Q) Discuss the micro and macro environment factors that influence service marketing

Micro-Environment (Controllable): These are factors directly linked to the business that can be influenced or
managed:

• Customers: Their needs shape the services offered.

• Suppliers: Provide essential resources for service delivery.
• Competitors: Push businesses to improve and stay competitive.
• Shareholders: Influence decisions through investment and expectations.
• Media: Affects public perception and brand reputation.
• Government: Policies and regulations impact operations.

Macro-Environment (Uncontrollable): These are broader forces that affect the business indirectly and cannot be
controlled:

• Political Environment: Government policies and stability impact business.

• Economic Environment: Inflation, interest rates, and economic growth influence customer spending.
• Socio-cultural Environment: Changing social norms and cultural values affect service demand.
• Legal Environment: Laws and regulations shape business practices.
• International Environment: Global trends and international markets affect local operations.

Q)What are the key reasons behind the rapid growth of the service sector in India?

1. Rise in Demand: Increased outsourcing from developed countries and a growing population have
boosted demand for services like banking, healthcare, and communication.
2. Technology & Structural Changes: Advances in technology and shifts from agriculture to services have
expanded industries like transport, storage, and trade.
3. Economic Reforms (1991): Liberalization, privatization, and easing of FDI restrictions opened doors for
private players, accelerating growth.
4. Attractive Ecosystem: Government initiatives like Start-up India and low setup costs made India a
favorable destination for service-based businesses.
5. Skilled Manpower: India’s large pool of IT talent turned the country into a global outsourcing hub,
especially in tech-driven services.
6. Improved Productivity: Better technology has increased productivity in agriculture and manufacturing,
shifting labor towards services.
7. Global Technology Hub: India has become a leader in digital innovation, with strong government
support and a rising digital economy.
Q)How can services be classified? Provide examples for each classification.

1. Service Tangibility: o Tangible Offerings: Physical products with services (e.g., car repairs). o
Intangible Services: Services with no physical product (e.g., consulting).
o Rental Good Services: Temporary use of goods (e.g., car rentals). o Owned Good
Services: Services for owned items (e.g., appliance repairs). o Non-Good Services: Pure
services with no goods involved (e.g., teaching).
2. Skills of Service Provider:
o Highly Skilled Services: Require specialized knowledge (e.g., doctors).
o Unskilled Labour: Basic tasks needing little training (e.g., housekeeping).
3. Goal of Service Provider:
o Profit Oriented: Focus on making money (e.g., banks).
o Non-Profit Organization: Aim to serve society, not profit (e.g., NGOs).
4. Degree of Labour Intensiveness:
o Equipment-Based Services: Machines do most of the work (e.g., ATMs).
o People-Based Services: Depend on human skills:
 Unskilled Workers (e.g., cleaners)
 Skilled Workers (e.g., electricians)
 Professionals (e.g., lawyers)
5. Degree of Customer Contact:
o High Contact Services: Direct interaction with customers (e.g., hospitals).
o Low Contact Services: Minimal interaction (e.g., online banking).
6. Place & Time:
o Service-Site: Customers go to the service provider (e.g., salons). o Customer-Site: Providers go
to customers (e.g., home repairs).
o Service-Delivery Services: Services delivered digitally or remotely (e.g., food delivery apps).

Q)What are the key components of a service delivery system? Explain it in simple words

• Service Process: The step-by-step process of how the service is delivered, from start to finish. Example:
In a restaurant, the process includes taking orders, preparing food, and serving it.

• People: Everyone involved in delivering the service, like employees and customers. Example: A doctor
providing treatment and the patient receiving care.

• Technology & Equipment: Tools, machines, and technology used to deliver the service. Example:
ATMs in banks or online booking systems in hotels.

• Physical Environment: The setting where the service is delivered, creating the right atmosphere.
Example: Clean hospital rooms or a well-decorated restaurant.

• Customer Feedback: Gathering input from customers to improve service quality. Example: Asking
customers to rate their experience after a hotel stay.

 Logistics & Operations: Scheduling, supply chain, and backend support.

