Service Marketing

Defining Services
 American Marketing Association, which, as early as in 1960, defined
Services as, activities, benefits, or satisfactions which are offered for sale, or
provided in connection with the sale of goods.
 Service Marketing is simply defined as a phenomenon wherein
a service or an intangible commodity is promoted and
marketed among the target audience.
 Unlike product marketing, services marketing focuses on advertising
intangible transactions that provide value to customers.
Some Industries in the Service Sector
 Banking, stockbroking
 Restaurants, bars, catering
 Insurance
 News and entertainment
 Transportation (freight and passenger)
 Health care Education
 Wholesaling and retailing
 Laundries, dry-cleaning
 Repair and maintenance
 Professional (e.g., law, architecture , consulting)

The four I's of Services are

 Intangibility: Services cannot be touched, felt, or seen in the same way as
physical goods. They lack physical presence and are experienced rather than
possessed.
  Inconsistency (or Variability): Services can vary in quality and performance
due to their dependence on factors such as human interaction and other
external variables.
 Inseparability: Services are often produced and consumed simultaneously,
meaning that the service provider and the consumer are often involved in the
service delivery process.
 Inventory (or Perishability): Unlike goods, services cannot be stored for
future use. They are time-sensitive and must be consumed when they are
produced.

These four characteristics help differentiate services from tangible goods and
shape how services are marketed, managed, and delivered.
Features/Nature/ Characteristics are as follows:
(i) Intangibility: The most basic and universally cited characteristic of
services is intangibility, because services are performances or actions
rather than objects, they cannot be seen, felt, tasted, or touched in the
same manner that we can sense tangible goods. For example, when we
buy a cake of soap, we can see, feel, smell and use to check its
effectiveness in cleaning.
(ii) Inseparability: In most cases a service cannot be separated from the
person or firm providing it. Services are generally created or supplied
simultaneously. They are inseparable. For an e.g., the entertainment
industry, health experts and other professionals create and offer their
service at the same given time. Services and their providers are
associated closely and thus, not separable.
(iii) Heterogeneity: Since services are performances, frequently produced by
human beings, no two services will be precisely alike. The doctor who
gives us complete attention in one visit may behave a little differently in
next visit. The new bank clerk who encashes our cheques may not be as
efficient as the previous one and we may have to spend more time for the
same activity.
(iv) Perishability: Perishability refers to the fact that services cannot be
saved, stored, resold, or returned. Goods can be stored and sold at a later
date in the absence of a customer. Services, on the other hand, go waste if
they are not consumed. A seat on an airplane or in a restaurant, an hour
 of a professor’s time, or telephone line capacity not used cannot be
reclaimed and used or resold at a later time.
(v) No Transfer of Ownership: When we buy a product, we become its
owner-be it a pen, book, shirt, TV or Car. In the case of a service, we
may pay for its use, but we never own it. By buying a ticket one can see
the evening film show in local cinema theatre; by paying wages one can
hire the services of a chauffeur who will drive his car; by paying the
required charges we can have a marketing research firm survey into the
reasons for our product’s poor sales performance, etc.

