SERVICES MARKETING

DR. PREETHI T M
ASSISTANT PROFESSOR
DCMS
UNIVERSITY OF CALICUT
 Evolution of Services
 Adam Smith; Late eighteenth centuries
 Value Contributors
 Process of value generation
 Change in consumer focus on consumption from physical goods to
services
 No upper limits in consumption of services
 Goods and service continuum

 Tangible goods
 Tangible goods with some services
 Goods and services in near equal measure
 Services with minor goods
 Pure services
 Service Economy

The services sector is a key driver of India's economic growth.

Services sector accounts for 54.40% of total India's GVA of 169.61 lakh
crore Indian rupees. With GVA of Rs. 50.43 lakh crore, Industry
sector contributes 29.73%. While Agriculture and allied sector shares 15.87%.
(2019)
Services sector is estimated to grow at 6.9% in 2019-20 as compared to
7.5% in 2018-19. The services sector is estimated to contribute 55.3%
to India's GVA in 2019-20. Currently, the services sector accounts for over
50% of the Gross State Value Added in 15 states and UTs.(2020)
 Role of service sector in Indian Economy

-One third in 1951, more than half in 1990s and now its 53.3% of GDP
-The sector contributed 55.39% to India's Gross Value Added at current price
in FY20*. ...
-According to RBI data, in April 2020, service exports stood at Rs 1,254.09
billion (US$ 17.06 billion) while imports stood at Rs 709.07 billion (US$ 9.65
billion).
Providing Employment-
17.3 % in 1951; Now its 25%

Providing support to other sectors

Supports agriculture and industries
 Service- Meaning and Definition

No universal definition.

• Philip Kortler - “an act or performance that one party can offer to another that is
essentially tangible and does not result in the ownership of anything. Its production
may or may not tie to a physical product”.

• American Marketing Association - “Activities, benefits or satisfaction which is

offered for sale or is provided in connection with the sale of goods”.

• Services are deeds, processes and performances provided or coproduced by one

entity or person for another entity or person. (Zeithml, Bitner, Gremler, & Pandit,
2011).
• Sir William Bieveridge - Services refer to social efforts which include government to
fight five giant evils, want, disease, ignorance, squalor and illness in the society.

• Quinn, Baruch, & Paquette, 1987 - All economic activities whose output is not a physical
product or constructions are generally consumed at the time it is produced and provides
added values in forms such as convenience, amusement, timeliness, comfort, or health that
are essentially intangible concerns of its first purchaser.

• Rao – “Human efforts, which provide succour to the needy. It may be food to a hungry
person, water to a thirsty person, medical service to an ailing person, education to a
student, loan to a farmer, transport to a consumer, communication to two persons who
want to share a thought, pleasure or pain.
• Saser, Olson and Wyekoffs - “Establishments primarily engaged to provide various
services to individuals, government establishments, and organisations, establishments
providing personal services, educational institutions, membership organisations and
other miscellaneous services are included”.

• Govind Apte, 2004 - Services are economic activities that bring about a desired
change for the recipient thereby creating value and providing benefits for the
customers. In Service, emphasis is given to the personal reception of these benefits.

• Experience of a service is the totality of the effects of all the elements present at the
time so it is difficult to provide it as a sample. It is not possible to duplicate the
totality as a sample.
 Characteristics of services

a. Intangibility

b. Heterogeneity

c. Simultaneous production and consumption

d. Perishability

e. Lack of ownership
 Types/ Classification of services

5 categories. They are:

a)Production/ trade services

b)Business services
c)Consumer/personal services
d)Infrastructural services
e)Public services
Production/ trade services

a)Repairs
b)Advertisement
c)Maintenance and
d)Transportation of goods
 Business services

a) Banking, g) lawyers,
b) insurance, h) Advocates,
c) advertising, i) credit cards,
d) accountancy, j) software,
e) finance, k) business centres, call centres, and
f) market research, l) information processing.
 Consumer/personal services
7. Education,
1. Travel,
8. coaching classes,
2. leisure,
9. medical, Health care,
3. beauty,
10. Hotels,
4. entertainment,
11. Gymnasium,
5. information,
12. Swimming pools.
6. Investments,
 Infrastructural services

