Meaning of Services :A service is a non-material equivalent of goods .

A service provision is an economic activity that does not result in ownership and this is what differentiates it from providing physical goods. It is claimed to be a process that creates benefits by facilitating either a change in customers, a change in their physical possessions, or a change in their intangible assets. Philip Kotler : “ A service is an act of performance that one party can offer to another that is essentially intangible and does not result in the ownership of anything. Its production may or may not be tied to a physical product.” Characteristics : 1. Intangibility 2. Inseperatability 3. Variability 4. Perish ability 5. Ownership 6. Service in Performance 7. Simultaneously 8. Quality measurement 9. Nature of Demand 10. Consumer, a part of production process

Types of Services : 1. Periodical transaction volume : The volume of a transaction in a given time period stands as a major consideration in service industry. The hyper-market has very different operation challenges from the local grocery store, not least in simply managing the flow of hundreds of customers in store. 2. Mode of service Delivery : The retail sector provides a good example of this diversity, with face-to-face service in

traditional store, remote service through mail order and telephone shopping and the lost latest internet based service.

Classification of Services :1) By market segmentation 2) By degree of Tangibility 3) By skills of the service provider 4) By goals of the provider 5) By degree of regulation 6) By degree of labor Intensiveness

Service Marketing :Service marketing is a marketing based on relationship and value. It may be used to market a service or a product. Marketing a service-based business is different from marketing a goodsbase business. We term marketing as a function by which a marketer deliver , promotes and plans goods and services to customer and clients. Nature of Service Marketing : 1. Intangibility 2. Low price festivity 3. No inventory 4. Value creation process 5. Providing tangibility for the intangibility

Difference between service and goods :

Basis Intangible Inseperatability of buyer and provider Ease of inventory Difficulty in Measuring and controlling quality Sensitivity to time High degree of risk Consumption of the offering

Service Fully intangible may be physical evidence Both must be present Cannot store or ware house the service Measure and control people processes instead of product Needed on demand or sale is lost Cost of failure very high Customization likely to enhance customer perception of perceived quality Relationship can be as important as service

Goods Fully tangible Remote transaction easy Easily inventoried Measure and control product quality only. Can usually wait to receive the product Product can be replaced Customization increases cost, but likely to enhance perceived product quality Product is the focus of the transaction

Personalization of buyer relationship

Factors affecting development of service marketing : I. Organization size structure II. Regulatory bodies III.Growth in service industry IV. Characteristics of services

V. Customer/Employee interaction VI. VII. Service quality Specific service sector

Significance :

Internal customer focus is important than external customer orientation.i) Creation and expansion of job opportunities ii) An optimal utilization of resources iii)Paving avenues for the formation of capital iv)Increasing the standard of living v) Environment-friendly technology Paradigm in Service Marketing :Progress in any scientific field requires a paradigm. . Service as a process : This means that unlike manufacturing differentiation between operations and marketing is blurred in the service industry. . Doing right the first time Speedy response . Keeping customer perspective Customer Relationship Management :CRM is a strategy adopted by business firms in recent years and includes the formulation of methodologies and tools that help business manage customer relationship in an organize manner. CRM processes are extremely helpful in indentifying and targeting the best customer of the business firm and generating . Although paradigm can facilitate researchers and generate axioms that are useful for both teaching and practice. Further customer are often involved in the production of service. . which is conceived as a fundamental set of assumptions that is shared by members of particular scientific community. they are not absolute and the validity of the underlying assumptions may be open to challenges.

According to Gartner “ CRM is a business design to optimize profitability.” CRM in service industry :CRM was initially in the industrial context. Lifetime value of the customer 3. the practice of a company to anticipate and respond to the customer need with suitable . Greater focus on high value customers Need of CRM : i) Provide updated information ii) Customized strategies iii)Anticipates problem iv)Prompt follow ups v) Problem resolving mechanism vi)Assesses customer interest vii) Integrating functional system Types of CRM :1) Proactive Vs Reactive CRM In this type of categorization. the service industry is also focused on maintaining and enhancing customer relationship. Services are produced and delivered by the same institutions. revenue and customer satisfaction. as well as in the planning and implementation of marketing campaign and definite goals and objective. Customer equity 4.quality sales leads. The success of the service provider depends upon the long term customer relationship that develop between the customer and the service provider. Share of customer 2. Characteristics of CRM : 1.

