MARKETING

MANAGEMENT II
MODULE 2-PRODUCT STRATEGY
DR. SUPRIYA LAMBA SAHDEV
PRODUCT STRATEGY
PRODUCT STRATEGY
PRODUCT CLASSIFICATION
PRODUCT STRATEGY
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OVERLAP OF LIFE CYCLE FOR PRODUCTS A &
B
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FAD CYCLES
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NEW PRODUCT DEVELOPMENT
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SEVEN STAGES OF THE NEW PRODUCT DEVELOPMENT
PROCESS
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PRODUCT STRATEGY- POD & POP
WHAT ARE SERVICES?

• Services are deeds, processes, and

performances provided, coproduced, or
cocreated by one entity or person for
and/or with another entity or person.
EXAMPLES OF SERVICE INDUSTRIES
• Health Care
• hospital, medical practice, dentistry, eye care
• Professional Services
• accounting, legal, architectural
• Financial Services
• banking, investment advising, insurance
• Hospitality
• restaurant, hotel/motel, bed & breakfast
• ski resort, rafting
• Travel
• airline, travel agency, theme park
• Others
• hair styling, pest control, plumbing, lawn maintenance, counseling
services, health club, interior design
SERVICES SECTOR CLASSIFICATION
SHOSTACK, G. L. (1977). BREAKING FREE FROM PRODUCT MARKETING. JOURNAL OF MARKETING, 41(2), 73–80. DOI:10.1177/002224297704100219 
TANGIBILITY SPECTRUM
WHY SERVICE MARKETING?

• Services dominate India and worldwide

economies.
• Service as a business imperative in
goods-focused businesses.
• Deregulated industries and professional
service needs.
• Service marketing is different.
• Service leads to profits.
GOODS COMPANIES EXPANDING INTO SERVICES
SERVICE AND TECHNOLOGY

• Technology…
• Is the foundation of many service
offerings
• Provides new ways to deliver service
• Enables both customers and
employees.
• Extends the global reach of services
• The Internet is a service!
• Some outcomes may be negative.
CHARACTERISTICS OF SERVICES
COMPARED TO GOODS

Intangibility Heterogeneity

Simultaneous
Production
and Perishability
Consumption
THE SERVICES SECTOR OF INDIA CONTRIBUTED 53% TO
INDIA’S GROSS VALUE ADDED AT CURRENT PRICES IN FY21-22
SERVICE SECTOR PERFORMANCE 2021-22

Source: Ministry of Statistics and Programme Implementation.

Note: Share in GVA is in current prices and growth in GVA is at constant 2011-12 prices;
*: Other services include Education, Health, Recreation, and other personal services
RE: Revised Estimates. PE: Provisional Estimates. AE: Advance Estimates
ATTRACTIVE ECOSYSTEM OF INDIA

• • The Government’s move to launch ‘Startup India’ aims to create an

inclusive ecosystem for entrepreneurs and push for innovation. Services
are a big part of this system. The technology infrastructure required for
such an ecosystem has increased the potential for the sector in India.

• • Low setup cost make this sector an attractive investment destination.

• • India also has a reasonably well developed financial market.

• • All these factors make Indian services sector an attractive ecosystem

for both the entrepreneurs and the
• investors.
GLOBAL TECHNOLOGY HUB

• • A large pool of skilled IT manpower has made India into a global

outsourcing hub. It now commands a 55% share in the global sourcing
market.

• • Further, India is the digital capabilities hub of the world with presence of
75% of global digital talent.

• • In the next five years, the Ministry of Electronics and Information

Technology is working to increase the contribution of the digital economy
to 20% of GDP. The government is working to build cloud-based
infrastructure for collaborative networks that can be used for the creation
of innovative solutions by AI entrepreneurs and startups.

• • In the past five years (until July 2021), India filed >4000 artificial
intelligence (AI) patents.
KEY DRIVERS OF ECONOMIC GROWTH

• • The services sector of India remains the engine of growth

for India’s economy and contributed 53% to India’s Gross
Value Added at current prices in FY21-22.

• • In the healthcare sector, the telemedicine market is driving

growth with the increasing demand for remote consultation.
By 2025, the telemedicine market in India is expected to
reach US$ 5.5 billion.

