Services Marketing

Introduction
A service is an intangible product involving a deed, a performance, or an
effort that can’t be physically possessed.
Intangibility is certainly one of key characteristics that distinguishes service
product from tangible product.
Everyone from doctor, Teacher, Professor, and plumber is selling a service.

Services are the centre of all economic activities in the society. There are
numerous service industries which are presently working and this service sector is
one of the fastest growing sectors. Various types of services are provided by
various organizations, like government provides us services in the form
of courts, police, military services, fire department, hospitals, employment
 exchanges and many more. Similarly private sector also provides us services
such as airlines, hotels, insurance companies, entertainment sector and many
more. In present world, it is very difficult to identify services from the goods as
when a customer purchases a good service element is included in it. For example,
a meal eaten at a restaurant is a combination of both goods, i.e. food eaten, and
services, i.e. preparation of food, its delivery, etc.

-Definitions of Services
“Services are any primary or complimentary activity that does not directly produce
a physical product, that is, the non goods part of transaction between buyer and
seller.” – Service Industries Journal

“A service is an activity or benefit that one party can offer to another that is
essentially intangible and does not result in the ownership of anything. Its
production may or may not be tied to a physical product.”
– Kotler and Armstrong

Top Service Sector Companies in India:

 Reliance Industries
 HDFC Bank
 ICICI Bank
 Tata Consultancy Services
 Larsen & Toubro
 State Bank of India
 NTPC
 Kotak Mahindra Bank
 Axis Bank etc..

3. Types of Services
Services are mainly classified into two broad categories :
Professional services which are featured as advisory services which are
generally provided by a professional person who is an independent person
supervised by professional associations which provide them code of conduct and
ethics according to which a professional has to work. These include services like
financial advice, advertising, business and management consultancy, legal
services, medical services and many more.

Non-professional services are those which are either consumer oriented or

business to business firms. Consumer oriented firms are those which are mainly
focus on consumers such as entertainment companies and business to business
firms are those which provide services such as office catering services, cleaning
services, etc.

 Types of Service Products

There are several types of service products, including:

1. Core Services – These are the main services that a business provides to its
customers, such as transportation, healthcare, education, and entertainment.
2. Supplementary Services – These services support the core services and enhance
the customer experience, such as customer service, billing, and technical support.
3. Customized Services – These services are tailored to meet the specific needs of
individual customers, such as personal shopping, financial planning, and event
planning.

 Characteristics of Services
The distinctive characteristics of services are as follows:

1 Intangibility: When a customer purchases a product, he can touch, see,

smell and use it. But along with it something which is not seen but just felt, is also
purchased by the customer along with it. That something is services. Services
cannot be touched, seen, heard or smelt. Marketers develop diverse strategies for
facilitating the communication of benefits of service developing a tangible
representation of service and focusing on the service provider rather than on the
service. Sometimes it is not possible for the service provider to advertise the
service, then the service provider has to focus on the customers; like in case of
life insurance the companies advertise the policies by developing a link in the mind
of customers between their service and other tangible things that would create a
positive association. The service provider has some distinguished skills and
expertise that represent the service. Thus, the advertising generally focuses on the
skill and technical competence of the service provider.

2 Variability: Services are heterogeneous. There can be variations in the

services provided. The quality of service depends upon the service provider. Say,
Taj Group of Hotels has good reputation. But their services could differ from one
hotel to another due to different staff and their efficiency in providing that service.
An actor, a singer might have expertise in one thing but they might not
be efficient in any other one. High variability in services means the customer is
facing greater uncertainty and risk in purchasing services. The service provider has
to keep control over the quality of service provided. The higher the service
variability, the lesser will be the loyalty of customers. Quality control can be
improved by careful screening and training of the service personnel.

3 Inseparability: Services cannot be separated from the service provider.

Unlike products which are first produced then sold and consumed; services are first
sold then produced and consumed at the same time. The simultaneous production
and consumption of services leads the service provider to provide services in the
simple manner, services to be delivered close to the customer and the making
of image of service provider in the eyes of the customer. As the services are
produced and consumed at the same time, this helps the service provider to deliver
services in a simple manner involving fewer intermediaries. Although services
cannot be stored, but the service provider must provide the services at several
locations.

