SERVICE MARKETING II.

M COM

TWO MARK

1. What do you mean by growth?

  The act or process or a manner of growing development; gradual increase. Size or stage
of development: It hasn't yet reached its full growth completed development. Development from
a simpler to a more complex stage: the growth of ritual forms.
2. What are the growth industries?
 Airlines.
 Management Consultants. ...
 Hotels and Resorts. ...
 Beer Manufacturing. ...
 Cargo Airlines. ...
 Tourism. ...
 Cardboard Box and Container Manufacturing. ...
 HR and Recruitment Services. Revenue Growth 2019-2020: 7.7% ...
3. What is growth in human?

Growth refers to physical increase in some quantity over time. It includes changes in terms
of height, weight, body proportions and general physical appearance. In Encyclopedia
Britannica, growth is defined as “an increase in size or the. amount of an entity”.
4. What are the types of growth?
 The 2 Types of Growth: Which One of These Growth Curves Are You Following?
 Type 1: Logarithmic Growth. The first type of growth is logarithmic. ...
 Type 2: Exponential Growth. The second type of growth is exponential. ...
 The Challenges of Each Growth Curve. ...
 How to Accelerate Your Progress. ...
 The Bottom Line.
5. What industries are growing 2020?
 The top 4 emerging industries to watch in 2020
  CBD products. — As the cannabis industry continues to shed its social stigma, the rise
of cannabidiol (or CBD for short)—particularly in high-end lifestyle products—has been
astronomical.
 Bivouacking.
 Veganism and plant-based products.
 Astrology.
6. What is opportunity for growth?
What are opportunities for growth? Opportunities for growth are situations where you
can advance in your career. The main way to grow as a professional is to find ways to improve
your skills and applicable knowledge. You can do this by seeking out new responsibilities and
experiences
7. How can I improve my career growth?
FIVE Things You Can Do To Improve Your Career TODAY
 Set Small Goals Regularly. When it comes to annual reviews, there is so much focus on goals
for the year. ...
 Stretch Yourself. ...
 Get Feedback. ...
 Curate Your Work. ...
 Be Curious About Your Industry. ...
8. What is difference between growth and development?
Growth is defined as the development of a person in weight, age, size, and habits. On
the other hand, development is defined as the process wherein a person's growth is visible in
relation to the physical, environmental, and social factors.
9. What is the growth stage?
The growth stage is the period during which the product eventually and increasingly
gains acceptance among consumers, the industry, and the wider general public. During
this stage, the product or the innovation becomes accepted in the market, and as a result sales
and revenues start to increase.
10. Definition of Service Marketing:
 Service marketing is marketing based on relationship and value. It may be used to market
a service or a product. With the increasing prominence of services in the global economy, service
marketing has become a subject that needs to be studied separately. 
11. What is services marketing mix?
The service marketing mix is a combination of the different elements of services
marketing that companies use to communicate their organizational and brand message to
customers. The mix consists of the seven P's i.e. Product, Pricing, Place, Promotion, People,
Process and Physical Evidence.

II-UNIT

11. What are the marketing strategies for service firms?

Essential B2B Marketing Strategies to Grow Your Professional Services Firm
 Research. ...
 Niche-driven Strategy. ...
 A High Performance Website. ...
 Search Engine Optimization (SEO) ...
 Social Media. ...
 Advertising. ...
 Referral Marketing. ...
 Marketing Automation, CRM, and Lead Nurturing.

12. What are the 4 types of marketing strategies?

4 Types Of Marketing Plans And Strategies
 Market Penetration Strategy.
 Market Development Strategy.
 Product Development Strategy.
 Diversification Strategy.
13. What are the 7 C's of marketing?
These seven are: product, price, promotion, place, packaging, positioning and people.
14. What are service marketing communication strategies?
The 6 most efficient marketing communication strategies:
  A Great Brand Name.
 Don't Forget the Creativity of the Logo.
 Product Positioning- Clarity is key.
 Efficient Advertisement Pitch.

15. What are the features of consultancy services in Service Marketing?

 The top benefits of marketing consulting services can be summarized in the
following key features.
 Specific knowledge. ...
 Third-party advisor. ...
 Flexibility. ...
 Customization. ...
 Marketing spend control. ...
 Consulting and Marketing Transformation.
16. How do you advertise professional services?
 When you're marketing the professional services firm, keep the following in mind.
 Find your niche.
 Be client-centric, not service-centric.
 Don't forget about SEO.
 Attend trade shows.
 LinkedIn networking.
 Make video content.
 Embrace company culture.
17. What is advertising a professional service?
Advertising Is Not a Professional Service under Insurance Agents and Brokers Policy.
18. What do you mean by sales of services?
Sales as a Service provides organizations with a dedicated sales force, staffed with
highly experienced sales professionals who focus solely on sales. These sales reps fully learn the
client's brand and products so that they are qualified enough to act as a true representative of the
client's company.
19. Why recruitment and training is important?
Improved employee performance – the employee who receives the necessary training is more
able to perform in their job.
20. What are the types of recruitment?
 We want to share the various types of recruitment you can use:
 Direct advertising. ...
 Talent pool databases. ...
 Employee referrals. ...
 Boomerang employees. ...
 Promotions and transfers. ...
 Employment exchanges. ...
 Recruitment agencies. ...
 Professional organizations.
21. What is training important in tourism industry?
Tourism education plays a major role in preparing students to gain professional and
practical skills required by the tourism industry.
III.UNIT

What is Product Support Services Marketing?

Product support services refer to labor-based services for hardware or software, which
can be performed by the manufacturer of the product or parties other than the vendor that created
the product.
23. What are 3 important qualities of customer service?
Essentially, the 3 important qualities of customer service center around three “p”s:
professionalism, patience, and a “people-first” attitude. Although customer service varies from
customer to customer, as long as you're following these guidelines, you're on the right track
24. What are the 7 qualities of good customer service?
 Problem solving skills. Customers do not always self-diagnose their issues correctly. ...
 Patience. Patience is crucial for customer service professionals. ...
 Attentiveness. ...
 Emotional intelligence. ...
 Clear communication skills. ...
 Writing skills.
25. Meaning of price.
 Price is the amount we pay for goods, services or ideas. ... Generally speaking, the price
is the exchange value between the seller and buyer. So, price is the money charged by a marketer
for his product or service. For the marketer, price covers the total market offering
26. What are the objectives of pricing of services?
Five main objectives of pricing are: (i) Achieving a Target Return on Investments (ii)
Price Stability (iii) Achieving Market Share (iv) Prevention of Competition and (v) Increased
Profits! Before determining the price of the product, targets of pricing should be clearly stated.

