Unit I MOS - Final

Noida Institute of Engineering and Technology, Greater Noida
Introduction To Services Marketing
Unit: I
AMBAMK0413
Dr. Ajay Gangele
MARKETING OF SERVICES
School of Management
MBA
IV SEM
Ajay Gangele AMBAMK0413 UNIT-1

1
04/09/2024
Topic Objective /Topic Outcome
Unit 1: Introduction to Services
Topic 1:
 To know meaning of services
 To understand classification of services
 To learn how to make difference
between a good and a service
04/09/2024 Ajay Gangele AMBAMK0413 UNIT-1 2

 To know meaning of services

 To learn how to make difference between a good and a service
 To understand characteristics of services
 To learn Importance of the Service Sector in Our Economy

Concept of Services (CO1)
Services are intangible products
• Services are deeds, processes, and performances provided or
co-produced by one entity or person for another entity or
person
• Services include all economic activities whose output is not
a physical object
• According to Philip Kotler, “Service is any act or performance
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.”

04/09/2024 4
Definition of Services (CO1)
“In exchange for their money, time, and effort, service customers
expect to obtain value from access to goods, labor, professional skills,
facilities, networks, and systems; but they do not normally take
ownership of any of the physical elements involved”.

04/09/2024 5
Service Concepts (CO1)
• Service Industry and Companies

• It involves those industries and companies which are typically classified
within the service sector and whose core product is service
• Service as a Product
• It represents a wide range of intangible product offerings that customers
value and pay for in the marketplace.
• Customer Service
It is the service provided in support of a company’s core products.
• Derived Service
• It is an abstract view
• Value derived from physical goods is the service provided by the good, not
the good itself.
• E.g. A pharmaceutical product provides medical service.

Developed Service (CO1)
• Service-oriented development is based on the concept of

services. It is the realization of business functionality via
software that customers can use to compose new business
applications by using existing services in the context of new or
modified business processes. how you should design and
develop the services to make them useful for both Oracle
Fusion Applications and for customers. It also covers how the
services are consumed.

Service Concepts (CO1)

Characteristics of Services (CO1)

Evolution of Services(CO1)
• Changing pattern of government regulations.

• Privatization of some public/ nonprofit service
• Technological innovations.
• Internationalization & Globalization.
• Expansion of leasing & rental business.
• Manufacturers as service providers.
• Hiring of employees.

Importance of the Service Sector in Our Economy (CO1)
• In most countries, services add more economic value than agriculture, raw
materials and manufacturing combined
• In developed economies, employment is dominated by service jobs and
most new job growth comes from services
• Jobs range from high-paid professionals and technicians to minimum-wage
positions
• Service organizations can be any size—from huge global corporations to
local small businesses
• Most activities by government agencies and nonprofit organizations
involve services

Difference between Products and Services(CO1)
Goods
Services
1. Services are intangible products 1. Goods are tangible products
2. Services can not be inventoried 2. Goods can be inventoried
3. It lacks standardization 3. Goods are standardized in nature
4. Services are inseparable from 4. Goods are separable from the
• service provider while selling
them producer while selling them
5. The place of production and 5. The place of production and
consumption of service is same consumption of goods is not same
6. Minimum scope for physical
distribution 6. There is large scope of physical
distribution
7. Consumer acts as a co-producer of
service 7. Goods are not co-produced by
consumer

Daily Quiz
1. Define Marketing.
2. Discuss the concept of Services.
3. Differentiate goods and services.
4. Mention five service industries in india.
5. List 10 companies dealing in service sector.

Topic Objectives
 To understand Service marketing mix i.e 7 p’s

 To know the Reasons for Development of Service Marketing
(CO1)
 To understand service marketing Triangle.