4 Perishability: Most of the services cannot be stored for future sale, thus
they are generally perishable in nature. If they are not consumed then they are
generally wasted. Like if a theatre is not having all seats occupied then the seats
left vacant in a show is the loss of revenue of the theatre owner. The service
provider can try to overcome these problems of Perishability by matching the
demand and supply of the services. This could be done by the service provider by
not performing essential tasks during slack periods and performing them efficiently
during peak periods.

5 Ownership: Generally, there is no transfer of ownership of services. The

buyer does not become the owner of the anything like in case of product purchase,
say, by purchasing a car the customer becomes the owner of it, but in case
of services nothing happens like this.

Classification of Services:
The service sector can best be characterized by its diversity. Service organizations
range in size from huge international corporations in such fields as airlines,
banking, insurance, telecommunication, hotel chains, and freight transportation to a
vast array of locally owned and operated small businesses, including restaurants,
laundries, taxis, and numerous business services.
The classification helps managers understand service, the offer, the unique delivery
process, and the common problems and accordingly recognize them and manage
them by bringing out solutions.

Importance of classification system The purpose of the development of

classification system for services can be multidimensional. Hafer (1987) compiled
the following reasons to classify products/services and the advantages thereof:
 Classification helps to understand the needs of consumers and their
motivation for making purchases. This helps a marketer to stay abreast of
changes in the needs of the consumers.
  It helps a marketer to understand pre-purchase and post-purchase buyer
behavior. This provides insights into the consumers approach at evaluating
services. Their sources of information, and judgment of a products absolute
and relative performance.

 Classification can help service providers formulate strategies for groups of

products/services. Such strategies save time and effort and can become the
foundation for the marketing mix of the firm.

 Classification helps to identify whether products/services have complements

in other industries or business and identify strategies for possible adoption. It
is a benchmark to list the service types or organizations, which are felt to fit
into the groupings.

 Classifying services acts as a checklist of service dimensions possessed by

service providers and helps to determine their strategic positioning. This
further helps to determine the strengths and weaknesses of a particular
service, i.e., determine areas of excellence as well as areas that need to be
worked upon, abolished, or reduced.

 It also helps to determine the competitor set. This also leads to the
determination of the competitor’s strengths and weaknesses, which could
enable a marketer to identify strategic gaps that represent growth potential or
high risk.

 Developing Marketing Mix Plan

The reforms of the 1990s have been associated with the expansion of the service
sector in India. Midway through the 1980s, the service sector began to expand, but
it took off in the 1990s when India started a series of economic reforms in response
to a serious balance of payments issue.

The services sector is not only the dominant sector in India’s GDP but has also
attracted significant foreign investment, has contributed significantly to exports,
and has provided large-scale employment. India’s services sector covers a wide
variety of activities such as trade, hotel and restaurants, transport, storage and
communication, financing, insurance, real estate, business services, community,
social and personal services, and services associated with construction. To enhance
India's commercial services exports, share in the global services market from 3.3%
and permit a multi-fold expansion in the GDP, the government is also making
significant efforts in this direction.

The service sector has over 50% contribution to India’s GDP, and it had
witnessed a growth of 9.1% in 2022-23. Out of 8.12 million jobs in FY23, service
sector companies in IT, banking, and finance accounted for almost half of the new
jobs generated.

The services sector of India remains the engine of growth for India’s economy and
contributed 55% to India’s Gross Value Added at current prices in FY24 (as per
advance estimates). The services category ranked first in FDI inflows, as per data
released by the Department for Promotion of Industry and Internal Trade (DPIIT).

India is a unique emerging market in the globe due to its unique skills and
competitive advantage created by knowledge-based services. The Indian services
industry, which is supported by numerous government initiatives like smart Cities,
clean India, and digital India, is fostering an environment that is strengthening the
services sector. The sector has the potential to open up a multi-trillion-dollar
opportunity that might stimulate symbiotic growth for all nations. Service
providers in India continued to signal positive demand trends in June, which
underpinned a stronger increase in new business volumes and further job creation.

The World Bank has raised India's growth forecast for the current financial year to
7%, up from 6.6%, thanks to increased government spending on infrastructure. The
World Bank's India Development Update report attributes this growth to enhanced
public investment in infrastructure and rising household investments in real estate.

