Services Marketing

Definition
“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 (1981) 11
 Services
Economic activity between two parties
Time based performance
Solutions to Customer needs

There are no such things 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
Definition – Characteristcs – Present Environment
Zeithmal and Bitner define services as ‘deeds, processes and performances’.
• Deeds are the actions of the service provider
• Processes are the steps in the provision of service and
• Performance is the customer’s understanding of how the service has been
delivered.
Service does not involve the transfer of any tangible commodity. It is integral part
of human life in modern day.
Services are activities, benefits or satisfactions which are offered for sale or are
provided in connection with the sale of goods.
Services constitute a very significant portion of the business market.
It is the largest and the fastest growing sector in most of the economies.
The developed economies are primarily service economies as it generates bulk of
As per latest news published by the World Economic Forum, India
is the 7th largest economy of the world. The International
Monetary Fund (IMF) has predicted that the Indian economy will
be the fastest growing economy in the world and expected to grow
at the rate of 7.4% in the FY 2018.
Characteristics of Services
Inseparability
Active participation and involvement of consumers in
processing and delivery of service

Intangibility
Services cannot be returned or resold
Services cannot be easily patented
Services cannot always be displayed
Difficult to synchronize supply and demand with services
Simultaneous Production and Consumption

The physician’s advice has been exchanged for his fee….

The act of giving advice was its production,
of hearing the advice - its consumption,
Production and Consumption were simultaneous

Hetrogeneity
Differentiation - Employees affect the service outcome
Variability - Mass production is difficult
Diversity - Decentralization may be essential

A professor may be perceived completely different at the same time by different students
A professor may deliver the same lecture in different ways at different institutes
Perishability
Services cannot be Inventoried
It should be consumed as soon as it is produced eg. Musician,
lawyer, physician
If not consumed it perishes at the very instant of production
Goods vis a vis Services
 Classification - Four Categories of Services – Process Perspective
People Processing -
Customer is integral part of the process and delivery of service.
Service production and consumption is simultaneous
Active co-operation of customer required
Eg: Beautification, fitness
Possession Processing
Service organisation providing service to any possession product of the
customer
Customer involvement limited
Production consumption separable hence service firm has more flexibility
Eg: Pest control, computer maintenance/repair
Mental Stimulus Processing
Service touches peoples minds and has the power to change attitude
Core content of the service is information based
Service can be inventoried
Can be used repeatedly later
Eg: Online education/entertainment content
Information Processing
The service is more consultative and advisory format
It involves mental expertise and analysis
Can be transformed into tangible permanent forms like reports/books/files
Eg: Lawyer, medical, management consultancy
 B2B Services

Outsourcing Offshoring non core competencies

Benefits:
High quality and productivity of core and non core processes
Cost control
Specialisation
Innovation
Improved growth