• • To build IT capabilities and competitive advantage over

international players, Indian companies plan to deploy-10
cloud platforms to drive business transformation in sectors
such as retail, telecommunication and insurance, which is
expected to boost growth in the IT & BPM sector.
A CONCEPTUAL MODEL OF SERVICE QUALITY AND ITS IMPLICATIONS FOR FUTURE
RESEARCH PARASURAMAN, A JOURNAL OF MARKETING (PRE-1986)
COMPARING GOODS AND SERVICES

Source: Parasuraman, A., Zeithaml, V. A., & Berry, L. L. (1985). A conceptual model of
service quality and its implications for future research. Journal of marketing, 49(4), 41-50.
IMPLICATIONS OF INTANGIBILITY

• Services cannot be inventoried

• Services cannot be easily patented

• Services cannot be readily displayed or

communicated

• Pricing is difficult
IMPLICATIONS OF HETEROGENEITY
• Service delivery and customer satisfaction
depend on employee and customer actions.

• Service quality depends on many uncontrollable

factors.

• There is no sure knowledge that the service

delivered matches what was planned and
promoted.
IMPLICATIONS OF SIMULTANEOUS PRODUCTION AND
CONSUMPTION • Customers participate in and affect the transaction.

• Customers affect each other.

• Employees affect the service outcome.

• Decentralization may be essential.

• Mass production is difficult.

IMPLICATIONS OF PERISHABILITY

• It is difficult to synchronize supply and demand

with services.

• Services cannot be returned or resold.

SEARCH, EXPERIENCE, AND CREDENCE QUALITIES
CONTINUUM OF EVALUATION FOR DIFFERENT TYPES OF PRODUCTS

Source: Adapted from V.A. Zeithaml, How Consumers Evaluation Processes Differ Between Goods and Services, in
J.H. Donnelly and W.R. George, Marketing of Services (Chicago: American Marketing As-sociation, 1981)
CHALLENGES AND QUESTIONS FOR SERVICE
MARKETERS
• Defining and improving quality.
• Designing and testing new services.
• Communicating and maintaining a consistent image.
• Accommodating fluctuating demand.
• Motivating and sustaining employee commitment.
• Setting prices.
• Organizing to facilitate strategic and tactical decision-making.
• Finding a balance between standardization and
personalization.
• Protecting new service concepts from competitors.
• Communicating quality and value to customers.
• Ensuring the delivery of consistent quality service.
TRADITIONAL MARKETING MIX

• Elements an organization controls that

can be used to satisfy or communicate
with customers:
• Product
• Price
• Place
• Promotion
EXPANDED
• The 4 Ps plus………MIX FOR SERVICES – THE 7 PS

1. People
All human actors who play a part in service delivery and thus
influence the buyer’s perceptions: namely, the firm’s
personnel, the customer, and other customers in the service
environment.

2. Physical Evidence
The environment in which the service is delivered and where
the firm and customer interact, and any tangible
components that facilitate performance or communication of
the service.

3. Process
The actual procedures, mechanisms, and flow of activities by
which the service is delivered—the service delivery and
operating systems.
EXPANDED MARKETING MIX FOR SERVICES
CUSTOMER FOCUS: A CRITICAL THEME

• All strategies should be developed with an eye on the

customer.
• All implementations should be carried out with an
understanding of their impact on the customer.
• All decisions regarding new services, communications,
operations, and human resources should integrate the
customers.
ROAD AHEAD FOR SERVICES

• By 2025, healthcare industry is expected to reach US$ 372 billion.

• India’s digital economy is estimated to reach US$ 1 trillion by 2025. By
end of 2023, India’s IT and business services sector is expected to reach
US$ 14.3 billion with 8% growth.
• The implementation of the Goods and Services Tax (GST) has created a
common national market and reduced the overall tax burden on goods. It
is expected to reduce costs in the long run-on account of availability of
GST input credit, which will result in the reduction in prices of services.
• India's software service industry is expected to reach US$ 1 trillion by
2030.
PRODUCT AND SERVICE DIFFERENTIATION
Thankyou