India's services sector also saw growth, with exports rising to US$ 30.61 billion in
September from US$ 28.42 billion in the same period last year.
In December 2023, services exports grew by 1.3% to US$ 31.6 billion, driven by
software, business, and travel services. While Imports declined by 1.2%, resulting
in a record high net earnings of US$ 16.0 billion.

During October-December 2023, India experienced a 5.1% YoY to US$ 87.7

billion with a trade surplus of US$ 44.9 billion, growth in services exports, driven
by software, business, and travel services.

 Service Marketing Mix

The marketing mix concept is for both product and services. For product the
marketing mix has 4P’s, but in case of services additional 3P’s are there.
Moreover, the 4P’s of marketing mix related to products requires some
modifications when they are to be applied to the service marketing.
The major challenges faced by the service marketer are the heterogeneity of
services, needs and requirements of the customers, Perishability of services or
absence of inventories, etc., necessitate the extension of marketing mix to include
people, process and physical distribution in service marketing mix.
The inseparability of services leads to the requirement of people in marketing mix.
The Perishability of services leading to its non storage or no inventory makes the
process of service marketing a critical one, so it match the flow of supply and
demand process was needed to be included in service marketing mix.
 For making the intangible services appear tangible one there was a
need of physical evidence in service marketing mix.

Example: McDonald’s, KFC, Pizzza Hut are perfect examples of homogeneity of

services. The customer would experience same whether he is in India or in any
other part of the world.

 Elements of service marketing mix

The main elements of service marketing mix are as follows:

Product (Service Package)

Price
Promotion
Place
People
Process
Physical Evidence

1 Product (Service Package): Services are intangible products. Service

Marketer has to keep in mind that the products are not purchased by the customers
rather they purchase the attributes of the products which are converted into
benefits. The main important aspect of service marketing is to consider the needs,
benefits and satisfaction of the consumers of the services. For achieving success a
service marketer has to match the consumers’ needs with the service delivered by
the service provider. For this, following levels has to be analysed:

 Customer Benefit: The services offered by the service provider must be in

accordance with the customer benefit. The services must be changed according to
the change in time and changes in the customer preferences.
 Service Concept: The service concept basically means what services are being
provided by the service provider. For example, a theatre owner provides
entertainment services; it can include movies, drama, theatrical programs, music
concerts and many more things. All these define the service concept.
 Service Offer: The service offer includes all the types of services being offered by
the service provider. When a service is offered, it includes both tangible and
intangible elements. The service provider must control these. Like in the same
example of a theatre, the service provider can provide comfortable seats, good
music systems, etc.
 Service Delivery System: The service delivery system is very important constituent
of service marketing mix. This includes people and physical evidence part. Like if
a customer goes to a bank, then the people would be the bank officials and physical
evidence would be the bank building, counter, signatures, furniture, etc. These are
tangible items of the service provided and have a huge impact on the services
provided.

2 Price: In case of products, the price is used for every type of products like
clothes, durables, etc. But in case of services, the price is different for different
types of services. Like if the service provided is legal services then price is fee, in
case of stock broker the price is commission, in case of education it is tuition fees,
in case of insurance it is premium, in case of banking services it is interest and
many more. The service provider has to be very careful while deciding the price of
the services due to perishable nature of the services. The intangibility of the
services is also significant for consideration in determination of prices. Like in case
of lawyer, the price will depend upon the different cases and the expertise needed
in it. Following types of pricing methods can be used:

 Differential Pricing: In this different prices are charged from different customers.
For example: in a theatre the price varies according to the rows in the theatre.
 Discount Pricing: This type of pricing methods is used by the companies by
offering discount to commission agents, brokers, dealers, etc., and even to
customers this type of pricing method is used when the new service is introduced.
 Diversionary Pricing: In this method a low price is charged first to attract
customers by just offering lower price on basic services. And the additional
services provided to the customer are charged at the normal price.
 Guaranteed Pricing: In this method of pricing, a guaranteed price is charged from
the customer on the results only. Like employment exchanges charge fee from a
person only at that time when that person gets the job.
 High Price Maintenance Pricing: This method of pricing is used by the doctors
when the services differ according to the quality of service provided.

