Marketing of Services
Marketing of Services refers to the strategies and techniques used to promote and sell
intangible products like banking, hospitality, healthcare, education, and entertainment. Unlike
physical goods, services are:
● Intangible (cannot be seen or touched)
● Inseparable (produced and consumed at the same time)
● Variable (quality may vary each time)
● Perishable (cannot be stored for future use)
The unique characteristics of services that distinguish them from physical goods are:
1. Intangibility: Services cannot be seen, touched, or stored. For example, a haircut or
consultation cannot be physically possessed.
2. Inseparability: Services are produced and consumed at the same time. For
instance, in a hotel, the service is experienced as it is delivered.
3. Variability (Heterogeneity): Service quality can vary depending on who provides it,
when, where, and how. For example, two customers may have different experiences
at the same restaurant.
4. Perishability: Services cannot be stored for later use. An unsold airline seat or
missed doctor's appointment cannot be recovered.
5. Lack of Ownership: Customers only gain access to or benefit from a service, but do
not own it. For example, using a gym or subscribing to Netflix.
Marketing Strategies of Service Firms – 7Ps of
Marketing
Service firms use the 7Ps of Marketing to effectively promote and deliver services. These
are:
1. Product: Refers to the service being offered. Since services are intangible, firms
focus on service design, features, quality, and customer satisfaction.
2. Price: The amount customers pay for the service. Pricing strategies depend on
factors like competition, perceived value, and cost. Discounts, bundling, or premium
pricing are commonly used.
3. Place: Refers to how the service is delivered. This includes physical locations (like
banks or hotels) and digital platforms (like apps or websites).
4. Promotion: Involves communicating the value of the service through advertising,
social media, public relations, and personal selling to attract and retain customers.
5. People: All individuals involved in the service delivery process, including employees
and customers. Employee behaviour, training, and service attitude play a key role in
customer satisfaction.
6. Process: The procedures, mechanisms, and flow of activities by which the service is
delivered. A smooth, efficient, and customer-friendly process enhances the service
experience.
7. Physical Evidence: The tangible aspects that support or represent the service, such
as brochures, ambiance, branding, uniforms, or website design. These help build
trust and make the service more concrete to customers.
Contemporary Issues in Marketing
Marketing today is changing fast because of new technology, changing customer needs, and
social trends. Here are some key issues that marketers face:
1. Data Privacy
Companies collect a lot of personal data from customers. People are now more
concerned about how their data is used. So, businesses must protect customer data
and be honest about how they use it.
2. Social Media and Influencers
Social media platforms like Instagram, YouTube, and TikTok have become very
important for marketing. Many brands work with influencers (popular online
personalities) to promote their products in a more natural and trusted way.
3. Digital Technology and Ads
With the help of new tools like artificial intelligence (AI) and smart ads, companies
can show the right ads to the right people at the right time. This makes advertising
faster and more effective.
4. Personalisation and Customer Experience
Customers want services and offers that match their personal needs. Companies
now use technology to send personalised messages and give a smooth and
enjoyable customer experience, both online and offline.
5. Ethical Marketing
People today prefer brands that are honest, fair, and care about society and the
environment. So, companies must market in a truthful and responsible way,
avoiding false promises or harmful practices.
Ethics in Marketing
Ethical marketing means doing marketing in a way that is honest, fair, and respectful
towards customers and society. It builds trust and helps in building a strong brand
reputation. Here are some key principles of ethics in marketing:
1. Truthful Advertising
Marketers should always give correct and honest information about their products or
services. They should avoid making false claims, misleading statements, or hiding
important facts.
2. Clear and Understandable Language
All advertisements and marketing messages should use simple and clear
language. Customers should easily understand what is being offered, without
confusion or tricks.
3. Fair and Transparent Pricing
Prices should be honest and clear, with no hidden charges or false discounts.
‘Customers should know what they are paying for and whether it’s worth the price.
