1

SERVICES MARKETING DEFINITION

Philip Kotler defined a service as "any act or performance that
UNIT-I one party can offer to another that is essentially intangible and
INTRODUCTION does not result in ownership of anything"

Services marketing, a pivotal aspect of marketing, is the art IMPORTANCE OF SERVICES MARKETING
of promoting intangible services that transcend the physical Service marketing plays an essential role in today’s
realm. It employs a myriad of strategies not just to satisfy competitive business environment. Let’s examine its key
potential customers but also to craft unique and memorable significance.
experiences for them.
1. Differentiation: The company should differentiate itself
This blog will explain service marketing, its different types, from competitors in a crowded marketplace. Service
importance, and uses. We will also discuss its 7 P’s to marketing offers an avenue to show customers unique
implement successful marketing service within the business services, provide them with exceptional customer
environment. Let’s dive in to have a comprehensive experiences, set businesses apart from the competition,
understanding. and customize better solutions.

Meaning

Service marketing is the process of promoting and selling a 2. Loyalty of Customer: By offering excellent customer
service with an intangible good to a particular group of service experiences, organisations can ensure customer
people. It’s a popular marketing method that helps loyalty and build significant relationships that go a long
companies promote their services worldwide. Unlike product way in satisfying customer needs. A satisfied customer is
marketing, service marketing focuses on advertising more than a customer who becomes a regular customer,
intangible transactions to provide customer value. which leads to positive referrals and word of mouth.

3. Revenue Generation: Service marketing can drive

Services are given to customers as a commodity, and
revenue growth positively and effectively by attracting
customers can choose from various services. Eventually, the
new customers and through cross-selling opportunities.
global sphere has become a hub that provides many services
When customers receive value for the provided services,
to customers all over the world.
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they are more likely to pay a premium amount, which 4. Internal Service Marketing
leads to increased profitability.
4. Trust and Reputation: Service marketing strategies This service marketing focuses on an organisation to ensure
help build positive customer trust and reputation. When that employees are inspired, engaged and aligned with the
customers gain faith in an organisation and its ability to organisation’s goals. It’s essential to deliver high-quality
deliver what it promises, they are likely to choose the external services.
service provider.
5. Social Service Marketing
SCOPE OF SERVICES MARKETING
Social service marketing promotes services that primarily
Let’s see the different types of marketing services below:
benefit society, such as environmental initiatives, health
campaigns and public safety programs. The target is to drive
1. B2C Service Marketing positive behavioural change within the community.

This directly involves consumers in its marketing services.

Examples include banking, healthcare, hospitality and NATURE OF SERVICE MARKETING
personal care services. They focus on building customer Service marketing is a specialized branch of marketing that
relationships, customer satisfaction, and repeat business. promotes and sells intangible products or services. It's based on
the idea that services are unique and require different strategies
than physical products.
2. B2B Service Marketing
Definition
These marketing services involve other businesses. Key “Service marketing is the process of promoting and delivering
examples include IT services, logistics, legal services, and intangible services to consumers. It involves creating
consulting. They emphasise demonstrating expertise, messages, launching the service, and building customer
building relationships, and offering effective solutions. relationships”.- John Britto

1. Intangibility
3. Non-Profit Service Marketing
Services cannot be touched, tasted, or seen like physical
Service marketing involves non-profit organisations
products. This intangibility makes it challenging for customers
promoting their services and causes. It often involves
to evaluate the service before purchasing, leading to greater
attracting volunteers, raising awareness, and encouraging
reliance on reputation, reviews, and word of mouth.
donations.
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2. Inseparability Services marketing is important for promoting services that

can’t be seen or touched physically. By understanding
Unlike products that can be manufactured and consumed later, service marketing, its importance, its traits, and the different
services are typically produced and consumed simultaneously. 7 P’s of service marketing, businesses can improve customer
This means the service provider’s interaction with the customer satisfaction by using strategies and strengthening
is crucial to the overall experience. relationships to grow their business landscape.

