Services Marketing

Concept of services
Difference between product and service
Service spectrum
Service Attributes
Learning objectives

Introduction, What are characteristics of services?

In what ways Services are classified?
Service as a process: What is each service organization
actually processing?
What are the different categories in which these
processes are categorized and their relevance to
consumers?
 Reference Text
Services Marketing: People, Technology, Strategy-
Christopher Lovelock, Jochen Wirtz, Jayanta
Chatterjee (2010)
Service Marketing and Management- Christopher H.
Lovelock, Lauren k. Wright
Services Marketing- M.K. Rampal, S.L. Gupta
Service Marketing and Management- Dr. B. Balaji
Services Marketing- C. Bhattachatterjee
Services Marketing- Dwayne D Gremler, Ajay Pandit
 Service Sector In Indian
Economy
India's large service industry accounts for 57.2% of
the country's GDP while the industrial and agricultural
sectors contribute 28.6% and 14.6% respectively.
Agriculture is the predominant occupation in Rural
India, accounting for about 52% of employment. The
service sector makes up a further 34% of
employment, and industrial sector around 14%.
Information technology and BPO are among the fastest
growing sectors.
Service Sector contribution in India’s GDP
 Service Sector Composition
The various sectors that combine together to constitute service industry in
India are:
Transport (Air, Water, Rail, Road)
Hospitality (Hotels and Restaurants)
Communication (Post, Telecom, Internet, IT/ ITES)
Banking & Insurance
Other Transport & Storage
Real Estate
Business Services
Public Administration; Defence
Health Care, Fitness
Community Services
Media and Entertainment Services
Warm-up Session

Think and enlist as many services as you can which

you have availed in the last one month..

List you favorite service brands in those

categories…

How do you buy a service and consume it??

Are services Intangible, perishable, customized,

interactive, heterogeneous ??
Current Affairs in Service business
https://
brandequity.economictimes.indiatimes.com/news/digit
al/from-a-to-z-snapchat-defines-new-trends-on-new-ge
neration/70047070?utm_source=b2bnotification&utm
_medium=notification

https://
brandequity.economictimes.indiatimes.com/news/digit
al/why-the-indian-market-needs-to-be-ready-for-5g-no
w/70048009

https://
brandequity.economictimes.indiatimes.com/news/busi
ness-of-brands/cardekho-selects-rezo-ai-to-focus-on-w
Introduction to Services Marketing

 What are services?

 Why services marketing?
 Characteristics of Services Compared to Goods
 Services Marketing Mix
 Service v/s Products
Definition
Services are ‘deeds, performances, efforts’.
Is a glass of coke a service?
Is attending a class a service?
Is a ride in a taxicab a service?
Is dining in a restaurant a service?
Is buying grocery on BigBasket a service?
 Characteristics of
Services Compared to Goods

Intangibility Heterogeneity

Simultaneous
Production
and Perishability
Consumption
(Inseparability)
Characteristics of Services Compared to Goods

Tangibility Spectrum
Salt
 Soft Drinks
 Detergents
 Automobiles
 CosmeticsFast-food
 Outlets
 Intangible
Dominant

Tangible

Dominant Fast-food
Outlets 
Advertising
Agencies

Airlines 
Investment
Management 
Consulting 
Teaching
Service marketing mix

 Product
 Price
 Place
 Promotion
 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.
 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.
 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
 Ways of Classifying Services
Degree of tangibility or intangibility of service process
(food service v/s net banking)
Direct recipient of service process (hair-cut v/s dry-cleaning
clothes)
Place & time of service delivery (hotel v/s courier at home)
Customization versus standardization (taxi or cab v/s bus
service)
Nature of relationship with customers [personal (bank) v/s
unidentified (TV broadcast)]
Extent to which demand & supply is managed (fluctuations
like rush in supermarkets at weekend)
Extent to which facilities, equipments, people are part of
service experience. (class-room v/s ATM card)
 Service as a Process
A process involves transforming inputs into output.
Two broad categories are processed in services: people
& objects.
People Processing: Where people as a customer
themselves are involved in process.
Objects Processing: Where objects are involved in
process.
Categorizing Service Processes

