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SERVICES MARKETING

CHAPTER 1 : INTRODUCTION
Introduction:Services are economic activities that create value and provide benefits for customers at specific time, place, form or psychological utilities as a result of bringing about a desired change in or on behalf of the recipient of the service. Definition of service:1. According to American Marketing Association, activities, benefits or satisfactions which are offered for sale, or provided in connection with the sale of goods. 2. In the words of kotler, a service is an activity or benefit that one party can offer to another which is essentially intangible and does not result in the ownership of any thing. Its production may or may not be tied to a physical product. Services Management:It is a total organizational approach that makes quality of service as perceived by customer, no one driving force for operation of business. In other words it is; a. To understand utility customers receive by using the offerings of organization. b. To understand how organization will be able to produce and deliver this utility or quality. c. To understand how organization should be developed and managed so that the utility is achieved. d. To make organization function and objective of parties involved are met. Services Marketing:It is the application of marketing principles by the service sector and through which the customer is enable to use or enjoy the services. It is marketing based on relationship and value. It is used to market or service a product. Some of the service sectors:1. Transport services 2. Distribution services 3. Financial services (banking, insurance etc)

4. Real estate services 5. Communication and information services 6. Public utilities, government services 7. Defiance services 8. Educational services 9. Hospitality services (hotels, travel etc) 10. Health care services 11. Legal services 12. Tourism etc Features of services:1. 2. 3. 4. They are rather activities rather than things. They are more or less intangible. They are produced and consumed simultaneously. Consumer participates in production process at least to some extent.

Differences between services and goods:SL.NO 1 2 3 4 5 GOODS They are tangible and non-perishable. Production and distribution are separated from consumption. They can be kept in stock. Consumer does not participate in production process. Ownership can be transferred. SERVCES They are intangible and perishable. Production and consumption happens simultaneously. They cannot be kept in stock. Consumers participate in production process. Ownership cannot be transferred.

Characteristics of services:1. Intangibility No possibility of the customer to see, touch or feel the service product. No impulse purchase there is no scope for the customers to make impulse purchase decisions as triggered by visual images and the touch and feel factors which are not anyway possible in intangible service offers. Very difficult to evaluate or measure quality in service There is no concept ownership possession or acquisition for the customers after the service transaction.

2. Perishability It refers to the fact that services cannot be saved, stored, resold or returned. It implies that unlike goods, services cannot be stored but have to be transacted during the given time. If the transaction cannot take place, then the service losses its value. 3. Variability It is never consistent in its quality and deliver. Is will vary from customer to customer and indifferent time periods. 4. Production and consumption happens simultaneously Whereas most goods are produced first, the sold and consumed, most services are sold first and the produced and consumed simultaneously. 5. Inseparability In the service industry, the service provider and the service recipient (customer), both have to present during the time and place of transaction. Even if one of them is absent, the service transaction cannot take place and neither does any productivity happen.

Classification of services:I. On the basis of ultimate user a. Individual customer as the end user:Services which are directly provided to consumers. Example:- hair dressing, package holidays, dry cleaning etc b. Business to business:Here service is provided to the business operations. Example:- advertising agencies, printing, consultancy etc c. Industrial end users:Example:- plant maintenance and repair, installation, project management etc. On the basis of level of tangibility a. Highly tangible:Example:- Car rentals, vending machines, telecommunications. b. Service linked to tangible goods:Example:- domestic appliance repair, automobile service to enhance consumer appeal. c. Highly intangible:Example:- consultancy, legal service, psychotherapy, baby sitting, massaging etc.

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People based services a. High contact:- high contact with people. Example:- education, dental care, restaurants, medical services, tourism, insurance etc. b. Equipment based contact:- low contact with people Example:- cinema, vending machine, ATM etc On the basis of expertise or specialization a. Professional services:Example:- doctor, lawyer, chartered accountant etc. b. Non-professional services:Example:- baby sitting, care taking, casual labor etc. On the basis of profit orientation a. Commercial or profit orientation:- in this type of firms the orientation is to earn profit. Example:- Banks, air lines, tour operators, hotel and catering services. b. Non-profit orientation:Example:- educational institutions, municipal parks, public library, charities etc.

Reasons for growth of services:1. Consumer affluence:Due to the fast rise in the income of consumers, they are attracted towards the new areas like clubs, health clubs, travel and tourism, banking, entertainment etc 2. Working women During the recent times a large number of women have come up in a variety of professions due to increasing involvement of women in commercial activities, the services like fast food restaurants, marriage counseling, personal care have emerged in the recent times. 3. Leisure time People do get some time to travel and holiday, and therefore there is a need for travel agencies, resorts, hotels and entertainment. 4. Greater life expectancy According to world development report, the life expectancy of the people have increased significantly all over the world due to advancement in medical technology and greater awareness about health and education.

Other examples:- hospitals, nursing homes, entertainment, leisure services, investment banking and so on. 5. Increasing complexity of life Certain products and services have made human life more comfortable and complex as well. Example:- legal aid, tax consulting, professional services, airlines, courier services, insurance, banking etc. 6. New young youth Every new generation has its own characteristics and enjoys a different life style. Todays generation with all these changes provide more opportunities to services like entertainment, fast food, computers, travel, picnic resorts, educational institutions, counseling, retailing etc. 7. Greater complexity of products Greater number of services is being purchased in households which can be serviced only by specialized persons. Example: - water purifiers, microwave oven, computers etc.

Role of services in an economy:1. 2. 3. 4. 5. Innovative tools Generation of income Increase in employment opportunities. Increase in income Increase in economic development.