Service marketing

By Ritvik Sharma
BCOM(Hons)
What is service?
Service is an act or performance that
one party can offer to another that is
essentially intangible and does not It is based on relationship
result in any ownership of anything.
Its production may or may not be and value.
tied to physical products.(Philip
Kotler)

It may be used to market a

service or product.
 Income increasing in the
Why do we need to past 20 years: Disposable
Personal Income in India
increased to 71640930 INR Developing country
study service Million in 2011 from
60158160 INR Million in
2010
marketing?
Liberalization Job Opportunities

Demand increases with

Increasing Specialization
disposable income

Upward trendin
disposable income Technology Cost effective

Development of services,
Expert and professionals
financial, banking
Characteristics
of service
marketing

• Intangibility
• Inseparability
• Variability
• Perishability
 INTANGIBILITY

• Services are intangible means it cannot be seen, tasted felt, heard or smelled
beforepurchase.
• Evaluation is achallenge
• Intangibility is used in marketing to describe the inability to assess the value
gained from engaging in an activity using any tangible evidence

• It draws inferencesabout:
• Place
• People
•Equipment
• Communication Material
• Symbols
• Price
 SERVICES ARE PROVIDER-CLIENT INTERACTIONS IS A
PRODUCED AND SPECIAL FEATURE OF SERVICE
CONSUMED MARKETING.

Inseparabil SIMULTANEOUSLY

ity

IN INSEPARABILITY, KEY A LIVE THEATRE

QUALITY OF SERVICES PERFORMANCE, A
AS DISTINCT FROM
GOODS MAKEOVER
Variability
It is otherwise called Services are highly
heterogeneity variable

The state or
characteristic of being Eg: service firms
variable

Mc Donald’s
consumables maybe
A car servicing varies
standardized but a
each time
weekday or a weekend
maybe different.
Perishability
Perish ability is used in marketing to describe the way in
which service capacity cannot be stored for sale in the
future

Services cannot be stored

A 100 m race in Olympics(4 years)

• Organization size and
Structure
• RegulatoryBodies
• Growth inservice
Industries
• Customer/employer
interaction
• ServiceQuality
• Specificsectors
some service firms

Banking, Stock broking

Restaurants, Bars, Catering

News and entertainment

Healthcare

Education

Professional(Architecture and Consulting)

Wholesaling and Retailing

 service
marketing mix

• ServicesMarketing
Mix:7Ps forServices:-
• Product
• Price
• Place
• Promotion
• People
• Process
• PhysicalEvidence
Traditional 4 Ps Applied to
Services (1)
• Product elements
• Service products are at the heart of services marketing strategy
• Marketing mix begins with creating service concept that offers value
• Service product consists of core and supplementary elements

• Core products meet primary needs

• Supplementary elements are value-added enhancements

 • Place and time
• Service distribution can take place

Traditional through physical and non-physical

channels
• Some firms can use electronic

4 Ps channels to deliver all (or at least

some) of their service elements
• Information-based services can be
Applied to delivered almost instantaneously
electronically
• Delivery Decisions: Where, When,
Services How
• Time is of great importance as

(2) customers are physically present

• Convenience of place and time
become important determinants
of effective service delivery
 Traditional 4 Ps
Applied to Services (3)
• Price and (other user outlays)
• Marketers must recognize that
customer costs involve more than
price paid to seller
• Identify and minimize non-monetary
costs incurred by users:
• Additional monetary costs
associated with service usage
(e.g., travel to service location,
parking, phone, babysitting, etc.)
• Time expenditures, especially
waiting
• Unwanted mental and physical
effort
• Negative sensory experiences
• Revenue management is an
important part of pricing
Traditional 4 Ps Applied to Services (4)
 Extended Mix for
Managing the Customer
Interface (1)
• Process
• How firm does things may be as important as what it does
• Customers often actively involved in processes, especially when acting as co-producers of service
• Operational inputs and outputs vary more widely
• Quality and content varies among employees, between employees
• Variations can be with different customers
• Variations from time of the day
• Variability can be reduced by:
• Standardized procedures
• Implementing rigorous management of service quality
• Training employees more carefully
• Automating tasks
• Train employees in service recovery procedures
• Manage process design and “flow of customers
Extended Mix
for Managing
the Customer
Interface (2)
 • People
• Interactions between
customers and contact
personnel strongly influence
customer perceptions of
service quality
Extended Mix • Well-managed firms devote
special care to selecting,
for Managing training and motivating
the Customer service employees
Interface (3) • Other customers can also
affect one’s satisfaction with
a service