1. Services Marketing by P Sivarajadhanavel
Chapter – 1
Introduction to Services

2. Objective Explain what services are and identify service trends
Explain the need for special services marketing concepts and practices
Outline the basic differences between goods and services and the resulting challenges for service businesses
Introduce the service marketing triangle
Introduce the expanded services marketing mix

3. What are Services Definition of Services
Services are deeds, processes, and Performance
Definition of Services
Services include “all economic activities whose output is not a physical product or construction, is generally consumed at the time it is produced, and provides added value (such as convenience, amusement, timeliness, comfort, or health) that are essentially intangible concerns of its first purchaser”

4. Distinct categories of Services
Service industries and companies
Service as products
Customer Service
Derived Service

5. Distinct categories of Services
Service industries and companies
Whose core product is a service & considered pure service companies
Ex: Hotels, Airlines, Financial services, Insurance, Healthcare etc..
Service as products
Intangible product offerings that customers value and pay for in the market place
Service products are sold by service companies and by non service companies like manufacturing and technology companies
Ex: IBM, HP, TCS, etc

6. Contd… Customer Service Derived Service
Service provided in support of a company’s core products
Ex: Employees in airline industry providing information and guiding them on boarding
Derived Service
Value derived from physical goods
Ex: computer provide information and data manipulation, razor provides barbering services

7. Trends in the Service Sector

8. What is GDP
The market value of all final goods and services produced within a country in a given period of time.
It is also considered the sum of value added at every stage of production of all final goods and services produced within a country in a given period of time.
GDP is a number that expresses the worth of the output of a country in local currency

9. Various Sectors Agriculture Industry Mining and Quarrying
Manufacturing
Electricity, Gas and Water
Services
Trade, Hotels, Restaurants, Transport, Storage and Communication
Financing, Insurance, real Estate and Business Services
Community, Social and Personal Services
Construction

10. Contribution of various Sectors in GDP of India
In , India's GDP grew at an impressive 9.2 per cent.
The share of different sectors of the economy in India's GDP
Agriculture per cent,
Industry per cent, and
Services per cent.
Recently India joined the elite club of 12 countries with a trillion dollar economy. The trillion dollar economy includes
US, Japan, Germany, China, UK, France, Italy, Spain, Canada, Brazil, and Russia
Source:

11. Why Service Marketing Service Based Economies
Service as a Business imperative in Manufacturing and IT
Deregulated industries and professional Service needs
Services Marketing is different
Service equals profits
Service profit chain – internal service and employee satisfaction to customer value and ultimately to profits
Service stinks
American Satisfaction Index

12. Service- based Economies
Country Name - % of services to its GDP
United States
France
Netherlands UK
Japan
India
Brazil
China

13. Service and Technology
Potential for new service offerings
Automated voice mail, interactive voice response systems, fax, ATMs
New ways to deliver service
Delivering existing services in more accessible, convenient, & productive ways
Ex: bill paying, accounts, tracking orders, etc
Enabling both customers and Employees
Extending the global reach of services
Today technology which takes services across the globe
The internet is a service

14. Services Vs Goods Intangibility Heterogeneity Simultaneous Production
and
Consumption
Perishability

15. Intangibility
Generally, services cannot be seen, felt, tasted, or touched in the same way as physical goods
Implications
Services cannot be inventoried
Services cannot be patented
Services cannot be readily displayed or communicated
Pricing is difficult

16. Tangibility Spectrum             Intangible Dominant
Salt 
Soft Drinks 
Detergents 
Automobiles 
Cosmetics 
Fast-food
Outlets 
Intangible
Dominant
Tangible
Dominant  
Fast-food
Outlets 
Advertising
Agencies 
Airlines 
Investment
Management 
Consulting
Teaching

17. Heterogeneity Generally, no two services are exactly alike due to:
Customers
Employees
Implications
Service delivery and customer satisfaction depend on employee actions
Service quality depends on many uncontrollable factors
There is no sure knowledge that the service delivered matches what was planned and promoted

18. Simultaneous Production / Consumption
Goods
Produced Purchased Consumed
Services
Purchased Consumed / Produced
simultaneously
Implications
Customers participate in and affect the transaction
Customers affect each other
Employees affect the service outcome
Decentralization may be essential
Mass production is difficult

19. Perishability Services cannot be saved, stored, resold, or returned
Implications
It is difficult to synchronize supply and demand with services
Services cannot be inventoried
Recovery processes are critical

20. Challenges for marketing a Services
Defining and improving quality
Communicating and testing new services
Communicating and maintaining a consistent image
Motivating and sustaining employee commitment
Coordinating marketing, operations and human resource efforts
Setting prices
Standardization versus personalization

21. Service Marketing Mix Traditional marketing mix
Expanded Mix for services marketing

22. Traditional Marketing Mix
Product
Place
Promotion
Price

23. Expanded Marketing Mix
Product
Place
Promotion
Price
People
Physical Evidence
Process

24. Expanded Marketing Mix
Product – Physical good features, Quality level, Accessories, Packaging, warranties, product lines, Branding
Place – Channel type, Exposure, intermediaries, outlet locations, transportation, storage, Managing channels
Promotion – Promotion blend, Sales people (Selection, Training, incentives), Advertising (Media types, Types of ads), Sales promotion, publicity, internet/web strategy
Price – Flexibility, price level, terms, differentiation, discounts, allowances

25. Expanded Marketing Mix
People – Employees (Recruiting, Training, motivation, rewards, teamwork), Customers (education, Training)
Physical Evidence – Facility design, equipment, signage, employee dress, other tangibles (reports, business cards, statements, guarantees)
Process – Flow of activities (standardized, customized), Number of steps (simple, complex), Customer, involvement

26. The Services Marketing Triangle
Company
(Management)
Internal Marketing
External Marketing
“enabling the
promise”
“setting the
promise”
Employees
Customers
Interactive Marketing
“delivering the promise”

27. Focused on the Customer
Service marketing is focused towards the customers and customers satisfaction
Service delivery and service quality

28. Reference
Consulting