SM Unit-1 Understanding Services Marketing.pptx

By
Dr. H.S. ABZAL BASHA, M.B.A., Ph.D.
Assistant Professor,
Department of Management Studies,
G. Pullaiah College of Engineering & Technology, Kurnool.
UNIT-1: UNDERSTANDING SERVICES MARKETING

Content
2
• Introduction,
• Characteristics of Services Marketing Mix,
• Services in the Modern Economy,
• Classification of Services,
• Marketing Services Vs. Physical Services.

A service is the action of doing something for
someone. Today, the service sector is seen as a
factor enhancing business of all kinds. For
example, a restaurant is not only judged by the
quality of food it offers but also the kind of
ambience, music and behaviour of the
employees.
The service sector forms the backbone of social
and economic development of a region. It has
emerged as the largest and fastest growing
sector in the world economy, making the highest
contributions to global output and employment.
It covers a wide range of activities, such as
trading, transportation and communication,
financial, real estate and business services, as
well as community, social and personal services.
3
Introduction
India's GDP at constant prices is
estimated to reach ₹173.82 lakh
crore in 2023-24, with a growth rate
of 8.2% compared to the previous
year.
The nominal GDP at current prices is
estimated to be ₹293.90 lakh crore,
showing a growth rate of 9.1%.
India has moved from the 10th
largest to the 5th
largest economy in
the world, with a GDP of $3.75
trillion in 2023.
Agriculture Sector: 45.8%
Manufacturing Sector: 11.4%-
Service Sector: 42.8%

1. According to American Marketing Association (1960) “activities, benefits, or
satisfactions which are offered for sale, or provided in connection with the sale of
goods.”
2. Regan (1963) suggested that “services represent either intangibles yielding satisfaction
directly (transportation, housing), or intangibles yielding satisfaction jointly when
purchased either with commodities or other services (credit, delivery).”
3. Robert Judd defined service as “a market transaction by an enterprise or entrepreneur
where the object of the market transaction is other than the transfer of ownership of a
tangible commodity.”
4. Kotler and Bloom (1984), defined services as “any 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.”
5. According to Gronross, “a service is an activity or series of activities of more or less
intangible nature that normally, not necessarily, take place in interactions between the
customer and service employees and/or physical resources or goods and/or system of
the service provider, which are provided as solution to customer problems.”
4
Services-Definitions

Characteristics of Service Marketing
1.Intangibility: Services are intangible,
meaning they can't be seen, touched, or
measured before purchase.
2.Inseparability: Services are produced and
consumed at the same time, and the
customer is present during delivery. For
example, a haircut or legal consultation is
only available when it's being provided.
3.Perishability: Services can't be stored for
later use, and unused capacity is lost. For
example, a doctor or dentist often charges
patients for missed appointments.
4.Variability: The quality of a service can vary
depending on who provides it, when, and
where.
6

7
Service
Characteristics
Marketing Implications Strategies
Intangibility Cannot be stored
No patents
No ready display
Communication problem
Pricing difficulties
Tangible clues
Personal sources
WOM
Organizational image
Cost accounting for prices
Post purchase communication
Inseparability Consumer involved in Production
No mass production
Supply demand match
Selection and training of contact
Person
Manage consumer
Multi-site location
Heterogeneity Standardization difficult
Quality control difficult
Industrialize
Customize
Perishability No Inventorisation Cope with fluctuating demand
Better match through process

Services marketing is a specialized branch
of marketing which emerged as a separate field of
study in the early 1980s, following the recognition
that the unique characteristics of services required
different strategies compared with the marketing of
physical goods.
The American Marketing Association defines “Service
Marketing as an organizational function and a set of
processes for identifying or creating, communicating,
and delivering value to the customers and for
managing customer relationship in a way that benefit
the organization and stake-holders.
Service marketing is simply the process of promoting
and selling a service or an intangible good to a specific
group of people. It is a new way of marketing that has
become very popular and helps companies all over the
world promote their services.
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Services Marketing-Definitions

1.Healthcare industry: Doctors, nurses,
surgeons, and other people who work in
hospitals are great examples they sell their
health services by seeing and taking care of
their patients.
2.Hospitality industry: The hospitality
industry is made up of places like hotels and
restaurants that serve food, rent rooms, give
massages, and do other things for their
customers.
3.Professionals services: Accountants,
lawyers, teachers, writers, masons,
carpenters, chefs, electricians, and plumbers
are all examples of service-based jobs.
Depending on the job, they may offer more
than one service to their clients.
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Services Marketing Examples

 Financial Services: Banking, investment
management, insurance
 Healthcare Services: Medical consultations,
surgeries, hospital care
 Information Technology Services: Software
development, IT consulting, data analysis
 Education Services: University courses, online
learning platforms, tutoring
 Professional Services: Legal advice, accounting,
consulting
 Transportation and Logistics Services: Delivery
services, shipping, ride-sharing
 Media and Entertainment Services: Streaming
platforms, television broadcasting, music production
 Hospitality Services: Hotels, restaurants, travel
agencies
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Examples of Services