1. Communication
2. transportation like Roads, Railways and
3. Motor transport
4. power, oil.
 Public Services

1. Government administration such as police and defence

2. providing employment through public works

3. Relief work during natural calamities

 Service marketing
Service marketing is marketing based on relationship and values

 Customer interface is more in service

 Marketing and operations are more closely linked than in a manufacturing business

 Consumers’ exposure to the full range of need-fulfilling service products may be

limited by the sale person’s mental inventory of services and how he/she priorities
them

 Condemnation of service is troubling when, at some level, service has never been
better
 Effective service marketing is a complex which involves many different strategies,
skills and tasks

 Service organisations have to address the issues like how to overcome problems
related to absence of services for optimising demand and supply, how to initiate
awareness in consumers about the quality of services and how to involve them in the
process

 Service provider’s skills and experiences are not directly transferable.

 Service marketing mix
Traditional Marketing Mix - four Ps: Product, price, place and promotion.

Service Marketing Mix - Expanded marketing mix in three groups

1) Product

2) Price

3) place

4) promotion

5) people,

6) physical evidence

7) process
 Product
 what the service provider offers.
 Not a physical entity
 A kind of promise
 Experienced only after purchase
 Made up of a number of intangible elements
 Not enough to pay attention to the tangibles
 Every combination of elements makes a different product
 The options are many. No great effort is needed to modify the features of a product at any
time
 The customer knows about the service after the service is bought, performed and experienced
 When the service is provided, it does not matter at what level it is provided
 Service that comes automatically is more satisfying.
 Price

 Revenue that a company’s services will earn

 Three major criteria - cost, competition and objectives

 Depending on price as a quality indicator is the risk in service purchase

 In high risk situations customer will look to price as a surrogate for quality

 So pricing services too low and too high should be avoided.

 Place

 customer is often present at the same place where the service is

manufactured and delivered [saloon, restaurant and a hotel]

 Decide where to locate a service [ conveniently located supplier of

services over the best service provider located far away]
 Promotion

 Through advertisement, publicity, public relation, personal selling and sales promotion

 Many service businesses do not spend adequately for promotion ; rely on word of
mouth

 Objective based promotion plan is a must for service organisations.

 People

 Human elements like employees, the customer, and other customers in the
service environment

 Attitudes, behaviour, dressing and the personnel appearance of people

influence the customer perceptions

 Customers can influence other customers too

 Service employees are critical when the degree of direct personal contact is
high and it is again critical when services involve repeated contacts

 Customer will have an experience may be good, bad or indifferent.

 Physical Evidence

 Any tangible components that facilitate performance or communication of the service

constitute physical evidence

 When consumers have little knowledge to judge the actual quality of service they will
rely on theses cues provided by the people and the service process

 Not limited to buildings but to the appearance of people, stationery, bills sent to
customers, visiting cards and any tangible evidence may result in an impression being
formed about the service brand

 Can attract customers, induce positive feelings in them, enhance credibility perceptions
and generally increase satisfaction with the service experiences

 Tangibilising of intangible services may help to market them better.

 Process:

 Includes actual procedures, mechanisms, and flow of activities by which the services are delivered

 Complicated and extensive series of actions to complete the process- Highly bureaucratized
services

 The logic of the steps involved often escapes the customer. None of the characteristics of the
service is inherently better or worse than another.

 A form of evidence used by the consumer to judge the service

 ex: In the case of hospital services customers interact with multiple, interconnected organisations.
Some of the steps involve customers interacting with providers (patients interacting with their
physician), some steps carried out by customer themselves (following the doctor’s orders). The
combination of these steps along with many, constitute a process, a service experience that is
evaluated by the consumers.