3. Variability
Enroll in a marketing course to learn more about service
The quality of services can vary greatly depending on who
marketing strategies and traditional methods. Focus on the
provides them, where, when, and how. Factors such as the
value and experience customers seek. Additionally, harness
service provider’s skill level, mood, and environment can
service marketing which opens exciting doors for you to
impact the service experience.
build an effective business.
4. Perishability
IMPORTANCE OF SERVICE MARKETING
Services cannot be stored or saved for later use. For example, an
empty seat on a flight cannot be stored and sold later, leading to Because services can’t be seen or touched, marketing them is a
potential revenue loss if the service isn’t utilised at the time. difficult but very important job. let’s understand why.

5. Lack of Ownership 1. A key differentiator:

Customers do not own the service they purchase; they merely As products become more similar, the services that go along
experience it. This contrasts with products, where ownership is with them are becoming a key differentiator in the minds of
transferred upon purchase. consumers. For example, Pizza Hut and Domino’s both serve
pizza, but they are different from each other more because of
6. Customer Participation the quality of their service than because of the pizza itself. So,
marketers can use the services they offer to set themselves apart
Services often require active participation from the customer. from the competition and draw in customers.
For example, in a haircut, the customer must be present and
communicate their preferences for the service to be satisfactory.

Conclusion
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2. Importance of relationships: 2. B2B Service Marketing

Relationships are a key part of marketing services, so it’s This involves marketing services to other businesses. Examples
important to keep them in good shape. Since the product can’t include IT services, consulting, legal services, and logistics. The
be seen or touched, a lot of the customer’s decision to buy will emphasis is on building long-term relationships, demonstrating
depend on how much he trusts the seller. So, it’s important to expertise, and offering tailored solutions.
listen to what the customer wants, meet those needs with the
right service, and build a long-term relationship that will lead to 3. Non-Profit Service Marketing
repeat sales and good word of mouth.
Non-profit organisations also engage in service marketing to
3. Customer retention: promote their causes and services. This type of marketing often
involves raising awareness, attracting volunteers, and
In today’s highly competitive market, where many companies encouraging donations.
compete for a small number of customers, keeping customers is
even more important than getting new ones. Since services are 4. Internal Service Marketing
usually made and used at the same time, the customer is actually
involved in the process by taking his needs and feedback into This type focuses on marketing within an organisation to ensure
account. So, they give customers more options for that employees are engaged, motivated, and aligned with the
customisation based on their needs, making them happier and company’s goals. It’s essential for delivering high-quality
more likely to stick with the company. external services.

TYPES OF SERVICE MARKETING 5. Social Service Marketing

Service marketing can be categorised into several types based This involves promoting services that benefit society at large,
on the nature of the service and the target audience: such as health campaigns, environmental initiatives, or public
safety programs. The goal is to drive positive behavioural
1. B2C Service Marketing change in the community.

This involves marketing services directly to consumers. SERVICE MARKETING MIX OR THE 7PS OF SERVICE
Examples include healthcare, hospitality, banking, and personal MARKETING
care services. The focus is on building relationships, customer
satisfaction, and repeat business. The service marketing mix is also called an extended marketing
mix, and it is an important part of the design of a service
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blueprint. The 7 Ps make up this marketing mix. Let’s talk about What is that? Because there is usually a lot of competition in the
them in more detail. service industry, you need promotions to stay in business. So,
advertising and promotions help banks, IT companies, and
1. Product dotcoms stand out from the rest.

The product-service marketing mix is not something that can be 4. Price

seen or touched. Service products can’t be measured in the same
way that soap or detergent can’t be. A good example would be Putting a price on a service is a lot harder than putting a price on
the tourism or education industries. Service products are also a product. If you run a restaurant, you could only charge people
different, change over time, and can’t be owned. for the food you serve. But then, who will pay for the nice
atmosphere you’ve made for your customers? Who will pay for
So, care needs to go into making the service product. the music group you have?
Blueprinting is usually used to define the service product. For
example, before starting a restaurant business, a blueprint will So, these things have to be taken into account when pricing.
be made. This service blueprint shows exactly how the product When pricing a service, labour, materials, and
(in this case, the restaurant) will be. overhead costs are usually taken into account. When you add a
profit markup, you get the final price for your service.
2. Place
5. People
In the case of services, the place will decide where the service
product will be. The best places to put gas stations are on One part of the service marketing mix is the people. People
highways or in cities. A place with little traffic is not a good define a service. If you run an IT business, your software
place to start a gas station. In the same way, engineers are what make you who you are. If you own a
a software company will do better in an area with a lot of other restaurant, your chef and service staff defines you. Additionally,
businesses than in a town or the middle of nowhere. if you work in banking, your employees and how they treat
customers show what kind of banker you are. In service
3. Promotion marketing, it’s the people who can make or break a business.