3 Promotion: The promotion of the services is a very vital part of service

marketing mix. Promotion means to promote the service in the eyes of the
customers. Promotion is considered to be beneficial only when the products to be
sold are promoted as per the wants and desires of the customers not according to
the seller. To have a successful promotion of the product, the service provider has
to make a favourable positive image in the eyes of the customers about the
attributes of the service provided. Advertising, publicity, personal selling and sales
promotion any of these methods can be used for promoting the service according to
the requirements of the service.

4 Place
: In case of place or physical distribution, the major issue is about the
location of the services so that maximum numbers of customers are covered.
Channels of distribution of services are short i.e. from direct manufacturer to
ultimate consumer. Although the distribution channel is short but still a large
number of intermediaries are involved in it. For example: while establishing a
university, schools, colleges, banks, hospitals, etc. the location is important point
of consideration as its location will ultimately affect it in all manners. The service
marketer has to consider the channels of distribution properly as the channels of
distribution of products are different from that of services.

5 People: People, the human element is an important constituent of marketing

mix. The people include both the service provider employees as well as the
customers. The contact personnel of the service provider company are those
personnel with whom the customers contact. The customers make the whole image
of the company by talking and interacting with those personnel. Thus, the contact
personnel needs to be polite, well-informed, well-behaved, courageous so that the
customers get satisfied after talking with them and the customers get full required
information from them. If the service provider firm cares about both the employees
and the customers, then it could lead to increased motivation and to higher level of
satisfaction which would ultimately brings loyalty to the company from both
employees and customer’s behalf.
 6 Process: The process element means the way in which the service is
delivered to the customer. In includes two points; first the inseparability feature of
the service. It includes the way in which the company’s personnel deliver the
service and the way in which the customer participate in the service delivery
process. The second point is auxiliary i.e. the added value of the service the way in
which the service of the company is different from that of its competitors.

7 Physical Evidence: Physical Evidence means the environment in which

the service is provided. As the services are intangible, the customer needs a
tangible clue about the service which would enable them to evaluate the service.
These physical evidences verify the existence of the service. These can be
peripheral evidence which generally possessed as a part of purchase, like in case of
opening a bank account, cheque book and pass book are physical evidences; and it
can be essential evidences like in case of purchase of airline services the customer
gets the service ticket as an essential evidence of the purchase of service.

 Marketing Strategies for the Service Product:

Marketing a service product requires a different approach than marketing physical

products. Here are some key strategies to keep in mind:
1. Emphasize the benefits: Since services are intangible, customers can’t physically
see or touch them. It’s important to emphasize the benefits of the service and how
it can solve their problems.
2. Focus on customer experience: Since customers are involved in the service
production process, it’s important to focus on creating a positive customer
experience. This can be done by providing excellent customer service, offering
customization options, and soliciting feedback.
3. Use social proof: Social proof is a powerful marketing tool for service products.
By showcasing positive reviews, testimonials, and case studies, you can build trust
and credibility with potential customers.
4. Offer guarantees: Since services can’t be returned or exchanged like physical
products, it’s important to offer guarantees to reduce the perceived risk for
customers.
 7. Managing Service Quality
In service marketing the management of the quality of service is very
important. The management of the service quality depends upon the customer’s
perceived service with the expected service. Generally, if the perceived service
falls within the limit of the expected service then the customer would continue to
use that service.
Otherwise, in case if the perceived service falls of the expected service level then
the customer might opt for any other service provider. Thus, it is very essential for
any service provider to make the service quality and to make necessary changes in
the quality of the service according to the needs and the changes in the
circumstances. Customer expectations are the beliefs about the service delivery
which are used as the base on which the service quality is measured. The customer
service is about the perception of the customers. Perception of one customer differs
from that of the other one. Generally, the perception of one customer might be very
good regarding a particular service but it might be totally opposite in regard to any
other customer regarding the same service. The one service firm differs from any
other firm on the basis of the service quality only.

 Services Marketing Management

The application of management process to the service marketing firm is similar to
the applicability of it to the product marketing firm. It comprises of following
steps:

1 Organizing Marketing Plan: Development of marketing strategy needs market

analysis and market planning. While deciding service marketing plan, the service
provider should first know about some things, such as type of service to be
provided, who would be the customers, facing competition, taking competitive
advantage of opportunities, knowing about the target market where the company
would introduce its service. When the company knows about the above
mentioned things, then it can develop market strategic plan for the services. Market
information through market research is very important in organising
market strategic plan. Through strategic planning, the company decided about its
target which it has to obtain on the basis of marketing opportunities,
threats and marketing situation.

