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Introduction to Services Marketing

D r. R . Ve n k a t e s h
Professor - Higher Academic Grade
VIT Business School Chennai

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Services Master title style
Marketing

• The American Marketing Association defines services marketing as an organisational

function and a set of processes for identifying or creating, communicating, and
delivering value to customers and for managing customer relationship in a way that
benefit the organisation and stake-holders.

• P. Kotler suggested that ”service is an 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”.

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Characteristics title style
of Services

• There are four characteristics of service: Intangibility, Inseparability, Variability, and

Perishability (Kotler and Keller, 2007).
• As service's nature is intangibility, therefore manufacturing and service delivery is more
complex than a product.
• Service cannot be touched or sensed, tested or felt before they are availed
• Inseparability is a significant characteristic that distinguishes a service from a     product
according to the simultaneous production and consumption.
• hair cut is not possible without the presence of an individual. A doctor can only treat when his patient is
present.
• Due to the service's variability, it's difficult to be controlled, because it greatly relies on the
service's provider, moreover when, where and how it's provided.
• Doctor can charge a much higher fee to a rich client and take much low from a poor patient.
• Perishability is one of the major characteristics of service, that it can't be stored for later use or
sale (No inventory).
• Theatre or plane tickets 3 3
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Important title style
Characteristics

• Fluctuating Demand
• Service demand has high degree of fluctuations. The changes in demand can be seasonal or by weeks, days or even
hours.
• Restaurants – peak hours, normal demand, off period time
• Pricing of Services
• Pricing is influenced by perishabilitym fluctuation in demand and inseparability
• Service Quality is not statistically measurable
• It is defined in form of reliability responsiveness, empathy and assurance all of which are in control f employee’s
direction interacting with customers
• For service, customers satisfaction and delight are very important
• Ownership
• In the sale of goods, after the completion of sale, the goods are transferred in the name of the buyer,
however as far as services are concerned the users only have access to services and cannot own them

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Classification title style
of Services

• Classification of service based on tangible action

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Classification title style
of Services

• Classification of service based on intangibility

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Classification title style
of Services

• Consumer Service Marketing • Industrial Service Marketing

• Food Service • Engineering Services
• Hotels and Motel • Warehouse Services
• Personal Care Services • Advertising and Promotional Services
• Medical and Surgical Services • Office Services
• Educational Services • Management Consultancy Services
• Household Services • Marketing Research Services
• Automobile Services • Manpower Selection and Training
• Entertainment Services
• Transport Services
• Communication Services
• Insurance Services
• Financial Services
• Personal Security Services.

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Classification title style
of Services

• On the Basis of Degree of Involvement of the Customer 

• People Processing
• The customer has to be present at the place of delivery to experience or consume the service, like a
training workshop, a dance class, health care, etc
• Possession Processing
• Even if the customer’s presence is not required, his possession or property needs to be deposited
for service, like car servicing/repair, TV/VCD repair, laundry, courier service, etc
• Mental Stimulus Processing
• In this case the customer’s mental attention is required, if not physical presence, in order to
experience services like career counselling, advertising, consultation and education services, etc.
• Information Processing
• In this case, data, information, knowledge are gathered and analysed for clients, like research
studies, market surveys, data processing, accounting, legal services, programming, etc
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Classification title style
of Services

• On the Basis of Service Tangibility

• Highly Tangible
• The service includes physical products (highly tangible) for use during the contract period, like a
cell phone or a house on rent.
• Services Linked to Tangible Goods
• These are the guarantee or warranty periods, during which the sellers provide free or subsidised
services to the customer, like machines, vehicles, gadgets, etc.
• Tangible Goods Linked to Services
• Here some physical goods are given to the customer as part of a service, like food with a
train/air ticket, hotel accommodation which includes morning breakfast, etc.
• Highly Intangible
• Here, no products are offered as part of the services, like haircuts, body massage, movie, etc

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Classification title style
of Services

• On the Basis of Skills and Expertise Required

• Professional Service Marketing
• High Skill
• These services require a higher level of qualification and training to provide services
• Doctors, lawyers, pilots
• Non-Professional Service Marketing
• Low Skill
• These services don’t require any special prerequisites in skills, and can be performed by
anybody with some practice
• Office security guards, babysitters, courier delivery boys, etc

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Classification title style
of Services

• On the Basis of the Business Orientation of the Service Provider

• Commercial Organization
• Profit Oriented
• The main objective here is to make a profit by providing service.
• They strive to do all that is required to earn profits by keeping the customers satisfied.
• Non-Profit Organisation
• Service Oriented
• The main objective here is to serve the target clientele, without any motive to earn any profit.
• Money is needed for running such an organization is obtained  from public donations, trust
funds, or government aid.
• This category includes government bodies and also no-profit-no-loss (cost to cost) organisations.
Schools, NGOs, welfare societies, disaster relief organisations, etc. are examples.

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Classification title style
of Services

• On the Basis of the Types of End Users

• Consumer Service Marketing
•  This is between the service provider (the company) and the individual customer for his personal
consumption like medical treatment, fitness services
• Business to Business Service Marketing
• This is between two companies, like one company hiring another, to do market research for it
• Industrial Service Marketing
•  This is the case where a manufacturing company buys services from a service provider like
supply, erection, commissioning, and maintenance of the plant and machinery.

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Services title style
Asia and World Economies

Sector shares of GDP by

country group, 1990 and 2016

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Services title style
Asia and World Economies

• The service sector is also a huge contributor to economic growth in recent times.
• Services' contribution to growth has been higher in South Asia than in other subregions; in
India, Maldives, Pakistan, and Sri Lanka, some 60 per cent or more of the growth in 2005–15
came from services.
• In Southeast Asia, particularly in Indonesia, Malaysia, the Philippines, and Singapore, services
contributed over half of the growth in 2005–15.
• But in East Asia—particularly in the PRC; the Republic of Korea; and Taiwan—industry
drives growth more than does the service sector.
• The service sector has helped to facilitate economic growth in countries where the pace of
industrialization has been slow, notably South Asian countries and the Philippines.
• In South Asia, the modern service sector has played an especially prominent role in overall
growth
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Thank You

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