Introduction to

Services Marketing

Dr.Sanjeev Verma
Assistant Professor
What is Marketing?
“Marketing is a social and managerial process by
which individuals and groups obtain what they
need and want through creating, offering, and
exchanging products of value with others.”
Philip Kotler
“Marketing is a total system of business activities
designed to plan, price, promote and distribute
want-satisfying products to target market to achieve
organizational objectives.”
Stanton, Etzel and Walker
What is SERVICE?
“A service is an act or performance that one party can
offer 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
“Deeds, processes and performances”
Zeithmal and Bitner
The Nature of Services
• regardless of the “product”, there is a
services component to the offerings of all
firms
• in some cases, a service is the principal
purpose of the transaction, as in the rental
of a car, a haircut, or legal services -- we
refer to this as the core service
• in others, service is performed in support of
the sale of a tangible product -- these are
referred to as supplementary services
 Goods and Services
Continuum
• Business are like tennis match, those who do not
serve well can expect to lose the match.
• Goods and services offerings being
intermingled in a unprecedented manner, in
different proportions, and can be termed a a
continuum of goods and services.
• With technological advancements, services
offered have become main distinguishing factor.
 The Goods-Services
Continuum

Soaps, Auto- Consumer Restaurant Air Insurance,

toothpaste, mobiles Durables travel Consulting,
or salt Teaching

MOSTLY GOODS MOSTLY SERVICES

Why to study Services Marketing?

Sectorial Distribution
Percentage Share of Sectors in India’s GDP at constant Prices

Year Primary Secondary Tertiary Growth Rate

1950-51 55.4 16.1 28.5 -
1960-61 50.9 20.0 29.1 +2.1
1970-71 44.5 23.6 31.9 +9.6
1980-81 38.1 25.9 36.0 +12.9
1990-91 30.9 30.0 39.1 +8.9
1999-2000 27.5 24.6 47.9 +22.5
Why to study Services Marketing?

Global Distribution of GDP in year 2000

(Share in GDP)
Country Primary Secondary Tertiary

India 27 25 48

China 17 49 34

France 3 23 74

Japan 2 36 62

Germany 1 28 71

USA 8 19 73
Why to study Services Marketing?
Share of Employment of different sectors in the
Indian Economy
Sector/Year 1981(%) 1991(%)

Primary 69.4 67.3

Secondary 12.4 12.2

Tertiary 17.7 20.5

Total 100 100

Characteristics of
Services
• intangibility:
intangibility difficult to sample and to evaluate
• inseparability: difficult to separate services from the
service provider; mainly direct sales; staff are essential to
the delivery of quality services
• heterogeneity:
heterogeneity virtually every service is different; very
difficult to standardize quality
• perishability: these can not be stored
• fluctuating demand: demand for some services fluctuates
by season, or even by time of day
• lack of Ownership
Strategic Services
Management
• intangibility generally makes the marketing
of services a challenge
• understanding how people buy services and
the segments that exist is just as important
• knowing more about the value of customer
segments is important -- some are more
valuable than others
• knowing what they value so that service
levels can be tailored is also important
Customer Involvement

Contribution of customers in service processes

Process Customer Action Comments

Need Recognition Recognized Need Common
Information Use means Common
Search available for search
Evaluation of Complex Common
Alternatives Consumer Behavior
Selection of Customer Unique
product Involvement
Receipt ‘’ ‘’
Post purchase Depend of Perception base
Behavior Experience
Classification of Services
By Industry
1. Entertainment
2. Hospitality
3. Trading
4. Finance
5. Insurance
6. Education
7. Transportation
8. Public Utilities
9. Government
10. Health
11. Business
12. Telecommunications
Classification of Services
By Target Effects
1. Physical Care
2. Intangible Assets
3. Mind of customers
4. Physical Possessions and tangible assets

By Customer Experience
1. Services purchases requiring extensive planning
2. Services dependent on customer experiences
3. Services based on trust