Service Marketing

DEFINITION
PHILIP KOTLER'S : A service is any activity
of benefit that one party can offer to another
that is essentially intangible & doesn't result
in the ownership of anything. Its production
may or may not be tied to a physical product.
Thus services are those activities which
satisfy wants.
According to American Marketing
Association services are defined as
activities, benefits or satisfactions which are
offered for sale or provided in connection with
the sale of goods.
 Characteristics of Services
Intangibility Services are cannot be touched or hold,
they are intangible in nature. For example you can
touch your Smartphone. But, you cannot hold or touch the
services of your telecom service provider.
Inseparability In case of services the production,
distribution, and consumption takes place simultaneously.
These three functions cannot be separated.
Variability It is impossible to provide similar service
every time. Youll experience some change every time you
buy a particular service from a particular service provider.
For example Yesterday you had a coffee at CCD. Today,
you are again at CCD to have a coffee, but you have got
different place to sit today; the person served you coffee is
different today; other people having coffee are also
different today. Hence, your experience of having coffee
today is different as compared to yesterday. Eg. Mc D
 Characteristics of Services

Perish-ability You can store goods, but it is

not so in the case of services. Services get
perished immediately. Flight, Disney Land
Participation of customer Customer is
co-producer in production of services. For
delivery customer involvement is as
important as is of the service provider. For
example if you went to a parlour for
haircut, how it cannot be possible without
your presence and involvement.
No ownership In the sale of services,
transfer of ownership not take place. It means
to say that consumer never own the services.
 7 Ps
Pricing for services
Hotel room based on its area or
upon how long you use it for?.
Would you cost dental surgery by the
amount of time you sat in the
dentists chair or by the actual
procedure that was undertaken?.
 Product for services
One-way dealing with this is to consider
that: service = product + process. So we
need to focus upon the process.
For example when you arrive at a hotel
people process you to ensure that you
are registered and your baggage is taken
to a room.
Service of car
Tourism industry
the education industry
 Place for services: With the place
element the marketer considers
convenience, location, footfall,
number of outlets, and timing.
 Physical Evidence
The environment in which the service is
delivered, and where the firm and
customer interact, and any tangible
components that facilitate performance
or communication of the service.
E. Private Hospital Vs Gov. Hospital.
Hotel with food with chair
 Process
(Process is) . . . The actual procedures,
mechanisms, and flow of activities by
which the service is delivered this service
delivery and operating systems.
Service process is the way in which a
service is delivered to the end customer.
Lets take the example of two very good
companies Mcdonalds and Fedex. Both
the companies thrive on their quick service
and the reason they can do that is their
confidence on their processes.
 People
(People are) . . . All human actors who
play a part in service delivery and thus
influence the buyers perceptions;
namely, the firms personnel, the
customer, and other customers in the
service environment.
Hotel : Chef, Waiter
Bank: Cashier, Manager,
 Transformation of the Service
Economy
Social Business Advances
in
Changes Trends
IT
Governme
nt Globalizati
on
Policies New markets and product categories
Increase in demand for services
More intense competition

Innovation in service products & delivery systems, stimulated by

better technology

Customers have more choices and exercise more

power

Success hinges on:

Understanding customers and
competitors
Viable business models
Creation of value for customers and
firm
 Factors Stimulating
Transformation of the
Service
Social Economy
Business
(1)
Advances
in
Changes Trends
IT
Governme
nt Globalizati
on
Policies

Changes in regulations

Privatization

New rules to protect customers,

employees, and the environment
New agreement on trade in
services
 Changes in Regulations>> Ban on
smoking in Restro>> ++ dine.
Privatization>> Telecom,
Transport>>More competitive Env.
New regulation to protect
customer>>Service Charge.
New agreement on trade in services>>
take over basic services water, health,
education >> transfer of expertise
across borders.
 Factors Stimulating
Transformation of the
Service
Social Economy
Business
(2)
Advances
in
Changes Trends
IT
Governme
nt Globalizati
Rising consumer expectations on
Policies
More affluence
More people short of time
Increased desire for buying
experiences versus things
Rising consumer ownership of high
tech equipment
Easier access to information
Immigration
Growing but aging population
 Rising consumer expectations : Expect Service quality>> Extended working
hour::Bank

More affluence: eg. Spending on tourism>> wider variety of offering:: Bihar,Kerala

More people short of time/Personal outsourcing: Baby sitting>> service provider

Increased desire for buying experiences versus things >> Higher spending on luxury
services like spa treatment>> health club and resort hotels add spas.:: Mahindra club

Rising consumer ownership of high tech equipment: Laptop 4G >> Greater need for
designers, engineers and Marketers for theses types of equipment::OLA,

Easier access to information : Internet podcasting>> More focus

Migration >> Many Indian Nationals who have Migrated Now Back >> Transfer to
talent.

Growing but aging population >>>> More services catering to the need of elderly
including health care.:: Physio
 Factors Stimulating
Transformation of the
Service
Social Economy
Business
(3)
Advances
in
Changes Trends
IT
Governme
nt Globalizati
on
Policies
Push to increase shareholder value

Emphasis on productivity and cost

savings
Manufacturers add value through
service and sell services
More strategic alliances and
outsourcing
Focus on quality and customer
satisfaction
Growth of franchising
 Push to increase shareholder value : Shareholder pressure>>
search for new revenue sources additional Fees

Emphasis on productivity and cost savings >> Move to self

services >> Rethink service delivery replace
employee>>Replacement of computer

Manufacturers add value through service and sell services>>

IBMs Consulting and IT services for financial market

Growth of franchising : Fast food chain >> consisting service

Marketing emphasis by nonprofits : Museums seeks to expand

audiences>> fund raising for improved facilities>> Bihar
 Factors Stimulating
Transformation of the
Service
Social Economy
Business
(4)
Advances
in
Changes Trends
IT
Governme
nt Globalizati
on
Policies

Growth of the Internet

Greater bandwidth

Compact mobile equipment

Wireless networking

Faster, more powerful software

Digitization of text, graphics,

audio, video
 Growth of the Internet

Greater bandwidth

Compact mobile equipment : 4G

Wireless networking: Public libraries, Cafs, Hotel >> More brick and mortar services

Faster, more powerful software

Digitization of text, graphics, audio, video >> More demand for website
 Factors Stimulating
Transformation of the
Service
Social Economy
Business
(5)
Advances
in
Changes Trends
IT
Governme
nt Globalizati
on
Policies

More companies operating on

transnational basis
Increased international travel

International mergers and alliances

Offshoring of customer service

Foreign competitors invade domestic

markets
 More companies operating on transnational basis

Increased international travel : More service like yatra.com air asia.

International mergers and alliances

Offshoring of customer service >> Call center

Foreign competitors invade domestic markets