INSTITUTE USB

DEPARTMENT BBA
Bachelor of Business Administration (BBA)
Service Marketing and BAB-311

Introduction to Service Marketing DISCOVER . LEARN . EMPOWER

 Introduction to
Service
Marketing
Course Outcome
CO Title Level
Number

CO1 Students will know about Services Marketing meaning, Remember

objectives, nature of Services
CO2 Students will know about current economic trends in Understand
service sectors and will understand the importance of
service sector
CO3 Students would learn about categories or broad Understand
classification of services and market implications on
service sector
CO4 Students would learn about marketing management of Understand
services – the process
CO5 Students would learn about consumer behavior, factors Understand 2
affecting it and decision making by consumers.
Introduction to
Service
Marketing (44)
Write your content here ( font size16)
1. Meaning and Nature of Services Growing
2. Importance of Services Sector.
3. Classification of Services and Marketing
Implications
4. Services Marketing Management
Process.

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 Definition
• All economic activities whose output is not a physical product is generally consumed at the time it is produced and
provides added value in forms (such as convenience, amusement, timeliness, comfort or health) that are essentially
intangible concerns of its first purchaser.
• In fact many organizations do have service elements to the product they sell, for example McDonald’s sell physical
products i.e. burgers but consumers are also concerned about the quality and speed of service, are staff cheerful and
welcoming and do they serve with a smile on their face?

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 Characteristics
• 1. Lack of ownership.
• 2. Intangibility
• 3. Inseparability
• 4. Perishability
• 5. Heterogeneity

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 1. Lack of ownership.
• You cannot own and store a service like you can a product. Services are used or hired for a period of time. For example
when buying a ticket to the USA the service lasts maybe 9 hours each way , but consumers want and expect excellent
service for that time. Because you can measure the duration of the service consumers become more demanding of it.

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 2. Intangibility
• You cannot hold or touch a service unlike a product. In saying that although services are intangible the experience
consumers obtain from the service has an impact on how they will perceive it. What do consumers perceive from customer
service? the location, and the inner presentation of where they are purchasing the service?.

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 3. Inseparability
• Services cannot be separated from the service providers. A product when produced can be taken away from the producer.
However a service is produced at or near the point of purchase. Take visiting a restaurant, you order your meal, the
waiting and delivery of the meal, the service provided by the waiter/ress is all apart of the service production process and
is inseparable, the staff in a restaurant are as apart of the process as well as the quality of food provided.

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 4. Perishability
• Services last a specific time and cannot be stored like a product for later use. If travelling by train, coach or air the service
will only last the duration of the journey. The service is developed and used almost simultaneously. Again because of this
time constraint consumers demand more.

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 5. Heterogeneity
• It is very difficult to make each service experience identical. If travelling by plane the service quality may differ from the
first time you travelled by that airline to the second, because the airhostess is more or less experienced.
A concert performed by a group on two nights may differ in slight ways because it is very difficult to standardize every
dance move. Generally systems and procedures are put into place to make sure the service provided is consistent all the
time, training in service organizations is essential for this, however in saying this there will always be subtle differences.

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 Service Marketing
• Activities or Benefits that one party can offer to another that is essentially Intangible and does not result in ownership of
anything. Its production may or may not be tied to a Physical product. Marketing of such benefits is known as Service
Marketing.

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 Challenges in Service Marketing
• Giving a feel for the “product”
• Managing Demand Fluctuations
• Maintaining Quality
• Cost Containment
• Attitudinal block in using proven marketing principles in service marketing

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 Factors that promote Demand
Health care Facilities
- Availability Perspective
• Services are available for longer or convenient hours
• Patients are provided information through Brochures, Publicity, etc on services available
• Services are reliable and offered promptly
• Required equipment are available
• Patient friendly Systems & Procedures

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 Factors that promote Demand
- Accessibility Perspective
• Good public transportation
• Centrally located
• Outreach Programs to reach out to the Rural People