4. Data Privacy
Marketers must protect customer data and use it only with permission. They
should follow rules and ensure that personal information is safe and not misused.
5. Respecting Consumer Autonomy
Customers should be free to make their own choices. Marketing should not
pressure, manipulate, or mislead people into buying something they don’t need.
6. Fair Competition
Businesses should compete in a healthy and respectful way, without spreading
false rumours about competitors or copying their products dishonestly.
7. Social Responsibility
Marketers should also think about the impact of their actions on society and the
environment. They should support good causes, avoid promoting harmful products,
and try to make a positive difference.
In short, ethical marketing is about doing the right thing — for customers, for business, and
for society.
Contemporary Trends in Marketing
Marketing is constantly evolving with technology and customer behaviour.
1. E-Commerce
E-commerce (electronic commerce) refers to buying and selling products or services online
through websites or mobile apps. It has become a major trend in marketing because it allows
businesses to reach a wider audience 24/7 with lower operational costs.
Key Components of E-Commerce Operations:
1. Website Development and Design
○ A well-designed, user-friendly website is the backbone of e-commerce.
○ It should be fast, mobile-friendly, secure, and easy to navigate.
○ Good design builds trust and encourages customers to shop.
2. Digital Marketing and SEO
○ Digital marketing includes using tools like Google Ads, social media ads,
email marketing, and influencer promotions to attract visitors.
○ Search Engine Optimization (SEO) helps the website appear in top search
results, bringing in more organic (free) traffic.
3. Payment Gateway Integration
○ This allows customers to pay online securely using debit/credit cards, UPI,
wallets, or net banking.
○ Popular gateways include Razorpay, Paytm, Stripe, and PayPal.
○ A smooth and secure payment process improves customer trust.
4. Customer Service and Support
○ Live chat, email, helplines, and FAQs help customers with their questions and
problems.
○ Quick and helpful support increases customer satisfaction and loyalty.
5. Data Analytics and Reporting
○ E-commerce platforms track user behaviour, sales trends, traffic sources, and
more.
○ Analytics helps businesses understand what’s working and where to improve.
○ Tools like Google Analytics and CRM dashboards are commonly used.
In summary, e-commerce has transformed modern marketing by making shopping faster,
easier, and more personalised for customers—while helping businesses grow digitally.
2. Digital Marketing
Digital Marketing is the use of the internet and digital tools to promote products or services.
It helps businesses connect with customers through websites, social media, emails, and
search engines. It is one of the fastest-growing marketing trends today.
Common Techniques and Strategies in Digital Marketing:
1. SEO (Search Engine Optimization)
○ Improving website content and structure to rank higher on Google and other
search engines.
○ Helps bring in free (organic) traffic.
2. SEMM (Search Engine Marketing)
○ Paid ads on search engines like Google Ads to appear on top of search
results.
○ Used to get quick visibility and attract customers actively searching for similar
products.
3. Email Marketing
○ Sending promotional or informative emails to customers to build relationships,
give updates, or offer discounts.
○ Useful for customer loyalty and repeat business.
4. Affiliate Marketing
○ Partnering with third-party individuals or websites who promote your products
and earn a commission on each sale.
○ Cost-effective and results-based.
5. Influencer Marketing
○ Working with social media influencers who promote your brand to their
followers.
○ Builds trust and reaches a wider, more engaged audience.
6. Pay-Per-Click (PPC) Advertising
○ Online ads where businesses pay only when someone clicks on the ad.
○ Helps control budget and measure results easily.
Key Features of Digital Marketing:
1. Measurability
○ Every click, view, or sale can be tracked using tools like Google Analytics.
○ Helps businesses understand what works and improve performance.
2. Targeted Reach
○ Ads and content can be shown to specific groups based on age, location,
interests, behaviour, etc.
○ Ensures better results and less waste.
3. Interactivity
○ Allows customers to engage directly through likes, comments, shares, and
messages.
