ABOUT SERVICE INDUSTRY

SERVICE
A service is an intangible product involving a deed, performance, or an effort that
cannot be physically possessed.

Service Industry Definition

An industry comprised of companies that primarily earn revenue through providing

intangible products and services. Service industry companies are involved in retail,
transport, distribution, food services, as well as other service-dominated businesses.
Also called service sector, tertiary sector of industry. See also primary industry,
secondary industry.

INTRODUCTION

Service sector is the lifeline for the social economic growth of a country. It is today
the largest and fastest growing sector globally contributing more to the global output
and employing more people than any other sector.

The real reason for the growth of the service sector is due to the increase in
urbanization, privatization and more demand for intermediate and final consumer
services. Availability of quality services is vital for the well being of the economy.

In advanced economies the growth in the primary and secondary sectors are directly
dependent on the growth of services like banking, insurance, trade, commerce,
entertainment etc.

Indian Service Sector

In alignment with the global trends, Indian service sector has witnessed a major
boom and is one of the major contributors to both employment and national income
in recent times. The activities under the purview of the service sector are quite
diverse. Trading, transportation and communication, financial, real estate and
business services, community, social and personal services come within the gambit
of the service industry.

One of the key service industry in India would be health and education. They are
vital for the country’s economic stability. A robust healthcare system helps to create
a strong and diligent human capital, who in turn can contribute productively to the
nation’s growth.
Post Liberalization
The Indian economy has moved from agriculture based economy to a knowledge
based economy. Today the IT industry and ITE'S industry are the dominant industry
in the service sector. Media and entertainment have also seen tremendous growth in
the past few years.

Subsectors

Information Technology Industry

The Information Technology industry has achieved phenomenal growth after
liberalization. The industry has performed exceedingly well amidst tough global
competition. Being knowledge based industry; India has been able to leverage the
global markets, because of the huge pool of engineering talent available and the
proficiency in English language among the middle class.

ITES sector
The ITES sector has also leveraged the global changes positively to emerge as one
of the prominent industries. Some of the services covered by the ITES industry
would be:

 Customer interaction services -Non voice and Voice.

 Back office, revenue accounting, data entry, data conversion, HR services.
 Medical Transcription.
 Content development and animation.
 Remote education, market research and GIS

The service industry forms a backbone of social and economic development of a

region. It has emerged as the largest and fastest-growing sectors in the world
economy, making higher contributions to the global output and employment. Its
growth rate has been higher than that of agriculture and manufacturing sectors. It is
a large and most dynamic part of the Indian economy both in terms of employment
potential and contribution to national income.

Service Sector in India today accounts for more than half of India's GDP. According
to data for the financial year 2006-2007, the share of services, industry, and
agriculture in India's GDP is 55.1 per cent, 26.4 per cent, and 18.5 per cent
respectively. The fact that the service sector now accounts for more than half the
GDP marks a watershed in the evolution of the Indian economy and takes it closer to
the fundamentals of a developed economy.

Services or the "tertiary sector" of the economy covers a wide gamut of activities like
trading, banking & finance, infotainment, real estate, transportation, security,
management & technical consultancy among several others. The various sectors
that combine together to constitute service industry in India are:

 Trade
 Hotels and Restaurants
  Railways
 Other Transport & Storage
 Communication (Post, Telecom)
 Banking
 Insurance
 Dwellings, Real Estate
 Business Services
 Public Administration; Defence
 Personal Services
 Community Services
 Other Services

There was marked acceleration in services sector growth in the eighties and
nineties, especially in the nineties. While the share of services in India's GDP
increased by 21 per cent points in the 50 years between 1950 and 2000, nearly 40
per cent of that increase was concentrated in the nineties. While almost all service
sectors participated in this boom, growth was fastest in communications, banking,
hotels and restaurants, community services, trade and business services. One of the
reasons for the sudden growth in the services sector in India in the nineties was the
liberalisation in the regulatory framework that gave rise to innovation and higher
exports from the services sector.

The boom in the services sector has been relatively "jobless". The rise in services
share in GDP has not accompanied by proportionate increase in the sector's share
of national employment. Some economists have also cautioned that service sector
growth must be supported by proportionate growth of the industrial sector, otherwise
the service sector grown will not be sustainable. In the current economic scenario it
looks that the boom in the services sector is here to stay as India is fast emerging as
global services hub.