Characteristics of Services Marketing
11
1.Intangibility: Services cannot be touched, tasted, or seen like
physical products. This intangibility makes it challenging for
customers to evaluate the service before purchasing, leading to
greater reliance on reputation, reviews, and word of mouth.
2.Inseparability: Unlike products that can be manufactured and
consumed later, services are typically produced and consumed
simultaneously. This means the service provider’s interaction
with the customer is crucial to the overall experience.
3.Variability: The quality of services can vary greatly depending
on who provides them, where, when, and how. Factors such as
the service provider’s skill level, mood, and environment can
impact the service experience.
4.Perishability: Services cannot be stored or saved for later use.
For example, an empty seat on a flight cannot be stored and sold
later.
5.Lack of Ownership: Customers do not own the service they
purchase; they merely experience it.
6.Customer Participation: Services often require active
participation from the customer. For example, in a haircut, the
customer must be present and communicate their preferences
for the service to be satisfactory.

Importance of Services Marketing
1.Differentiation: The company should differentiate
itself from competitors in a crowded marketplace.
Service marketing offers an avenue to show
customers unique services, provide them with
exceptional customer experiences, set businesses
apart from the competition, and customize better
solutions.
2.Loyalty of Customer: By offering excellent customer
service experiences, organizations can ensure
customer loyalty and build significant relationships
that go a long way in satisfying customer needs. A
satisfied customer is more than a customer who
becomes a regular customer, which leads to positive
referrals and word of mouth.
3.Revenue Generation: Service marketing can drive
revenue growth positively and effectively by
attracting new customers and through cross-selling
opportunities. When customers receive value for the
provided services, they are more likely to pay a
premium amount, which leads to increased
profitability.
12

Goals of Services Marketing
13

Types of Services Marketing
1. B2C Service Marketing: This involves marketing services
directly to consumers. Examples include healthcare,
hospitality, banking, and personal care services. The focus is on
building relationships, customer satisfaction, and repeat
business.
2. B2B Service Marketing: This involves marketing services to
other businesses. Examples include IT services, consulting,
legal services, and logistics. The emphasis is on building long-
term relationships, demonstrating expertise, and offering
tailored solutions.
3. Non-Profit Service Marketing: Non-profit organisations also
engage in service marketing to promote their causes and
services. This type of marketing often involves raising
awareness, attracting volunteers, and encouraging donations.
4. Internal Service Marketing: This type focuses on marketing
within an organisation to ensure that employees are engaged,
motivated, and aligned with the company’s goals. It’s essential
for delivering high-quality external services.
5. Social Service Marketing: This involves promoting services that
benefit society at large, such as health campaigns,
environmental initiatives, or public safety programs. The goal is
to drive positive behavioural change in the community.
14

Service Marketing Mix or the 7Ps of Service Marketing
1. Product: The new product development for services, therefore,
involves offering innovative services and adding new secondary
services at regular intervals.
2. Price: The pricing of services is very different from the pricing of goods
for various reasons. Services, for example, can be differentiated based
on their price, as a higher price is generally associated with better
quality.
3. Place: In services, place relates to the ease involved in accessing a
service. Due to the inseparability of services, they are produced and
consumed at the same place.
4. Promotion: Service providers may promoting positive word-of-mouth
publicity, developing strong brands, offering a trial use and finally, by
managing advertising and public relations effectively.
5. People: Many service organizations involve their personnel both at the
point of frontline delivery and during the production process that does
not involve the final consumer.
6. Process: A service encounter is the actual time period during which an
interaction takes place between the service provider and the customer.
7. Physical Evidence: The physical evidence can be in any form, for
example, brochures or TV commercials, pleasant and courteous
behaviour of the service personnel in a bank, the location and
ambience of a food outlet, etc.
15

Services in the Modern Economy
In a modern economy, "services" refer
to intangible activities provided by
businesses or individuals that primarily
focus on expertise, knowledge, and
customer interaction rather than
producing tangible goods, encompassing
sectors like healthcare, finance,
education, information technology,
consulting, hospitality, and entertainment,
which are often considered the driving
force behind economic growth in
developed nations; essentially, the service
sector is the part of the economy where
value is created through performing tasks
for others, not through manufacturing
products.
17

