SERVICES

MARKETING
Facilitator: Gaurav Basnet
MBA, CEO Aryan education
Credit hours: 3 credits
BBA VII SEMESTER
CIT COLLEGE

INTRODUCTION TO
SERVICES
MARKETING
Unit: I

TOPICS TO BE COVERED
Meaning & importance of service
marketing
Characteristics of services
Service and technology
Goods versus Services marketing
Services marketing mix

MARKETING
Buying and selling activities ( Exchange process)
Art and science of satisfying customer
Building relations with customers
Is a continuous tense of market ( market+ing). So it
is a continuous action. It is not one time action.

GAURAV BASNET, MBA

Services are going to move in this

decade to being
The front edge of the industry.
Louis V, Gerstner, CEO.. IBM

SERVICE
.. IS AN INTANGIBLE PRODUCT.
GOVERNMENTS OFFICES
HOSPITALS,
MILITARY,
MUSEUM,
CHARITIES,
CHURCH,
COLLEGE,
U N IV ER S ITI ES ,
AIRLINES, BANKERS, HOTELS, INSURANCE,
CONSULTANT, MEDICAL, L AW, ENTERTAINMENT,
REAL ESTATE, RETAILING ARE SERVICES.
GAURAV BASNET, MBA

CONT.

Services are deeds,

process and
performances.
-

Dr. V.A. Zeithaml

Author: Services Marketing

 INTRODUCTION

Concept of service
marketing
Service is invisible
product
Service is intangible
values for customers

Author: Services marketing

DEFINITION: SERVICES MARKETING

Service marketing is to manage,

develop, promote and exchange service
to attain organizational objectives.

DEFINITIONS: SERVICES

Activities, benefits and

satisfactions, which are offered
for sale or are provided in
connection with the sale of
goods.
(American Marketing
Association, Committee of
Definitions 1960, p. 21).

Author: Services Marketing

CONT.

Services is any act

or performance that
one party can off er
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.
- Philip Kotler
Author: Services marketing

CONT.
Services are separately identifi able, intangible
activities which provide want satisfaction when
marketed to consumers and/or industrial users and
which are not necessarily tied to sale of product
or another service.
William J. Stanton, 1974

A service product is an activity or a series of

activities which take place in interaction with a
contact person or a physical machine and which
provides consumer satisfaction. -Lehtinen, 1983
Author: Services marketing

 We can conclude
services are generally
intangible products
which results through
interaction between
consumer and service
employee and/or
physical resources of
the service provider in
creating values for
consumers.
Author: Services marketing

DIFFERENCE BETWEEN.
Customer Service
It is the service
provided in support of
companys core
products
Generally it is free of
cost or charge
nominated
E.g. A free shuttle bus
to the company staff s.

Service as Product
It is designed,
processed and off ered
to the customer.
Service as a product will
fulfi ll the company
objective and receiving
will satisfy the need of
the consumer
E.g. Services off ered by
IBM, Prisma Advertising

IMPORTANCE OF SERVICES
MARKETING

1.SERVICE BASED ECONOMIES

Author: Services marketing

1. Service based Economics

Service industries are providing most of
employment & GDP in most of countries.
Trade in services is growing worldwide
In Nepal service sector like tourism, healthcare,
education, bank, consulting, manpower, telecom,
media etc. are growing rapidly.

Sushil Awale, Author: Services marketing

2.SERVICE AS BUSINESS IMPERATIVE

IN MANUFACTURING AND IT
For competitive advantage, since customer are more
demanding.
High expectation of customer services and derived
services.
Services generating major part of revenue. For e.g.
IBM
In todays market customers need, as per
requirement and the service is increasing

Author: Services marketing

3.PROFESSIONAL SERVICE NEEDS

Internal services take recruitment, legal,
accounting, administration, cleaning,
landscape maintenance, supply chain
management, advertising etc. are out sourced
as a separate service operations.
Physicians, lawyers, accountants, engineers
and architects are more competitive , have
demanded new marketing concept i.e.
Services Marketing.
Specialization made need of other services
like cook,barber,laundry,cleaner,security,
household, child care, health instructor,
dietician etc.
Author: Services marketing

4.DEREGULATED INDUSTRIES
Government policies, social changes, business trends,
advancement in information technology, globalization
forces are shaping service markets.
Marketing decision making: Government to numerous
fi rm and individuals , in competitive environment.

Author: Services marketing

5. SERVICE MARKETING IS
DIFFERENT
People realized that marketing of tangible goods &
services marketing is diff erent .
Its not only about 4Ps.It includes Service Triangle
as well.