Promotions have become an important part of the service So, many companies today are putting extra effort into training
marketing mix. Services are easy to copy, so the brand is their staff in people skills and customer service with the goal of
usually what makes one service different from another. A lot of making customers happy. In fact, many companies have to go
banks and phone companies work hard to get their names out through accreditation to prove that their employees are the best.
there. In the case of services, this is a USP for sure.
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6. Process have a limited shelf life. In light of the growing global service
sector, it is done in a number of different ways.
The service process is how a service is given to the end
customer. Let’s look at two great companies as an example: It is also very different from product marketing, and there are
McDonald’s and FedEx. Both companies do well because they many things to keep in mind. In recent years, service marketing
offer fast service, which they can do because they trust their has become much more important as more and more services,
processes. like education, banking, hospitality, etc., become popular goods.

On top of that, these services are in such high demand that they CHALLENGES AND ISSUES IN SERVICE MARKETING
have to deliver at their best without sacrificing quality. So, a
service company’s process for delivering its product is very (a). Tangibility
important. It is also a key part of the service blueprint, which is
what the company uses to figure out how the service product A product is tangible, which means the customer can touch
will get to the end customer before it starts the service. and see the product before deciding to make a purchase.
Items such as packaging and presentation may compel a
7. Physical evidence customer to purchase a product. Services, on the other hand,
are not tangible, which can make them more difficult to
A very important part of the service marketing mix is the last promote and sell than a product.
one. As we already said, services are not physical things. But to (b). Relationship and Value
give the customer a better experience, tangible things are also
sent along with the service. Take a restaurant with just chairs Products tend to fill a customer's need or want, so
and tables and good food as an example. Or, take a restaurant companies can use this to sell a product. A service is more
with good lighting, nice music, and comfortable seating that about selling a relationship and the value of the relationship
also serves good food. Which one do you like better? The one between the buyer and seller of the service. For example, a
with a nice feel to it. That is physical evidence. In service car is something a buyer can touch and see as well as use. A
marketing, physical evidence is often used as a way to stand out. service, such as lifestyle coaching, for example, is not
tangible. A lifestyle coach may be able to assist clients in
creating a life plan and implementing steps to transform his
life into one that the client wants to live, but it is not
Conclusion something tangible that the client can place in his home and
look at every day. Therefore, the client needs to perceive the
To sum up, service marketing is a way for a company to
value of the service, which can be harder to get across.
promote its services that are intangible, can’t be split up, and
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SERVICE MARKETING IN INDIA

(c). One Versus Many

Marketing products tends to involve multiple products that
make up the line. For example, cleaning product
manufacturers tend to market not just one cleaning product.
Instead, they have a line of cleaning products to serve the
various needs of their customers. Services, on the other
hand, typically have a single option. It can be harder to
promote and sell the reputation of one single service over
the benefits of many different products.

(d). Comparing Quality

Measuring the quality of a product is easier than measuring Service marketing in India is the promotion and sale of
that of a service. If a customer buys a cleaning product to intangible goods and services to consumers and businesses. It's
clean the kitchen sink and it doesn‟t do product is zero. On a popular marketing strategy that helps companies showcase
the other hand, it is harder to measure the quality of a their services to a specific audience.
service.
Using service marketing, a company can display its intangible
(e). Return Factor benefits and offerings to increase end-customer value. This
If a customer purchases a product,thecustomerandcan might be for self-contained services or for services that
returnit thedoes product for her money back or at least to complement material assets. Service marketing is a business
receive a store credit. A service is consumed as it is offered, concept that focuses on non-physical abstract commodities. It is
so it lacks the return factor that a product has. Some service done for the advantage of the firm that cannot be seen, handled,
providers overcome this by offering money-back guarantees. or experienced. These are benefits that are mostly driven by
people and processes and that a client cannot keep. Service
marketing is used to boost business in industries such as
hospitality, tourism, financial services, and professional
services. Service marketing induces strategies for the growth of
a firm.
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Importance of service marketing  Increase in exports