Prerequisite and Recap
 Definition and meaning of services

 Classification of services
 Difference between a good and a service
 characteristics of services
 Importance of the Service Sector in Our Economy (CO1)

Topic 2:
 7 Ps of service marketing
 Service marketing triangle

7 P’s of Service Marketing (CO1)

People (CO1)

Process (CO1)

Physical Evidence (CO1)

Reasons for Development of Service Marketing (CO1)
• Customer service became essential tool for management to satisfy the

changing needs
• Products can be copied easily however it is relatively hard to copy service
for competitors because service offers experiences
• Service act as point of differentiation
• Change in family system
• Economic prosperity
• Concept of service, leisure, pleasure got changed
• Technological development
• Urbanization

Service Marketing Triangle (CO1)

External Marketing (CO1)
• Maintain loyalty of existing customers

• Between organization and customers
• Involves setting the promises through promotion to raise

expectations
• Service employees, organizations image and visible structure and
service delivery process forms the basis for customer expectations
• Realistic promises causes satisfaction and vice versa

Interactive Marketing (CO1)
• Between Employees and Customers

• It is most important stage of service delivery process
• This is called Moment Of Truth (MOT) or service encounter
• It is about keeping the promise by the organization to the

customers
• Relationship marketing plays vital role
• Huge role of employees in determining the quality of service

Internal Marketing(CO1)
• Between Organization and Employees
• Success of external marketing depends on the effectiveness of

internal marketing
• Employee satisfaction and customer satisfaction are interlinked

Daily Quiz
1. Define Physical Evidence

2. Discuss the concept of People in service
marketing
3. List any five physical evidences from hospital
4. What is internal marketing
5. State objectives of Interactive marketing

• Service marketing mix

• Service marketing Triangle
• Reasons for development of service marketing

Topic Objectives

 To know about STP approach in context of services

Topic 3:
 Classification of services
 Strategies for Service marketing:
Segmentation, Targeting &
Positioning

Classification of Services(CO1)
Service Marketing can be classified according to the market to which they

are offered-
(1) Services sold in the consumer market,
(2) Services sold in the business market.
Please note that we have many services common to both market, e.g.,
financial, insurance, transport and communication services

Classification of service marketing (CO1)
A. On the Basis of Degree of Involvement of the Customer –

1. People Processing 2. Possession Processing 3. Mental Stimulus Processing 4.
Information Processing
B. On the Basis of Service Tangibility –

1. Highly Tangible 2. Services Linked to Tangible Goods 3. Tangible Goods Linked to
Services 4. Highly Intangible
C. On the Basis of Skills and Expertise Required –

1. Professional Service Marketing 2. Non-Professional Service Marketing
D. On the Basis of the Business Orientation of the Service Provider –

1. Commercial Organization 2. Non-Profit Organization
E. On the Basis of the Types of End Users –

1. Consumer Service Marketing 2. Business to Business Service Marketing 3.
Industrial Service Marketing.
Strategies for Service marketing: Segmentation, Targeting &
Positioning(CO1)

STP( CO1)

STP (CO1)

Segmentation (CO1)
• Market segmentation is defined as the process of dividing the market into distinct
groups that share common characteristics, needs ,purchasing behavior, or
consumption patterns.
• Market segmentation is a strategy that recognizes the need of ‘specialization’ to suit
the needs of a segment of the market rather then trying to be ‘all things to all people’.
Why market segmentation is important ?

• It leads to efficient and effective utilization of resources.
• Improves manageability of the market by dividing the markets into smaller parts.
• Helps to improve the company’s ability to satisfy customers.

Objectives of Segmentation(CO1)
• Identify the similarity of needs of potential buyers within a segment and

pursue them with tailored products.
• Identify the difference between needs of buyers among segments and try
to cater to these different needs.
• Once the specific segment has been chosen for the marketing efforts ,the
organization is more focused in its efforts and there is a potential for
increased return on investment.
• It is cost effective for the marketers to assign the buyers to different
segment on the basis of a number of parameters.