27. What are the problems of service quality management?

Distinguishes four problems and discusses (1) determining quality norms; (2) developing
a quality management methodology which fits the specific character of the professional
organization; (3) demonstrating quality
28. What are consumer expectations?
Consumer expectations refer to the economic outlook of households. Expectations will
have a significant bearing on current economic activity. If people expect an improvement in the
economic outlook, they will be more willing to borrow and buy goods.
29. What are types of customer expectations?
 5 types of customer expectations
 Explicit expectations. Explicit expectations are specific targets that customers are looking
for when they seek out your product or service. ...
 Implicit expectations. ...
 Interpersonal expectations. ...
 Digital expectations. .
30. What are innovative services?
A service innovation is a service product or service process that is based on some
technology or systematic method. In services however, the innovation does not necessarily relate
to the novelty of the technology itself but the innovation often lies in the non-technological areas.
IV-UNIT

. What are the types of financial services?

 10 Types of Financial Services:
 Banking.
 Professional Advisory.
 Wealth Management.
 Mutual Funds.
 Insurance.
 Stock Market.
32. What are the financial services?
Financial services marketing refer to the collective use of marketing tactics employed by
marketers in the financial services sector to attract new customers or retain existing ones. If
you're a marketer working in the financial services sector, you probably know how difficult it is
to stand out of the crowd.

33. How is marketing used in finance?

Finance is focused on revenue, expenses, profit and shareholder value. For most
companies, the old adage “cash is king,” still reigns. ... Marketing is responsible for helping the
organization acquire and keep profitable customers and therefore relate its functions directly to
cash flow.
34. What is meant by insurance marketing?
The term insurance marketing refers to the marketing of insurance service with the motto
of customer-orientation and profit-generation. The insurance marketing focuses on the
formulation of an ideal mix for the insurance business so that the insurance organizations survive
and thrive in a right perspective.
35. What is a Mutual Fund simple definition?
A mutual fund is a company that brings together money from many people and invests it
in stocks, bonds or other assets. The combined holdings of stocks, bonds or other assets the fund
owns are known as its portfolio. Each investor in the fund owns shares, which represent a part of
these holdings.
36. What are mutual funds and its types?
A mutual fund is a type of financial vehicle made up of a pool of money collected from
many investors to invest in securities like stocks, bonds, money market instruments, and other
assets. ... A mutual fund's portfolio is structured and maintained to match the investment
objectives stated in its prospectus.
37. What are the marketing strategies for nonprofit marketing?
Nonprofit Marketing Strategies to Increase Awareness and Raise Money for Your Cause
Use Content Marketing to Increase Website Traffic.
38. What is the future of financial service sector in India?
India's financial services sector typifies the progress and opportunity of its economy. The
sector will grow rapidly out to 2035, driven by rising incomes, heightened government focus on
financial inclusion and digital adoption – India's digital payments could pass $1 trillion by 2030.
39. What is Profit?
The businessperson produces goods and services for his customers with the hope of
earning a profit by efficient operation. A profit in the business sense is the difference between
the selling prices of a good (or service) and its total cost.
40. What is the nature of the insurance?
The concept of insurance developed from the need to minimize the adverse effects of risk
associated with the probability of financial loss. The function of insurance is to safeguard against
financial loss by having the losses of few paid by the contributions of many who are exposed to
the same risk.

V UNIT
. What is customer satisfaction in CRM?
Customer satisfaction is the measure of how the needs and responses are collaborated and
delivered to excel customer expectation. It can only be attained if the customer has an overall
good relationship with the supplier.
42. How do customers benefit from CRM?
CRM software helps you centralize, optimize and streamline your communication. The better
you know your customers, the stronger your relationships will be with them.
43. What is a CRM tool?
A CRM tool lets you store customer and prospect contact information, identify sales
opportunities, record service issues, and manage marketing campaigns, all in one central location
— and make information about every customer interaction available to anyone at your company
who might need it.
44. What is meant by relationship marketing?
Relationship marketing is a facet of customer relationship management (CRM) that
focuses on customer loyalty and long-term customer engagement rather than shorter-term goals
like customer acquisition and individual sales.
45. What are the 3 types of relationship marketing?
 Here are 3 levels of relationship marketing examples, based on where the customer is in
their journey:
 Level 1: Customizing to the customer. ...
 Level 2: Rewarding customer loyalty. ...
 Level 3: Connecting with high value customers on a personal level.
46. What is customer satisfaction and why is it important?
Customer satisfaction is a marketing term that measures how products or services
supplied by a company meet or surpass a customer's expectation. Customer satisfaction is
important because it provides marketers and business owners with a metric that they can use to
manage and improve their businesses.
47. What is the purpose of customer satisfaction?
Measuring customer satisfaction enables companies to identify factors of dissatisfaction.
By doing so, they can implement the necessary improvement initiatives before customers
abandon the brand.
48. What are service brands?
A service brand develops as companies move from manufacturing products to delivering
complete solutions and intangible services. Service brands are characterized by the need to
maintain a consistently high level of service delivery.
49. What are the 4 types of brands?
 Here are the 8 types of branding you need to know:
  Personal branding.
 Product branding.
 Service branding.
 Retail branding.
 Cultural and geographic branding.
50. What are brand management services?
Brand management services are crating crafting and managing a brand. The brand
management process integrates together a perfect mix of modules including defining the brand,
positioning the brand, and delivering the brand value constantly.

I-UNIT FIVE MARK

1. Natures of Service Marketing.

 So far, much of what has been said could be equally applicable to either a product or a
service. So, is there anything special about services marketing?

 At one level, the theory of marketing has universal application – the same underlying
concerns and principles apply whatever the nature of the business. However, the nature of
a particular service business may dictate a need to place much greater emphasis on
certain marketing elements, which in turn could lead to different marketing approaches.
 It is frequently argued that services have unique characteristics that differentiate them
from goods or manufactured products. The four most commonly ascribed to services are:

 Intangibility – services are to a large extent abstract and intangible.

 Heterogeneity – services are non-standard and highly variable.
 Inseparability – services are typically produced and consumed at the same time, with
customer participation in the process.
 Perish ability – it is not possible to store services in inventory.
 From the 1980s these characteristics, known as ‘IHIP’ (intangibility, heterogeneity,
inseparability and perish ability) were widely discussed in the academic literature and
textbooks in services marketing. However, the huge diversity of types of service
businesses suggests that it is difficult to fit services into a neat definition. The
universality of these characteristics has been increasingly challenged over recent years.
As we comment on shortly,
2. Classification of service Marketing.
Wherever people or products are involved directly, the service classification can be done based
on tangibility.

a) Services for people – Like Health care, restaurants and saloons, where the service is delivered
by people to people.

b) Services for goods – Like transportation, repair and maintenance and others. Where services
are

Classification of services based on intangibility

There are objects in this world which cannot be tangibly quantified. For example – the number
of given by people for objects or goods.

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 Intimation.

Services directed at people’s mind – Services sold through influencing the creativity of humans
are classified on the basis of intangibility.