 Q)What role does advertising play in service marketing, and how does it differ from advertising for physical
products?
Role of Advertising in Service Marketing:
1. Creates Awareness: Helps inform customers about the service and its benefits. o
Example: An ad for an online education platform highlights its courses.
2. Builds Trust: Services are intangible, so ads build credibility through testimonials and guarantees.
o Example: A hospital ad shows patient success stories.
3. Reduces Risk: Since services can’t be seen or touched, ads reduce uncertainty by explaining the process.
o Example: A car insurance ad explains the easy claim process.

How It Differs from Product Advertising:

1. Intangibility: Services can’t be seen or touched, so ads focus on experiences and outcomes rather than physical
features.
o Example: A spa ad highlights relaxation, not the massage oil used.
2. Customer Involvement: Service ads often show people interacting with the service, unlike product ads that
focus on the product itself.
o Example: A gym ad shows happy members, while a shoe ad shows the product.
3. Trust Building: More focus on testimonials and expert opinions to assure quality, as services can’t be tested
beforehand.
o Example: A lawyer’s ad features client success stories, unlike a phone ad that shows product specs.

Q)Why are people considered a key factor in service marketing? Explain with examples.

• Service Delivery: People directly deliver the service, making their behavior crucial.
Example: A waiter’s friendliness impacts the dining experience.
• Personalized Experience: Services can be tailored to individual needs through human interaction.
Example: A personal trainer designs workouts based on client goals.
• Building Trust: Friendly and reliable service builds long-term customer relationships.
Example: A doctor’s care creates trust in medical services.
• Handling Complaints: Staff can resolve issues quickly, turning negative experiences into positive ones.
Example: A hotel receptionist resolving a booking issue politely.
• Brand Representation: Employees represent the company and shape its image through their actions.
Example: A polite bank employee makes the bank seem trustworthy.
• Customer Satisfaction: Positive human interactions enhance overall satisfaction and loyalty.
Example: A helpful customer service agent improves brand perception.
7. How Does Service Distribution Differ from Distribution of Tangible Goods?
Factor Service Distribution Goods Distribution
Intangibility Cannot be stored, must be experienced Physical, can be stocked
Customer
Requires participation (e.g., education, healthcare) No direct involvement needed
Involvement
Instant Consumption Produced & consumed simultaneously Can be used later
Delivery Channels Online, physical, mobile (e.g., digital banking) Retail stores, warehouses
Employee
Quality depends on skilled professionals Standardized product quality
Dependence
Scalability Harder to scale due to personalization Easily mass-produced

Q)What are some common challenges faced by marketers in the service industry? How can they overcome these
challenges?
• Intangibility (Can’t See or Touch Services):
Challenge: Customers can’t evaluate the service before purchase, making it hard to build trust.
Solution: Use testimonials, case studies, and service demos to show value.  Example: Hospitals
share patient success stories to build credibility.
• Inconsistency (Service Quality Varies):
Challenge: Service quality depends on the person delivering it, leading to inconsistency.
Solution: Standardize processes and provide regular training to staff.
Example: Fast-food chains train employees to maintain consistent service across outlets.
• Customer Involvement (Customers Affect the Service):
Challenge: The service experience depends on customer behavior and cooperation.
Solution: Set clear expectations and guide customers throughout the process.  Example: Airlines
give clear boarding instructions to ensure smooth check-ins.
• Perishability (Services Can’t Be Stored):
Challenge: Unused services are lost revenue — like empty hotel rooms or unbooked flights.
Solution: Offer discounts during off-peak times to maximize usage.  Example: Hotels offer lower
prices in off-seasons to attract guests.
• Managing Customer Expectations:
Challenge: Customers often expect personalized services, which can be hard to deliver consistently.
Solution: Communicate clearly about what the service includes and deliver more than promised.
Example: Restaurants offering complimentary desserts for special occasions.
• Handling Complaints and Negative Feedback:
Challenge: Negative experiences spread quickly online, damaging reputation.
Solution: Respond quickly to complaints, apologize, and offer solutions.
Example: E-commerce platforms provide instant refunds for unsatisfactory service
 Service marketing is the process of designing and delivering services that meet the needs and
expectations of customers while managing the interaction between the service provider and the
customer."
Characteristics of Services
Services differ from tangible products in several key ways. Here are the main characteristics of services:
1. Intangibility
o Services cannot be seen, touched, or stored before purchase.
o Customers rely on brand reputation, reviews, and previous experiences to evaluate services.
o Example: A financial advisory service cannot be physically inspected before use.
2. Inseparability
o Production and consumption of services happen simultaneously.
o The provider and the customer must often be present during service delivery.
o Example: A doctor must be present to provide medical treatment to a patient.
3. Variability (Heterogeneity)
o The quality of services can vary depending on the provider, time, and place of delivery.
o Standardization is difficult because human interaction is involved.
o Example: A customer’s experience at a restaurant may differ based on the chef and waiter.
4. Perishability
o Services cannot be stored, saved, or resold for future use.
o Unused service capacity leads to lost revenue.
o Example: An unsold airline seat on a flight cannot be sold later.
Are you referring to the importance of the service sector in economic development? If so, here's how
the service sector contributes to these aspects:

