SERVICES MARKETING

SERVICES
“Services are activities, benefits or satisfaction
which are offered for sale or provided in
connection with sale of goods”.
- The American Marketing Association

“Services are those separately identifiable

essentially intangible activities, which provide
want satisfaction when marketed to consumers
and/or industrial uses and which are not
necessarily tied to the sale of a product or another
service”. - Stanton
Components / Nature of Service
1. Physical Product
2. Service Product
3. Service Environment
4. Service Delivery
1. The Physical Product
•The various products marketed by a firm involve
the physical transfer of ownership of those
products. They are tangible and their quality is
standardised.

•For Example, physical products include T.V., Radio,

Refrigerators, Computers, Hair oil, Vacuum Cleaner,
Washing Machine, etc.
2. Service Product
• A service is an activity or benefit that one party
can offer to another which is essentially intangible
in nature. Service involve some interaction with
customers without effecting transfer of ownership.

• For example, people visiting exhibitions, trade

fairs are allowed to inspect the consumer durables
without being approached by sales representatives.
Salesmen are trained in making proper approach to
the customer visiting their showrooms.
3. Service Environment
• The potential customers form an impression
about the service on the basis of service
environment. The service environment represents
the physical back drop that surrounds the service.

• For example, providing hygienic food is the core

service in a hotel or restaurant. Customers expect
the restaurants to be maintained clean, offer
flexible dining hours prompt service, soft music,
décor, exotic menu etc.
4. Service Delivery
• The Service delivery is one of the important
components of service. Service delivery is of great
importance to the customer’s overall perception
about the quality of service.
• The service provider should give due
consideration to the way service is rendered to
customers. Services are created as they are
consumed.
Reasons for Growth of Service Sector
1. Demographic Changes
2. Economic Changes
3. Social changes
4. Political and Legal Changes
5. Technological Changes
Significance of Services Marketing
1. Generation of employment opportunities
2. Optimum utilisation of resources
3. Capital formation
4. Increased standard of living
5. Use of environment-friendly technology
1. Generation of employment
opportunities
• The components of the service sector are wide
and varied. For example, the service sector
includes personal care services, education services,
medicare services, communication services,
tourism services, hospitality services, banking
services, insurance services, transportation
services, consultancy services etc.
• The organised and systematic development of the
service sector would create enormous employment
opportunities.
2. Optimum Utilisation of Resources
• India is bestowed with rich resources.
Particularly, the human resources available in India
favour the growth of the service sector.
• While the labour content in most manufacturing
activities is dropping steadily with use of
technology, the labour content in the service sector
is comparitively high.
• As India is rich in human resources, service sector
can grow steadily. Moreover, service sector offers
excellent export opportunities too.
3. Capital Formation
• There are indications that Services will grow
more rapidly in the near future. Economic, social
and political factors signal an expansion of the
service sector. Investments and job generations are
far greater in the service sector compared to
manufacturing.
•For the development of a nation, the flow of
capital should be directed towards the most
productive uses. If investments are made in the
service sector, it will contribute to the nation-
building process.
4. Increasing the Standard of Living
• The standard of living of the people in any
country would be decided on the basis of quality
and standard of products consumed or services
availed in the day-to-day living.
• Any development is transparent only when the
living conditions of the masses improve.
• When compared with developed countries, the
standard of living in India is far from satisfactory.
Standard of living cannot be improved by offering
more opportunities for earnings.
5. Use of Environment friendly
Technology
• Now-a-days, almost all services are found
technology-driven. Developed countries are
making full use of latest technology while
rendering services.
•Technologies used by service generating
organisations such banks, insurance companies,
tourism, hotel services, communication services
and education services are not detrimental in any
way to the environment.
• On the contrary, technologies used in
manufacturing organisations may have harmful
effects on the environment.
CHARACTERISTICS OF SERVICES
1. Intangibility
2. Inseparability
3. Heterogeneity (Individuality or Variability)
4. Perishability
5. Ownership
6. Absence of Quantitative measurement
CLASSIFICATION OF SERVICES
1. Classification of Services by Adrian Payne
(a) Communications and information services
(b) Public utilities, government and defence
(c) Health care
(d) Business, Professional and Personal
Services
(f) Recreational and hospitality services
(g) Education; and
(i) Other non-profit organisations
CLASSIFICATION OF SERVICES
2. Classification of Services by Christopher
Lovelock
(a) Nature of Service Act
(b) Type of relationship that the service
organisation has with its customers
(c) Scope for Customisation and Judgement in
Delivery System
(d) Nature of demand and supply for the
service
(e) Methods of Service Delivery
CLASSIFICATION OF SERVICES
1. Consumer Service: 2. Industrial Service:
 Food Services
 Hotels and Motels
 Personal care services
 Car services firms
 Entertainment services
 Transport services
 Communication Services
 Insurance services
 Financial services
 Financial Services
 Insurance services
 Transport & warehousing
 Engineering services
 Advertising and
promotion services
 Office services,
 Management consultancy
services.
Classification of services based on
tangible actions
Classification of service based on
intangibility
SERVICES DESIGN
A service involves creation and delivery of core
benefits in order to satisfy an identified need of the
customer. As a process, it refers as to how a service
is provided or delivered to a customer. In a
competitive market, the importance of the actual
process in service delivery has been recognised.
 Service Customer
Service Customer
Performance Experience
Requirements Expectations
Standards With service

Service Design

Service Custom Service Customer

Operati er Provider
Product Facilitie Encounter Provider
ons Service behaviour
Design s Design Environment interaction
Process Process
Design Design