Characteristics of a Service
What exactly are the characteristics of a service? How are services different from a
product? In fact many organisations do have service elements to the product they
sell, for example McDonald’s sell physical products i.e. burgers but consumers are
also concerned about the quality and speed of service, are staff cheerful and
welcoming and do they serve with a smile on their face?There are five
characteristics to a service which will be discussed below.
1. Lack of ownership.
You cannot own and store a service like you can a product. Services are used or hired for a
period of time. For example when buying a ticket to the USA the service lasts maybe 9 hours
each way , but consumers want and expect excellent service for that time. Because you can
measure the duration of the service consumers become more demanding of it.

2. Intangibility
You cannot hold or touch a service unlike a product. In saying that although services are
intangible the experience consumers obtain from the service has an impact on how they will
perceive it. What do consumers perceive from customer service? the location, and the inner
presentation of where they are purchasing the service?.

3. Inseparability
Services cannot be separated from the service providers. A product when produced can be
taken away from the producer. However a service is produced at or near the point of
purchase. Take visiting a restaurant, you order your meal, the waiting and delivery of the
meal, the service provided by the waiter/ress is all apart of the service production process and
is inseparable, the staff in a restaurant are as apart of the process as well as the quality of food
provided.

4. Perishibility
Services last a specific time and cannot be stored like a product for later use. If travelling by
train, coach or air the service will only last the duration of the journey. The service is
developed and used almost simultaneously. Again because of this time constraint consumers
demand more.

5. Heterogeneity
It is very difficult to make each service experience identical. If travelling by plane the service
quality may differ from the first time you travelled by that airline to the second, because the
airhostess is more or less experienced.
A concert performed by a group on two nights may differ in slight ways because it is very
difficult to standardise every dance move. Generally systems and procedures are put into
place to make sure the service provided is consistent all the time, training in service
organisations is essential for this, however in saying this there will always be subtle
differences.

7 P’s of Service Marketing

People

An essential ingredient to any service provision is the use of appropriate staff and
people. Recruiting the right staff and training them appropriately in the delivery of
their service is essential if the organisation wants to obtain a form of competitive
advantage. Consumers make judgments and deliver perceptions of the service
based on the employees they interact with. Staff should have the appropriate
interpersonal skills, aptititude, and service knowledge to provide the service that
consumers are paying for. Many British organisations aim to apply for the Investors
In People accreditation, which tells consumers that staff are taken care off by the
company and they are trained to certain standards.

Process

Refers to the systems used to assist the organisation in delivering the service.
Imagine you walk into Burger King and you order a Whopper Meal and you get it
delivered within 2 minutes. What was the process that allowed you to obtain an
efficient service delivery? Banks that send out Credit Cards automatically when their
customers old one has expired again require an efficient process to identify expiry
dates and renewal. An efficient service that replaces old credit cards will foster
consumer loyalty and confidence in the company.

Physical Evidence

Where is the service being delivered? Physical Evidence is the element of the
service mix which allows the consumer again to make judgments on the
organisation. If you walk into a restaurant your expectations are of a clean, friendly
environment. On an aircraft if you travel first class you expect enough room to be
able to lay down!
Physical evidence is an essential ingredient of the service mix, consumers will make
perceptions based on their sight of the service provision which will have an impact
on the organisations perceptual plan of the service.

 Promotion :
Promotion Advertising Personal Selling Sales Promotion Public Relations Advertising
done online, direct mail, and via television Personal Selling by instructors to fill their
classes Sales Promotion – periodic free classes Public Relations – large community
involvement and public relations staff. News articles central to the college’s
promotion.
Product :
Product Variety Quality Design Features Brand Name Packaging Services Class can
be taken online, in a class setting, or in a hybrid setting. Offered at FSCJ – focus is
more on real life application rather than theory Part of the Bachelors program Access
to full school services

Price :
Price List Price Discounts Allowances Payment Period Credit Terms Priced per
credit hour. About $260 for this course. Book extra – about $130 used to $180 new
Different prices for out of state and GA Students Discounts for state workers
Financial Aid in the form of Grants, loans, and scholarships available Tuition due
before access to course is granted. Professionals to help with payment and credit
terms. Credit Cards accepted

Place :
Place Channels Coverage Assortments Locations Inventory Transportation Logistics
Direct to consumer channel. In class offerings for local consumption and online
offerings for national consumption 5 campuses and 7 centers Small class sizes
Public transportation stops at most campuses and centers Large support staff for
students and instructors
 “WELLNESS”

India's wellness industry seen growing 30-35 pc

New Delhi: Estimating India's market

for "wellness" services at Rs.110 billion
($2.2 billion), a report released
Wednesday has projected this industry
to grow at an annual rate of 30-35
percent.