3. Characteristics of Service Marketing.

Characteristics of services are as follows: Perish ability, Fluctuating Demand, Intangibility,

Inseparability, Heterogeneity, Pricing of Services; Service quality is not statistically measurable.

1. Perish ability:

Service is highly perishable and time element has great significance in service marketing

2. 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.

3. Intangibility:

Unlike product, service cannot be touched or sensed, tested or felt before they are availed. A

service is an abstract phenomenon.

4. Inseparability:

Personal service cannot be separated from the individual and some personalized services are

For example hair cut is not possible without the presence of an individual. A doctor can only

treat when his patient is present.

5. Heterogeneity:

The features of service by a provider cannot be uniform or standardized. A Doctor can charge

much higher fee to a rich client and take much low from a poor patient.

6. Pricing of Services:

Pricing decision about services are influenced by perish ability, fluctuation in demand and

inseparability. Quality of a service cannot be carefully standardized. Pricing of services is

dependent on demand and competition where variable pricing may be used.

7. 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, customers 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

4. Elements of Marketing Mix.

 1. Product
Your customer only cares about one thing: what your product or service can do for them.
Because of this, prioritize making your product the best it can be and optimize your product lines
accordingly. This approach is called “product-led marketing.” In a marketing mix, product
considerations involve every aspect of what you're trying to sell. This includes:
2. Price
Many factors go into a pricing model. Brands may:

Consider what you're trying to achieve with your pricing strategy and how price will work
with the rest of your marketing strategy. Some questions to ask yourself when selling products:
3. Promotion
Promotion is the part of the marketing mix that the public notices most. It includes television
and print advertising, content marketing, coupons or scheduled discounts, social media
strategies, email marketing, display ads, digital strategies, marketing communication, search
engine marketing, public relations and more.

All these promotional channels tie the whole marketing mix together into an omnichannel
strategy that creates a unified experience for the customer base. For example:

4. Place
Where will you sell your product? The same market research that informed your product and
price decisions will inform your placement as well, which goes beyond physical locations. Here
are some considerations when it comes to place:
5. People
People refers to anyone who comes in contact with your customer, even indirectly, so make
sure you're recruiting the best talent at all levels—not just in customer service and sales force.
6. Packaging
A company's packaging catches the attention of new buyers in a crowded marketplace and
reinforces value to returning customers. Here are some ways to make your packaging work
harder for you:.
7. Process
Prioritize processes that overlap with the customer experience. The more specific and seamless
your processes are, the more smoothly your staff can carry them out. If your staff isn't focused on
navigating procedures, they have more attention available for customers—translating directly to
personal and exceptional customer experiences.

5.Growth of Service Sector.

 Reasons for Growth of Services The growth of service industries can be traced to the
economic development of society and the socio-cultural changes that have accompanied
it. Changing environmental forces brought out of the services in forefront of the
economy. Those environmental forces separately or in combination create new type of
service. The following environmental factors are responsible to make a new service.
Economic affluence one, of the key factors for the growth of demand for services is the
economic affluence. The size of the middle income consumer is raising fast and the
percentage of the very poor household’s declining. The rural households in the upper
income category are growing at a much faster pace than the urban households in the
corresponding categories. The Economic liberalization Process has had a positive impact
on the Indian households. Their income as well as their expenditure has been pushed,
creating a demand for many goods and services
 Changing Role of Women Traditionally the Indian woman was confined to household
activities. But with the changing time there has been a change in the traditional way of
thinking in the society. Women are now allowed to work. They are employed in defense
 services, police services, postal services, software services, health services, hospital
services, entertainment industries, Business Process Outsourcing and so on. The
percentage of working women has been growing rapidly. The changing role of women
has created a market for a number of product and services. Earning women prefer to hire
services in order to minimize the innumerable roles that they are required to perform. The
demand by woman is forcing service organizations to be more innovative in their
approach.
 Cultural Changes Change is the underlying philosophy of culture place of change in
Indian culture is not uniform. However, during the last century the factors of change are
prominent. The emergence of the nuclear family system in place of the traditional joint
family system creates a demand for a host of services like education, health care,
entertainment, telecommunication, transport, tourism and so on. There has’ been a
marked change in the thought Processes relating to investment, leisure time perception
and so on which has created a huge demand for services.

II-UNIT
1. What are the Marketing Strategies for Service Firms?

 Market Research. Research is the bedrock of all present-day marketing efforts. ...
 Niche strategy.
 High performance website.
 Search engine optimization (SEO)
 Social media.
 Advertising.
 Referral service marketing.
 Marketing automation, CRM, and lead nurturing
 The 4 Ps of marketing are place, price, product, and promotion. By carefully integrating all of
these marketing strategies into a marketing mix, companies can ensure they have a visible, in-
demand product or service that is competitively priced and promoted to their customers.
Simple Marketing Strategies That Will Give You an Edge. The gurus sometimes
make things harder than they need to be.
 Product strategy. This lever is about what is being delivered to the marketplace and
consumed by the customer.
 Service strategy.
 Pricing strategy

2. What is the strategies service firm with special reference to information.

Customer Referrals

Qualified sales leads can usually be found in the existing customer base. When a
professional service firm deals with their current crop of satisfied customers, its sales staff
should find out if those clients have business associates that would benefit from their services.
These referrals come with an instant connection to the prospect and remove much of the
anxiety often associated with making a cold call.

More Options

Professional networking opportunities give service firm chapters an additional avenue to

implement their marketing strategies. Networking groups allow companies to conduct face-to-
face interactions with potential clients and industry leaders. Gatherings that mix business with
pleasure, such as conventions, charitable functions and civic events, give sales staffers
additional chances to spread the word about the company. They can also interact with
important contacts in ways that leave personal impressions.

Industry Specialization

With so many service firms competing for a limited number of potential clients, their
respective marketing plans must include methods on how to stand out from their rivals. Since
no firm can meet every customer's every need, each company must determine which skill sets
it possesses and emphasize those skills. For instance, a law firm specializing in bankruptcy law
will stress its abilities to clients seeking help in reorganizing their debts.

Social Media

Social media has quickly become one of the most effective marketing tools for service
firms. Sites such as Face book, Twitter and Tumbler give companies new outlets to spread
their messages to a worldwide audience. Professional networking sites such as LinkedIn allow
marketers and sales staff to connect with prospective customers based on work experience and
industry status.