People Processing: Involves tangible action to

people’s bodies. Eg. Passenger transportation
Possession processing: Tangible action to any
object or possession belonging to customer. Eg.
Repairing PC
Mental Stimulus Processing: Intangible actions
directed at people’s minds. Eg. entertainment
Information Processing: Intangible action
directed at people’s assets. Eg. Consulting,
insurance
Management Challenges for Different
Processes
Identifying Service benefits
Designing Service factory
Finding alternative channels for service delivery
Balancing Supply and Demand
Making most of the IT
Seeing people as part of the product
Type of Processing Implications for Manager

People Processing •Seek active cooperation from customer

•Thinking about process & output in terms of what
happens to customer
•Process helps to identify some non-financial costs like
physical effort incurred by customer

Possession Processing On-site (home service)/ off-site (at service centre),

output should be a satisfactory solution to customer’s
problem or some tangible enhancement of the item or
possession

Mental Stimulus •Seeks customer’s mental attention to make the service

Processing delivery more effective.
•Information can be stored on physical media and
packaged and marketed as a tangible product

Information Processing Services highly dependant on effective collection &

processing of information, involves informational input
from customer like law, market research, medical
diagnosis etc..
 Activity # 1
List one of your service experience as a consumer
under each of the four categories of service processing
to differentiate among the types of processing involved
and tangible/ intangible benefits involved in availing
that service.
 Service Encounters
Transactional interaction between customers and
service employees, either in person or by phone.
Service encounters may also take place between
customers & physical facilities or equipments.
Types of service on this basis:
High contact services (contact with humans more)
Low contact services (more contact with automated
machines)
 Moment of Truth
“A point in service delivery where customers interact with
service employees or self-serve equipment and the
outcome may affect perceptions of service quality.”
 Elements of Service Encounter
Service Personnel Service facilities & Non-personal Other People
Equipments communications
Sales Building exteriors, Form letters Fellow customers
Representative Parking, encountered during
landscaping service delivery
Customer service Building interiors Brochures/ catalogs Word of mouth
staff and furnishing instruction manuals comments from
friends, strangers
Accounting/ billing Vehicles Advertising
staff
Operations staff Self-service Signage
equipments
operated by
customers
Designated Other equipments News stories/
intermediaries editorials
Critical Incidents in Service
Encounters
It is a specific encounter between customer & service
provider in which the outcome has proved especially
satisfying or dissatisfying for one or both parties.
CIT (Critical incident Technique): A methodology
for collecting, categorizing & analyzing critical
incidents that have occurred.
Implications for Managers
Negative Critical incidents satisfactorily resolved have
great potential of enhancing loyalty.
Findings from CIT can be helpful in pinpointing
opportunities for future improvements in service delivery
process.
 Level of Customer
Participation
LOW MODERATE HIGH

Customer presence Customer input required Customer coproduces the

required during service for service creation service product
delivery

Product is standardized Customer inputs Active client participation

(information, material) mandatory

Payment may be only Client input customize Customer inputs

required customer input standardized service coproduces the outcome

Eg. Airline travel Annual physical check-up Career counseling

B-2-B customer Self-service restaurant Weight-reduction

program
Increasing productivity when customers are Co-
producers

Conduct a “job analysis” of customers’ present role in

business & compare it to the roles that firm would like
them to play
Determine if customers are aware of how they are
expected to perform
Motivate customers by ensuring that they will be
rewarded for performing well (eg. Satisfaction from better
quality & more customized output)
Regularly appraise customer’s performance. If
unsatisfactory, try to change their role or procedures in
which they are involved.
 Activity # 2
Think of a time when as a customer, you had a
particularly satisfying or dissatisfying experience with
either service personnel or service facilities.
When did incident occurred?
What specific circumstances led to the situation?
Exactly what did the employee say or do?
What resulted that made you feel the interaction was
satisfying/dissatisfying?