2 Analyzing Marketing Opportunities: While analyzing the marketing

opportunities, the decisions are taken such as identification of target market,
determination of changing needs of the customers, taking advantage of
opportunities and considering threats of the market. Specially, service marketers
have to find out which is the target customer market where the company would
introduce its service. For this the service provider has to consider the attributes of
the customers. The marketing environment has to be considered. Internal
environment, which is controllable, is the organizational structure and policies and
decides about the manner in which the company responds to the customer. The
external environment has to be considered carefully as it includes suppliers,
distributors, competitors which have direct impact on the image of the company.

3 Selecting Target Market: The process of identification and evaluation of

marketing opportunities is necessary in deciding about the target market. It
involves the process of segmenting and targeting, and positioning.

3.1 Segmenting and targeting: As the services are heterogeneous in nature, due to
this the service provider has to segment total market into small segments so that
the whole target market could be divided into homogenous groups. On
examination of numerous methods, the service organizations generally use the
demographic variant as the most widely used method of segmenting the market.
Age, sex and socio-economic analysis along with geographic location provide
information for building up the profile of users of the service. This helps in
targeting purposes in media planning, assistance in new service development,
pricing policy and service delivery location.

3.2 Positioning: Positioning is concerned with the efforts of the firm in

developing the clear image of the service to be delivered to the customer in the
minds of the target customers. It recommends some problems for service marketers
due to intangibility of services. The service provider has to position its service
image in the mind of its customer like inn case of airline travel firm; it has to create
a concrete image of its service in the mind of its customer.

4 Developing Marketing Mix Plan: The marketing mix of services is similar to the
marketing mix of products. It also consists of service product, price, place,
promotion, people, process and physical evidence. During the evaluation of the
marketing opportunities, the service firm must select the target customers after
segmenting the customers based on their homogenous needs. The firm must then
position itself in relation with the competitors.

5 Managing the Marketing Effort: For the success of any marketing plan, the
business firm has to make it so effective that it achieves the objectives
of business. Finally the service firm mobilizes the people and resources
for implementation of plans and strategies. A systematic feedback is collected from
the customers for the revaluation of the standards of the performance.

EXAMPLE: selling of managed services has a perfect example of software

management service.

- Growth of service sector economy in India

Indian service sector is popular for its competency and efficiency. In seven decades
of independence, Indian service sectors have witnessed phenomenal growth. In
Financial Year 2020, the contribution of service sectors in Indian GDP is 55.39%.
India’s service sectors are not only giving an unprecedented (Extraordinary)
contribution to the growth of the Indian economy but also attracting foreign
investors to Endeavour their industrialization venture. Hotels and restaurants,
transport, storage and communication, telecommunication, finance, insurance, real
estate, business services related to IT, community, social and personal services,
etc. come under the service sector of India.

- Market Size of Service Sectors in India:

From Financial Year 2016 to 2020, the Gross Value Added of service sectors in
India grew to US$ 1,064.8 billion from US$ 1,005 billion, at the Compound
Annual Growth Rate of 1.45%. In Financial Year 2020, the total market of export
from service sector is US$ 214.14 billion and import is US$ 131.41 billion.

According to the recent economic survey, out of the overall service sector, India’s
Key services sub-sectors such as Information Technology and Business Process
Management (IT-BPM) services reached about US$ 177 billion, and the Indian
Government spent about US$ 1.5 billion in the Space sector.

Indian Government is also taking aggressive steps to boost India’s commercial

services exports share in the global services market, and to make India 5 Trillion-
Dollar economy in the next five years.
Some Major Steps Taken by the Indian Government to Promote Growth in
Service Sector are:

 To facilitate broadband across all villages of the country by 2022, the Indian
Government has launched the National Broadband Mission.
 The Central Government increased incentive by 2% under services exports
from India.
 To ensure easy trade in the service sector, the Government of India is
removing many trade barriers.

o Role of Service Sector for the Growth of Indian Economy:

Service sector gives significant contribution in the GDP of the country. It not only
provides the large number of employments but also trade in services improves
economic performance significantly in the country. Below mentioned points
explain the main role of the service sectors in the development of Indian economy.