3. What are briefly explained communication and consultancy.

For instruction: The instructive function unvarying and importantly deals with the
commanding nature. It is more or less of directive nature. Under this, the communicator
transmits with necessary directives and guidance to the next level, so as to enable them to
accomplish his particular tasks. In this, instructions basically flow from top to the lower level.
For integration: It is consolidated function under which integration of activities is endeavoured.
The integration function of communication mainly involves to bring about inter-relationship
among the various functions of the business organization. It helps in the unification of different
management functions. For information: The purposes or function of communication in an
organization is to inform the individual or group about the particular task or company policies
and proceduresetc. Top management informs policies to the lower level through the middle level.
In turn, the lower level informs the top level the reaction through the middle level. Information
can flow vertically, horizontally and diagonally across the organization. Becoming informed or
inform others is the main purpose of communication. For evaluation: Examination of activities to
form an idea or judgment of the worth of task is achieved through communication.
Communication is a tool to appraise the individual or team, their contribution to the organization.
Evaluating one’s own inputs or other’s outputs or some ideological scheme demands an adequate
4. What are the advertising and professional services?
Professional services (PS) marketers, on the other hand, were at pains to point out they were
about everything but advertising. Advertising was their ‘bête noire’, almost the antithesis of what
they considered good marketing to be. If PS marketing was about developing discrete one-to-one
relationships, then how could advertising play a role when it was an indiscriminate punt to an ill-
defined audience? Spray and pray! 
Any firm that resorted to advertising was looked down upon as being unprofessional or even
desperate. At best, it was the seen as a preserve of small firms that needed profile to attract a
regular stream of new clients, particularly in areas such as personal injury law. 
If you were a larger practice, with a reasonable market profile and established clients, then
advertising marked you out as a firm that didn’t value its existing clients, wasn’t focused on
building relationships and didn’t care about where its marketing pounds or dollars were spent.
Advertising = hubris + wastefulness.
The only point of debate between PS marketers was the value of the ‘advertorial’: a piece of
paid for editorial and surely marketing’s worst portmanteau.
So for a time, the easiest way to define the difference between professional services and
consumer product marketing was the former’s hostility to and the latter’s obsession with
advertising. 

5. Explain the sales service.

1) Pre-Installation services

Whenever a product is bought it comes with a manual for installation. Depending on the
nature of the product the installation may vary. While some products have very specific
installation steps other products are customer friendly. Products like a ceiling fan, air
conditioner, washing machine etc. require technical expertise for installation other products like
mobile phones does not. Providing free pre-installation is one of the after sales services.

Most of the companies provide this for free of cost world very few companies may charge.
Providing good installation services starts in the customer and customer service relations on a
good note. Industrial machinery, electric household items, Copier machines, requires technical
expertise installation. Providing a demonstration is also a part of installation wherein the
customer service team installs the product and demonstrates the functions of the product.
2) User training

Training of the end user is another part of after sales service. In the case of industrial machinery,
this is a very crucial part. Even in case of surgical equipment’s which are used in the operation
theatres, it is very essential that the doctor has to get trained on the machine. Organizations like
St Jude’s, Medtronic, etc. ensure they provide training to the end users or doctors in their case
effectively. It is very essential that user training is provided propositions user is going to be
handling the product.

6. Explain the recruitment training and tourism.

Introduction
In recent studies, organizations are realizing that the generic skills portrayed in soft skills are
increasingly important for a workplace to succeed. With human resources constantly finding the
best option to carry out efficient recruitment, some selection process tools carry upon curiosity
factors whether it is reliable, valid or even legal to test on individuals.

Recruitment and Selection

Recruitment is the first step in order to achieve highly qualified employees for the
organization. The more successful an organization’s recruitment strategy, the stronger the
applicants pool, thus, the stronger the resulting hired employees. There are a wide variety of
recruitment strategies which include advertisements on newspapers and job websites such as
SEEK and Indeed. Another recruitment strategy that is used in organizations is recruiting internal
applicants for jobs. Not only do these individuals understand the values of the organization, they
also possess the desired skills that meet the organizations standards

III-UNIT
1. What are the product supportive services?

SS also gives feedback to Microsoft development groups for use in the development of
future products or product features. The Windows 2000 recovery console, for instance, was
developed in large part to address difficulty that PSS agents had when attempting to assist
customers with non-functional Windows NT installations. Additionally, PSS identifies major
issues with products, and works with the responsible product teams in order to create "hot fixes"
for these issues, and/or make sure that the issues are addressed in service packs or future product
versions. It is a type of Call Center.

 Basic usage
 "Break-fix" support
 Security patch installation
 Onsite and offsite consulting
 2. What are the pricing of services?

Many service-based businesses struggle to come up with a fair and profitable pricing
strategy. Unlike product pricing, you can’t exactly quantify all the costs that go into providing a
service.

The expenses that go into providing a service are more subjective than the expenses that go into
making a product. How much you charge customers doesn’t always directly correlate with the
amount you pay to perform services.

If you own a retail store, you buy goods at a certain price. To earn a profit, you need to sell the
goods for more than what you paid. You determine how to price a product according to its cost.

In service industries, finding a target profit margin is not as simple. You don’t have an original
price to reference. Instead, your pricing formula for services should account for the intangible
aspects of running your business, such as time and value.

3. What are the problems of service quality management?

Several reasons have been put forward as explanations of poor service
quality: Inseparability of production and consumption and labour intensity. The provision
of service, as distinct from the manufacture of goods, occurs in the presence of customers.
Inevitably as with any human encounter, problems do arise.

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

materials.
 Reliability: ability to perform the promised service dependably and accurately.
 Responsiveness: willingness to help customers and provide prompt service.
 Customer contact
 Service mix
 Location of service consumption
 Design of service facility and accessories
 Technology
 Employees
 Organization Structure
 Information

,
4. Explain the customer expectation.
Customer expectations refers to the expected perceived value, behavior, service or benefits
that the customers seek when purchasing a good or availing a service. They are the result of the
 ‘learning’ process and can be formed very quickly because even first impressions matter a lot.
Once established, these expectations can hold significant influence in decision-making processes
and can be very hard to change.
Customer expectations are similar to customer requirements but they exceed them.
Requirements might be at a basic level. An example can be an air conditioner should be able to
give cold and warm air but expectation can be that the AC should have a remote control as well
as temperature control. An AC with basic requirement fulfillment might be doing the job well
but would not sell in the market as it does not meet the customer expectations.
Also, the customer expectations matter a lot in service industry as it surpassed the core
offerings and encompasses the service quality, interactions, actions, staff behavior and quick
resolution time.

6. What is the innovation in services?

Service innovation is used to refer to many things. These include but not limited to:
Innovation in services, in service products – new or improved service products. Often this is
contrasted with “technological innovation”, though service products can have technological
elements.

 Lego has been changing the materials of its famous bricks to biodegradable oil-based plastics.
 The first electric vehicles introduced in the car's market were also an innovation, and new
batteries with longer ranges that keep coming out are also an example of innovation.
Examples of product innovations:

 Lego has been changing the materials of its famous bricks to biodegradable oil-based plastics.
 The first electric vehicles introduced in the car's market were also an innovation, and new
batteries with longer ranges that keep coming out are also an example of innovation.

IV-UNIT
1. What are the marketing if financial services.

Definition

Financial service marketing uses various marketing strategies and techniques to create and drive

awareness of financial products. The process goes further to capture leads and converts them into
loyal customers through a series of ongoing marketing campaigns.