Co-ordination v. Enquiry ii. 2) Operational.offerings is contrasted with the practice of simply responding to the customer stimulus that comes in through suggestions and complaints. Confusion in attributes 4. Problem in implementation 5. Involve customer satisfaction 5.Exchange iv. Increases win rates 3. Building relationship 6. Adoption Importance of CRM : 1. Increase margins 4. Increased sales revenue 2. Require top-management support 3. Company ownership is based on Capitalist system 2. Collaborative and Analytical CRM Building CRM : i. Decreases general sales 6. Lower cost of recruitment customers Barriers of CRM : 1. Interaction iii. Customer dissatisfaction .

Performance . the identification of causes of service quality shortfalls and design and implementation of corrective action. letters from service personnel. Service Quality :Company personnel need a common understanding in order to be able to address such issues at the measurement of service quality. new stories and editorial in the mass media word of mouth comments from current or former customers and even participation in market research studies collectively these components plus those in the service delivery system and up to what is termed as service marketing system. billing from the accounting department and random exposure to service personnel and facilities. telephone calls. Incapability Service Marketing System :Many elements contribute to the customer’s overall view of the service organization. These includes the communication efforts of the advertising and sales department. Perspective : 1) Transcendent approach 2) Product-based approach 3) User-based approach 4) Manufacturing based-approach 5) Value Based-approach Dimensions of Quality : a.7.

. Not knowing what customer expect This is basically of ‘Customer Service’ and ‘Company Perception’ as expected service is the highest level of desired service existing in the mind of customer. Reliability d. Conformance e. Features c. Durability f. Inability to set the right type of Standards The customer may have service standard expectations that may be either higher or lower than the standards set by you. Aesthetics Gap Model of Service Quality Delivery :- Customer Customer Gap Expected Service Perceived Service Company Gap 3 Gap 1 Service Delivery Gap 4 External communication to customers Customer-driven Service designs and standards Gap 2 Company perception of consumer expectation Gap 1.b. Serviceability g. Company perception of consumer expectation are nothing but the company’s understanding of what the consumer want. Gap 2.

references performance customers . Insufficient customer education Gap 4. Lack of right type of employees ii. Empathy Dimension Understanding customer expectation :Customer functions expectation as is and of belief Because about service points delivery against compare that which their standard judged.Gap 3. Reliability Dimensions 3. Tangibles dimensions 2. Assurance Dimension 5. Unrealistic communication to customers 2. 1. Lack of empowerment iii. Mismatch between promises and performance This is physically impossible or financially unviable to provide all that was promised. Not delivering the service standards i. Lack of internal communication Putting it all together : Closing the gap Measurement to Service Quality : 1. This is usually result in customer disappointment. Lack of training iv. Failure to predict v. Over promising through advertising 3. Responsiveness Dimension 4.

Reliability 4. Responsiveness 5. Ideal service level 2. Tangible Consumer expectation model :1. Measurement of Customer Expectation :1. and even with the same service employee. Zone of tolerance Zone of Tolerance :As we discussed earlier. service are heterogeneous in that performance may vary across providers. thorough knowledge about customer expectation is critical to service marketers. across employees from the same provider. The extent to which customer recognize and are willing to accept the variation is called the zone of tolerance and is shown in figure aside. Desired service level 3.perceptions of performance with these references points when evaluating service quality. Assurance 2. Adequate service level 4. Empathy 3. Predicted service level 5. Managing Consumer Expectation :- .

Customer expectations can be managed during each phase of the purchase process. 1) During the pre purchase phase 2) During the service encounter 3) During the post purchase phase Service Market Segmentation :Meaning and definition of Market Segmentation : Market segmentation is a process of dividing the total market for goods and services into several smaller groups.Managing consumer expectations is a critical component in the marketing plan of a service business. The purpose of market segmentation is trying to identify specific user group and then pursue with the tailored product or services supported by appropriate marketing mix strategies. Distinctiveness 2. Requirement for Effective Segmentation :1. recognizes the wisdom of specializing to suit the needs of a segment of market rather than trying to do “all things to all people”. Measurable segment 3. such that member of each group are similar with respect to the factors that influence demand. Consumer expectation must be managed during the pre purchase phase. Substantial size of the segment 4. the service encounter and the post. Market segment as an element of marketing strategy. Actionable Advantage : i) Customized service .purchase phase. Accessibility 5.

products and services and channels helps illustrate this point. The following brief review to two ‘predetermined’ approaches frequently used in market segmentation.ii) Multiple choices iii)Best distribution Channel iv)Cost effective Bases of Segmentation :Before giving some brief explanations about these bases. it is vital to understand that. in themselves they are not segments. .

