1. Marketing Of Services
MBA-SEM-III
TERM

2. MODULE-01 Duration-3 Lectures.
INTRODUCTION TO SERVICES MARKETING
Definitions.
Characteristics & classification of services
Services economy
Nature and scope of
service market potential

3. g o o d s
and
s e r v i c e s
Goods - things you can touch - “tangible”
Services - things you can’t touch - but you can see their effect “intangible” “… services are not physical, they are intangible…”

4. Service
A Service is a type of a product. “… a deed performed by one party for another…”
Services have special characteristics that make them different than products.

5. Service Defination A product without physical characteristics;
a bundle of performance and symbolic attributes designed to produce consumer want satisfaction.

6. Definition of Service-2
A service is an act for performance of an essentially intangible nature that does not result in the ownership of tangible product or commodity but serves to create value and benefits for customer.

7. “There are no such thing as service industries
“There are no such thing as service industries.There are only industries whose service components are greater or less than those of other industries. Everybody is in service.”
-Theodore Levitt-

8. Tangible / Intangible Attributes
touch
see
taste
smell
Intangible
can’t see
can’t touch
can’t smell
can’t taste
GOODS
SERVICES
Not in the text

9. What is a service Services are deeds, processes and performances.
Service industries and companies – industries and companies typically classified within the service sector whose core product is a service.
Services as products – a wide range of intangible product offerings that customers value and pay for in the marketplace.
Customer service – the service provided in support of a company's core product.
Derived service – the value derived from physical goods is really the service provided by the good, not the good itself.

10. Definitions James Schorr
At Procter & Gamble:
“ A product is something a consumer purchases and takes away with him or consumes or otherwise uses. If it is not physical, not something that they can take away or consume, then we call it a service”
At Holiday Inns:
“…people are buying a hotel experience. I’m selling the room, the way they treat you at the front desk, the way the bellman treats you, the way the waitress treats you – it’s all mixed together in a consumer’s mind when he makes a hotel decision”

11. Services (examples) Medical Centers Industrial Design Services
Investment Banking
Management Consulting Services
Satellite Telecommunications
Internet Search Engine provider
Casino / Hotels
Continuing Care Retirement Communities
Diet and Weight Reducing Centers
Environmental Consulting
Golf Courses and Country Clubs
Hazardous Waste Collection

12. Goods and Services: Scale of
Elemental Dominance
Not in the text

13. 4 Characteristics of Services
1. Intangibility - “u can’t touch this”
2. Production (or performing the service) and Consumption (using the service) - happens at the same time
3. Heterogeneity - services are not always delivered the same way
4. Perishability - cannot be put in inventory or stored for later use
ie. You can’t buy 2 haircuts

14. Characteristics of Services
1. Intangibility - “u can’t touch this”
Services cannot be stored
Services cannot be protected through patents
- therefore a really great travel package and service can be copied
a really great physical object can be patented, and NOT allowed to be copied

15. Characteristics of Services
1. Intangibility - “u can’t touch this”
Hard to explain and display Services if you can’t see them
Prices are difficult to set - depends on customers expectations
Not in the text

16. Characteristics of Services
2. Inseparability of Production (or performing the service) and Consumption (using the service) - happens at the same time
mass production of services is hard to do
Not in the text

17. Characteristics of Services
2. Inseparability of Production (or performing the service) and Consumption (using the service) - happens at the same time
Marketing Strategies
Emphasize how much you train your people - so their ability to give you good service will be high
Have many locations so customers can get to you
ie. Insurance sales come to your home
Not in the text

18. Characteristics of Services
3. Heterogeneity - services are not always delivered the same way
It is very difficult to standardize services
eg. A machine can make ice cream cones a standard size 100% of the time
A person filling an ice cream cone with a scoop cannot do it the same amount each time, unless you use a machine to dispense the ice cream
Not in the text

19. Characteristics of Services
3. Heterogeneity - services are not always delivered the same way
It is very difficult to standardize services
eg. A Taxi driver cannot drive you to the office in exactly the same time each day because the traffic patterns change
eg. A travel agent can sell you a vacation package - but cannot guarantee you will like the trip exactly the same way another tourist did.
Not in the text

20. Characteristics of Services
4. Perishability - cannot be put in inventory or stored for later use
ie. You can’t buy 2 haircuts
Demand fluctuates and changes, sometimes depending on the season, or weather
eg. Taxi in the rain, vacation in summer
Not in the text

21. Characteristics of services
Intangible
Variable
Service
Characteristics
Inseparable
Perishable
Temporary
ownership

22. So what’s it all about? No ownership Not inventoried
Intangible dominated
Customer involvement in production
Other customers may form part of the product
More variability than products
More difficult to evaluate
Time = important

23. Key factors behind the growth of services
Consumer Business
Demographics
Social norms and working
2 income families
Increase in quality of life
Greater life complexity
International travel and mobility
Increasing aspirations
Globalisation
E- business
IT linked to competitive advantage
Globalisation
Growth in government services
Mergers and acquisitions
Too expensive to retain service expertise
Outsourcing of
services

24. Results in…
In the US 80% of employment and 77% of GDP is attributable to the service sector.
In the UK 63% of employment and 76% of GDP is attributable to the service sector.
Across Europe, services account for most growth in new jobs
Business services are growing even where manufacturing is in decline
Service sector accounts for >50% of GNP and employs >50% of work force in many Latin American countries
Now growing rapidly in developing nations
(World Bank)

25. Services dominate the Economy: GDP by Industry, 2001
Agriculture, Forestry,
Mining, Construction 8%
Finance, Insurance,
Real Estate
20%
Manufacturing 14%
Government
(mostly services)
13%
Wholesale and
Retail Trade
16%
Other Services 11%
Transport, Utilities,
Communications 8%
SERVICES
Business
Services 5%
Health 6%
Source: Bureau of Economic Analysis, November 2002

26. In China (2004)
share of the economy
Services sector contributed $265 billion of its economic growth
service
46%
Small factory
13%
primary
41%
industries

27. Assignment Prepare a PPT of.
5 organizations providing services in different categories .
How these companies tangibalise their intangible services.
TOTAL OF 8 SLIDES.
Presentation Time- 5 minutes.
Give one page write up on services industry relevance in today’s economy with facts and figures- Mention along the sources.
Date of presentation-