Marketing of SERVICES

INTRODUCTION TO SERVICES MARKETING

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Session Objectives:-
 What is a Service?
 Why Service Marketing?
 Service and Technology
 Uniqueness and Challenges of Services
 Service Marketing Mix
 Staying Focused on the Customer

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 Economy of India-At a Glance
 The Economy of India is the fifth-largest in the
world by nominal GDP and the third-
largest by purchasing power parity.

 Indian Economy become world's fastest

growing major economy replacing China.

 Agriculture accounted for 15.5% of the GDP and

employed 42% of the total workforce.
 Economy of India-At a Glance
 Industry accounts for 23% of the GDP and
employs 26% of the total workforce.

 Services sector has the largest share in the GDP,

accounting for 57% in 2012, up from 15% in 1950.
It provides employment to 32% of the work force.

 Services sector accounts for 61.5%.

WHAT IS A SERVICE?
What is a Service?

Services: deeds, efforts, or performances

Goods: objects, devices, or things
 Examples of Service sectors
 Health Care
 hospital, medical practice, dentistry, eye care
 Professional Services
 accounting, legal, architectural
 Financial Services
 banking, investment advising, insurance
 Hospitality
 restaurant, hotel/motel, bed & breakfast
 ski resort, rafting
 Travel
 airline, travel agency, theme park
 Others
 hair styling, pest control, plumbing, lawn maintenance, counseling services, health
club, interior design

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Reasons for the growth of services in India

 Economic affluence

 Cultural changes

 IT Revolution

 Developments of markets
Reasons for the growth of services in India

 Market orientation

 Health awareness

 Rampant migration

 Service Tax
What is services marketing???

What is your role???

Why Service Marketing?

 Services dominate U.S. and worldwide

economies.
 Service as a business imperative in goods-
focused businesses.
 Deregulated industries and professional service
needs.
 Service marketing is different.
 Service leads to profits.

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Contributions of Service Industries to
U.S. Gross Domestic Product
Dominance of Service Economy

 Service sector accounts for 64% of global economy

 61.5% of India’s GDP

 79% of the GDP of USA

Contribution of services over the years in %
Year Agriculture Industry Services

1950-51 53.1 16.6 30.3

1960-61 48.7 20.5 30.8

1970-71 42.3 24 33.8

1980-81 36.1 25.9 38

1990-91 29.6 27.7 42.7

2000-01 22.3 27.3 50.4

2010-11 14.5 27.8 57.7

2011-12 13.9 27 59

Source: Economic Survey

Estimated Size of Service Sector in
Selected Countries
Comparing Products and Services

Products Services
 Tangible  Intangible

 Standardized  Heterogeneous

 Production separate from  Simultaneous production

consumption and consumption

 Non-perishable  Perishable
 The Services Marketing Triangle
Company
(Management)

Internal External
Marketing Marketing

“enabling the “setting the

promise” promise”

Employees Interactive Marketing Customers

“delivering the promise”
Source: Adapted from Mary Jo Bitner, Christian Gronroos, and Philip Kotler
SERVICE AND TECHNOLOGY

 New service offerings

 New ways to deliver service
 Enabling both customers and employees
 Extending the global reach of services
 The internet is a service
 Defining Services

 “Any activity or benefit that one party can offer to

another that is essentially intangible and does not
result in the ownership of anything. Its production
may or may not be tied to a physical product”.

(Kotler and Bloom)

 “deeds, processes and performance”

(Zeithaml)
Characteristics of Services
(4 I’s)

Intangibility Inconsistency

Inseparability Inventory

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Tangibility Spectrum

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Search, Experience, and Credence Qualities

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 Examples

 Search Qualities-color, style, price, hardness and

smell etc.

 Experience Qualities-taste, wearability and

comfort etc.

 Credence Qualities-appendix operations, brake

re-linings on a car and computer software
updates.
 SERVICES MARKETING MIX
https://www.youtube.com/watch?v=GhFpvXsmBXY
Traditional Marketing Mix

 Elements an organization controls that can be

used to satisfy or communicate with customers:
 Product
 Price
 Place
 Promotion

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 Expanded Mix for Services – The 7 Ps

 Product
 Price
 Place
 Promotion

 People
 All human actors who play a part in service delivery and thus influence the buyer’s
perceptions: namely, the firm’s personnel, the customer, and other customers in
the service environment.
 Physical Evidence
 The environment in which the service is delivered and where the firm and
customer interact, and any tangible components that facilitate performance or
communication of the service.
 Process
 The actual procedures, mechanisms, and flow of activities by which the service is
delivered—the service delivery and operating systems.

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FOUR BROAD CATEGORIES OF

SERVICES
Four Broad Categories of Services

 Based on differences in nature of service act

(tangible/intangible) and who or what is direct
recipient of service (people/possessions), there
are four categories of services:
 People processing
 Possession processing
 Mental stimulus processing
 Information processing