 Secondary and primary sector development
More demand will come from countries beyond international
Different service strategies for growth are required for the borders for high-quality service sectors. These, in turn, increase
smooth operation of the primary and secondary sectors. As a exports and improve a country’s economic stability by bringing
result, the service industry as a whole is critical to the efficient in foreign currency.
operation of various sectors.
 More opportunities for women
 Increased employment
Working women are in more demand in the service sector. This
The service industry employs people in industries such as has provided unprecedented opportunities for women to work
aviation, brokerages, tourism, hospitality, software, and compete on an equal footing with males.
entertainment, retail, and BPOs. This causes development in the
whole country. Product development strategy advantages and
disadvantages
 Increased National Income Advantage
 Maintaining the pace: A product line that remains the same
The expansion and growth of the service industry will benefit over time may appear worn and stale in a world where game-
economic output. The country would have the same level of changing technology is introduced faster than all the buyers can
development and progress just like any other sector. maintain pace with it. A product development strategy allows
your company to keep up with the trends and reach the
 Support for fundamental services customers who are tired of seeing the same products all the
time.
Post offices, insurance, courts, transportation, banking,  Seizing the moment: A product development strategy can help
telecommunications, educational institutions, and hospitality all your company capitalise on chances to sell to changing
benefit from the service industry. These services are essential in consumer preferences and interests. If your efforts are effective
the daily lives of ordinary people. and you properly predict new trends, your organisation may be
in a position to start a trend or enjoy the ride of one who has
 Boost a country’s image
started.
 Creating possibilities: Your company will have a simpler way
ITES and BPO services will improve a country’s international
of recruiting and retaining talent if you establish a reputation as
image. This displays the country’s bright future to the rest of the
a place where creative people may flourish. Developing a solid
globe.
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and dynamic team positions you to create and introduce Strengths of your service
interesting new goods and provides you with individuals who This should encompass both the outcomes your service offers
can approach day-to-day difficulties with new eyes. and the quality of your method in getting there. As previously
said, this might involve various factors such as cost,
Disadvantage functionality, credibility, efficiency, and adaptability.
 Riskiness: It’s best to stick to something you and your
consumers are familiar with then try something new. New The competitive advantage of your service
products are fraught with risk, from figuring out unusual It can be discovered by applying the well-known SWAT
manufacturing techniques to introducing clients to services they analysis to map where you stand with your competitors and
will or will not desire. If your product development strategy where your opportunities to outshine them might be.
fails, your company will have to absorb the investment cost
without any returns to offset the costs. Categories of service marketing
 Extra charge: A detailed brand marketing and development Individual Processing Services
strategy can be costly, especially if you spend on market It necessitates the users’ physical presence.
research and promotion activities. Even if your new goods
prove to be a success, you will still have to incur high costs until Processing of Products and Possessions
your product innovations generate significant revenue. It is linked to a certain product or item, such as moving services.
 Markets are changing: Although innovation is a conditioned
response to a constantly shifting landscape of client tastes, those Services for Mental Stimulus Processing
personal preferences will keep evolving even as your new items It’s linked to services that affect people’s mental capacities,
are being developed. Things that excite buyers at the start of the conduct, religious beliefs, lifestyles, or views.
product development process may lose their appeal when you’re
Processing Information Services
ready to launch your new product.
Such services are linked to intangible products, such as
Service marketing strategies for growth information.
Recognise your customer
Examples of service marketing
Create client personas by mapping out the factors that may
Service marketing strategies for growth include restaurants,
impact their purchasing choice. This can include everything
banks, airlines, and other services businesses.
from gender to age and career. It should also go over your
customers’ frequent pain points, any difficulties they might face
 Every bank offers training programmes to its customers to help
in buying a product, and how your solution addresses these.
them make informed financial decisions. Banks provide services
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such as opening accounts, loans, and lockers. All of these cross their industry boundaries and gain experience from other
services are intangible. service industries which share common problems and have
 E-commerce businesses and food delivery applications are similar characteristics. Solutions to problems and breakthroughs
examples of service marketing businesses. in similar service industries can then be applied by managers to
their own service businesses. Ever since marketing researchers
Conclusion started defining services, they also proposed their classification.
This article covered some important points, such as every
company should build their service marketing strategies for 1.1 Learning Objectives – After studying this chapter, you
growth. Developing product strategies has some advantages and should be able to know:
disadvantages that should be followed. Some important ways in
which service marketing is implemented. Students should go Classification of Services Service as a process
through this article to understand the basic concept of service
marketing. 1.2 Key Words- Service, Classification, market segment,