o Service Sector Enhances the GDP of the Country:

Service sector plays a crucial role to enhance the GDP of the country. In 1990, the
GDP of the country was 5.7%. After the economic liberalization in 1991, the
country witnessed a GDP growth of 8.6% during the period 2004-05 to 2009-10.

o Creates Employment Opportunities:

Service sector creates employment opportunities for the people of the country.
India has witnessed a structural change in terms of employment during the period
1983 to2004-05. Before 1983, Agriculture and construction sectors were major job
creators in the country. But after 1991, several sub-sectors like trade, hotels,
restaurants, and transport, etc. created a lot of employment opportunities. Now
within the service sector, employment opportunity is highest in finance, insurance,
and business services, followed by trade, hotels and restaurants, and transport, etc.

o Contribution to India's Service Trade:

Service sector plays a crucial role to raise the volume of exports in the country.
According to the Balance of Payment data, India’s service trade has witnessed the
growth of 22.2% and 25.3% during 2004-05 and 2008-09 respectively.

o Contribution Toward Human Development:

Service sector encourages some valuable services like health services, educational
facilities, IT, and IT-enabled services (ITEs), skill development, health tourism,
sports, cultural services, etc. which is a valuable contribution toward human
development and improvement of quality of life of the people which directly helps
in the growth of Indian economy.

- Service Marketing Triangle

The service marketing triangle is a strategic model that outlines the relationships
between three key pillars in a service environment: the company, the employees,
and the customers. It emphasizes the importance of aligning these three groups to
deliver high-quality service.
By understanding and applying the service marketing triangle, companies can
improve their internal processes, employee engagement, and customer
interactions, ultimately strengthening customer relationships and business success.

The triangle demonstrates how each relationship—company to employee,

employee to customer, and company to customer—must be managed effectively
to ensure successful service delivery.
 Company to Employee (Internal Marketing)
Internal marketing involves the communication and relationship between the
company and its employees. It is about empowering and motivating employees to
deliver excellent service.

This component emphasizes the importance of training, development, and creating

a positive work environment. Employees who are well-informed, motivated, and
aligned with the company’s goals are better equipped to provide superior customer
service.

 Employee to Customer (Interactive Marketing)

This component focuses on the direct interactions between employees and
customers. It is where the actual service delivery takes place. The quality of this
interaction plays a significant role in customer satisfaction and loyalty.

Engaged and knowledgeable employees can create positive customer experiences,

leading to repeat business and positive word-of-mouth.

 Company to Customer (External Marketing)

External marketing is the communication and relationship between the company
and its customers. It includes all the activities that promote the company’s
services to the market, such as advertising, public relations, and branding.
Effective external marketing sets the expectations for the service and builds the
brand’s reputation in the eyes of the customers.
The service marketing triangle illustrates that these three components are
interconnected. Success in service marketing depends on the alignment and
coordination between the company’s internal processes, the employees’
interactions with customers, and the external marketing efforts.
Moreover, pursuing marketing courses is essential for understanding the dynamics
of the service marketing triangle, which includes internal, interactive, and external
marketing. Mastery of these components enhances customer satisfaction and
drives business success.

Relationships in the Service Marketing Triangle

Understanding the relationships within the service marketing triangle is crucial for
creating a cohesive and effective service strategy. Each relationship serves a
unique purpose and requires a specific management approach.
 o Company and Employee Relationship

The relationship between the company and its employees is foundational to

service delivery. Companies must invest in their employees by providing the
necessary training, resources, and support.

Internal marketing initiatives, such as employee recognition programs,

ongoing professional development, and open communication channels, help build
a strong and motivated workforce.

When employees feel valued and supported, they are more likely to deliver
excellent service, positively impacting the customer experience.

o Employee and Customer Relationship

The core of service delivery is the direct interaction between employees and
customers. This relationship is where the company's promises are either fulfilled
or broken. Employees must have the knowledge, skills, and attitude to meet
customer expectations.

Personalization, empathy, and proactive problem-solving are key elements that

enhance the employee-customer relationship. Positive interactions can increase
customer loyalty, while negative experiences can harm the company’s reputation.

o Company and Customer Relationship

External marketing efforts shape the relationship between the company and its
customers. This includes everything from advertising campaigns to customer
service policies. The company must ensure that its external communications
accurately reflect the service quality and experience customers can expect.