Marketing Segmentation (CO1)

Targeting in Service marketing (CO1)
Targeting is the choice of a single segment or group of segments that the

organization wishes to select.
Companies can evaluate and select market segment on the basis of:-
• Segment size and growth
• Segment structural attractiveness
• Company objective and resources
Selecting market segments
Once the segments have been evaluated the market to be targeted can be
selected on the basis of-
• Undifferentiated marketing
• Differentiated marketing
• Concentrated marketing
• Customized or micro marketing

Targeting in Service marketing (CO1)

Market coverage Strategy (CO1)
The target market selection involves the dynamic process of matching the
changing variety of products and services with the changing variety of
customer wants. Companies need to consider several factors while
choosing a market coverage strategy.
Some of them are as follows:-
• Company’s resources
• Degree of product homogeneity
• Product life cycle stages
• Market homogeneity
• Competitor’s marketing strategies

Market coverage Strategy (CO1)

Daily Quiz
1. What is people processing?

2. List down any two commercial service
organization.
3. Describe Professional service marketing?
4. Explain Mental Stimulus Processing .
5. Describe Information Processing

• Service classification
• Segmentation approach
• Targeting approach
• Market coverage strategy

Topic Objectives
• To understand Market Research

• To learn about service differentiation

Topic 4:
• Market Research
• Differentiation

Market Research (CO1)
A marketing research study usually includes the following steps:

 Definition of problem and specification of information to be sought
 Design of the study with particular reference to data collection methods
(surveys), instrumentation (questionnaires), and simple design.
 Field work (utilizing questionnaires, structured interviews, consumer
panels)
 Data analysis (using statistical and O.R. techniques)

Differentiation (CO1)
Where products are tangible in nature and easily differentiated on the basis of
features, form, performance and quality, service differentiation is quite
challenging and needs out of the box thinking. A common question is “How can
you differentiate your services” and the answer lies in this article.
Services may be offered individually to the customer or they may be bundled
with a product. For example, tours and travels are independent services offered
to customers. But the service which accompanies the Volkswagen car you
bought, is dependent on the product – Volkswagen.
Areas of Service Differentiation
1. Ordering Ease
2. Delivery
3. Installation
4. Customer Training
5. Customer Consulting
6. Maintenance and Repair
7. Returns

Daily Quiz
1. Explain market research.

2. What is order ease?
3. List down four areas of service differentiation.
4. How one can collect data for research?
5. List any example of company providing service differentiation.

You tube & NPTEL Video Links and Online Courses Details
• https://www.youtube.com/watch?v=T456sxZ0EIo
• https://www.youtube.com/watch?v=VxYrLYBt2yQ
• https://www.youtube.com/watch?v=3U5o2PT8qlU&t=36s
• https://nptel.ac.in/courses/110/105/110105038/
• https://www.youtube.com/watch?v=UaKtVtTahCQ
• https://www.youtube.com/watch?v=DV8NnBBmYso
• https://www.youtube.com/watch?v=68M7Dm25ZDA&list=RD
CMUCch9-kudvO87zJhFewOUzdQ&index=5
• https://www.youtube.com/watch?v=tAjfH2qgAyg

MCQs
1. The additional P’s in Service Marketing Mix are:

(a) People
(b) Physical Evidence
(c) Process
(d) Procedure
2. Which is the correct definition of People in 7 P’s of Service marketing
(a) The procedures, mechanism and flow of activities by which service is
delivered
(b) Human factors who participate in Service delivery
(c) Individuals who constitute firm’s distribution network
(d) The space where customers and service personnel interact
3. _____ defines the environment in which Service Occurs
(a) Place
(b) Physical Evidence
(c) Marketing Channels
(d) Distribution
MCQs Contd.
4. The most frequently used method of Market Segmentation is based on

(a) Demographic Variables
(b) Psychology
(c) Personality
(d) Product type
5. Standardization is part of which of the following:
(a) People
(b) Process
(c) Physical evidence
(d) Price
6. “USP” in marketing means________
(a) Unique Selling Practices
(b) Uniform Selling Practices
(c) United salespersons
(d) Unique Selling Proposition

MCQs Contd.
7. Marketing mix includes:

(a) Product, price, premiums, production
(b) Product, price, place, promotion
(c) Product, production, place, promotion
(d) Product, Person, place, promotion
8. Which of the following is one of the 4 C’s
(a) Channels
(b) Communication
(c) Cost reduction
(d) Customer Relations
9. Which of the 4 P’s is equivalent to Customer needs and wants
(a) Product
(b) Price
(c) Place
(d) Promotion