Marital status 4. Gender and sexual orientation 3. what interest them and what they like. Social class 6.Segmentation Approaches Customer Characteristics Customer Responses Demographi c Psychograph ic Geographic Benefits Usage Loyalty Major Approaches to Service Market Segmentation Based on Customer Characteristics :Demographic and socio-economic segment : It is based on wide range of factors including age. family size. Occupation 8. Some of the demographic variables used are : 1. Age and life cycle scale 2. Religion Psychographic Segmentation : Psychographic is a technique that classifies life styles by investigating how people live. income. Family Size 7. Educational Level 9. Income 5. It is also called life style analysis or AIO because it relies on number of statement about a person’s activities. 1. Life Style . So it is helpful in indicating the profile of a people who buy a company’s product or services. education and social class and ethics origin. sex. interest and opinions.

A firm may decide to market different product or services in certain areas and not in other. 2. Personality 3. Segmentation and Zone of Tolerance :The zone of tolerance differs across customers groups and products. Process of Market Segmentation : 1. much the same way as it is in consumer product marketing. Amongst the uses they distinguish segment based on volume. Usage : Marketers make an attempt to segment final consumer and organizational consumer based on usage rate. One useful way of something the marketer is establishing the zone of tolerance across different customer decision criteria like price. These groups are then examined to try and identify any common characteristics so that the product can be targeted at prospectively loyal customers. region. Loyalty Segmentation : Loyalty segmentation involves identifying customers’ loyalty to a brand or product customer tend to be very loyal or disloyal. stages. the marketers divide the market according to geographic units. Belief 5.2. therefore. performance and service quality. cities and town. Values Geographical Segmentation : In geographical segmentation. Identify bases of segmenting the market Develop profile of resulting segment . 3. necessary to segment the market. Attitude 4. Based on consumer responses : 1. They can divide the consumer on the basis of countries. It is. 2. Benefit Segmentation : Benefit segmentation groups customers together on the basis of the benefits they are seeking from a product. usage expenses and brand loyalty.

To provide a completive edge to the product or service. Develop measure of segment attractiveness Select the target segment Ensure that the target segment are compatible Market Targeting in service :Targeting follows market segmentation as a natural step and is defined as the process of estimation and comparison of the previously identified segments for selecting one or more segment that fetch the best result for the business. positioning intends to influence the perceptual process of consumers against a product or a service.3. To create a distinctive place ii. 5. Bases : i) ii) iii) Segment size and growth potential Structural attractiveness Company objective and resources Positioning of Service :Positioning means projecting the product or services in such a way that consumer perceives it value distinctively from that of competitiveness offers. Objective of Positioning : i. The chosen segment should be the most profitable for the company and should also helps in delivering superior value to the chosen customer base. The studies on a consumer behavior provide that consumer do perceive against the marketing stimulation. a consumer may not respond selectively through a perpetual process. In other words. To place an intangible service to the more tangible frame of reference. iii. Since marketing stimulation are many. . 4.

To follow consideration of competitor’s possible moves. According to Borden “ The marketing mix refers to the appointment of efforts.iv. Steps in developing positioning strategy Identification if Attributes Location of Attributes on positioning map Evaluating positioning Option SERVICE MARKETING MIX UNIT – II Definition of Marketing Mix :Marketing mix means to collect and mix the resources of marketing in the manner that object of the enterprises may be achieved an maximum satisfaction may be provided to the consumer. v. To give the target market the reason of buying your service and then design the whole strategy. the combination the designing and integration of the element . Steps in developing positioning strategy : 1. vi. To help both service development and the redesign of the existing service. 4. 2. 3.