CLASSIFICATION OF SERVICES 1.3 Classification of services

Service can be classified in several ways. Various authors

1.0 Introduction
have tried to classify services on the basis of different features/
aspects such as the market segment, tangibility factor, skill type,
The service sector can best be characterized by its diversity.
etc. they are enlisted as follows:
Service organizations range in size from huge international
corporations in such fields as airlines, banking, insurance,
Tangibility component Skill-type involved Goals of the
telecommunication, hotel chains, and freight transportation to a
business Regulatory dimension Intensity of labour used
vast array of locally owned and operated small businesses,
Consumer contact
including restaurants, laundries, taxis, and numerous business
services. Researchers have directed much attention to the
Place and timing Customization Relationship with customers
development of classification systems for services. It is very
Demand and supply
necessary to classify any industry, especially service. The
classification helps managers understand service, the offer, the
1.3 Categorizing service processes
unique delivery process, and the common problems and
accordingly recognize them and manage them by bringing out
Various authors have classified services on the basis of the
solutions. Such classification schemes help service managers to
processes, which in turn are differentiated on numerous factors.
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The various service classifications are discussed in detail in this 1.4.4 Goals of the service provider: At times, services are
section. differentiated on the basis of the goals they pursue-whether they
are profit making or non-profit making. For example, an
1.4.1 Market segment: Services can be classified on the organization can be a profit-oriented entity, such as airlines,
basis of market segment they are catering to. Thus we can have hotels, or restaurants. Non-profit organizations or services
services catering to end-consumers, such as the hair salon and include state-owned post and telegraph services, public libraries,
beauty services, coaching classes, and car wash services or etc. (Kotler 1980).
services catering to organizational consumers such as
management consulting, repair and maintenance services for 1.4.5Degree of regulation: Services are also classified
machines, and legal services (lovelock 1983, and Rampal and according to the extent of government regulation on them
Gupta 2002). (Rathmill 1974). Services, such as mass transportation systems,
which include airlines, railways, and roadways, are highly-
1.4.2Degree of tangibility: According to Lovelock and regulated, while some face limited regulations. The hospitality
Wright(1999) services can be classified into tangible offerings, sector faces limited government regulation. There are some
such as food services or dry cleaning, and intangible services, services that are not regulated at all; for example, barber and
such as teaching and medical services. Judd(1964) classified beauty services, domestic help services, etc.
services as rental goods services, such as hotel and lodging
services, and car rental; owned-goods services such as laundry, 1.4.6Degree of labour intensiveness: Services employees
cleaning, repair of gadgets, etc. which involves repair or play a vital role in the delivery of services and sometime are
improvement of goods owned by the customer; and non-goods also a part of the service delivery (Varoglu and Eser 2006).
services that cover personal experiences such as legal services, However, services may vary according to the extent of the
educational services, and services (family and counselling labour involved. Thus, there can be equipment-based services
services, job training, etc.). on the one hand and people-based services on the other
(Thomas 1978). Equipment-based services, as the name
1.4.3 Skills of the services provider: Services can be suggests, could include completed automated services such as
provided by highly skilled labour or unskilled labour (Rampal ATMs and vending machines, or an offering through a machine
and Gupta 2002). Thus services can be classified as with little or unskilled human intervention, as in movie theatres,
professional, such as health/ medical services, engineering, dry cleaners, etc. They also include services that are operated by
accounting, research, management, etc., and non-professional skilled professionals, such as airlines, BPOs, etc. People-based
services such as shoe shining, laundry, cleaning services, etc. services can again be classified into unskilled (guards and
cleaning services); skilled (appliance repair, printing, catering,
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etc.); and professionals like engineering, management adapted to suit the needs of individual customers.’ Lovelock
consulting, data processing, medical services, etc. (1983) has also classified services as customized and
standardized. A standardized service is where the services to be
1.4.7 Degree of customer contact: Chase (1978) classified provided is predetermined and predesigned. A customer may be
organizations on the basis of the contact time between the offered several options, all of which are predetermined and the
customers and the services staff. Thus organizations could be customer can make a choice.
high-contact or low-contact ones depending upon the time a
