
planning, good timing, a clear message and a deliberate effort.
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Current Trends in Telecom Services

Telecommunication, also known as telecom, is referred to the exchange of information by electronic

means such as telephones, microwave communications, satellite, radio, fiber optics etc. through voice,
data and video transmission over long distances. Since the advent of the internet, telecommunication
has been one of the major driving force behind the global development and value creation.
Recently, there are many changes occurring in the telecom industry which can easily be attributed to the
advancement in technology. High rates of growth are being forecasted for this fastest growing market.
Telecom companies and virtually all businesses that access telecom networks will feel both the
immediate as well as far-reaching impacts because of these major trends that are currently being
circulated in the telecom sector.
The Internet of Things
The Internet of Things or IoT is the collection of smart devices that talk to each other (and to us) through
wireless technology. IoT is going to be our future ecosystem which will connect everything we have from
our home to work to our car to even the heart monitors.
Since IoT is a new territory for telecommunication companies and mobile operators, it can prove to be a
challenge as well as an opportunity for customers who depend heavily on telecommunication
companies for reliable and high-speed internet connection.
Apart from providing services and investing on valuable user data from IoT devices, telecom companies
will invest more in building infrastructure committed to providing 5G and secure carrier-grade WIFI
networks along with transferring a large amount of data securely.
Platform-based Services
Another big trend of this year which got everybody into talking is the rise of platform-based services.
Since one of the challenges, today faced by the telecom industry is that of stagnating revenues, more
and more operators are shifting from connectivity providers to platform providers in order to generate
greater value.
5G Wireless
Due to the ever-growing demand for faster internet, every major telecommunication company is
competing hard among themselves to win the race for dominance over the 5G network which is
probably one of the hottest telecom trends of this year.
5G is not only important because of its lead role in next-generation IoT and M2M applications such as
augmented/virtual reality and autonomous vehicles but also because it is essential to meet the ever-
increasing demand for higher data rates and capacity.
We will also witness a significant increase in the number of research connected to 5G networks along
with lots of advancements from other industries such as agribusiness, energy, and transportation etc. in
the development of 5G networks.
Content is (always) King
Internet TV is another hot trend of this year which is made possible due to the rise of content along with
streaming services such as Netflix, Amazon Prime, and Google YouTube premium.
Because of this, telecom operators are on the lookout for new business models that are based on
content along with heavy investments in software and platform development and merging with content
providers.
Cloud Computing
Clouds are basically remote servers that host data storage and applications, Cloud Computing saves the
expenditure on IT assets as these files can be accessed by users on a pay-as-you-go basis from literally
anywhere across the globe.
Telecommunication sector is keenly interested (and therefore have heavily invested) in this technology
due to its efficiency, convenience and pay-per-use models from geographically independent third-party
suppliers.
Cloud services have enabled telecom industry that offer call center services to deliver cloud capabilities,
manage connectivity and leverage network assets in order to enhance computing capacity, cloud
offerings, and deliver-on-demand applications.
Network Security
Last year was full of news about data breaches in some high-end companies which have prompted
network providers to come up with more robust protection techniques rather than data being simply
transported through traditional means.
Focus on network security this year will be more important for telecom industry than ever before, which
will be processed through the shift in encrypted data from a niche play to more pervasive technology.
Data Centers
Till now, the telecom sector has used data centers to organise, process, store and disseminate large
amounts of data, application, and services in a facility composed of networked computers and storage.
As the telecom industry will continue to integrate cloud computing into its IT operations, besides
managing increased data, more and more focus will shift toward improving the current underlying
infrastructure,
The demand for smart data center solutions will continue to grow in the upcoming years and as a result,
telecom operators providing BPO services India and other such developing countries will be pressurized
to deliver faster data along with more flexibility than ever before.
Closing Thoughts
In today’s increasingly connected ecosystem of digital products and services, mobile phones remain the
central point and telecommunications, the keystone sector of connected networks such as IoT, personal
connectivity, smart cities etc. and traditional telecommunication values and related assets, this year, will
give rise to rapidly changing technologies, customer preferences and proposed regulations.
Current Trends in Consultancy Services