Marketing of financial services utilizes two primary methods:

 Digital marketing: including inbound channels like blogs and outbound channels like PPC
ads
 Traditional marketing: including TV, radio, print, and signage
 Most financial service providers will use a mix of digital and traditional marketing.
However, due to legacy practices, most rely more on traditional marketing channels. This is
changing as digital marketing campaigns in the financial sector are being shown to be effective
means of reaching customers. It's important to know what these new marketing efforts are
achieving to implement them yourself success fully.

Effective marketing of financial services drives awareness, reduces customer acquisition costs,

drives down churn, and bolsters revenues.

2. Nature of financial services.

In general, all types of activities which are of financial nature may be regarded as financial
services. In a broad sense, the term financial services means mobilization and allocation of
savings. Thus, it includes all activities involved in the transformation of savings into investment.

The traditional services which come under fund based activities are the following
Underwriting or investment in shares, debentures, bonds, etc. of new issues (primary market
activities). ii. Dealing in secondary market activities. iii. Participating in money market
instruments like commercial papers, certificate of deposits, treasury bills, discounting of bills
etc . iv. Involving in equipment leasing, hire purchase, venture capital, seed capital, dealing in
foreign exchange market activities. Non fund based activities

3. Types of financial services.

Banking

Banking includes handing deposits into checking and savings accounts, as well as lending
money to customers. About 10% of the money deposited into banks must stay on hand, as
dictated by the Federal Deposit Insurance Corporation’s (FDIC) reserve requirement. The other
90% is available for loans. Some of the interest the bank earns from these loans is given to the
customers who have deposited money into the bank.

2. Advisory

This branch of financial services helps both people and organizations with a variety of tasks.
Financial advisors can help with due diligence on investments, provide valuation services for
businesses, aid in real estate endeavors, and more. In each case, advisors help to guide people in
the right direction when making financial decisions.
3. Wealth Management

This type of financial service helps people to save money intelligently, and receive a return on
their investment when possible. If you have a 401K program through your employer, that is one
type of wealth management.

4. Mutual Funds

Mutual funds institutions offer a type of investment that multiple parties share in. These
investments are managed by a professional, not the investors themselves. The buy-in for a
mutual fund is not quite as large as some traditional investments in bonds, the stock market, or
the like, so they are a popular option for people who are a little hesitant with their finances. The
investments are also diversified, which helps to mitigate risk.

5. Insurance

This is one of the most common areas of financial services. Most people have some
understanding of insurance; it is a system that you pay into monthly or annually which acts as a
safety net and covers costs of some large expenditure which are often unforeseen. There are
many kinds of insurance: health, auto, home, renters, and life insurance, just to name a few.

4. Explain about marketing of insurance and mutual funds.

A mutual fund pools the savings from numerous investors and invests them in diversified
securities in the capital market in order to optimize the returns, safety and liquidity and offer the
maximum benefits to investors. Mutual funds can be divided into open-ended, closed-ended and
interval The mutual funds market can be segmented into growth fund, income fund,
balanced fund and money-market fund, based on the customer's investment objective. In
purchasing mutual funds, investors look for capital appreciation, liquidity and safety. Therefore,
marketers are required to design the products keeping those objectives in mind.

Products that are customized and designed to suit the risk profile of the customer and his
investment objective are offered in the market. The price of a fund chiefly depends on the
underlying stocks' performances and the stock market trends. The company's performance to

The various channels of distribution used by mutual fund companies include their own
employees, distribution companies, agents, banks and post offices apart from the Internet. The
role of people becomes quite important in the mutual fund industry for two reasons. The fund
manager determines the success of a fund in the market. As there is limited knowledge of mutual
funds among investors, they need to be convinced by the employees and agents to invest

The mutual fund industry has evolved as a competitive industry in the financial services sector
with the introduction of reforms. The entry of global and private players and the inventions of
technology like the Internet have transformed the business completely. The development of the
equity market has made the mutual fund an attractive investment option for consumers. The
option to invest in foreign equities is expected to change the mutual fund market in India further.

5. What are the marketing for non-profit firm?

Target Market

Just as a for-profit business targets a certain audience with its marketing, so should a non-
profit. NPOs should develop a picture of the person most likely to support them in their cause
or benefit and create promotion and advertising around that target. Recent television
advertising campaigns reflecting a large religious affiliation reach out to those who have
walked away from their faith and those who need the support and guidance the church can
provide. A church group would probably not spend advertising dollars on those who already
regularly attend church services, but rather on attracting new church goers.

Branding

It is crucial for the non-profit to build its brand. The brand is typically a logo, wording,
motto or design that identifies the group. The look and content of all communication, events,
service, leadership, alliances and the organization’s office expresses the brand of the non-
profit. The experiences that clients have with the NPO also lead to the overall brand of the
organization. The brand allows donors, supporters and clients to remember, recognize and trust
the organization. It keeps the NPO separate from similar organizations by building an identity.

7. What is the growth of financial services in India?

The growth of financial sector in India at present is nearly 8.5% per year. The rise in the
growth rate suggests the growth of the economy. The financial policies and the monetary policies
are able to sustain a stable growth rate.

The global financial services market is expected to grow from $20,490.46 billion in 2020 to
$22,515.17 billion in 2021 at a compound annual growth rate (CAGR) of 9.9%. The market is
expected to reach $28,529.29 billion in 2025 at a CAGR of 6%.

V-UNIT
1.What are the identifying and satisfying customer needs?

Customer needs are defined as the influential factors that trigger them to buy your product or
service. In order to identify customer needs, it is important to understand the reasons behind their
decision making.
In order to understand customer needs better, it’s very important to know who your customers
are. By defining your target audience and segmenting them based on their industry or other
attributes, you not only get a clear view of what’s your selling proposition but also identify their
needs. 

Here are four simple steps to follow in order to meet customer needs successfully.

 Identify – Follow customer needs analysis via surveys, interviews, focus groups, or
social listening.
 Distribute – Once identified the needs, you can distribute it across the right teams and
departments.
 Create – Tailor product features; create detailed content that speaks about customer
needs.
 Collect – Obtain customer feedback regularly to learn how your efforts meet their
expectations.

TO identify needs, you must both listen and ask the right questions. After identifying needs,
always check for additional or related needs. Use your knowledge and experience to identify and
present the right products, services, and solutions to meet your customers' needs.