Author: Services marketing

6. SERVICE EQUALS PROFIT

Marketing science institute suggested
that strategies focused on customer
satisfaction ,revenue generation and
service quality may be more profi table
than strategies focused on cost cutting
or both simultaneously
Service profi t chain is linking internal
service and employee satisfaction to
customer value(satisfaction) and
ultimately to profi ts
Author: Services marketing

7.LARGE SCOPE OF GROWTH:

SERVICE STINKS
Services are not up to customers expectations, its
a challenge, opportunities, good scope of growth
American Customer Satisfaction Index ( ACSI)
scores for service industries are generally lower
than the average for all industries.
Service companies are providing service for
business purpose. At one time service was related
to social work. So people feel negatively about the
commercialization of service.
Self-service & technology based service is
perceived as less service because no human
interaction or human personalization is provided.
Author: Services marketing

8.GLOBALIZATION:
Because of globalization not only manufacturing
goods but many services like international trade and
transit, transportation, warehousing, shipping,
courier, export-import custom services, packaging,
labelling, grading, standardizing, agency services,
franchising, retailing, promotion, and advertising,
repricing, repair and maintenance services have
increased.
Recent study showed USA making 55% of the value
economically on goods exported from China. China
only makes 45% of its manufactured products sold in
America (CNN World Business Today 2011, August 16).
Author: Services marketing

9.EVEN TANGIBLE GOODS EVENTUALLY

DELIVERS SERVICES, THE DERIVED
SERVICES .

Author: Services marketing

MAJOR SERVICE ACTIVITIES

Generally there are 11 major activities identifi ed as
service activities;
1) Business Service
2) Communication
3) Construction
4) Distribution
5) Education
6) Environment
7) Finance
8) Health
9) Tourism
10) Transport
11) Recreation

CHARACTERISTICS OF
SERVICES

CHARACTERISTICS:

1.Intangibility
2.Inseparability
3.Heterogeneity
4.Perishability

1. INTANGIBILITY:
Service has no features- no color, size, weight, length,
etc.
Cannot protect service by patents.
Cannot readily display or communicated. Service
cannot be seen, touched, tested, weighted, before
consumer is involved in service receiving process.
Pricing is diffi cult.
Service diff erentiation and tailor-made is diffi cult.
Buying and selling of intangible service requires
tangible clues.
E.g. Selling airline ticket is a promise of safe transport
to the destination.
Buyer cannot feel, test, service beforehand. So
services involves high risk and uncertainty to the
consumers

2. INSEPARABILITY:
Consumers involve in production. They cannot be
separated during the service delivery process.
Follow consumers involvement makes it diffi cult to
manage.
Centralised mass production is not possible.
Service manager requires managing the employees
and customers, customer and customer relation,
customer and environment relation.
Services cannot be delivered to customers through
the channels of distribution.

3. HETEROGENEITY/VARIABILITY:
Standardization and quality control is diffi cult to
achieve.
Quality of service is highly variable. Quality not only
depends on how it is delivered but also on how
customer receives it.
Service delivery environment and follow consumers
creates variability.

4. PERISHABILITY:
Service cannot be stored.
Neither seller nor buyer can postpone or extend the
consumption of the service. Preproduction and post
production is not possible.
Service is not possible to produce, store, display and
sale.
Underutilized or unutilized services are economic
wastage for the producer.
Management excellence is to minimize the economic
waste.

SERVICE &
TECHNOLOGY

1)

2)
3)
4)
5)

Potential for New Service offerings.

New ways to deliver service.
Enabling both customers and employees.
Extending the global reach of services.
The internet is a service.

GOODS VS SERVICES
MARKETING

GOODS VS SERVICES
MARKETING
Goods

Services

Resulting Implications

Tangible

Intangible

Services cannot be inventoried.

Services cannot be patented.
Services cannot be readily displayed or communicated.
Pricing is difficult.

Standardized

Heterogeneous Service delivery and customer satisfaction depend on

employee actions.
Service quality depends on many uncontrollable factors.
There is no sure knowledge that the service delivered
matches what was planned and promoted.

Production
separate from
consumption

Simultaneous
production and
consumption

Nonperishable Perishable

Customers participate in and affect the transaction.

Customers affect each other.
Employees affect the service outcome.
Decentralization may be essential.
Mass production is difficult.
It is difficult to synchronize supply and demand with
services.
Services cannot be returned or resold.

Source: Adapted from Valarie A. Zeithaml, A. Parasuraman, and Leonard L. Berry, Problems and Strategies in Services Marketing,
Journal of Marketing 49 (Spring 1985): 33-46.

SERVICES MARKETING
MIX

SERVICES MARKETING MIX:

7 PS FOR SERVICES
Traditional Marketing Mix : 4 Ps
Expanded Mix for Services: 7 Ps
Building Customer Relationships Through:
People, Processes, and Physical Evidence

TRADITIONAL MARKETING MIX

All elements within the control of
the fi rm that communicate the fi rms
capabilities and image to customers or
that infl uence customer satisfaction
with the fi rms product and services:
Product
Price
Place
Promotion

EXPANDED MIX FOR SERVICES

-THE 7 PS
Product
Price
Place
Promotion

People
Process
Physical Evidence

EXPANDED MARKETING
MIX FOR SERVICES
PRODUCT

PLACE

PROMOTION PRICE

Physical good Channel type

features

Promotion
blend

Flexibility

Quality level

Exposure

Salespeople

Price level

Accessories

Intermediaries

Advertising

Terms

Packaging
Warranties

Outlet location Sales

promotion
Transportation Publicity

Product lines

Storage

Branding

Differentiation
Allowances

EXPANDED MARKETING
MIX FOR SERVICES

THANK -YOU

Unit I
completed