customer spent with the service provider. High contact service 1.4.10 Relationship with customers: Lovelock (1983)
system, like in education and hospitality industry; while low classified services according to the nature of relationship with
contact service is one in which the contact with service system customers. According to him, the relationship can be formal,
ranges from a few minutes to some hours. For example, informal, ongoing, or a membership-based one. A formal
appliance repair services, postal services, etc. relationship is exemplified in banks, where each transaction is
noted; while an informal relationship is one in which customers
1.4.8 Place and time: According to Lovelock (1983), are anonymous and the transactions are short-lived, as in case of
services can be classified on the basis of the place and time of watching television. An ongoing relationship is epitomized by
services-delivery. Thus, there can be service-site, customer-site, services of a barber or in a restaurant, where proactive measures
and service-delivery services. need to be taken to enjoy continued patronage of clients. A
membership relationship is one in which patrons (clients) must
Service-site service: the customer needs to visit the service apply to become members and their performance is reviewed
location to avail the service; for example, watching a movie in a over time. Sometimes service providers create special
theatre. memberships or frequent user programmes to reward loyal
users. For example, airline companies offer frequent flyer
Customer-site service: the services are delivered to the programmes for regular customers.
customer, like home delivery of food items.
1.4.11 Demand and supply: Some services organizations
Service delivery: service delivery involves the interaction can be classified according to the demand for the service and the
between the customer and the service provider through a ability of the service organizations to match the demand
physical channel such as e-mail, as in case of online reservation (Lovelock 1983). Thus the grouping can be categorized as
of airline, railway tickets, etc. steady like colleges where there is a steady demand for the
services; or fluctuating as in the hospitality industry where the
1.4.9 Customization: According to Silvestro et al. (1992), ‘a demand is not constant over a period of time.
high degree of customization is when the service process can be
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1.4.12Facilities, equipment, and people: Equipment, what the customer buys, and process-oriented, where the focus
facilities, and people form the tangible elements of service is on how the service is delivered to the customer. Thus,
delivery. It is important because customers use tangible clues to restaurants and transport service are product-focused, whereas
assess the quality of a service provided. The more intangible a hotels are process focused.
service is, the greater is the need to make it tangible (Rafiq and
Pervaiz 1995). For example in a college the classrooms, tables 1.4.16 Utility creation perspective: Hsieh and Chu (1992)
and chairs, the overhead projector, and the faculty form a part of classified the service business from the utility creation
the tangible elements (Lovelock and Wright 1999). perspective. According to them, the value of a service business
depends on its ability to create a utility. They identified time
1.4.13 Degree of discretion: Silvestro et al. (1992) classified utility and space utility as dimensions of the service product,
services according to the degree of discretion. A high degree of and people or things as the service recipients. For example, they
discretion is exercised when front office personnel can use classified hair styling and beauty salon as time utilities where
judgment in altering the service package or process without recipients could obtain better appearance in a short while.
referring to superiors, as in case of management consultancy. A Similarly, a space utility for people is created by a hotel to
low degree of discretion is where changes to service provision widen the area of lodgers’ activities.
can be made only with authorization from superiors, like in
services by news agents and confectioners. 1.5 Service as a Process

1.4.14 Value addition: Silvestro et al. (1992) grouped A process involves the conversion of an input into an output.
services on the basis of value addition done by the front-office In services, two broad categories-people and objects-are
or back-office staff. According to this parameter, service can be processed. The nature of service act can be tangible or
classified into back-office and front-office services. ‘A back- intangible. From an operational perspective, Lovelock and
office-oriented service is (one) where proportion of front- office Wright (1999) categorized service process into four broad
(customer contact) staff to total staff is small and a front-office- groups-
oriented service is (one) where proportion of front-office staff to
total staff is large,’ for example, in management consultancy
and in hospitality sector the focus is on front-office orientation,
whereas in transport service back-office orientation is
predominant.

1.4.15 Product and process: Silvestro et al. (1992) also

classified services as product-oriented, where emphasis is on
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