They have suggested the need of services has led to the extension of the mix to serve seven P’s. People Physical evidence Process The process of augmented product mix is developed by Booms and Bitner. 3. 4.of marketing into a program me or mix which is on the basis of an appraisal of the market forces with best achieve an enterprise at a given time. Physical evidence and process. 1. The additional three P’s listed below are known as the extended service mix. there is a need to strengthen the approach through the inclusion of three other elements.” Marketing mix elements : 1. Product Price Promotion place Augmented / Extended marketing mix :In case of services how ever. there are alternatives approaches suggested by various authors. 2. It was conducted that whist the four elements of the marketing mix provided a useful structure for marketing implementation. Service Marketing Mix :- . 3. 2.

Service Product Mix : .The 7 P’s of service marketing mix are : 1) 2) 3) 4) 5) 6) 7) Service product Service pricing Service promotion Service distribution People Process of operation Physical Evidence Service Product :Developing the service product : Physical goods and services can be looked at in terms of benefits offered. 4. 2. 1. 3. Expected service – The customer might expect the service they required. benefits and features. product. Augmented Service – Some extra benefit added with the Potential Service – Attracting the new customers. 2. 3. Statement of Objective Marketing and operating assets statement Developing service marketing Levels of Service Product :1. as well as features and specific attributes associated with those benefits. Core benefit service – Specifically to satisfies the needs. The notion of service concept is based in the idea that actual service offerings can be broken down into a number of levels relating to customer need satisfaction.

c. II. Profit Maximization To increase sales volume Status-quo oriented objectives Society oriented objective . 3.Service product mix consists of all the different product lines a company offers – 1. it must be acceptable to target customers and it must reflects the other components of the mix accurately. 4. 2. 2. d. 3. Characteristics of Service Pricing : i) ii) iii) Negotiation Discounts Quality Cost associated with service : I. Monetary Costs Non-Monetary Cost Time cost Search Cost Convenience Cost Psychological Cost Pricing Objective :- 1. Width of the service product mix Depth of service product mix Consistency in service product mix Service Pricing Strategy :The price is the kept element of marketing mix. The price of the service is the value attached to it by the service provider and it must correspond with the customer’s perception of value. a. b.

9. 4. adding tangibility and value to their offer. VI.5. Survival Maximize market share Service Quality leadership Operation-oriented objective Patronage-oriented objective Pricing Methods :- 1. In field of service promotion marketing mix plays an important role. 2. IV. III. 3. Promotion is used only as a temporary tool and is communication oriented. Promotion is a descriptive term for the mix of communication activities which serve organization carry out in order to influence those publics on whom their service depends. 7. Cost of production Competitor pricing Demand level and elasticity Regulatory factors Marketing mix Positioning Service Promotion :Service marketers have used the marketing tool to great advantage in using their service. 8. Cost-based pricing Competition based pricing Demand oriented Pricing Value based pricing Factors affecting pricing policy : I. 6. II. . V.

persuade and remind people about and organization’s individual goods. Without effective communication. iv. Types of Communication : . personal selling and other sales promotion techniques.According to Philip Kotler “ Promotion compasses all the tools in the marketing mix whose major role is persuasive communication. involvement and impact of the society. iii. v. Promotions includes advertising. What it has to offer them. prospects may never learn of a service firm’s existence. or how to use its products to best advantage. Need of Promotion : Promotion is the tool in marketing mix serves to inform. Role of Communication in Service Marketing :Marketing communication is essential process to a company’s success. and there would be no proactive management and control of the firm’s identity. ideas. service. Customers are reminded of the product or service of the company. community. Customers are requested and persuaded to purchase the product and service of the company. Promotion activities are performed by the manufacturer are the important source to attract with packaging and important promotional tool. Customers are informed about the product or service of the company. image. Customers might be more easily lured away by competitors and competitive offerings. ii.” Characteristics : i.

maintain and increase demand of the service product. I. business man. publicity and the direct marketing tool that the company uses to pursue its advertising and marketing goals. Advertising Sales promotion Public relations . It involves an integration of all the above elements of promotion. 4. II. advertising. 3. Usually a firm chooses more than one type of promotional tool and the manager of the firm is to decide how he is going to choose the communication media and blend them into an effective promotion. According to Philip Kotler “A company’s total marketing communication mix also called its promotion mix consists of special blend of advertisement. foreign clients. government and various boards depending on the nature of service business. Technology Budgetary Constraints Content Delivery Promotion Mix : Promotion mix refers to the combination of various promotional elements as . Communication issues of Service Marketers :1.Internal Communicating – The communication which is carried into the organization between their employees from top level to the service level are comes under that category. 2. This communication is basically the best way of interaction regarding company’s overall objective. personal selling. sales promotion and sponsorship techniques used by a business firm to create. People/ External Communication : The external communication include the communication between the suppliers. personal selling. sales promotion. 3.” Elements : 1. shareholders. 2.