2. Difference between relationship marketing and customer satisfaction.

 Establish the initial relationship. This stage is also called “exploratory,” better known
as the first step in the customer acquisition process. It includes initial activities and
conversations to determine if a customer and company are a good fit for each other’s
needs. Consider it the first impression whether that's on social media or at an event.
 Get to know each other. The “basic” stage takes the customer relationship a step further.
A company attempts to prove to potential customers that they understand their needs,
sharing helpful resources and communicating the value of their product/service perhaps
via an email marketing campaign or other inbound marketing efforts.
 Develop a deeper relationship. A potential customer shouldn’t stay in the “basic” stage
too long. Multiple departments need to become involved in this, the “collaborated” stage,
and work together to nurture the customer relationship.
 Become committed partners. The “interconnected” stage means that your company has
forged a connection with your customer that’s hard to break. Departments are working
 together to create a seamless experience. Customers completely trust your company and
are incentivized to stick around for the long-term.

I-TEN MARKS;

1. What are the Types of Customer Needs?

Product Needs
1. Functionality

Customers need your product or service to function the way they need in order to solve their
problem or desire.

2. Price

Customers have unique budgets with which they can purchase a product or service.

3. Convenience

Your product or service needs to be a convenient solution to the function your customers are
trying to meet.

4. Experience

The experience using your product or service needs to be easy -- or at least clear -- so as not to
create more work for your customers.

5. Design

Along the lines of experience, the product or service needs a slick design to make it relatively
easy and intuitive to use.

6. Reliability

The product or service needs to reliably function as advertised every time the customer wants to
use it.

7. Performance
The product or service needs to perform correctly so the customer can achieve their goals.

8. Efficiency

The product or service needs to be efficient for the customer by streamlining an otherwise time-
consuming process.

9. Compatibility

The product or service needs to be compatible with other products your customer is already
using.

10. Empathy

When your customers get in touch with customer service, they want empathy and understanding
from the people assisting them.

11. Fairness

From pricing to terms of service to contract length, customers expect fairness from a company.

12. Transparency

Customers expect transparency from a company they're doing business with. Service outages,
pricing changes, and things breaking happen, and customers deserve openness from the
businesses they give money to.

13. Control
II-UNIT

2. Types of Customer Service

1. Email
Email is one of the most fundamental forms of customer service. It allows customers to
fully describe their problems, and it automatically records the conversation into a resourceful
thread. Customers only have to explain their issue once, while reps can reference important case
details without having to request additional information.
Email is best used with customer needs that don't need to be resolved right away. Customers can
ask their question, go back to work, and return to the case once the service rep has found a
solution. Unlike phones or chat, they don't have to wait idly while a rep finds them an answer.
One limitation of email is the potential lack of clarity. Some customers have trouble describing
their problem, and some service reps struggle to explain solutions. This creates time-consuming
roadblocks when the issue is overly complex. To be safe, use email for simple problems that
require a brief explanation or solution.
2. Phone

When customers have problems that need to be answered immediately, phones are the
best medium to use. Phones connect customers directly to reps and create a human interaction
between the customer and the business. Both parties hear each other's tone and can gauge the
severity of the situation. This human element is a major factor in creating delightful customer
experiences.

Phones come in handy most when there's a frustrated or angry customer. These customers are
most likely to churn and require your team to provide a personalized solution. Your team can use
soft communication skills to appease the customer and prevent costly escalations. These
responses appear more genuine the phone because reps have less time to formulate an answer.

The most common flaw with phone support is the wait time. Customers hate being put on
hold, and it's a determining factor for customer churn.

3. Chat
Chat is one of the most flexible customer service channels. It can solve a high volume of
simple problems or provide detailed support for complex ones. Businesses continue to adopt chat
because of its versatility as well as the improvement in efficiency it provides for customer
service reps.

When it comes to solving customer needs, chat can be used to solve almost any problem.
Simple and common questions can be answered with chatbots that automate the customer service
process. For more advanced roadblocks, reps can integrate customer service tools into their chat
software to help them diagnose and resolve issues.

The limitations of chat are similar to those of email. However, since the interaction is
live, any lack of clarity between the two parties can drastically impact troubleshooting. As a
former chat rep, there were plenty of times where I struggled to get on the same page as my
customer. Even though we resolved the issue, that miscommunication negatively impacted the
customer's experience.

4. Social Media
Social media is a relatively new customer service channel. While it's been around for
over a decade, businesses are now beginning to adopt it as a viable service option. That's because
social media lets customers immediately report an issue. And since that report is public,
customer service teams are more motivated to resolve the customer's problem.

Social media is an excellent channel for mass communication, which is particularly

useful during a business crisis. When a crisis occurs, your customers' product and service needs
become the primary concern of your organization. Social media is an effective tool for
communicating with your customers in bulk. With a social media crisis management plan, your
team can continue to fulfill customer needs during critical situations.

Social media is different than other types of customer service because it empowers the
customer the most. Customers tend to have more urgent needs and expect instant responses from
your accounts. While this type of service presents an enormous opportunity, it also places
tremendous pressure on your reps to fulfill customer demand. Be sure your team is equipped
with proper social media management tools before you offer routine support.

5. in Person
 As the oldest form of customer service, you're probably familiar with working in
person with customers. Brands who have brick-and-mortar stores must offer this
service for customers living near their locations. This fulfills a convenience need
as customers can purchase and return a product without having to ship it back to
the company through an online service.

 In-person customer service is great for businesses with strong service personnel.
Without dedicated employees, your customer service team won't be able to fulfill
your customers' product or service needs. Successful teams have reps who are
determined to provide above-and-beyond customer service.
Importance of Service Marketing
 Marketers market different types of entities such as goods, services, events, persons
etc. The marketing of services is known as service marketing. Services are essentially
intangible and does not result in the ownership of anything. Its production may or may
not be tied to a physical product
 Service marketing excellence requires excellence in three broad levels: external, internal
and interactive marketing. External marketing covers the pricing, distribution and
promotion of services to consumers.

Internal marketing involves training and motivating employees to serve customers well.
Interactive marketing describes the employees’ skill in serving the client.
Factors in Service Marketing
The key factors which define marketing for services are:

1. Intangible

services are non-physical unlike physical products which can be touched, felt, seen. This makes services
different from products and hence the marketing approach would also be different.

2. No ownership

Services cannot be owned but can only be experienced. This is a holistic concept which is related to
customer experience.
There is ownership in service in form of evidence like plan, bills, invoice etc. but you cannot own it like a
product.

3. Inseparability

Service marketing is driven by a concept of moment of truth, i.e. the services are created & used at the
same moment.

They cannot be stored like products in an inventory, they are produced and consumed at the same time.

4. Variability

Services vary in nature despite the same people, process, type of work etc., unlike standardized
products. Different customers can get different experience for exactly the same service used.

e.g. a telecom customer might get different experience for the same plan.

5. Perishability

Unlike products which can be stored, services are consumed at that very moment. But there is another
way to look at it as well. These days many services or plans do have expiry date. They are not similar to
best before dates in products but these dates are more in terms of validity of service.

e.g. free warranty service after 2 years of purchase.

6. People involvement

Service marketing is driven by people who provide benefits & solutions to the needs of the customers.
These days lot of automatic service solutions are coming up but people play the most important role in
service marketing.