Need/Reasons for growth of services

(i) Consumer affluence: Due to the fast rise in the income of consumers,
they are attracted towards the new areas like clubs, health clubs, domestic
services, travel and tourism, entertainment, banking, investment,
retailing, insurance, repairs, etc. and these are growing much faster than
ever before. There is a significant change in the pattern of family
expenditure.
(ii) Working women: During the recent times a large number of women have
come up in a variety of professions. The work performance of women in
most of services sector like bank, insurance, airlines, etc. is highly
appreciable. In short, women are getting involved in almost all male
dominated activities. Due to increasing involvement of women in
commercial activities, the services like domestic activities, fast food
restaurants, marriage counselling, personal care, financial services,
retailing, etc. have emerged in the recent times.
(iii) Double income no kids (DINK): Dinks are the working couples who
have consciously postponed parenthood plans indefinitely or in an
increasing number of cases, have decided not to have any children ever.
The dink culture is getting stronger and spreading wider day by day.
Whatsoever be their life style, they have double income and no kids,
resulting in the emerging and enhancing of services like, entertainment,
hotels and restaurants, career institutes, domestic services, travel resorts,
personal care, etc.
(iv) Leisure time: People do get some time to travel and holiday, and
therefore, there is a need for travel agencies, resorts, hotels and
entertainment. There are others who would like to utilise this time to
 improve their career prospects, and therefore, there is a need for adult
education, distance learning, part time courses, etc.
(v) Greater life expectancy: According to the World Development Report
and World Human Resource Index, the life expectancy of people has
increased significantly all over the world barring few developing
countries. It may be due to the advancement in the medical technology,
and greater awareness about health and education. Greater life
expectancy invites opportunities in services like hospitals, Nursing
Homes, entertainment, leisure services, investment banking and so on.
(vi) Product innovations: In the changing time the consumers have become
more conscious of quality than cost. They need high quality goods at par
with international standards. Having this in mind the manufacturers have
focused their attention on quality improvement, innovations, etc. In this
process many more services have emerged on account of product
innovation. Some of them are servicing services, repairs, computer,
training and development, education, etc.
(vii) New young youth: Every new generation has its own characteristics and
enjoys a different life style. There is a lot of difference between the
generations in respect to their living conditions/ styles, maturity,
thinking, attitudes, behaviour, beliefs, satisfactions, performance values
and so on. Today’s generation with all these changes provide more
opportunities to services like entertainment, fast food, computers, travel,
picnic resorts etc.
(viii) Resource scarcity and ecology: As the natural resources are depleting
and need for conservation is increasing, we have seen the coming up of
service providers like pollution control agencies, car pools, water
management, etc.
Service Marketing – Classification
Though it is really difficult to classify all the services, the following classifications
have been accepted:
1. On the Basis of End User:
i. Consumer services – These are directly provided to end users like hair dressing,
laundry, package holiday, counseling etc.
ii. Business to business services – These are provided to businesses like
consultancy, marketing research, advertising etc.
2. On the Basis of Tangibility:
i. Tangible services – These are services which are connected to the period to
which the products are purchased from the seller like televisions, laptops, cars,
watches etc.
ii. Intangible services – These are the services which do not provide customers
with any tangible products. Examples- consultancy, services at a spa and massage
centers.
3. On the Basis of Specialization:
i. Professional services – These are services which can be provided only by
sufficiently qualified and experienced persons. Some of such service providers also
have recognition by the required authorities. Examples – counseling, audit, legal
services, health care etc.
ii. Nonprofessional services – These are services which can be provided even by
persons not possessing any educational or professional qualifications. Examples –
domestic servants, gardening, painting etc.
4. On the Basis of Profit Orientation:
i. Commercial services – These are the services offered on business lines with an
intention of earning profit. Examples- private banking, beauty parlors etc.
ii. Social services – These are the services offered on philanthropic lines without
any intention of earning profit. These are provided with the intention of serving the
society and are therefore also called social services. Examples – services rendered
by orphanages, charitable trusts etc.
5. On the Basis of Labor Intensiveness:
i. People based services – These are services which involve human labour of a
high degree. These services are actually provided by these human beings.
Examples – repairs of auto mobiles, catering, event management, security services
etc.
ii. Equipment based services – These are services where certain equipment play a
dominant role. The role played by labourers is either minimal or totally absent.
Examples- vending machines, ATMs, self-activating machines.
6. On the Basis of Contact and Interaction between the Service Provider and
the Service Consumer:
 Customer Contact is the process of handling a query of
the customer before, during and after the purchase of any product or
services. It is the process of resolving customer's issues and providing them
with an appropriate solution, crafted with excellent call center services.
i. High contact services – These are the services where the contact or the
interaction between the service provider and the service consumer, is very high.
The service cannot be provided in the absence of such contact or interaction.
Examples – Psychiatric counseling, surgery etc.
ii. Low contact services – These are the services where the contact or the
interaction between the service provider and the service consumer is very low. The
service can be provided even without such a contact or interaction. Examples –
tailoring, diagnostic services etc.

The significance of the services may be discussed under the following

headings:
1. Support to Primary and Secondary Sector- Primary sectors and secondary
sectors are always in need of various services in order to function smoothly on a
regular basis. Thus, services form an important part for the efficient functioning of
these sectors.
2. Creates Employment Avenues- Service sectors create a lot of employment
opportunities in various sectors like BPOs, hospitality, retail, tourism,
entertainment, brokerages, software, aviation and more. This in turn promotes and
develops the overall growth of the nation.
3. Contribution to National Income- Due to the growth and development of the
service sector, the other sectors in the market are also witnessing an equal growth
and development. Moreover, because of this rapid growth and development of all
the sectors in the market, it automatically contributes to the overall national income
of the country.
4. Provision for Basic Services- Service sectors provide the country with the basic
services like hospitality, transport, educational institutions, courts, telecommuni-
cations, insurance companies, banks, post offices and a lot more. This facilitates
the daily living of a common man like us.
5. Adds to Comforts and Leisure- Service sectors provide ample comforts and
leisure to the life of a common man. By providing various services, it definitely
makes our lives easy and smooth.
6. Improvement in India’s Image- Various services in the Indian market like
telecommunications, BPOs, software development, Information Technology
Enabled Services (ITES) has helped in improving the image of our country in the
eyes of the entire globe. Other nations have started considering India at par with
them when it comes to its service sectors.
7. Increase in Exports- Due to the increase in the service sectors and the quality
of the same, there has been a tremendous increase in the exports of the country.
This in turn is adding rapid growth and development to the country in the form of
earnings and ranking.
8. Increase in Number of Working Woman- Due to the increase in the service
sectors and the employment opportunities in the same, it has given ample work
opportunities to women too. This has marked the increasing number of working
women in the country which helps in the overall up liftment of the entire economy.

Difference Between Goods And Services