Importance of the Service Sector

1. Development of Primary & Secondary Sectors:- Services like banking, insurance, logistics, and
communication support agriculture (primary sector) and manufacturing (secondary sector).
 Example: Transport services help farmers distribute crops, while financial services aid industrial
growth.
2. Rise in Employment: -The service sector generates a significant number of jobs across industries like
IT, healthcare, retail, and tourism.
 Example: The BPO industry provides employment to millions worldwide.
3. Upturn in National Income:- A growing service sector increases GDP by adding value through finance,
education, and professional services.
 Example: The IT sector contributes significantly to India's GDP growth.
4. Assistance to Basic Services:- Essential services like healthcare, education, and public transport
improve the quality of life.
 Example: Telemedicine helps remote areas access medical consultations.
5. Boosts a Nation’s Image:- A strong service industry enhances global recognition and attracts foreign
investment.
 Example: Countries like Singapore and the UAE are known for their financial and tourism services.
6. Upturn in Exports:- Exporting services such as software, consulting, and outsourcing earns foreign
exchange.
 Example: India is a leading exporter of IT and software services.
7. Opportunities for More Women:- The service sector provides flexible job opportunities for women,
leading to economic empowerment.

Advantages of the Service Sector

 1. High Employment Generation
o The service sector creates numerous job opportunities in fields like IT, healthcare, banking, and
tourism.
o Example: The BPO and IT sectors employ millions globally.
2. Contribution to GDP Growth
o A growing service sector increases a country's GDP and overall economic development.
o Example: In developed economies, services contribute more than 70% to GDP.
3. Supports Other Sectors
o Services like banking, transportation, and communication enhance the efficiency of agriculture
and manufacturing.
o Example: Logistics services help industries distribute products faster.
4. Encourages Foreign Investment & Exports
o Countries with a strong service sector attract foreign direct investment (FDI) and export high-
value services.
o Example: India exports IT and software services worldwide.
5. Enhances Standard of Living
o Availability of services like healthcare, education, and entertainment improves people's quality
of life.
o Example: Online education allows students to access global learning resources.
6. Requires Less Capital Investment
o Compared to manufacturing, many service businesses require lower initial investment.
o Example: A consulting firm needs fewer resources than a factory.
Significance of the Service Sector
1. Gross Value Addition (GVA) Contribution
o The service sector significantly contributes to a country's Gross Value Added (GVA), boosting
overall economic output.
o Example: In India, the service sector contributes over 50% to GVA.
2. Promotes Industrialization
o Services like banking, transportation, IT, and consulting support the growth of industries by
providing essential infrastructure and financial backing.
o Example: Financial services help industries secure loans for expansion.
3. Growth of the Economy
o A strong service sector drives GDP growth, increases national income, and attracts foreign
investment.
o Example: The rise of IT services in countries like the US and India has boosted their economies.
4. Growth of Agriculture
o The service sector supports agriculture through logistics, weather forecasting, digital payments,
and market access.
o Example: E-commerce platforms allow farmers to sell produce directly to consumers.
5. Increase in Productivity of Goods
o Efficient supply chain management, research & development, and technological advancements
help improve the production and distribution of goods.
o Example: Automation in logistics reduces delivery time and costs.
6. Provides Good Quality of Life
o Services like healthcare, education, entertainment, and digital connectivity enhance living
standards.
o Example: Telemedicine services provide healthcare access in remote areas.