The management consulting industry is undergoing a transitionary phase. Although it has witnessed
encouraging growth figures recently, consulting firms would need to navigate some impending
challenges to continue the upward trajectory. Key trends prevalent in the consulting world are explained
below.
New frontiers
A consulting firm cannot keep charging high rates for what’s now seen as “commodity” consulting. The
growth of firms and their ability to acquire new business will hinge on how they can provide tangible
value addition in the twin opportunity areas of automation and new regulations.
74. Automation: Technological transformation is leading to new business models, disrupting

company structures. Innovation and differentiation offered by consulting firms will be critical to framing
new operational models for their clients. Skill sets such as Agile, AI (artificial intelligence), and analytics
will be crucial in providing a digital and customized customer experience.
75. Legislation: Regulatory changes, influencing the industries consulting firms cater to, will require
the firms to stay relevant and provide high-value advice. This would be best achieved by upgrading their
skills and service delivery mechanisms to suit the new order. Existing commoditized practice areas will
continue to shore up the lion’s share in the sector, but will command lower rates comparatively.
Multi-Sourcing
Gone are the days when a large multipronged project would be awarded to a single consultant and
consultancies would have all the capabilities in-house to deliver solutions to clients. By contrast, it is
becoming increasingly difficult for a single firm to offer all services, given the transformation in various
practice areas. Firms are, therefore, partnering with specialists to offer a whole spectrum of services.
Concurrently, corporates are increasingly asking multiple firms to collaborate so that they receive
expertise in every niche area of a single large project.
This has led to the emergence of disruptive models, of which the most notable is “crowdsourcing.” In
this model, a network of freelancers and small firms come together online to provide solutions to a
client.
Gig economy
Also known as “a la carte model” or the “uberization” of the consulting industry, by definition, it refers
to the transactional and commoditized engagement between a client and a consulting firm. Clients
choose the services they need and when they need and end the engagement on the completion of the
project. Since it does not involve long-term relationships between a client and a consultant, talent
development in consulting firms may be impacted, as firms will focus on short-term or project-based
requirements.
Talent management
The performance of a consulting firm is directly correlated to the wealth of talent it possesses and can
deploy in a particular engagement. Clients are selecting team members who will work on their
engagement. While scouting for the best talent, firms are looking beyond the boundaries of universities
and focusing on specific skill sets to bring onboard diverse candidates with unconventional and creative
aptitudes.
There is an emerging trend where consulting firms are devising ways to sell services or products that are
not dependent solely on the resources employed.
Performance-based billing
Clients are engaging with consultants to extract “value for money,” in the form of operational
improvement or strategy formulation. Thus, consultants would do well if they “define” and “deliver”
outcomes of an engagement and share the client’s risks and rewards. This would entail premium/higher
pricing than the regular time and materials model of pricing.
Current Trends in Logistic Services

Blockchain Technology
The emergence of blockchain technology has enabled logistic companies to failsafe digital
contracts. The use of this upcoming technology allows the different stakeholders of the logistics
industry such as manufacturers, suppliers, customers, auditors, warehouse managers, and others
to create a transparent and efficient system for recording transactions, tracking assets, and
managing all documents involved in the logistics process. The implementation of the blockchain
technology is one of the most prominent logistics trends gaining traction in the global blockchain
technology market in transportation and logistics industry as it can increase the efficiency and
transparency of supply chains and is expected to impact everything from warehousing to delivery
top payment positively during the next few years.
Digitalization of the Logistics Industry
With digitalization shaping almost all the industries across the globe, logistics industry is no
exception. Rising digital literacy and consumer awareness about the usage of different online
platforms for making customized purchasing decisions, the digitalization of the logistics industry
has emerged as the key trend gaining utmost traction. The use of digitization in the logistics
industry is further expected to bring about significant reduction in procurement and supply chain
costs while giving a considerable boost to the overall revenues. The integration of digital
channels in the logistics industry is another critical logistics trends further allowing the logistics
service providers to lend transparency to the customers while optimizing solutions for increased
safety and efficiency.
Emergence of 3PL and 5PL
The proliferation of third-party logistics (3PL) and fifth-party logistics (5PL) is expected to
accelerate the global logistics market during the predicted period. During 2017, the 3PL was able
to contribute the highest to the global logistics market share. 3PL is responsible for
encompassing a broad range of end-to-end transport and logistics needs including transporting
goods, maintaining inventory logs and travel insurance, and offering a shield against property
loss. Furthermore, according to Technavio’s express delivery market in Brazil, 3PL is one of
those advancements in supply chain outsourcing, which provides decreased procurement
expenses as well as reduced delivery times. The rising complexities in the global supply chain
market are further ensuring the adoption of 5PL, wherein, providers of 5PL solutions often link
e-businesses to achieve minimum cost targets.
Efficient Last Mile Deliveries
With the continuously increasing proliferation of e-commerce companies, the provision of

