Mcpu (management student circle of purbanchal university) NOTE

BBA 7TH SEMESTER SERVICE MKT.

What is service?
A service is an act or performance offered by one party to another. Thought the process
may be tied to physical product the performance is transitory, often intangible in nature
and does not result in ownership of any of the factor of production.
A service is an economic activity that creates value and provides benefit for customers at
specific time and places by bringing about a desired change in on behalf of the recipient
of the services

Characteristics:
Customers do not obtain ownership: - customers usually derives value from service
without obtaining ownership of any tangible elements; exception include food services
and installation services of spare parts during delivery of repair services. In many
instances service markets offer customer to rent the use of physical object such as rental
car or a hotel room, to hire labor & expertise of people, to rent, as a loan, a sum of money
to subscribe network.
Service product cannot be inventoried or Empheral: - service is a deed or
performance. It is transitory and perishable and cannot be stocked. Exceptions are found
among those service performances that can be recorded for later use in printed or
electronic form. If there is no demand during a given time period, unused capacity is
wasted and during the period when demand exceed, customers are asked to wait until
sufficient capacity is available to serve them.
Intangible elements dominate value creation: - although service often include
important tangible elements such as hotel bed restaurant, spare parts installed during
repair, bank check book are tangible but intangible elements including labor service &
expertise of personal service dominant creation of value in service performance for
example the food may account 20-30% of the price of meal. Most of the value added
comes from the food operation table service restaurant environments and facilities like
parking toilets. The notion of service as a performance that cannot be wrapped up and
taken away often.
Customers may be involved in the production process:- many service require
customer to participate in creating the service product. Customers involvement can take
the form of self-service, such as withdrawal of money from automated teller machine, cooperate with service personnel at hospital or colleges. Under such circumstances
customer can be though of partial employees.
Other people are often part of product:- customer not only came into contact with
service personnel but also rush shoulder with other customers. If you attend the sporting
event the behaviors of fans can add to the excitement of the fame if they are enthusiastic
but well behaved.
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Mcpu (management student circle of purbanchal university) NOTE

There is greater variability in operational inputs & outputs:- the presence of
employees and other customer in the operational system make if difficult to standardize
and control quality in both service inputs & outputs. For those service that are consumed
as they are produced such service must take place under real time conditioned. Which
may vary from customer to customer and even from one time of day to another.
Many services are difficult for customer to evaluate:- many physical goods can be
evaluated prior to purchase such as its color, shape, price and feel but service can be
evaluated only after purchase or during consumption. Such as table personnel treatment.
Moreover customer find difficulty to evaluate even after consumption because they are
purchasing expertise in which they have very little knowledge such as surgery,
professional service such as accountancy.
The time factor assumes great importance:- today time sensitive customers are
increasing, speed is often seen as a key element in good service and the way to attract
new customers. Service marketers need to understand time constraints priorities.
Distribution channel take different form :- service business may choose to combine
the service factory retail outlets and point of consumption at a single location or use
electronic means to distribute their service.

Distinction among services

Although it is useful to distinguish between goods & service marketing, it is also
important to recognize that there are marketing relevant difference among services
themselves. The traditional way of grouping services is by industry. Service manager may
say were in transportation or hospitality or banking or telecommunication business.
These grouping help us to define the core product offered by the firm during service
processes.
Categorizing service processes.
The classification of service is based on the nature of processes by which service are
created and delivered. Marketer need to understand the nature of service processes to
which their customer may be exposed.
A process implies taking an inputs and transforming it into outputs. Two broad things get
processed in service i.e. people and objects.
In transportation of passanger, education, customer themselves are principal inputs
whereas in malfunctioning of computer that need repair an object is inputs.
By looking at service processes from operational perspective service processing can be
catagorised into four group. Each category involves fundamentally different processes.
a) People processing- since ancient time people have sought out that services are
directed towards themselves being transported , fed, lodged, restored to health ,look
more beautiful. To receive these service customers must physically enter the service
system. Because they are an integral part of process. They cannot obtain the benefit
they desire without own involvement. Therefore they must be prepared to spent time
interacting and cooperating with service providers.
The output from these services is a customer who has reached his destination such as
stylish haircut. Better health.
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It is important for managers to think about process and output in term of what happen
to the customer because it helps to identify what benefits are being created.
b) Possession processing- often, customers ask service organization to provide
treatment to a physical possession such as house computer or even a day. Customers
are less physically involve. Consider the difference in your role between acting as
passenger and using freight transportation. In most possessing processing service the
customer involvement is usually limited to dropping off item, requesting, explaining
the problem and later returning to pick up and pay the bill.
Sometimes service provider must come with toob if an object becomes difficult to
more. In this case both inputs and output are longible elements
c) Mental stimulus processing- services that interact with peoples mind include
education, news information professional advice, entertainments, anything touching
peoples mind has power to shape attitudes and influence behavior. Receiving these
service require an investment of time on customer part. However, recipient doesnt
necessarily have to be physically present in service factory.
Although passengers can sleep through a flight and still reach the destination but a
student who fall asleep in a class will not be wiser.
Service such as entertainment and education are often created in one place and
transmitted by TV in distant location.
We need to recognize that watching live concert on TV dont have same experience as
watching in concert hall.
The core content of all service in this category is information based. Whether it is
music of visual image such service can be converted into digital format recorded and
made available whenever needed.
d) Information processing- information is the most intangible form of service output.
But it may be transformed into more tangible form. Such as letter reports disk.
Information processing services are highly depends on effective collection and
processing of information such as professional service, market research.
The extent of customer involvement in both information and mental stimulus
processing service is often determined by tradition and personal desire. Strictly
speaking, personal contact is quite unnecessary.

Importance of service marketing

1. A service based economy- service-marketing concept and strategic have
developed in response to the tremendous grown of service industries. Service
sector represent 80% of total employment in U.S. another indicator of economic
importance is that trade in service is growing worldwide.
2. Service as a business imperative in manufacturing and IT- Earlier service
industries such as banking & health care were given importance but nowadays
manufacturing & technology industries such as automobile computers recognize
the need to provide quality service in order to compete worldwide. These
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Mcpu (management student circle of purbanchal university) NOTE

companies are realizing that a percentage of their revenue and profit is coming
from services. Competitive advantages cannot be provided only through physical
product alone customers not only expect high quality goods but they also expect
high levels of service with them. Service marketing is an integral part of every
business.
3. Deregulated industries and professional service needs- Deregulating of
industries accelerates customer based, more sophisticated and competition
sensitive marketing, which demand for service marketing. The concept
professional service and their approach for business have been changed. They are
now seeking better way to understand their market segment for delivering quality
service and to strengthen their position
4. Service equal profit- Corporate strategy focus on customers satisfaction,
revenue generation and service quality may actually be more profitable then
strategies focus on cost cutting.
Service and profits are in chain. Internal service provides satisfaction to the
employees for the customers value which ultimately leads to profits.

Services and TechnologyTechnology specifically information technology is currently shaping the field and
influencing the practice of service marketing. Technology dramatically changing the
nature of service, enabling both customer and employees to get and provide better,
more efficient customized services. Technology facilitates global reach of services
that historically tied up to their home location. Internet is king of current technology
as one big service vehicle. There are also paradoxes and dark side of the technology
in every aspects of service.
Customers dont always welcome technology because it threatens their
privacy.
Employees resist to changes.
Loss of human contact.
Tremendous investment with uncertain payback.
Potential for new services
New ways to deliver service.
Enabling both customer & services
Extending the global reach of services.
Internet is a service.