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 Factors that increase Demand
- Promotion Avenues
• Structured approach with designated staff
• Good Rapport with Community
• Publicity through different media
• Promotion at Outreach activities
• Meetings/seminars for other doctors
• Developing a referral network
• Promotion through satisfied patients
• Industrial tie-up for routine examination of their employees

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 Factors that affect Demand
- Attitude Perspective
Reasons for Low Demand:
• Sophisticated technology will automatically trigger demand
• Belief that patients, if need eye care, will definitely come to us
• Providing Service as per Providers’ Convenience
• Systems & Procedures are not patient friendly
• Gap between Patients’ Expectations & Providers’ Perception
• Lack of patient orientation

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 Factors that promote Demand
- Quality Perspective
• Skilled Doctor & other staff
• Standard Clinical Protocol
• Good Administrative System & Procedures
• Courtesy & Politeness
• Proper Explanation
• Clean environment and comforts meeting or exceeding expectations
• Systems to monitor clinical outcomes & Patient satisfaction

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 MARKETIN MANAGEMET PROCESS
FOR SERVICES
• ORGANIZING MARKETING PLANNING
• ANALYSING MARKETING OPPORTUNITIES
• SELECTION OF TARGET MARKET
• DEVELOPING MARKETING MIX
• MANAGING MARKETING EFFORT

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 ORGANIZING MARKETING PLANNING
• Developing a marketing strategy requires market planning and market planning is usually preceded by market analysis.
Before making any strategic plan the manager has to go through some self questioning. The answers of these critical
questions are the beginning of the development of strategic plan.

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 ANALYZING MARKETING
OPPORTUNITIES
• Analyzing market opportunity is to identify target markets
• determine the changing needs of customers
• their bases for choosing among the many alternatives offered.

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 ANALYZING MARKETING
OPPORTUNITIES
• Marketing orientation requires organizations to monitor their environment
to adjust their offering so that customer needs are fulfilled.
• There are some other imp. Factors to be considered to analyzing the
marketing opportunities, they are:

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 ANALYZING MARKETING
OPPORTUNITIES
• The internal environment
• The immediate external environment
• The uncontrollable external environment:
• Economic Factors
• Social Factors
• Political and legal factors
• Technical factors

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 SELECTING TARGET MARKET
• The process of identifying and evaluating marketing opportunities gives rise to many new ideas, each of these
opportunities must be studied relevance to the company’s resources. This steps involves:
• Segmenting & Targeting
• Positioning

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 SELECTING TARGET MARKET
• Services marketing can not be separated from market segmentation.
• There are some segmentation methods which are used by service organization:

• Demographic variant
• Psychographic variant

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 SELECTING TARGET MARKET
• After this process market targeting is focused, deciding on which of the market segment to target is a challenging one &
after this process the service provider decides upon the number of segments to serve such as :
• Undifferentiated marketing –e.g. Mass banking
• Differentiated marketing –e.g. bank products for products for corporate clients and individual clients
• Concentrated marketing – e.g. special agricultural banks or industrial credit banks.

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 DEVELOPING THE SERVICE
MARKETING MIX
• The marketing mix which is the essence of every marketing strategy & includes tangible dominant products, they are:
• Service Product
• Place
• People
• Price
• Demand oriented method
• Cost oriented method
• Competitor based pricing
• Process
• Physical Evidence

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 MANAGING AND CONTROLLING
MARKETING EFFORT
• The service firm must mobilize its people and resources e.g. money , equipment, physical facilities within the
organization to put the strategic plan to work. Another key issue that relates to the implementation programme is the
organizational framework.

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• Heskett lays out a link of activities that emphasizes on the interrelation of various activities of the organization. This
interdependence between marketing, operations, & human resources is termed as service management trinity.