efficient last mile deliveries is witnessing a major upswing to become one of the most critical
aspect of creating differentiation of services among the competitors. Furthermore, getting a
package within the same day of delivery is almost common in the present days, resulting in the
growth of the same-day delivery market in the US. Businesses are also witnessing a greater
emphasis on including same day delivery options across industries including pharmaceuticals
and food and beverages. Furthermore, along with the same-day delivery, the consumers are also
expecting a higher level of services while encouraging large retailers including Walmart and
Amazon to add DIY last mile delivery divisions in their own companies instead of outsourcing.
Consequently, the continuous efforts of logistics companies to offer efficient last mile deliveries
is another logistics trends expected to offer promising logistics market’s growth during the
predicted period. The need for getting the orders not just right but perfect will also allow
companies to offer ultimate customer satisfaction.
Integration of Drones and Smart Glasses
The rising integration of drones and smart glasses in the logistics industry has improved the
flexibility and speed of delivery, in turn, impacting the growth of last mile logistics market
during the predicted period. Self-driving vehicles, autonomous vehicles and trucks have been
able to maintain high reliability and same-day delivery in both urban and rural areas.
Furthermore, integration with smart glasses backed by augmented reality will make deliveries in
the transportation and logistics industry much easier by hands-free route searches, face
recognition for error-free deliveries and personalized deliveries. The adoption of AI integrated
smart glasses will increase the operational efficiency of first and last mile logistics along with
flexibility and speed of delivery.
Logistics Automation and IoT
Automation has been gaining traction in the logistics industry as well with the continuous
adoption of Internet of Things (IoT). The inception of logistics 4.0 is one of the key logistics
trends transforming the global supply chain market. Shortcomings including transportation
delays, operator errors, poor monitoring of cargo, outdated IT failures, and thefts are being
overcome by the integration of IoT in the logistics industry. Furthermore, this next generation of
successful supply chain management is expected to leverage IoT and edge computing for
yielding real-time automated insights. For instance, US-based Union Pacific has introduced an
IoT-based system to predict equipment failures and reduce derailment risks by using visual and
acoustic sensors on tracks. Such rising adoption of logistics automation and IoT has boosted the
emergence of connected logistics.
Logistics Safety Becomes the Topmost Priority
With greater connectivity to the internet, there have been rising concerns among the companies
pertaining the cybersecurity and logistics safety. Furthermore, the protection of consumers’
private data is another key concern making the safety of logistics solutions as one of the topmost
priorities. Continuous hacks into the websites of e-commerce companies including Amazon,
Walmart and others have revealed potential cyber security threats. This has further encouraged
logistics providers to focus more on offering secure logistics solutions. According to
Technavio’s global secure logistics market, various logistics companies including FedEx and
International Post Corporation are using technologies like automatic identification and data
capture (AIDC) for keeping a track of the shipments in real-time, in turn, resulting the market to
register a CAGR close to 7% by 2022.
Elastic Logistics
Elastic logistics is expected to emerge as the latest conceptual buzzword in the logistics and
supply chain industry. It basically refers to the flexibility of expanding and shrinking capabilities
for aligning with the demands within the supply chain during a timeframe. The use of elastic
logistics is one the latest logistics trends that can help companies across the globe by enhancing
customer experience, providing agility and scalability, adding real-time visibility, and connecting
all business processes. The changing demand and fluctuations in orders are being handled by the
3PL companies by making their operations much elastic for planning the capacity according to
the requirement.
Implementation of Chatbots and Collaborative Robots (Cobots)
According to the Logistics Bureau, the use of voice-controlled chatbots for interacting with users
to perform specific actions at several purchase points in a supply chain including shopping,
ordering, picking and others are expected to trend continuously in the global logistics market.
Furthermore, robotics is also set to revolutionize the logistics industry with e-commerce giants
including Amazon engaging in the increased development of logistics robots for several
functions in warehouses including packaging, storing, and picking. In addition, various players in
the market are leveraging the inception of collaborative robots or cobots which will be used for
effective order fulfillment warehousing and delivery operations. Consequently, the rise of
Robots-as-a-Service (RaaS) subscription business model will allow retailers, third-party logistics
firms, and e-commerce sites to use robots for addressing their fulfillment needs, in turn, resulting
the global logistics robots market to witness significant growth throughout the predicted period.
Current Trends in Education Service Industries