Key points about Services in a Modern Economy
Dominant Sector: In most developed economies,
the service sector represents the largest portion
of GDP, signifying its significant role in economic
activity.
Intangible nature: Unlike goods, services are
intangible, meaning they cannot be physically
held but are experienced through the process of
delivery.
High-skilled workforce: The service sector often
requires a highly skilled workforce with
specialized knowledge and expertise.
Digital transformation: Modern services are
increasingly facilitated by technology, including
online platforms, cloud computing, and data
analytics, enabling efficient delivery and global
reach.
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Key Trends in Modern Services
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1. Personalization: Tailoring services to individual customer needs and preferences through
data analysis and dynamic service delivery.
2. AI and Automation: Utilizing artificial intelligence to automate repetitive tasks, improve
efficiency, and enhance customer interactions.
3. Omni channel Engagement: Providing a seamless customer experience across multiple
channels like websites, mobile apps, social media, and physical stores.
4. Customer Experience Focus: Prioritizing customer satisfaction through proactive service,
intuitive interfaces, and rapid issue resolution.
5. Data-Driven Decisions: Using customer data to analyze trends, identify insights, and
inform strategic service improvements.
6. Cloud Computing: Delivering services through cloud infrastructure for scalability,
flexibility, and cost-effectiveness.
7. Subscription Models: Offering services on a recurring subscription basis, providing
predictable revenue streams and customer loyalty.
8. Gig Economy: Utilizing freelance workers for on-demand services, providing flexibility for
both businesses and employees.
9. Sustainability and Ethics: Integrating environmentally conscious practices and ethical
considerations into service delivery.

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People-based services are when people
primarily deliver the service, rather than
equipment or machinery. It’s the
individuals delivering the service, and the
knowledge and skills that they possess,
that add value and allow the service to be
performed. People-based services can be
broken down further into these
subcategories:
a. Services provided by unskilled labor:
parking lot attendants, babysitters, and
janitors
b. Services provided by skilled labor:
plumbers, caterers, and hairstylists
c. Services provided by professionals:
doctors, attorneys, college professors,
and accountants
People-Based Services

22
Equipment-based service firms utilize
equipment, machinery, and other
forms of technology to perform service
tasks Similar to people-based services,
equipment-based services can be
further broken down into
subcategories:
a. Automated services: car washes and
parking meters
b. Equipment-based services operated
by relatively unskilled operators:
dry-cleaning equipment
c. Equipment-based services operated
by skilled operators: X-ray machines
and ultrasound equipment
Equipment-Based Services

23
"Marketing Services" refer to
intangible services like advertising,
branding, and social media
management provided by a marketing
agency, while
“Physical Services" are tangible
services that involve a direct physical
interaction with a customer, like a
haircut, car repair, or a massage,
where a product or outcome is
delivered through a process; the key
difference is that marketing services
promote a product or brand, while
physical services provide a tangible
experience or result to the customer.
Marketing Services Vs. Physical Services

24
Marketing Services
1. Intangible: Marketing services are
intangible, meaning they can't be
touched or seen.
2. Expertise-based: Marketing services
rely on expertise, skills, and
knowledge.
3. Customizable: Marketing services can
be tailored to meet specific client
needs.
4. No physical storage: Marketing
services don't require physical
storage.
5. Examples: Advertising, Branding,
Digital Marketing, Public Relations,
and Social Media Management.
Physical Services
1. Tangible: Physical services involve
tangible products or physical
interactions.
2. Labor-based: Physical services rely on
manual labor, equipment, and
physical resources.
3. Standardized: Physical services often
follow standardized procedures.
4. Physical storage: Physical services
require physical storage for
equipment, supplies, and products.
5. Examples: Healthcare, Hospitality,
Transportation, Food Service, and
Repair Services.

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1. Advertising Agencies
• Ogilvy India (1966)
• Wieden+Kennedy India (2007)
• DDB Mudra (1985)
2. Advertising Agencies
 Interactive Avenues (2006)
 Wipro Digital (2014)
 Infosys Digital (2015)
3. Public Relations Firms
 Adfactors PR (1997)
 Genesis Burson-Marsteller (1996)
 Perfect Relations (1992)
4. Branding and Design Firms
o Elephant Design (1989)
o Tata Elxsi (1989)
o IDC Designs (2004)
1. Healthcare Services
• Apollo Hospitals (1983)
• Max Healthcare (2000)
• Fortis Healthcare (2001)
2. Hospitality Services
 Taj Hotels (1903)
 Oberoi Hotels (1934)
 ITC Hotels (1975)
3. Transportation Services
 Meru Cabs (2007)
 Ola Cabs (2010)
 Rapido(2015)
4. Food Service Providers
o Haldiram's (1937)
o Barista Coffee (2000)
o Jumbo King (2001)

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Tangibility: Marketing services are
intangible, while physical services are
tangible.
Delivery: Marketing services are often
delivered digitally or through
consultations, while physical services
require physical presence.
Customization: Marketing services are
highly customizable, while physical
services may have more standardized
procedures.
Storage: Marketing services don't
require physical storage, while physical
services do.
Key differences

Thank You
27
120 Examples of a Service Business -
Simplicable

SM Unit-1 Understanding Services Marketing.pptx

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