Building a strong brand image and maintaining customer trust is essential to this
relationship. By consistently delivering on its promises, the company can foster
long-term customer loyalty and differentiate itself from competitors. However,
businesses must also navigate the top challenges in marketing, such as staying
ahead of changing consumer preferences, managing brand reputation in a digital
era, and effectively utilizing data to drive personalized campaigns. Addressing
these challenges is key to sustaining growth and competitive advantage.
 -The Service Gap Model
The Service Gap Model involves the concepts of service quality and customer
satisfaction. As a result, it is also known as the SERVQUAL model, abbreviating
"service" and "quality". Marketing professors and researchers Leonard Berry, A.
Parasuraman, and Valerie Zeithaml proposed this model in 1985.

There could be following gaps in the service delivery:

 Gap between customer expectation and management perceptions

 Gap between management perceptions and service quality specifications

 Gap between service quality specifications and service delivery

 Gap between service delivery and external communications

 Gap between expected quality and perceived quality.

The management of service quality would need the setting up of right standards
according to which the service would be delivered to the customers, organizing and
implementation of the service quality process so that the process works in a
systematic manner, and proper and regular monitoring of the process should be
there so that the necessary changes can be made whenever needed.

It will also enable to explore how closing these gaps enhances service quality.
This will help you lay the foundations for long-term success in your business.
it assesses the journey from customer expectations to service delivery. Its goal is to
improve service quality by addressing the gaps through better communication. This
will align the service expectations with the actual service delivery.
There are five gaps identified in the GAP Model of Service Quality. Each gap
defines the discrepancy between the expectations of customer and actual
product or service quality.

These service quality gaps are the knowledge gap, policy gap, delivery
gap, communication gap, and perception gap. Let’s take a closer look at the
model by exploring the 5 gaps in detail:
1- Knowledge gap

Knowledge gap refers to the difference in understanding between the manager

(service deliverer) and the customer's expectations. You can bridge this gap by
understanding the customer's needs and expectations. You can create effective
communication channels, receiving customer feedback, and regular market
research. This will align your knowledge with the actual expectations of the
customer.

2 - Policy gap

The policy gap represents the misalignment between the management’s

perception of customer expectations and the actual service standard policies
and specifications. Closing this gap involves refining internal policies to
accurately reflect customer needs. Understand the customer complaints and make it
easier to translate the customer experience into service quality specifications.

3 - Delivery gap

The delivery gap reveals the disparity between specified service quality and the
actual delivery of the service. It emphasizes the need to synchronize the delivery
process with the delivery expectations. The solutions for this gap are simple. Make
sure that your service delivery aligns with your predefined service quality
specifications and meets your customer expectations.

4 - Communication gap

The communication gap reflects the discrepancy between what an enterprise

communicates about its services and the actual service delivery. The gap
between how a company perceives its service and its service delivery can lead to
many problems. Closing this gap involves aligning your marketing messages with
the reality of your service delivery and enhancing transparency.

5 - Perception gap

The perception gap signifies the distinction between the customer's perception
of the delivered service and their initial expectations. It reveals the subjective
nature of customer perception. You can close this gap by understanding your
customer’s perspectives and actively seeking feedback. Also, addressing any
discrepancies between the perceived and expected service will immensely help
enhance your service delivery.

Examples of Gap model of service

Applying the service quality GAP model will differ in many sectors because the
examples of service quality vary in each industry and business. Any company or
enterprise offering products or services to any type of customer portfolio can
benefit from this model.

Example #1

For example, think of a hotel. Hotel management uses customer feedback surveys
and reviews them to understand guests' expectations (knowledge gap).
Recognizing the need for personalized services, the hotel revised its policies and
included a guest preference profile (policy gap). With updated policies, the hotel
ensures its service delivery aligns with the new personalized approach (delivery
gap).

The hotel updates its marketing materials to communicate enhanced personalized

services and establishes clear communication for guest preference profiles
(communication gap). Following all these changes, the guest can perceive a
noticeable improvement in the service quality. Now, the experience offered
exceeds the actual customer expectations (perception gap).

References :
1. Service Management System Manuals
2. Different Google sites
3. "Essentials of Services Marketing" by K D Hoffmann and J E G Bateson
4. Govt. Journals and related fields news

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