Educators, administrators, and those in higher education who are committed to ensuring quality
experiences for students across the ages (and for new growth opportunities for themselves too) should
be excited for the year ahead
76. Opportunities to develop programs for Career & Technical Education (CTE) and associated high-
quality apprenticeships and best practices will emerge; e.g., health, automotive, and mechatronics
programs. A bill passed by the House in 2017 focuses on improving CTE programming, recognizing that
not all programs are equally well resourced or supported. The education field will need to carefully
balance early career opportunities in these fields with program features that set students up for long-
term success as fields evolve over time
77. Opportunities for practicing teachers to participate in residency-based preparation programs for
pre-service teachers will continue to grow, including the use of the gradual release model in teacher
preparation clinical experiences. Residencies are commonly designed to support areas of high need
(secondary math and science, special education) that result from extensive teacher turnover,
particularly in major city school districts. The creative partnership between districts, graduate programs
of education, and non-profits that fund stipends for the candidates can result in teachers who stay in the
system for longer periods, providing students with increased learning opportunities from experienced
teachers.
78. Teachers and school leaders will see opportunities to become trained mentors and leaders in
providing induction programs with mentoring and support through the early years of an educator’s
career in both the teaching and school principal professions. Programs such as those offered through
The New Teacher Center have been around for quite a while but renewed attention to issues of turnover
and attrition in the field continue to focus efforts that support new teacher retention. Programs are
available at the school, district, and state level that foster ongoing reflection and mentoring
opportunities for early career teachers and administrators.
79. Information on building the skills of paraprofessionals who work alongside teachers in
classrooms will really develop. As paraprofessionals continue to work with some of the most
marginalized populations in classrooms, building their skills and capacities for this work is crucial for
ensuring quality educational experiences for all. Finding creative ways to embed professional
development opportunities within and throughout the school day and year will continue to be a goal for
districts around the country.
80. Leveraging technology in education will be of paramount interest to teachers and educators;
e.g., Flipgrid, a video discussion platform is being employed with young children in schools. It is amazing
how quickly young children engage and embrace learning with the opportunity to incorporate
technology into their practice. Tools that foster oral, audio, and written skills are of interest to young
learners and allow them to express themselves beyond the capacity of their writing abilities.
81. Interest in information on trauma-informed practices will continue to increase across education
as teachers and other education professionals seek resources for responding to traumatic events that
affect children of all ages. Studies show that 25% of children under the age of 16 have experienced
trauma in their lives. Children bring their lives with them to school, and schools and teachers are
learning to adapt classroom management strategies, instructional supports, and school climate to
support children who have experienced trauma to help them build their resilience over time.
82. Educators will need to adopt more inclusive practices in education—practices designed to
enable a child with a disability to be involved in, and make progress in, the general education
curriculum. Inclusive education is not a new concept, but educators continue to progress in their
knowledge about effective ways to support students with a wide range of needs in the least restrictive
environment possible.
83. There will be a continued focus on student achievement and its connection to school/teacher
evaluation systems. States have designed and redesigned systems that look closely at teacher evaluation
through the lens of student achievement on various assessments (some local, some state, some
national). There are many thoughts on the validity of assessments as linked to teacher or school
evaluation, and this is a conversation that will continue for a long time!
84. Career pathways for teachers that build on exemplary classroom practice will be highlighted;
e.g., mentoring skills, teacher leadership roles. Teaching is often considered a “flat career” because
there are few steps forward in the profession outside of leaving the classroom for administrative
positions. Because not all teachers are interested in those types of roles, teaching has slowly embraced
some positions that are informal (like new teacher mentoring in some places) or formal (TOSAs—
teachers on special assignment, instructional coaches) that create a new space for additional
professional growth and development. These roles honor the capacities of teachers while building on
their expertise to support curriculum, instruction, and new teacher growth in schools.
85. The existing teacher shortage—especially in special education, math, and science, and in schools
serving students of color, low-income students, and English Learners—will continue through 2018 and
will increase, based in part on the predicted increase in the school-going population in the upcoming
decade. Additionally, as the baby boomers move towards retirement, the need for teachers will
continue to grow. While this is not a new problem, the challenges are present across the nation and will
likely have to be tackled on multiple fronts at once to result in true change.
Current Trends in ITES (IT enabled Services) Service
Industries
A digital network is emerging to support the upcoming digital business and its underlying technology
platforms and IT practices. It focuses on people and the Internet of Things (IoT) endpoints. The digital
business evolution is exploiting new digital models to align more closely to the physical and digital world
for employees, partners and customers. Technology is rooted in everything. Digital technologies such as
mobile, social media, smartphones, big data, predictive analytics, and cloud etc. are different than the
preceding IT-based technologies. Newer technologies touch the customers directly and that interaction
creates a source of digital difference that matters to value and revenue.
The companies are searching for ways to cut costs while at the same time grow capabilities that are core
to their future growth. Traditionally, Technology strategy was viewed as a cost center, however now
organizations formulate technology strategy as it acts as enabler of future business success. Technology
helps organizations expedite business outcomes with best-in-class cost structures. To create strategic
plans for next FY year, organizations should consider top 10 Disruptive Technologies Trends for 2019.
Trend No. 1: Artificial Intelligence and Advanced Machine Learning
Applied AI and machine learning are composed of many technologies and techniques (such as deep
learning, neural networks and natural-language processing [NLP]). These technologies, which are
different from traditional algorithms and programs, make the machines intelligent. Gartner predicts that
the applied AI advanced machine learning will inspire applications like robots, autonomous vehicles,
consumer electronics, virtual personal assistants, and smart advisors. The smart machines are context &
event driven. They will be able to deal with complexities, understand, learn, predict, adapt and act
anonymously.
Trend No. 2: Intelligent Apps
Organizations are applying AI and machine-learning techniques to create new apps. Intelligent
applications like personal assistants are making our lives easier. Gartner expects that future assistants
will be more specialized and equipped with potential to transform the workplaces and homes. Virtual
Personal Assistants (VPAs) make tasks easier and users effective by highlighting important information
and interactions, virtual customer assistants (VCAs) help in specialized areas like sales and customer
service. Packaged app and service providers are increasingly using AI and machine-learning techniques
to deliver more robust systems. Over the course of next 10 years, every application, and service will
make use of some kind of AI. Artificial Intelligence and Machine Learning is used in intelligent sensors,
smart appliances, operational & security applications, smart enterprise apps etc.
Trend No. 3: Intelligent Things
Intelligent things are the machines that use applied machine learning to interact with the surroundings
and people more naturally. Gartner expects that intelligent things like drones, autonomous vehicles and
smart appliances will work together in an intelligent and collaborative environment. The autonomous
vehicles is used in controlled settings like farming, mining and warehousing etc. Autonomous drones and
robots will undergo significant technical evolution powered by new AI and machine-learning models and
algorithms. They will be used in defined scenarios and controlled environments. AI and machine learning
will increasingly be embedded into everyday things, such as appliances, speakers and hospital
equipment etc.
Trend No. 4: Virtual Reality and Augmented Reality
Presently VR and AR technologies are in nascent phase. They are new wave of computing devices that
will transform the way individuals interact with one another and with software systems. Gartner expects
that the landscape of immersive consumer applications will evolve at a rapid pace through 2021. They
will form a digital network by collaborating with apps, mobile, wearables, and IoT devices and will
extend immersive applications beyond isolated and single-person experiences.
Trend No. 5: Digital Twins
Digital twin refers to a dynamic software model that uses sensor data to understand its state. It
responds to the changes accordingly and improves its operations. They include a combination of
metadata, state, event data, and analytics. Gartner predicts that within 3-5 years, hundreds of millions
of things will be represented by digital twins. They will be used for planning and repairing equipment
services, predict equipment failure or increase operational efficiency, planning manufacturing processes
for operating factories. They will replace the combination of skilled human resources, traditional
monitoring devices and will perform enhanced product development.
Trend No. 6: Blockchains and Distributed Ledgers
Blockchain and distributed-ledger concepts are becoming popular as the industry thinks that they hold
the power to transform the operating models. Apart from the financial industry, they have future
applications in identity verifications, title registry, supply chain, healthcare, music distribution etc.
Bitcoin is the only proven blockchain. Its architecture not only supports bitcoin transactions, but also
enables authoritative recording of events, immutable snippets of data and simple programmable scripts.
They lack scalability, complete transparency, have limitations concerning consumption of resources,
Operational risk from unintended centralization of resources (mining) etc. They also bring adoption
challenges like lack of standards, robust platforms, scalable distributed consensus systems,
interoperability mechanisms. While they have immense potential, Gartner says that they are still in their
early alpha or beta testing stage.
Trend No. 7: Conversational Systems
In future, in the conversation interface arena, the focus will shift from chatbots and microphone-
enabled devices to the digital meshes that will encompass a wide range of endpoints. According to
Gartner, Dynamic natural-language ontologies or knowledge graphs at multiple levels of specificity will
be needed to support NLP capabilities, such as disambiguation, concept identification and relationship
extraction. Apps will target an orchestrated collection of devices being used together, rather than an
individual device used in isolation. This will preserve continuity of user experience across traditional
boundaries of devices, time and space. There will be greater cooperative interaction between devices,
creating a path for a new ambient digital experience.
Trend No. 8: Mesh App and Service Architecture