Direct Marketing Adventure marketing Personal Selling Corporate identity Cause-related Marketing Service Distribution :Delivery of service differs significantly from that of the manufacturing goods. The production of goods is followed by distribution whereas services usually cannot be separated from the service provider. The personnel of the marketing department as well as others are very much instrumental in performing the marketing functions. 1. Distribution Place : 1. 2. Nature of service delivery : 3. 6. Inseperatability of production and consumption Difficulty in balancing the demand and supply . This makes it essential that one should clearly understand the common purpose and spirit of the task to be performed and its backward and forward linkage with the other task. 7. 5. Location Accessibility and Availability Channel of Distribution Service Inventory Managing Channels People :The service is predominantly people-based. 8. 2. 5.4. 4.

4. The adoption of the processes. II. are beneficial to the customers and the organization. 4. The level of contact can be determined by classifying the service according to whether it is laborintensive service or an equipment based service. Lack of standardization in service Recovery services Role of the Employee in Service Marketing :The role of the employee in services marketing varies according to situation and the level of interaction. as follows : i) ii) People Based service Equipment based service I. 3.3. Characteristics of Service process :1. 2. This has received less attention though it is an important part of marketing task. Selection and Recruitment Training and Development Empowerment Process of Operations :The service process is a element of segmented marketing mix and vital point of the value chain. which add value to the service offering without incurring major cost disadvantage. Customer participation process Location of service delivery Service itself High-contact . Frequently this depends on the degree of tangibility of a service. III.

Technology id profoundly changing how services are delivered enabling both customers and employee to get and provide better. ii) Timing and sequencing functions are depicted graphically. customized. Wasteful and insufficient use of IT Legged Effect Outdated method of productivity Measurement Impact of other problems Level of Aggregation UNIT – III . A customer blueprint has three basic functions : i) All the principal function required to make and distribute a service are identified. more efficient. 5. Degree of standardization Complexity of the service Delivery of Service :Blueprinting is a graphical approach proposed by “shostack” designed to overcome problems that occur where a new service is launched without adequate identification of the necessary support functions. Some of reason why information technology not having the desired impact on service : 1.5. 3. 6. 2. iii) relationship among the For each functions. acceptable tolerance are identified. Role of Technology in Service Marketing :Technology is dramatically changing the nature of service. resulting in tremendous potential for new services offerings not imaginable even a decade ago. 4. along with the responsible company unit.

loans and business finance. Building societies offered savings and mortgages while banks provided current accounts. Reliability Functional Quality Technical Quality . A high level of external customer satisfaction largely depends upon the level of internal customer satisfaction and corresponding nature of service quality delivered by internal customer to the external customer in financial service industry. Intangibility Inseperatibility Variability Perish ability High involvement purchases High level of brand liability Deciding the service quality of Financial service : Quality of service is very important for customer satisfaction. 5.Marketing of Financial Service :The financial service industry in india has experienced massive changes since the early 1990s. Customer satisfaction for financial service is also depends upon the relationship of the customer with the employee of the organization. Regulatory frameworks and traditional business practices meant that there was virtually no competition between types of institution. 3. 4. Prior to this time. banks served different customer needs. often catering to different sets of customers. Characteristics : 1. Perspective II : I. Perspective of financial service quality : Perspective I : I. II. Insurance and investment were largely dealt with by specialist brokers. 6. 2.