"This growth is expected on the back of

favorable market demographics,
consumerism, globalization, changing
lifestyles, increasing availability across
categories and regions and rising
awareness among people," says the joint report of the Federation of Indian
Chambers of Commerce and Industry (FICCI) and Ernst and Young.

The report classifies the wellness industry into seven core segments within
different products and services, such as allopathy, alternative therapies, beauty,
counseling, fitness and slimming, nutrition and rejuvenation.

"Given the favorable demand and supply dynamics, wellness presents strong
business potential," said Farokh Balsara, partner for advisory services with Ernst
and Young.

"With this report, we have sought to present a comprehensive picture of the

complete wellness economy, comprising users, service providers and the
facilitators, the challenges faced by each one and the way forward for each of
these stakeholders, to successfully ride this wave."

According to the report, the increasing level of activity is arising from the entry of
several providers such as organized Indian and international players, expansion
by existing companies, strategic alliances and interest among private equity
investors and hospitality and realty industries.

In terms of payback and gestation periods, products such as health foods and
drinks, dietary supplements and alternative medicines require greater
investments, normally exceeding Rs.250 million or more, says the report.
Payback periods range from three-six years.

At the same time, services such as ayurveda treatment, alternative treatment

centers and salons require much lower investment and also have lower payback
periods of up to three years.

When it comes to regions, the south is much ahead in terms of indicative

 concentration for the organized wellness-based centers per household: 34.4
centers per 100,000 households, compared with 13.6 for the north, 12 for the
west and 10.1 in the east.

The report attributes south's lead to the presence of more alternative therapies-
based centers.

There are also clear customer preferences in each region with regard to each
segment - alternate therapies are the most popular choice of people in southern
India, while customers in north are inclined towards beauty. The maximum
number of fitness and slimming centers are in the west.

The report shows that across segments, on an average more than 50 percent of
the market is unorganized and highly segmented with several small and regional
players.

While ayurveda and alternative treatments are predominantly unorganized, health

foods and drinks and dietary supplements are more organized. The larger service
providers face a challenge from the presence of the unorganized sector as it puts
tremendous pressure on pricing and therefore margins.

Wellness offerings have also seen increased demand from corporate clients. A
greater corporate focus on employee welfare and a desire to inculcate beneficial
wellness practices into employees’ lifestyles has resulted in a new breed of
corporate clients for wellness players.

Our report classifies the wellness industry into seven core segments, constituting
both products and services, such as alternative...

The wellness industry is conscious of health as never before; promoting it

with a holistic approach that stresses health-promoting food, exercise
and the right lifestyle. Check if your priority is `getting fit and not `fitting
into a pair of jeans.'

Growing awareness of fitness has led to a spurt in fitness centers

A growing emphasis on preventive and holistic healthcare has led to a

boom in the fitness and wellness industry. Aerobics, yoga and fitness
training, medical systems such as ayurveda and naturopathy, beauty
therapy and nutrition are in the limelight like never before. With rising
disposable incomes matched by a spurt in lifestyle-induced illnesses,
people appear more than willing to spend on wellness products and
services.

A booming market

The Indian beauty and wellness market is pegged at about $9 billion,

about the size of Italy's cosmetic industry alone, says Ranjit Pisharoty,
member - CII Tamil Nadu State Council. But this is set to grow. The
worldwide market for herbal products and services is about $150 billion
and traditional Indian and Chinese systems are expected to grab a major
portion of this. Dr Avilochan Singh, Ayurveda consultant at the Apollo
Wellness Plus Clinic in Chennai, feels that the future lies in an integrated
medical approach. And wellness centers would play a major role by
offering preventive and curative care for specific ailments. Such a holistic
approach to health is prominent in North India, says Dr S. Sangeeth,
naturopathy and yoga consultant, Sanjeevanam, a wellness center in
Chennai.

Oryza, a day spa in Chennai.

Agreeing that the concept of holistic body and mind experience has
caught on, Vikram Mohan, Director, Oryza, a day spa in Chennai that
combines both European and Oriental techniques for rejuvenation, says,
"Today's working professionals live in a high-stress environment. A day
spa in the city addresses their need for rejuvenation."

This in turn is expected to spur job opportunities in the wellness sector.

As Pisharoty says, there is scope for well over a million new jobs opening
up in the next 4-6 years in this area. Apart from wellness services,
opportunities exist in the manufacturing and export sector too.