○ Builds stronger relationships and customer trust.
4. Cost Effectiveness
○ Compared to traditional ads (TV, newspapers), digital marketing is cheaper
and gives better return on investment, especially for small businesses.
5. Adaptability
○ Campaigns can be changed anytime based on performance or customer
feedback.
○ Makes it easier to keep up with trends and customer needs.
In short, digital marketing helps businesses grow online by being smart, flexible, and
customer-friendly. It combines various tools and strategies to deliver powerful results in
today’s digital world.
3. Integrated Marketing
Integrated Marketing is the process of aligning and coordinating all marketing channels and
strategies to deliver a consistent message to customers. It ensures that every interaction
with the brand feels unified and reinforces the same message.
Key Principles of Integrated Marketing:
● Selective and Analyzed Brand Messaging: The message must be tailored and
carefully crafted to match the brand’s goals and the audience’s needs.
● Customer and Recruit Data-Driven Decision Making: Making decisions based on
customer behavior, market data, and feedback ensures campaigns are more targeted
and effective.
● Multi-Channel Coordination: Using multiple marketing channels (social media,
email, ads, etc.) in a coordinated way ensures a consistent experience.
● Collaboration and Communication: Marketing teams and departments work
together, ensuring that all messages and strategies are aligned and communicated
clearly across the brand.
4. Guerrilla Marketing
Guerrilla Marketing refers to unconventional, creative, and low-cost marketing strategies
that create high impact with minimal investment.
Key Features of Guerrilla Marketing:
● Low Cost: Guerrilla marketing relies on creativity rather than big budgets.
● Creative Campaigns: These are often surprising, clever, and attention-grabbing,
making them memorable.
● Word of Mouth: Guerrilla marketing often relies on customers sharing their
experience, which can lead to viral buzz.
● Media Hype and Publicity: Often aims to get noticed by the media or create viral
campaigns that spread across social platforms.
Advantages:
● Low Cost: Can be done with a minimal budget, making it ideal for small businesses.
● Creative Impact: Stands out by being unexpected and engaging.
● Word of Mouth: The more creative and unique the campaign, the more likely it is to
be shared, creating organic publicity.
Disadvantages:
● Illegality: Sometimes guerrilla tactics (e.g., unauthorized use of public space or
property) can lead to legal issues.
● High Predictability Requirement: These campaigns need careful planning to
ensure they resonate with the audience.
● Misunderstandings and Backlash: If the campaign is misunderstood, it could
backfire, leading to negative publicity or irritation.
● Public Irritation: Some guerrilla tactics may be seen as intrusive or annoying by the
public.
5. Rural Marketing
Rural Marketing involves targeting consumers in rural areas for the promotion of products
and services. It’s an important strategy as rural populations are often underserved but have
immense potential.
Importance of Rural Marketing:
● Vast Consumer Base: The rural market represents a large, growing segment of the
population with increasing buying power.
● Rising Income Levels: As income levels rise in rural areas, there is an increasing
demand for consumer goods and services.
● Growth of Infrastructure: With improvements in rural infrastructure, access to
products and services is expanding.
● Government Policies and Initiatives: The government has launched several
initiatives like Make in India and rural employment schemes that help boost rural
purchasing power.
6. Social Marketing
Social Marketing refers to the use of marketing principles to promote social good or
influence public behavior for the benefit of society.
Key Benefits of Social Marketing:
● Improving Customer Welfare: Encourages people to adopt healthier, safer, or more
socially responsible behaviours.
● Protection of the Environment: Promotes sustainable practices and educates
people on environmental issues (e.g., recycling, conservation).
● Educating Customers About the Effects of Harmful Products: Helps inform
consumers about the dangers of tobacco, alcohol, or unhealthy foods.
● Helping Consumers Make Right Product Choices: Encourages informed
decision-making for better health or social outcomes.
● Improving Company/Brand Image: By promoting social causes, a company can
improve its reputation and build customer loyalty.