III. Typical topic covered in customer satisfaction. IV. 3. 7. So proactively conducting customer survey about their satisfaction is must for every financial organization. V. b. Assessing product and customer attributes Striving the quality mission Continuous quality improvement Encouraging employee initiatives Collecting and analyzing information Training and development program me Rewarding quality adherence Understanding Customer Expectation :Customer expectation understanding is must for every organization.II. 6. Tips for Understanding Customer : i) ii) a. Because customer dissatisfaction or even worse situation will create a hurdle in organization growth. Overall satisfaction Performance of front line staff . 4. 5. 2. Assurance Tangible Empathy Responsiveness Improving Financial service : 1. Interview customer to design a questionnaire.

2. 5. Prime Prospects Middle Majority Price Shoppers Tomorrow’s Valued Customers No Frills . 3.iii) service quality iv) survey. 2. Prime Customers Highly Valued Customers 3. 6. 7. 8. Design a feedback form and ask customer to rate Use a consultant to design and if necessary conduct a Segmenting financial service :1. Demographic Psychographic Behavioral segmenting Targeting of Financial Services :1. Prosperous but Mobile – This group is generally aware of its prospects is not loyal and will frequently shop around for the best deal and will move readily to take advantage of the best offer. 4.

directed at providing services to satisfy customer’s financial needs and wants. positioning is still in its infancy in many areas of financial services around the world. the absence of patent protection and the ease with which products and services can be copied to competitors. Marketing Mix : ( 7 P’s ) i) ii) iii) iv) v) vi) Product Price Promotion Place People Process Physical Evidence vii) Insurance Marketing Telecom Services Home Loan Credit Cards UNIT – IV Services In Global Perspective . Devising Financial Services :Banking Marketing : Bank marketing is the aggregate of functions. owing to the intangibility of its products.9. Social Responsibilities Positioning of Financial Services :Positioning presents particular challenges to the financial service industry. Arguably. more effectively and efficiently than the competitors keeping in the view the organizational objectives of the bank.

Obviously. 2. trends in international trade will affect all service to lesser and greater degree. 4. This increase in inevitable. Producer Service Consumer Service Stock broking. as they seek to serve new clients and exploit their own unique competitive advantage. they have to develop their international operations. the scale of service marketing internationally can be seen to be increasing dramatically. 3.Services in Global Perspective :As a service economy continuous to grow both in size and importance. Factors influencing globalization : i) Changes in Social factor Changes in technology Changes in political condition Competition in the market Competitive advantage Regulations in home country Lack of demand in home country ii) iii) iv) v) vi) vii) International Marketing of Services :Service firms are increasingly investing overseas on their own account. if service organization are to grow and survive in today’s global marketplace. Such advantage take several forms : 1. Foreign Exchange or securities dealing Outward Expansion Market environment for services : i) ii) iii) Protectionism Trans-border Data flow Competition .

They often neglect their strategic thinking. Information technology Enabling service Principal Driving Force in Global Marketing of Services :Several factor driven and influence the globalization of manufacturing firms : Types of globalization drivers : 1. 3. 2. Parameters Decision-making for global marketing Specific consideration for international services Service Strategy :Service firms to a large extent have done their strategic decision in an ad hoc manner based on emerging tendencies and spontaneous opportunities. Questions as which competitive domain the firm was operating.As off-shoring creates a better advantage because workers are available at lower cost. 3. which client they .iv) v) Protection of Intellectual Property Cultural barriers Recent Trends :Off-shoring Service . Market drivers Competition Drivers Technology Drivers Cost Drivers Government Drivers Key Decision in Global Marketing :1. 4. 2. 5.

Having made the decision to venture into world market. a. b. Defining global vs Multi local strategies Global market participation Delivering global products Global location Global marketing Global competitive moves Foreign Market entry Decision : One of the most crucial steps a firm or organization ever takes is the decision to introduce a product a service to a foreign market. Market entry method level of Co-operation : a. Elements of Global service strategy : 1. c.served and did not serve. h. d. e. the next crucial step is determining the foreign market entry strategy. g. which core service they offered and did not offer and how the firm could expect. b. f. d. i. Wholly owned strategy Exporting Trading company Piggy-back Agent Distributor Licensing Industrial Co-operation Joint venture Organizing for Global Services Marketing :- . c. e.

.Organizing for global marketing is to find a structure that enables the company to respond to relevant market environment differences while ensuring the diffusion of corporate knowledge and experience from national markets throughout the entire corporate system. The pull between the value of centralized knowledge and coordination and the need for individualized response to the local situation creates constant tension in the global marketing organization.