SERVICES MARKETING Session1

8th July 2017

 COURSE OBJECTIVE
Understand the importance of Services and Services Marketing

Learn how to create and maintain strong customer relationships through

quality services

Learn how to implement quality service and service strategies for

competitive advantage across industries

Appreciate best practices and benchmarks, globally and in Indian context

related to Services and Services Marketing
INTERNAL ASSESSMENT
Sr. Type of Internal Group /
Task Marks Timeline
No. Assessment Individual
Material from previous sessions Anytime during
1 Surprise Test (2) 5 Each Individual
or case study or both the semester

Case Analyses and some

2 Mid-term Test 10 Individual Mid Semester
Practical situation

Submissions (Case Submission every

Study/Exercise) week
Power Point
3 (Graded:1-5) for submission 10 Group of Six
Presentation
(Graded:1-5) for presentation Presentation once
in the semester
Every week by
4 Article Review Presentation (Graded: 1-5) 5 Individual each member of
one Group
Power Point (Subject Topic) Last Lecture of
5 5 Group of Six
Presentation (Graded: 1-5) the Semester
TODAYS SESSION
Marketing and Services
Characteristics of Services
Individual Exercise
Sectors in an Economy
Factors affecting Service Economy
Importance of Service Economy
Group Exercise
?

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 MARKETING
Meeting Needs Profitably
Selling
focuses on
AMA: Organizational function and a set of processes for identifying, the needs
creating, communicating, and delivering value to customers and of the
for managing customer relationship in a way that benefit the seller,
organization and stake-holders marketing
on the
needs of
the buyer-
The aim of marketing is to make selling superfluous Peter Drucker Theodore
Levitt

Goods, Services, Experience, Events, Persons, Places etc

WHAT ARE SERVICES
Deeds Processes and Performances You cannot drop a service on your feet

All economic activities whose output is not a physical product, and is generally
consumed at the time it is produced, provides added value (convenience, health,
comfort, amusement)

AMA: Activities, benefits and satisfactions which are offered for sale or are
provided in connection with the sale of goods.

Service vs Customer Service

CHARACTERISTICS OF SERVICES (IHIP)

Intangibility

Heterogeneity

Inseparability

Perishability

Tangibility Spectrum
INDIVIDUAL EXERCISE - 1
Intangible Inseparable Perishable Heterogeneous
Product/Services (Yes/No/Partial) (Yes/No/Partial) (Yes/No/Partial) (Yes/No/Partial)
TVS Two-wheeler Service
Yes No Yes Yes
(No parts/Oil changed)
Spice Jet
Tata Salt
Apollo (Doctors Consultation)
(No medicines offered)
IMS/TIME Coaching
(No books offered)
McDonalds
Kaya Skin Clinic
(Medicines offered)
PVR (Only movie)
Bajaj Allianz Insurance
Essel World
HDFC Bank
ECONOMIC SECTORS
Service Sector
Trade, repair, Trade & repair services
Primary Secondary hotels and Hotels & restaurants
restaurants
Transport, Railways
Tertiary Quaternary storage, Road transport
communication & Water transport
services related Air transport
to broadcasting Services incidental to transport
Agriculture Sector
Storage
- Agriculture, forestry & fishing
Communication & services related to
Industry Sector
broadcasting
- Mining & quarrying
- Manufacturing Financial, real Financial services
- Electricity, gas, water supply & Construction estate & prof Real estate, ownership of dwelling &
Services Sector services professional services
- Trade, hotels, transport, communication Community, social Public administration & defense
- Financial, real estate & prof services & pers. Services
- Public Administration, defense &other services
GLOBAL SECTOR SHARE IN GDP
Top-10 Countries in Bottom-10 Countries in
Country GDP Agri. Indus. Serv.
the World on %age of the World on %age of
World 75.2 6% 31% 66% Services in GDP
Services in GDP
1 United States 17.9 1% 19% 80%
Country Services Country Services
2 China 11.2 9% 40% 52% France 80% Saudi Arabia 31%
3 Japan 4.7 1% 28% 71% United States 80% Indonesia 39%
4 Germany 3.5 1% 28% 71% Algeria 79% United Arab
United Emirates 40%
5 United Kingdom 2.6 1% 21% 78% 78%
Kingdom Iran 48%
6 France 2.5 2% 18% 80% Belgium 78% China 52%
7 India 2.3 17% 26% 57% Denmark 76% Thailand 53%
8 Italy 1.9 2% 24% 74% Italy 74% Colombia 53%
Netherlands 73% Nigeria 55%
9 Brazil 1.8 5% 27% 67% Spain 73% India 57%
10 Canada 1.5 2% 29% 70% Japan 71% South Korea 58%
 0%
10%
20%
50%
60%

30%
40%
1950-51
1951-52
1952-53
1953-54
1954-55
1955-56
1956-57
1957-58
1958-59
1959-60
1960-61
1961-62
1962-63
1963-64
1964-65
1965-66
1966-67
1967-68
1968-69
1969-70
1970-71
1971-72
1972-73
1973-74
1974-75
1975-76
1976-77
1977-78
1978-79
1979-80
1980-81
1981-82
1982-83
1983-84
1984-85
1985-86
1986-87
NATIONAL SECTOR SHARE IN GDP

1987-88
1988-89
1989-90
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-2K
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
Services

2007-08
2008-09
2009-10
2010-11
Agriculture

2011-12
Industry

2012-13
2013-14
SHARE OF SERVICES IN EMPLOYMENT
Notice a pattern in share of Services
in GDP and Employment in countries.

What do you see?

What can be inferred?

Why is Indias share in employment

to GDP for Services almost 0.5 while
other countries have a healthy 1:1
ratio?
FACTORS AFFECTING SERVICE SECTOR
Population Surge
Growth in primary and secondary sectors
Higher Disposable incomes
International Exposure
Globalization
Changing Lifestyles
Increased labor productivity
IMPORTANCE OF SERVICES SECTOR
Contribution to Gross Domestic Product
Employment opportunities
Contribution to Exports
Helpful in Development of Infrastructure and Communication Services
FDI Inflows
Nurturing IT/ITes sector as young sector
Support to other sectors