SERVICE MARKETING

Designing and Managing

Services
INDIAN SCENARIO

 India’s services sector has matured considerably during

the last few years and has been globally recognized for
its high growth and development.
 Presently services sector account for about 55% of India’s
GDP
 This sector dominates with the best jobs, best talent and
best incomes
INDIAN SCENARIO
% of GDP
Sectors 1984 1994 2003 2004
Agriculture 35.2 30.4 22.8 21.2
Industry 26.2 27.1 26.4 27
Manufacturing 16.4 16.9 15.6 16.1
Services 38.7 42.5 50.7 51.8

Average Annual Growth

Sectors 1984-94 1994-04 2003 2004
Agriculture 3.4 2 9.6 1.1
Industry 6.3 5.6 7.0 7.7
Manufacturing 6.2 5.6 6.9 7.7
Services 6.7 8.2 8.9 8.9
INDIA vs. OTHERS

Country Share of GDP (%) 2007

India 55%
USA 78.5%
EU 65 – 75%
Australia 72%
Japan 73.1
SERVICE MARKETING
“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

“A service is any act or performance 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, 2004
THE NATURE OF SERVICES
 Regardless of the “product”, there is a services
component to the offerings of all firms
 In some cases, a service is the principal purpose of the
transaction, as in the rental of a car, a haircut, or legal
services -- we refer to this as the core service
 In others, service is performed in support of the sale of a
tangible product -- these are referred to as
supplementary services
CATEGORIES OF SERVICE MIX
 Pure tangible good
 Tangible good with accompanying services
 Hybrid
 Major service with accompanying minor goods
 Pure services
THE GOODS-SERVICES CONTINUM

Readymade Auto- Repairs: Air Insurance

FMCGs Restaurants
Clothes mobiles auto, Travel Consulting
Teaching

MOSTLY GOODS MOSTLY SERVICES

CHARECTERSTICS OF SERVICES
 INTANGIBILITY
 Cannot be seen, tasted, felt, heard or smelt before
 Difficult to sample and to evaluate
For example, how could you sample a haircut or a
flight to Mauritius?
 Service companies demonstrate their service quality
through physical evidence and presentation
“Tangibilizing the Intangibles”
 Through proper designing of place, people, equipment,
communication material, symbols, price
 ELEMENTS OF PHYSICAL EVIDENCE
PHYSICAL FACILITY
 Exterior  Interior
 Building design  Design
 Architecture  Equipment and facilities
 Décor
 Signage
 Layout
 Parking  Atmosphere (lighting,
 Surrounding environment music, air temperature,
 Landscape etc.)
 Other tangibles
 Staff Uniforms
 Brochures
 Stationery
 Company logo
 Tickets, Business cards
CHARECTERSTICS OF SERVICES
 INSEPEBRABILITY
 Refers to the fact that the provision of the service, and the
experience of it, occur simultaneously
 Typically produced and consumed simultaneously

 Strategies for getting around the limitation

 Learn to work with large groups
 Learn to work faster
 Use Technology to reach a larger audience without sacrificing
interactivity
CHARECTERSTICS OF SERVICES
VARIABILITY
 Indicates that a service performance is unique to the
customer, or group of customers, being serviced.
 A level of inconsistency is inherent in service provision.

Steps to increase service quality control

 Good hiring and Training
 Standardize the service performance
 Monitor customer satisfaction
PERISHABILITY
 Offerings that cannot be saved, stored, resold, or
returned.
 It is not possible to delay the consumption of services.

 Those not sold can not be stored – Demand fluctuates

firms have problem
Strategies on the demand side
 Differential Pricing
 Non peak Demand
 Complementary services
 Reservations
CHARECTERSTICS OF SERVICES
(cont)

PERISHABILITY
 On Supply side
 Part-time employees
 Peak time efficiency
 Increased consumer participation
MARKETING MIX FOR SERVICES

 Product
 Price
 Place
 Promotion
 Process
 Physical Evidence
 Personnel / People
SERVICES DIFFERENTIATION

 Ordering ease
 Delivery
 Installation
 Customer Training
 Maintenance & Repair
Determinants of service quality
 Reliability – Delivering on promises
 Responsiveness – Willing to help, prompt
service
 Assurance – Inspiring trust and confidence
 Empathy –Individualized attention to
customers
 Tangibles- physical representation
MOMENTS OF TRUTH
 It is the customer – service encounter
 Every positive or negative experience of the
consumer would have fall-out on the overall
service experience
 In services, the last experience remains
uppermost in your mind. Therefore, it is not
enough to be good, you have to be consistently
good
CUSTOMER COMPLAINTS

 It pays to resolve customer complaints

 On an average only 5 % dissatisfied customers complain.
Others simply go over to the competitor
 A satisfied consumer speaks to an average of 3 people on
his her experience
 A dissatisfied consumer gripes to on an average 11
persons about his/her unpleasant experience