The mesh app and service architecture (MASA) is a multichannel solution architecture that supports
multiple users in multiple roles using multiple devices and communicating over multiple networks to
access application functions. In MASA, mesh app and service architecture, mobile, desktop, and IoT apps
are connected to a mesh of back-end service to create an application for the end user. This architecture
exposes APIs at different levels balancing the demand for agility and scalability of services. It allows the
users to have an optimized solution for endpoints in the digital mesh as well as a continuous experience
as they shift across these different channels.
Trend No. 9: Digital Technology Platforms
They act as a basic building block for a digital business. Gartner has specified 5 major focal points that
enable new capabilities and model businesses. These points are-
86. Information system platform: Supports the back office, operations such as ERP, core systems,
and associated middleware and development capabilities to deliver solutions.
87. Customer experience platform: Contains the main customer-facing elements, such as customer
and citizen portals, multichannel commerce, and customer apps.
88. Analytics and intelligence platform: Contains information management and analytical
capabilities. Data management programs and analytical applications fuel data-driven decision making,
and algorithms automate discovery and action.
89. IoT platform: Connects physical assets for monitoring, optimization, control and monetization.
Capabilities include connectivity, analytics, and integration with core and operational technology
systems.
90. Business ecosystem platform: Supports the creation of, and connection to, external ecosystems,
marketplaces and communities. API management, control and security are the main elements.
Trend No. 10: Adaptive Security Architecture
The intelligent digital mesh and related digital technology platforms and applications are creating
complex world for security. The technology companies will be focusing more on the security applications
due to a complex world of interconnected platforms and applications. Organizations will need security-
aware application design, application self-protection, user and entity behavior analytics, API protection,
and specific tools and techniques to address IoT and intelligent app related vulnerabilities. With the
addition of the IoT frontier, slowly, we are observing newer security implications. Security providers will
have to factor new remediation tools and processes.
Current Trends in Travel & Tourism Service Industries