III-UNIT

3 . What is a customer needs analysis and future?

1. Customer Needs Analysis Survey
The customer needs analysis is typically conducted by running surveys that help
companies figure out their position in their respective competitive markets how they stack up in
terms of meeting their target customers' needs.
The survey should primarily ask questions about your brand and competitors, as well as
customers' product awareness and brand attitudes in general.

2. Means-End Analysis
Once you've conducted the customer needs analysis survey, you can use the answers to
get a fuller picture of the reasons why your customers purchase from you, and what makes your
product or service stand apart from your competitors'.
A means-end analysis analyzes those answers to determine the primary reasons why a customer
would buy your product. Those buyer reasons can be divided into three main groups:

1. Features: A customer buys a product or service because of the features included in the
purchase. If the customer were buying a computer, for example, they might buy it because it's
smaller and more lightweight than other options.
2. Benefits: A customer buys a product or service because of a benefit, real or perceived, they
believe it will offer them. The customer might also buy the computer because it syncs easily with
their other devices wirelessly.

3. Values: A customer buys a product or service for unique, individual values, real or perceived,
they believe it will help them fulfill. The customer might think the computer will help them to be
more creative or artistic and unlock other personal or professional artistic opportunities.

As you might imagine, these reasons for purchasing something can vary from customer to
customer, so it's important to conduct these customer surveys, collect the answers, and group
them into these three categories. From there, you can identify which of those motivating factors
you're solving for, and which you can improve on to make your product or service even more
competitive in the market.

4. Customer Feedback
If you want to know what your customers think about the experience with working with
your company, ask them. Interviewing your customers and members of your service team can
contribute to a customer needs analysis and improvements to your customer lifecycle.

As you gather data from your customer needs analysis, it's important to identify the
points of friction that your customers experience and the moments in their journey that provide
unexpected delight.
4. What are the Types of Financial Services?

1. Banking
2. Professional Advisory
3. Wealth Management
4. Mutual Funds
5. Insurance
6. Stock Market
7. Treasury/Debt Instruments
8. Tax/Audit Consulting
9. Capital Restructuring
10. Portfolio Management
These financial services are explained below:

1. Banking
The banking industry is the backbone of India’s financial services industry. The country has
several public sector (27), private sector (21), foreign (49), regional rural (56) and urban/rural
cooperative (95,000+) banks. The financial services offered in this segment include:

Individual Banking (checking accounts, savings accounts, debit/credit cards, etc

Business banking (merchant services, checking accounts and savings accounts for businesses,
treasury services, et
Loans (business loans, personal loans, home loans, automobile loans, working-capital loans, etc
The banking sector is regulated by the Reserve Bank of India (RBI), which monitors and
maintains the segment’s liquidity, capitalization, and financial health.

2. Professional Advisory
India has a strong presence of professional financial advisory service providers, which offer
individuals and businesses a wide portfolio of services, including investment due diligence,
M&A advisory, valuation, real-estate consulting, risk consulting, taxation consulting. These
offerings are made by a range of providers, including individual domestic consultants to large
multi-national organizations.

3. Wealth Management
Financial services offered within this segment include managing and investing customers’ wealth
across various financial instruments- including debt, equity, mutual funds, insurance products,
derivatives, structured products, commodities, and real estate, based on the clients’ financial
goals, risk profile and time horizons.

4. Mutual Funds
Mutual fund service providers offer professional investment services across funds that are
composed of different asset classes, primarily debt and equity-linked assets. The buy-in for
mutual fund solutions is generally lower compared to the stock market and debt products. These
products are very popular in India as they generally have lower risks, tax benefits, stable returns
and properties of diversification. The mutual funds segment has witnessed double-digit growth in
assets under management over the last five years, owing to its popularity as a low-risk wealth
multiplier.

5. Insurance
Financial services offerings in this segment are primarily offered across two categories:
General Insurance (automotive, home, medical, fire, travel, etc
Life Insurance (term-life, money-back, unit-linked, pension plans, etc
Insurance solutions enable individuals and organizations to safeguard against unforeseen
circumstances and accidents. Payouts for these products vary across the nature of the product,
time horizons, customer risk assessment, premiums, and several other key qualitative and
quantitative aspects. In India, there is a strong presence of insurance providers across life
insurance (24) and general insurance (39) categories. The insurance market is regulated by the
Insurance Regulatory and Development Authority of India (IRDAI).

6. Stock Market
The stock market segment includes investment solutions for customers in Indian stock markets
(National Stock Exchange and Bombay Stock Exchange), across various equity-linked products.
The returns for customers are based on capital appreciation – growth in the value of the equity
solution and/or dividends – and payouts made by companies to its investors.

7. Treasury/Debt Instruments
Services offered in this segment include investments into government and private organization
bonds (debt). The issuer of the bonds (borrower) offers fixed payments (interest) and principal
repayment to the investor at the end of the investment period. The types of instruments in this
segment include listed bonds, non-convertible debentures, capital-gain bonds, GoI savings
bonds, tax-free bonds, etc.

8. Tax/Audit Consulting
This segment includes a large portfolio of financial services within the tax and auditing domain.
This services domain can be segmented based on individual and business clients. They include:

Tax – Individual (determining tax liability, filing tax-returns, tax-savings advisory, etc.)
Tax – Business (determining tax liability, transfer pricing analysis and structuring, GST
registrations, tax compliance advisory, etc.)
In the auditing segment, service providers offer solutions including statutory audits, internal
audits, service tax audits, tax audits, process/transaction audits, risk audits, stock audits, etc.
These services are essential to ensure the smooth operation of business entities from a qualitative
and quantitative perspective, as well as to mitigate risk. You can read more about taxation in
India.

9. Capital Restructuring
These services are offered primarily to organizations and involve the restructuring of capital
structure (debt and equity) to bolster profitability or respond to crises such as bankruptcy,
volatile markets, liquidity crunch or hostile takeovers. The types of financial solutions in this
segment typically include structured transactions, lender negotiations, accelerated M&A and
capital rising.

10. Portfolio Management

This segment includes a highly specialized and customized range of solutions that enables clients
to reach their financial goals through portfolio managers who analyze and optimize investments
for clients across a wide range of assets (debt, equity, insurance, real estate, etc.). These services
are broadly targeted at HNIs and are discretionary (investment only at the discretion of fund
manager with no client intervention) and non-discretionary (decisions made with client
intervention).

5. What are the Characteristics of Financial Services?

Customer-centric: Financial services are usually customer focused. Financial Services are
provided, depending on the need of customer for example, leasing finance service may be needed
by an industrial customer, while merchant banker’s services may be needed by a company
issuing new equity share in the market.

Financial services firms like other service firms continuously remain in touch with their
customers, so that they can design products which can cater to the specific needs of their
customers.

Intangibility: Financial services are intangible in nature. In a highly competitive global

environment, brand image is very important. Unless the financial institutions providing financial
products and services have good image, enjoying the confidence of their clients, they may not be
successful.