Service
Quality
Factors Influence Designing Service Process

1. The Service Itself

2. Customer Participation in the process
3. Location of Service Delivery
4. Level of Customer Contact
5. Degree of Standardisation
6. Complexity of the service
Mgt model for Service Design / Stages / Process

Specifying Generating &

Developing
design evaluating Developing
design
performance design design details
attributes
standards concepts

Improving Assessing Measuring Implementing

performance satisfaction performance the design
BLUEPRINTING

• A service blueprint is a flow chart of the service

process. It conveys the service concept by showing
all the elements or activities and their sequencing
and interaction.
• It is pictorial description of the service system
showing the service at an overview level.
• It explains how each job or department functions
in relationship to the service as a whole.
Blueprinting was developed by Shostak in 1987.
Blueprinting is a technique which enables one to
understand the totality of a service as a process.
 COMPONENTS OF SERVICE BLUEPRINTS

• According to Rust “blue printing is a technique that

helps to understand the totality of a service as a
process.
• There are four key action areas in a service blue
print, namely, customer actions, on stage employee
actions, backstage contact employee actions and
support processes.
• Customer actions are marked by the line of
interactions. This represents the direct interactions
between the customer and the organisations.
• On stage contact employee actions are those
activities which are visible to the customers.
• In a lawyers office, rendering legal services, the
actions of the attorney, such as an initial
interview, immediate meetings, final delivery of
legal documents are all on stage activities.
• The back stage activities are undertaken by the
backstage contact employees. These activities
intend to support the on stage activities.
• For eg: consulting law books, meetings with
juniors before the preparation of final
documents by the attorney are known as
backstage contact employees actions.
• The support process activities covers the
internal services, steps and interactions which
support the contact employees in delivering
the service.
STAGES IN PREPARATION OF BLUEPRINTING

1. Put the service in the form of its molecular

structure
2. Divide the process into logical steps
3. Recognise the variability in the process
4. Identify the backstage actions in the process
 USES OF SERVICE BLUEPRINT
• A blueprint is useful in several ways in
managing a service. A blueprint can be used to
improve the design for an existing service or
to design a new service.
• A blueprint serves as a guide for implementing
the service plan by showing the sequence of
steps needed to deliver a service.
• Service unit managers employ blueprints in
their decision making activities.
• Detailed service blueprints help marketing and
communication people.
• Human resource managers use service blueprints
in the preparation of job description, job
specification, job evaluation, performance
standards, training and appraisal schemes and
compensation schemes.
• It helps in identifying weak links in the chain of
service activities and facilitates continuous
quality improvement.
• Blueprint supports both internal and external
marketing.
• Blueprint enable managers to identify,
channel and support quality improvement
efforts of grass roots employees working on
both frontline and supporting teams.
Technology & Service Productivity
• Service organisations can improve their
productivity by introducing systems and
technology in their operations. Under the systems
approach to services marketing technology,
engineering and management sciences are
implemented into service industries.
• The systems approach looks at the task as a
whole. The systems approach identifies the key
operations to be performed, devises new ways of
performing each operation, eliminates superfluous
practices through new methods and improves the
coordination of processes within the system.
Application of technology to service activities

Hard Hybrid
Soft Technology
Technology Technology
1. Hard Technology

• Hard technologies substitute machinery, tools

and other engineering devices for labour intensive
performance of service work. The following
examples can be offered for the application of hard
technologies in the service sector.
Example: Automatic car washes, airport x-ray
equipment, automatic car parking, automatic
vending equipment, audio visual equipment,
computers, the consumer credit card and bank
balance checking machine.
2. Soft Technology

• Soft technology means substituting pre-planned

systems for individual service operations. Though the
systems involve some technology, the basic
characteristic is the system itself.
•Food restaurants, safe materials, restaurants,
operation tool rooms in factories, open stack libraries.
Example: Fast food restaurants such as MC Donald,
Wendy, Pizza hut, Kentucky Fried Chicken follow
rationale division of labour. Use of soft technologies
in these organistions ensures the benefits in the forms
of high quality, cost control, speed and efficiency,
cleanliness and low prices.
3. Hybrid Technology

• Hybrid technologies combine hardware with

carefully engineered systems to bring greater
efficiency, order and speed to the service process.
Example: The cost of energy can be substantially
saved by careful programming for types and grades of
roads, location of stops, congestion of roads, toll road
costs and mixing point access. A new generation of
automatic teller machines will allow customer access
to personalised information on mortgages or
insurance with on the spot quotations, information on
standing orders and direct debits, traveller’s cheque
and foreign currency and travel insurance.
Role of Technology in Service process

1. Easy accessibility of service

2. New ways to deliver service
3. Close link with customers
4. Higher level of service
5. Global reach of service
6. Cost Rationalization
Building Service Aspirations

• The service generating organisations building

service aspirations in the process of generating
demand for the services.
• The aspirations may be generated in two ways,
namely, generating aspirations to serve the users
and generating aspirations to use the services.
• Service aspirations of organisation engaged in
generating services focus on offering quality
services. Quality is generally conceptualised as an
attitude towards service.
Building Service Aspirations
Developing Human Resources
• Use of sophisticated technologies enhances the
efficiency of the service organisations.
Sophisticated technology along will not have any
impact, if the human resources in the service
organisations are not properly tapped.
• The performance of the service units will be
commendable only when there is a fair
synchronisation of information technologies and a
team of personally committed employees.
• It is a commonly accepted fact that generation of
efficiency is substantially influenced by the quality
of human resources.
Developing Human Resources
Input & Output
interface

HRM

Personnel mobilisation
Internal marketing
interface
interface