Travel & Tourism marketing is different because the customer purchases a series of services, but is left
with very little concrete value at the completion of his trip. As a result, the marketing initiatives have to
emphasize the value of the memories, make the collection of services easily accessible and add value
through additional programming and other factors. A key challenge is to convince potential customers
that the item they are purchasing provides good value for the price, and that the services will be as
described and expected. The 8 P’s in marketing tourism summarize the special approach that is
required. Many small businesses market tourism products and employ these marketing strategies.
Product: What You Have to Offer
The product is the collection of services that have features and benefits. Standard features and benefits
include the normal amenities of a hotel room, for example. Good marketing adds special features, such
as free breakfasts or free Internet.
Price: What Customers Will Pay
The price has to match the product, but good marketing makes the price seem more attractive. The
operator can either add features to the product and keep the price the same or give a discount for the
same features.
Promotion: How You Sell Your Wares
The promotion gives details of the product and the price. The key characteristics of your Travel & travel
marketing strategy are the method of communicating the information, the content of the promotion
and the cost to the operator. The promotion has a target market, and the method and content of the
promotion has to appeal to the people who it reaches. The price the members of the target market are
willing to pay has to cover the cost of the promotion.
Place: Where You Do Business
Place refers to the location where the customer buys the collection of services. Ideally, the operator
who sends out the promotion uses it to encourage the potential customer to visit the operator’s
location and complete the purchase. With the convenience of online payments, the operator may find
that the best strategy is to direct potential customers to an attractive website where they can complete
the purchase.
People: Your Hidden Strength
Since the product is a collection of services, the people who provide the services are a key to the success
of the transaction. Operators must have top-level service to initially complete the sale and to encourage
repeat customers.
Planning: Look Ahead
The key service component of the Travel & tourism experience is planning. The customer expects that
the experience will correspond closely to what he purchased. The only way to ensure that kind of
correspondence is to execute according to detailed plans, and have contingency planning in place for
problems.
Programming: Cater to Your Clients
One way to add value to the standard product and to distinguish a particular offering from competitors
is to offer exclusive programming, a practice known as service marketing. Customers will purchase a
product that caters to their particular interests. Special programming can address such preferences and
draw in additional customers.
Physical Evidence
If possible, the provision of physical evidence that the customer experienced the particular tourism
product can help sales. Providing professional photographs of the customers at key events or the supply
of branded products are effective strategies for promoting particular tourism products.
Current Trends in e-Services and Professional Service