7. Green Marketing
Green Marketing involves promoting products and services based on their environmental
benefits, focusing on sustainability, eco-friendliness, and ethical production practices.
Features of Green Marketing:
● Product: Focuses on environmentally-friendly products (e.g., organic, recyclable, or
sustainably sourced).
● Price: Green products are often priced higher due to the costs associated with
sustainable production but offer value in terms of environmental benefits.
● Promotion: Emphasizes the eco-friendly aspects of the product, often using
certifications (e.g., Energy Star, Organic) or green labeling.
● Place: Often involves selective distribution in eco-conscious retail environments or
online platforms that support green brands.
Benefits of Green Marketing:
● Increased Consumer Loyalty: Consumers are increasingly supportive of brands
that prioritize sustainability.
● Competitive Advantage: Being eco-friendly can differentiate a brand and create a
unique selling proposition.
● Positive Brand Image: Companies are seen as responsible and forward-thinking,
which builds goodwill.
Challenges and Limitations of Green Marketing:
● Higher Costs: Sustainable production methods and eco-friendly materials can be
more expensive, leading to higher product prices.
● Consumer Skepticism: Some consumers may be skeptical about whether brands
are truly green or just "greenwashing" (making false claims).
● Limited Market: Not all consumers are willing to pay a premium for green products,
limiting their appeal.
8. AI in Marketing
Artificial Intelligence (AI) is revolutionizing marketing by automating processes, optimizing
campaigns, and personalizing customer experiences. AI tools help marketers make more
informed decisions, enhance efficiency, and improve customer engagement.
1. AI-Powered Content Creation
● AI tools can generate content for blogs, social media posts, or advertisements by
analyzing patterns from previous content.
● These tools can create personalized content that resonates with different segments
of an audience, improving engagement rates and customer satisfaction.
2. AI for SEO (Search Engine Optimization)
● AI tools can optimize websites for search engines more efficiently by analyzing
algorithms, keywords, and trends.
● They help predict search engine ranking factors and suggest keyword strategies,
content improvements, and backlink opportunities for better visibility.
● Tools like Frase or Clearscope use AI to help marketers enhance their SEO
strategies by providing insights based on search intent and content gaps.
3. Targeted Advertising
● AI enhances targeted advertising by using customer data to identify and predict
behaviors.
● AI tools can analyze demographic information, purchase history, and browsing
behavior to segment audiences and deliver more relevant ads.
● Programmatic advertising is powered by AI, automating the ad buying process and
enabling real-time optimization for better targeting and performance.
4. Chatbots and Conversational AI
● Chatbots powered by AI are used on websites or social media platforms to provide
instant customer support, answer frequently asked questions, and guide users
through the buying process.
● These AI chatbots use Natural Language Processing (NLP) to engage in meaningful
conversations and enhance customer experience.
● Tools like Drift and Intercom leverage AI to offer real-time, 24/7 customer support
and automate responses.
5. Data Analysis and Conversational Data
● AI can analyze massive amounts of customer data and generate actionable insights.
By processing data from various channels, AI helps identify patterns in customer
behavior, preferences, and needs.
● Conversational data analysis is used to track customer interactions (e.g., chats,
calls) and understand emotions, helping businesses refine customer engagement
strategies.
6. Predictive Modeling
● Predictive analytics powered by AI uses historical data and patterns to predict
future outcomes.
● This can be applied in various areas such as sales forecasting, customer churn
prediction, and personalized recommendations.
● Tools like HubSpot, Salesforce Einstein, and Hootsuite Insights use AI for
predictive modeling to help marketers forecast trends and make proactive decisions.
Summary: AI in marketing is about automation, optimization, and personalization. It
improves customer targeting, enhances content and SEO strategies, supports real-time
customer interactions, and helps in predictive decision-making. Marketers use AI to create
personalized experiences, boost efficiency, and maximize ROI.