Concomitant: Production of financial services and delivery of these services have to be

concomitant. Both these functions i.e. production of new and innovative financial services and
supplying of these services are to be performed simultaneously.
Perishable in nature: Like other services, financial services also require a match between
demand and supply. Services cannot be stored. They have to be supplied when customers need
them.

Dominance of human element: Financial services are dominated by human element. Thus,
financial services are labour intensive. It requires competent and skilled personnel to market the
quality financial products.

Advisory: Financial services can be of three types i.e. a fund based or a fee-based or both. In
case of fee-based services, the advisory function is dominant. Issue management, registrar of
issue, merchant banking, pricing of securities etc. are few examples of advisory financial
services.

Heterogeneity: Financial services are customized services. It cannot be uniform for all clients.
Financial services vary from one client to other. Institutional client requirements differ from
individual client. After analysing the needs of the clients, financial institutions offer customised
financial services to the clients.

Information based: Financial service industry is an information based industry. It involves

creation, dissemination and use of information. Information is an essential component in the
production of financial services.

67. What are the Functions of Financial Services?

Financial services, through the network of financial institutions, financial markets and
financial instruments serve the needs of individuals, institutions and corporate.

In essence, orderly functioning of the financial system depends to a great deal, on the range and
the quality of financial services extended by the financial intermediaries. Specifically financial
services perform following functions for the orderly development of an economy.

Mobilization of funds: A financial service helps in mobilizing fund from investors, individual,
institutions and corporate entities. These funds are mobilized through different financial
instruments like equity shares, bonds, mutual funds etc.

Effective utilization of funds: These financial services also help in effective utilization of
mobilized funds. Financial services helps in this regard through services like factoring,
securitization, credit rating etc. Services of Credit Rating Company enables investors to make
wise and informed decisions related to investment. Similarly merchant banking services helps
companies in mergers and acquisitions.
Transforming risk: Financial services like insurance helps in reduction of risk by transferring risk
to those who are more willing to bear it.

Enhancement of economic development: A financial service helps in economic development of

the country by mobilization and deployment of funds. Ideal savings of individuals are
channelized into productive investment through financial services.

Provision of liquidity: The financial service industry promotes liquidity in the financial system
by allocating and reallocating savings and investment into various avenues of economic activity.
It facilitates easy conversion of financial assets into liquid cash.

Creation of employment opportunities: The financial service industry creates and provides
employment opportunities to millions

IV-UNIT
What are Classification of Financial Services?

The term “financial services” refers to an assortment of institutions that provide the
means for people to save for the future, hedge against risks, acquire capital for consumption and
organize capital for investment.
Financial services cover wide range of activities like fund raising, funds deployment, credit
rating, underwriting, merchant banking, depository, mutual fund, book building etc.
Financial services can be broadly classified as:
Traditional Financial Services

It includes services rendered for both money and capital market, which can be grouped
under two heads:
Fund Based Services

In fund-based services the firm raises funds through debt, equity, deposits and the bank invests
the funds in securities or lends to those who are in need of capital. Fund based Services are the
activities which come under the following:
1. Primary market activities
2. Secondary market activities
3. Foreign exchange market activities
4. Specialized financial services activities
5. Financial engineering activities.
The important fund based services include:
Fee based financial services are those services wherein financial institutions operate in
specialized fields to earn a substantial income in the form of fees or dividends or brokerage on
operations. The major fee based financial services are as follow:
Managing Capital Issues according to SEBI guidelines

Making arrangements of funds from financial institutions to meet the project cost and
working capital. Making arrangements for the placement of capital and debt instruments with
investment institutions Assisting in the process of getting all government and legislative
clearances.· Managing the portfolio. The fee based/advisory services include:
1. Issue Management
2. Portfolio Management
3. Corporate Counseling
4. Loan Syndication
5. Merger and Acquisition
6. Capital Restructuring
7. Credit Rating
8. Stock broking etc.
7. Challenges to Indian Financial Service Sector.

Financial service in India is industry characterized by increasingly vibrant public and

private-sector institutions. A large number of banks and non-banking finance companies (NBFC)
are providing a variety of financial services to both individual and institutional clients.

o Therefore, the financial service industry will be facing a new, demanding

competitive map, which will create challenges for financial service providers in
India.
o Angel Cano (2010) has identified following challenges to financial service
industry in India:
Markets are segmented in unconventional ways:
o The classical financial services segments are affinities such as chartered
accountants, Independent Financial Analysts or insurance agents. These are not
the most effective groupings in India because the linkages between communities,
localities and religious sects are often stronger than those between occupations.
o Changes in society and relationship patterns: Deep changes in consumer
preferences will determine how financial institutions reach out to their customers
and relate to them. This will mean evolving towards a more efficient, more
productive distribution model.
o The talent pool is shallow and itinerant: Most financial services businesses require
high quality, intelligent people. These are hard to find and already work in high
paying multinationals. It is common to have 100% attrition which means that the
sales force gets replaced each year. In such circumstances how can one build
sustainable institutional capabilities?
  Tougher regulatory and oversight standards will materialize as increased capital, liquidity
and provisioning requirements and more stringent consumer protection.
 The main consequence will be greater pressure on banks’ returns, forcing them to being
more selective in allocating scarce resources, in particular, capital, which will become
increasingly scarce.

V-UNIT

Scope of Financial Services

Financial services cover a wide range of activities.
i. Traditional. Activities
ii. Modern activities.
1.Traditional Activities
Traditionally, the financial intermediaries have been rendering a wide range of services
encompassing both capital and money market activities. They can be grouped under two heads,
viz.
a. Fund based activities and
b. Non-fund based activities.
Fund based activities :
The traditional services which come under fund basedactivities are the following:
i. Underwriting or investment in shares, debentures,bonds, etc. of new issues (primary market
activities).
ii. Dealing in secondary market activities.
iii. Participating in money market instruments like commercial papers, certificate of deposits,
treasury bills, discounting of bills etc.
iv. Involving in equipment leasing, hire purchase, venture capital, seed capital, dealing in foreign
Exchange market activities. Non fund based activities financial intermediaries provide services
on the basis of non-fund activities also. This can be called 'fee based' activity. Today customers,
whether individual or corporate, are not satisfied with mere provisions of finance.
2. Modern Activities

Financial intermediaries beside the traditional services offer a wide range of financial services at
present. These activities are mostly in the category of non-fund based activities.

Few of the modern activities are listed below;

Merger and acquisition planning and helping with their smooth carry out.
Providing guidance in capital reconstructing to corporate customers.
Assisting in rehabilitation and reconstruction of sick companies.
Portfolio management of large public sector corporations.
Providing recommendations in management style and structure for attaining better results.
Acting as trustees to the debentures-holders.
Providing project advisory services ranging from project preparation to capital raising