Industries
91. Social Media Adoption
For finding and engaging client’s online, marketing services, and monitoring competitors,
professional services firms have widely started using social media. This is an understandable step
forward since the global web content, search portals, and social media market grew at 13% in the
historic period, and it is forecast to register 11.8% growth rate from 2016 to 2020, driven by the
increased number of internet users worldwide and by people’s attitude towards new ways of
communication through social media.
An enhanced social media presence helps professional services firms to improve brand
awareness, increase their client base, boost client satisfaction, and deepen client relationships.
The rapidly increasing use of social media makes it important for professional services firms to
harness the power of social media to achieve their firms’ overall goal and vision.
33. Virtual Firms in the Professional Industry
Rapid technology change, increased pressure to reduce costs, and increased use of smartphones
is making the concept of virtual firms more attractive to many in the industry. In the future, more
professional firms will go virtual and have few permanent offices.
By hiring contract employees, placing the entire infrastructure in the cloud, and utilizing a small
number of physical offices, professional services firms can cut their costs and help increase their
revenue. Professional services firms need to adapt to technology changes and should be ready to
take major steps in this direction to take on new business challenges and maximize growth.
 Value-Oriented Revenue Model
Traditionally, professional services firms have been charging their customers on an hourly basis.
In line with increasing wages and rapid pressure from clients to decrease pricing, many
professional firms are shifting towards value-oriented billing. Value-oriented billing is easy to
apply in the professional services industry since the value (such as tax savings, damage awards,
ad placements, or the size of an acquisition or merger) is explicit.
It is expected that more professional services firms will shift to value-based pricing as they try to
become “advisors” rather than just being service providers paid by the hour. Professional service
firms should shift from hourly rates to value-based pricing. This shift can help professional
services firms to increase their revenues and profitability.
 Emergence of Modularization
Services are now being split into several individual components and sold separately rather than
bundled together. A growing number of clients prefer to pick and choose service elements that
can be executed in house and allocate the rest to specific service providers. This approach is
called modularization of services. Modularization is particularly appealing when a single service
firm would not be able to handle the complexity of a large project and hence is willing to
approach four to five firms to collaborate together.
Alternatively, the client may want to break down the project into various small components that
can be allocated to specialized professional firms. Going forward, the strategy for professional
services firms should be to develop specializations to enable them to cater to this trend. These
professional firms should also be looking for opportunities to collaborate with other professional
services providers to work on a single project.
8. Automation of Back-End Services
Back-end services automation is increasingly becoming important for companies to eliminate