MCQs Contd.
10. Which of the following is not a tangible dominant?

a) Detergents
b) Automobiles
c) Investment Management
d) Soft drinks

Unit I MOS - Final

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Noida Institute of Engineering and Technology, Greater Noida

Introduction To Services Marketing

Ajay Gangele AMBAMK0413 UNIT-1

Unit 1: Introduction to Services

04/09/2024 Ajay Gangele AMBAMK0413 UNIT-1 2

 To know meaning of services

04/09/2024 Ajay Gangele AMBAMK0413 UNIT-1 3

Ajay Gangele AMBAMK0413 UNIT-1

Ajay Gangele AMBAMK0413 UNIT-1

• Service Industry and Companies

04/09/2024 Ajay Gangele AMBAMK0413 UNIT-1 6

• Service-oriented development is based on the concept of

04/09/2024 Ajay Gangele AMBAMK0413 UNIT-1 7

04/09/2024 Ajay Gangele AMBAMK0413 UNIT-1 8

04/09/2024 Ajay Gangele AMBAMK0413 UNIT-1 9

• Changing pattern of government regulations.

04/09/2024 Ajay Gangele AMBAMK0413 UNIT-1 10

04/09/2024 Ajay Gangele AMBAMK0413 UNIT-1 11

04/09/2024 Ajay Gangele AMBAMK0413 UNIT-1 12

04/09/2024 Ajay Gangele AMBAMK0413 UNIT-1 13

 To understand Service marketing mix i.e 7 p’s

04/09/2024 Ajay Gangele AMBAMK0413 UNIT-1 14

 Definition and meaning of services

04/09/2024 Ajay Gangele AMBAMK0413 UNIT-1 15

Unit 1: Introduction to Services

04/09/2024 Ajay Gangele AMBAMK0413 UNIT-1 16

04/09/2024 Ajay Gangele AMBAMK0413 UNIT-1 17

04/09/2024 Ajay Gangele AMBAMK0413 UNIT-1 18

04/09/2024 Ajay Gangele AMBAMK0413 UNIT-1 19

04/09/2024 Ajay Gangele AMBAMK0413 UNIT-1 20

• Customer service became essential tool for management to satisfy the

04/09/2024 Ajay Gangele AMBAMK0413 UNIT-1 21

04/09/2024 Ajay Gangele AMBAMK0413 UNIT-1 22

• Maintain loyalty of existing customers

• Involves setting the promises through promotion to raise

04/09/2024 Ajay Gangele AMBAMK0413 UNIT-1 23

• Between Employees and Customers

• It is about keeping the promise by the organization to the

04/09/2024 Ajay Gangele AMBAMK0413 UNIT-1 24

• Between Organization and Employees

• Success of external marketing depends on the effectiveness of

04/09/2024 Ajay Gangele AMBAMK0413 UNIT-1 25

1. Define Physical Evidence

04/09/2024 Ajay Gangele AMBAMK0413 UNIT-1 26

• Service marketing mix

04/09/2024 Ajay Gangele AMBAMK0413 UNIT-1 27

 To understand classification of services

04/09/2024 Ajay Gangele AMBAMK0413 UNIT-1 28

Unit 1: Introduction to Services

04/09/2024 Ajay Gangele AMBAMK0413 UNIT-1 29

Service Marketing can be classified according to the market to which they

04/09/2024 Ajay Gangele AMBAMK0413 UNIT-1 30

A. On the Basis of Degree of Involvement of the Customer –

B. On the Basis of Service Tangibility –

C. On the Basis of Skills and Expertise Required –

D. On the Basis of the Business Orientation of the Service Provider –

E. On the Basis of the Types of End Users –

04/09/2024 Ajay Gangele AMBAMK0413 UNIT-1 32

04/09/2024 Ajay Gangele AMBAMK0413 UNIT-1 33

04/09/2024 Ajay Gangele AMBAMK0413 UNIT-1 34

Why market segmentation is important ?

04/09/2024 Ajay Gangele AMBAMK0413 UNIT-1 35

• Identify the similarity of needs of potential buyers within a segment and