SERVICES

MARKETING
BA7013

UNIT I - INTRODUCTION

Definition Service Economy Evolution and growth of

service sector Nature and Scope of Services Unique
characteristics of services - Challenges and issues in
Services Marketing.

A service is an act or performance offered by one party

to another. Although the process may be tied to a
physical product, the performance is essentially
intangible and does not normally result in ownership of
any of the factors of production.

Service Economy
Service economy can refer to one or both of two recent
economic developments:

The
increased
importance
of
the service
sector in industrialized economies. The current list
of Fortune 500 companies contains more service
companies and fewer manufacturers than in previous
decades.

The relative importance of service in a product offering.

The service economy in developing countries is mostly
concentrated
in financial
services, hospitality, retail, health, human
services, information technology and education.
Products today have a higher service component than in
previous decades. In the management literature this is
referred to as the servitization of products. Virtually
every product today has a service component to it.

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

airlines, travel agencies, theme park

Others:

hair styling, pest control, plumbing, lawn maintenance,

counseling services, health club

Evolution and growth of service

sector
Evolution
1. The crawling out stage - before 1980
2. The scurrying about stage - 1980-1986
3. The walking erect stage - 1986-2000
4. The galloping stage - 2000 till date.

Unique characteristics of
services
Services can be paraphrased in terms of their generic key
characteristics
1. Intangibility (Cannot be felt with the human senses)
2. Perishability (Cannot be stored for later use)
3. Inseparability (Services cannot be separated from the
service provider)
4. Simultaneity (consumed at the same time immediately
on request)
5. Heterogeneity (Services are not same all the time)
6. Ownership (Lack of ownership)

Challenges and issues in

services marketing
The following are some of the challenges and issues of services
marketing
Variable quality
Internal marketing
Managing service providing processes
Client as production factor
Attuning marketing and policy
Relation management
Capacity management
Service Development
Competition
Differentiation

Differences between physical

goods and services

Difference between
physical goods and
services
Physical goods
Services
tangible

intangible

homogeneous

heterogeneous

Production and distribution are

separated from consumption

Production, distribution and

consumption are simultaneous
processes

A thing

An activity or process

Core value processed in factory

Core value produced in the buyerseller interaction

Customers do not participate in the

production process

Customers participate in production

Can be kept in stock

Cannot be kept in stock

Transfer of ownership

No transfer of ownership