paper-driven processes. Professional service companies such as accounting and legal services are
automating back-end processes to match front-end services. Companies are increasingly shifting
to electronic check records from old processes of scanning and filing paper checks.
Automation enables companies to reduce operational costs and time to service customer
requests. For instance, according to a report by McKinsey, a leading bank automated about 900
of its back-end operations to relieve about 50% of its full-time employees from their back-end
tasks.
On the other hand, automation also adds to the overall growth of information technology market
which is forecast to reach 1.2 trillion by 2020. Professional services companies should consider
automating their back-end operations to reduce their operational costs and customer requests
service time.
To sum all points above, the professional services industry is changing rapidly, and in order to
stay up-to-date, firms in this industry should focus on engaging social media for communicating
with their clients and growing brand awareness, create and engage virtual teams for cutting
company costs, change the working model to the value-oriented revenue model, implement
modularization to provide services to a wide range of businesses, and automate all back-end
services to eliminate paper-driven processes.

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Definition, Characteristics and Classification of Services

AKTUTHEINTACTONE21 MAR 20194 COMMENTS

Examples of services are-

7 Important Characteristics of Services

(ii) Fluctuating Demand

(vi) Pricing of Services

(vii) Service quality is not statistically measurable

1. Classification of services based on Intangibility

Difference between Product and Services Marketing

Example: Marketing of professional services, beauty parlours or salon, spa, coaching centres,

Product marketing refers to the Service marketing implies the

Marketing mix 4 P’s 7 P’s

Sells Value Relationship

Who comes to whom? Products come to customers. Customers come to service.

It can be owned and resold to It is neither owned nor

Returnability Services cannot be returned

They are tangible, so customer can

Product and the company Service cannot be separated

Products cannot be customized as Services vary from person to

Quality of a product can be easily Quality of service is not

Key Differences between Product Marketing and Service Marketing

Paradigms in Services Marketing

13. From Making Contacts to Building Assets

14. From Campaigns to Platforms

 From Transactions to Experiences

Present Marketing Environment

Components of Marketing Environment

14. Internal Environment

(a) Micro Environment

(b) Macro Environment

(i) Demographic Environment

(ii) Economic Environment

(iii) Physical Environment

(iv) Technological Environment

The technological environment constitutes innovation, research and development in technology,

(v) Political-Legal Environment

(vi) Social-Cultural Environment

Understanding Customers: A thorough knowledge of the marketing environment helps marketers

Services Marketing Mix: Understanding the 7P’s

Strategies for Services Marketing: Segmentation,

Targeting – Step 2 of the Marketing Strategy

Differentiation and Positioning – Steps 3 and 4 of the Marketing Strategy

Understanding Consumer Behavior

Knowledge of consumer behavior can be an important competitive advantage while formulating

Analyzing Market Opportunity

Selecting Target Market

Services Vis-A-Vis goods

AKTUTHEINTACTONE21 MAR 20192 COMMENTS

Services are amenities, facilities, benefits or help provided by other people.

Very simple and easy

Goods can be returned.

Services cannot be returned back once they are provided.

Yes, goods can be separated from the seller.

No, services cannot be separated from the service provider.

Goods can be stored for use in future or multiple use.

Services cannot be stored.

Production and Consumption

There is a time lag between production and consumption of goods.

Production and Consumption of goods occurs simultaneously.

Example: Postal services, banking, insurance, transport, communication, etc.

Key Differences between Goods and Services

Consumer Behavior in Services

Customer Expectations and Perceptions of Services-

Perceived Quality of Services