Holistic health
The convergence of healthcare, beauty, wellness and holidays or leisure
built around traditional medicinal systems is the trend to watch out for.
"It will be interesting to watch whether, similar to the IT and software
training centers that mushroomed in the late 1990s, we will see a training
industry spring up to rebuild skill-sets in our traditional systems. If the
trends are proved right and entrepreneurs smell success, what this can do
for rural transformation is mind-boggling," says Pisharoty.

Windfall opportunities

Says Radha Krishnaswamy, Chennai-based Reebok master-trainer, "You

can earn anywhere between Rs 5,000 and Rs 10,000 as a part-timer in a
fitness centre. And then may be take up something else as your main
career. There are many lecturers, interior designers and others who are
pursuing this as their hobby." Experienced trainers also double as
personal trainers to celebrities and often earn Rs 1,000 for each one-hour
session, she adds.

Health resorts that offer ayurveda as part of their rejuvenation package

have had a major impact on the remuneration offered to ayurvedic
therapists, says Dr Singh. Now a qualified ayurvedic therapist can earn up
to Rs 30,000 a month at `five-star' health resorts. A trainee starts off
with about Rs 2,000 and can expect about Rs 7,000 at the end of training,
he says

Continuous learning

So what does it take to survive in the wellness industry?

Here are some guidelines for the wannabes. Apart from commitment,
dedication and knowledge, Bharat Savur, a Mumbai-based fitness trainer,
says one must be abreast of emerging research and developments in the
field. "There is no animal like a fat fitness trainer. So she/he has to
constantly work on her/his own body."

"Never stop learning," says Jyotsna Radja, Diet Consultant at Apollo

Hospitals, Chennai. She adds that in the field of nutrition, it pays to be
"innovative and imaginative. It is better to go beyond the prescribed food
and know what it does to the body. More importantly, go back to your
grandmother's recipes."

She says diet consultants should arrive at their own "concoction"

scientifically. Prescribe diets that are user-friendly and interesting, thus
"making eating a joyful experience." Another important skill is people
management. "Apart from basic knowledge of treatment and therapy,
constant interaction with clients is key. After all, customer satisfaction
and happiness drives this business," says Sanjana Dominick, training
manager and consultant, Oryza.
Quacks and quick fixes

While the career options in the industry are enormous, one must be wary
of quacks, says Savur.

Radha agrees. "Yes, the spurt of fitness centers does bring with it a lot of
not-so-qualified trainers. Fitness centers should take care to employ only
those who can guide people in the right and, more importantly, safe ways
of doing exercise."

Quick-fix solutions are what many experts in the industry are worried
about. "Beware of false claims, however real they might sound! There are
no quick fixes, no short cuts to better health and fitness. For example, a
crash diet most often leads to a crash," says Savur. He quotes Joe
Weider, body-builder turned publisher of Muscle and Fitness magazine: "A
personal trainer (or institute) should be interested in your well-being.
Your problems and goals are paramount — not that of the trainer or the
institute."

Kales Fontana, an aerobics instructor in Chennai, says the priority today

is "not getting fit... but fitting into a pair of jeans," and this is a sheer
recipe for disaster.

Prospects bright

But he is optimistic about the industry and its growth. "A few years ago,
people would hesitate to even pay Rs 700 as monthly fees. But today,
they don't think much about paying Rs 3,000 a month," he says.

As the sunrise industry grows, it will employ more and more people, says
Savur. Fontana finds a demand for fitness trainers at in-house gyms
provided by corporate, especially call centers and IT companies. Radha
adds that with proper certification, trainers and therapists could flourish.

There are a host of fitness-training academies in India that teach and

train trainers. Institutes like the VLCC Institute offer short-term training
programmes and diploma courses in beauty, health and fitness. The
career prospects for students who pass out of the institute are many and
varied, says Sandeep Ahuja, Director, VLCC Healthcare Ltd. They can
start their own business ventures — beauty and fitness salons, or join
other established names in this industry; or have a career in sales and
marketing fields with cosmetic manufacturers or in a training profile in
such organizations or other beauty schools, he adds.

But certain services like aromatherapy are yet to be properly recognized

in India. Dr Raani Rao, Clinical Aroma therapist at the Apollo Wellness
Plus Clinic, Chennai, says that clinical aromatherapy is a field that needs
sound knowledge of physiology, human anatomy, chemistry, and also
medicine. Knowledge of alternative medicine is also preferred. And the
therapist has to be certified by a recognized council.