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 Factors that promote Demand
- Accessibility Perspective
• There are some strategies to control service performance:
• Establishing customer service divisions
• Performance Control
• Profitability Control
• Strategic Control

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 Service – Tertiary Sector
It mainly consists of following:
• Trade
• Hotels and Restaurants
• Railways
• Other Transport & Storage
• Communication (Post, Telecom)
• Banking
• Insurance
• Real Estate
• Business Services
• Public Administration; Defence
• Community Services

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 ECONOMIC GROWTH
•Economic growth is the increase in the market value of the goods and services produced by an economy over time. It is
conventionally measured as the percent rate of increase in real gross domestic product.
•GDP refers to Gross domestic product , it is the market value of all officially recognized final goods and services produced
within a country in a given period of time, generally a year. GDP per capita is often considered as an indicator of country’s
standard of living.

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 SERVICE SECTOR IN INDIA
• Services sector in future providing about 70 per cent of the new job opportunities in the economy

• New employment possibilities in the services sector are construction, trade, transport, storage, financial services,
communication and personal services

• Employment in manufacturing would also expand, but its contribution to the total increase in employment would only be
around 17 per cent.

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 HISTORY OF SERVICE SECTOR IN INDIA
• The services sector has played a vital role in the acceleration of economic growth.
• Growth in services picked up in the 1980’s and accelerated in the 1990’s. Since then, it has become a dominant contributor
to economic growth.
• The share of services in India’s GDP increased from 33.5 per cent in 1950-1 to 56.5 per cent in 2011-12.

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 WHERE IS SERVICE-SECTOR GROWTH
CONCENTRATED?
• The three groups of services are :
• Group I - Traditional services – retail and wholesale trade, transport and storage, public administration and defense –
which tend to be slow growing in the sense that their share in GDP has fallen in more advanced countries.
• Group II is a hybrid of traditional and modern services consumed mainly by households – education, health and social
work, hotels and restaurants, and other community, social and personal services – whose share in GDP has risen in step
with per capita income.
• Group III is made up of modern services – financial intermediation, computer services, business services, communications,
and legal and technical services.
• Productivity growth has been highest in Group III.

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 REASONS FOR GROWTH OF SERVICE
SECTOR
• Both demand and supply factors have led to the growth of service sector.
• On the demand side, the high growth of services output was mostly attributed to factors such as increasing input usage of
services by other sectors, mainly manufacturing sector (i.e. higher domestic demand); higher foreign demand due to trade
demand); liberalization; and high income elasticity for services.
• On the supply side, the increased trade in services following trade liberalization policies and other reforms in 1990s
induced this growth.
• Economic affluence
• Changing role of women
• Cultural changes
• Conservation of natural resources
• Development of markets
• Increased consciousness of health care.
• Development of Information technology
• Rampant Migration

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Importance of service sector

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Service Marketing Triangle

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 Service Marketing Triangle
• On the right side of the triangle are the external marketing efforts that the firm engages in to set up its customers’
expectations and make promises to customers regarding what is to be delivered.
• Anything that communicates to the customer before service delivery can be viewed as part of this external marketing
function.
• On the bottom of the triangle is what has been termed interactive marketing, or what some refer to as real-time
marketing. Here the actual service delivery takes place-the firm’s employees interact directly with customers.

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 Service Marketing Triangle
• Internal marketing refers to the activities the firm must carry out to train, Motivate , and reward its employees. Unless
service employees are able and willing to deliver on the promises made, the firm will not be successful in keeping its
promises and the services marketing triangle will collapse. Internal marketing hinges on the assumption that employee
satisfaction and customer satisfaction are inextricably linked.

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 References
• Zeithaml V. A. , Bitner M. J. and Pandit, A., Services Marketing, Tata McGraw Hill Publishing Co. Ltd. New Delhi.
• Lovelock C. H., Wirtz, J. and Chaterjee, J. Service Marketing: People, Technology, Strategy, Pearson Education, New
Delhi.
• Internet Sources

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 THANK YOU

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