MARKETING OF SERVICE

UNIT 1: THE EMERGENCE OF SERVICE ECONOMY

SERVICE ECONOMY : IT IS AN ECONOMY WHERE THE PRIMARY
ECONOMIC ACTIVITY IS THE PROVISION OF SERVICE RATHER THAN THE
PRODUCTION OF GOODS
CONTRIBUTORY FACTORS:
1. GOVERNMENT POLICIES:
 
It is Govt. which makes mandatory for price levels, distribution
strategies, defining procedure attributes.
 
Another important action taken by the Govt.‟s “Privatization”
means the policy of transformcompanies.
 
 
The transformation of such operations like telecoms, airlines has led
to restructuring cost cutting and more market focused.
PROS OF PRIVATIZATION:
 
a. Increase the efficiency
 
b. Increase in profits
 
New change will require services firm to change their marketing
strategy, operational procedures, and HR policies.
2. SOCIAL CHANGES
 
Now a day there is a drastic change, two members are working, which
requires to hire individuals to perform tasks that used to be performed
by a house hold member.
 
E.g. Child care
 
Laundry
 
Food preparation
 
Combinations of changing life styles like
 
√Higher income
 
√Declining prices for many high technology products –made for
people to by computers.
 
√Mobile phone etc.
 
Increased imaginations into countries –U.S, Canada and Australia.
3. BUSINESS TRENDS
 
Many professional associations have been forced by Govt. to remove
long-standing bars on adv and promotional activities.
 
Franchising has become wider spread in many service industries.
 
Licensing of independent entrepreneurs to produce and sell a branded
service according to tightly specified procedures.
4. ADVANCES IN IT:
 
Changes come from the integration of computers and tele-
communication
 
More powerful software enables firm to create databases that combine
information about customers with details of all their transaction, so
that they can be used to predict new trends, segment the market, new
marketing opportunities.
5. INTERNATIONALISATION AND GLOBALIZATION:
 
A strategy of international expansion may be driven by a sector for
new markets or by the need to respond to existing customers who are
traveling abroad in greater numbers.
 
When companies set up operations in other countries they often
prefer to deal with just a few international suppliers rather than
numerous local firms.
 
CONSUMPTION PATTERN ANALYSIS
The analysis of consumer demand is one of the major successes of
economics as it represents the near perfect marriage of theory and
econometrics. 
ECONOMIC TRANSFORMATION UNIQUE ASPECTS OF
SERVICE
The world economy is evolving into a service-driven economy as
reliance on value-based service increases.
• SERVICE :- Firms need to understand their service and their
customers to ensure that their services will be viewed as
solutions to consumer needs.
If you want customers to buy your services, you need offer them a
solution that costs less than the problem is costing them. Your
solution might:
• Save your customer money;
• Save your customer time: or
• Improve your customer’s productivity.

• PRODUCTS :- Services represent an integral part of many products

and the correlation of goods and services is represented on a goods-
services continuum.
a. Services can be products that are both tangible and intangible.
Typically, the dominant form will classify the product as a good or as
a service.
b. Many theorists see a continuum with pure services on one end and
pure commodity goods on the other. Most products fall between
these two extremes.
c. Service products are often difficult to identify, because they come
into existence at the same time that they are bought and consumed.
MANAGERIAL CHALLENGES
Service marketing management oversees the implementation of
marketing programs, while metrics measure their effectiveness and
performance.
a. To create an effective, cost-efficient marketing management
strategy, firms must possess a detailed, objective understanding of their
own business and the market in which they operate.
b. After the firm’s strategic objectives have been identified, the
target market selected, and the desired positioning for the company,
product, service or brand has been determined, marketing managers
focus on how to best implement the chosen strategy.
c. Marketing management often makes use of various organizational
control systems to ensure marketing programs achieve desired
objectives, and do so in a cost effective manner.
CONCEPT OF VALUE AND VALUE DRIVERS
Value drivers are anything that can be added to a product or service
that will increase its value to consumers. These differentiate a product
or service from those of a competitor and make them more appealing
to consumers.
The greatest benefit of a value driver is that it provides a competitive
advantage to a business, giving that business an upper hand in its
industry. Value drivers can come in many forms, such as superior brand
awareness or revolutionary technology.
Why are value drivers important?
Value drivers will make a company's products seem better than its
competitors'. By creating as many value drivers as possible, a company
can boost its leverage on the marketplace. They will further influence
consumers to purchase that product. These provide products with
distinguishable traits that companies can use to make their respective
products more desirable in the eyes of the consumer.
To continuously add value to products and services, businesses should
constantly be monitoring the market so that they can be the first to take
advantage of changes in demand and consumer behavior. Value driver's
do not have to directly relate to a product. Something such as a
reputation of having great customer service can be a value driver for a
company.
SERVICE MARKETING SERVICE
The service marketing system incorporates elements of the service
experience which may contribute to the customer’s overall view of the
organisation but are not specifically part of the delivery system. Clearly,
many of these are the elements which the organisation may not be able
to control, such as conversations customers may have about the parlour
with friends or relatives at home, or exposure to the service they may
get from reading a hairdressing editorial in the local paper.
Lovelock feels that by conceptualising the service experience as three
overlapping systems, services managers are forced to consider their
business from a customer’s rather than a purely operations perspective.
It highlights the importance of managing all elements of the business
that are visible to customers.