services

1. Introduction to Service Marketing
Dr. Gobinda Roy
International Management Institute Kolkata
10 October 2023
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2. “Services are going to move in this decade
to being the front edge of the industry”
Manufacturing giant IBM has sifted its from manufacturing PC units
to services including product support services, IT consulting, network
Consulting services.
Changing from manufacturing to services require mind-set changes
changes in culture, ways people work.
IBM successfully managed it!
Research division in IBM has adopted changes to focus on service
Science and Service Innovation
Many large manufacturing and IT companies follow the IBM ways for
Competitive advantage.
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3. 1. What are Services?
2. Why Service Marketing?
3. Service and Technology
4. Characteristics of Services
5. Service Marketing Mix
6. Staying Focused on the Customer
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Objectives

4. What are the services?
 Services are the deeds, processes, and performances provided
or coproduced by one entity or person for another entity or
person.
 Services are not tangible things that can touched, seen, and
felt.
 Rather are intangible deeds and performance provided
and/or coproduced for this customers.
 Examples include –IT services, Training, Air lines services, etc.
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5. 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
 airline, travel agency, theme park
 Others
 hair styling, pest control, plumbing, lawn maintenance, counseling services,
health club, interior design
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• Virtual assistant
• Freelance researcher
• Online business coach
• Paralegal services
• Private investigator
• ??

6. Contributions of Service Industries to
U.S. Gross Domestic Product
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7. Role of service sector in India
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8. Role of service sector in India
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(India Brand Equity Foundation, August 2022)
1. CAGR of 11.43% to Rs.
101.47 trillion (US$ 1,439.48
billion) in FY20
2. 66% share in India's GDP
3. 28% of the total
employment in India.

9. Role of service sector in India
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The services sector is a key driver of India’s economic growth. The sector contributed 55.39 per
cent to India’s Gross Value Added at current price in FY20*. Services sector’s GVA grew at a CAGR
of 1.45 per cent to US$ 1,064.8 billion in FY20 from US$ 1,005 billion in FY16.

10. Tangibility Spectrum*
• Some products are purely intangible – consulting
• Some products have both tangible and intangible component-
fast-food industry
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11. Why Service Marketing?
 Services dominate India and worldwide economies
 Service as a business imperative in goods-focused
businesses (Example?)
 Deregulated industries and professional service needs
 Service marketing is different
 Service leads to profits
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12. Examples of Goods Companies that are
Expanding into Services
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13. Service as a business Imperative in Good-
Focussed businesses*
 Traditional service industries (banking, transportation, health care)
have been evolved and become more competitive. (e.g. IRCTC)
 This creates need for service innovation and service growth strategies.
 Even manufacturing companies (GE, Caterpillar) feels that excellent
products are not enough to retain customers. Customer needs
superior supports.
 Xerox took initiative of document management system (digital and
papers).
 Why these companies are focussing onto services?
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14. Service as a business Imperative in Good-
Focussed businesses
 Commoditization of products has resulted in price and margin
pressure (e.g. mobile phones). Services can help customers to
customize the offering, adding value for the customers.
 Customer in demanding product and support solutions (mainly
in B2B case) (example, IBM servers solutions to corporate). This
require both products (servers, routers, IT peripheral devices
etc.) and services. (HFCL in FLAG project)
 Service often provide higher profit margin, and opportunity for
upselling. (Power system with AMC).
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15. Is service marketing different?*
 Gary knisely, a principle of Consulting frim Smith and Knisely, conducted a
series of interviews of experts.
 Consumer goods companies can not directly use marketing practices used in
the service firm. Reasons?
 More variables exist in marketing mix of a service company than a
manufacturing company (7P).
 In a service company, marketing and operation is closely linked than that of
manufacturing company (e.g. IBM’s IT solution and integration business).
 Customer interface is direct in service firm (hotel manager  guest),
whereas, manufacturing company hardly face customers (Dettol no direct link
customers)
 In service, your people is the key to business success as “people-on people
sales.
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16. Why service stinks?
 Company provided tiered services based on profitability (high value
customers), some segments (low profit margin) get neglected in this
way.
 Increasing adoption of self-service and technology based service
(automated voice support service for Airtel pre-paid customers, SBI e-
Zone).
 Customer expectation is high in all industries, because of excellent
service they got from few service providers. Hence, they expect same
service from all other service providers.
 Less-skilled people at the front desk and less training provided to front
line professionals.
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17. How to compete strategically through
service?*
 Exemplary Out-of-box customer service: Gain
competitive advantage using out-of-box services.
(Southwest Airlines – distinct sense of humour and
employees, in-flight games and jokes)
At Gallery Furniture, free food and day care for
kids
 Innovative and cutting-edge service: being the first
to provide service with inventions, technology, and
science. (Amazon first introduced online shopping;
Airbnb, Inc. is an American company which operates
an online marketplace and hospitality service for
people to lease or rent short-term lodging including)
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Ritz-Carlton -chatbots to request
customer feedback and offer
personalized services

18. How to compete strategically through
service?
 Value-added, revenue producing services: Besides servers selling,
IBM sells integrated services (end-to-end consulting services).
PeTSmart, largest pet retailers in US selling pet items, in addition
to “pet parent” offering pet training, grooming, and over night care.
 A service culture that differentiates: You can serve better, if you
hire best workers from Industry, and help him/her to excel and
feel for company. Happy employee can make customer happy.
Hence target for “employer of choice”.
E.g.- “Take care your employee, they will take care your guest”
(Marriott)
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19. Characteristics of Services Compared to
Goods*
Intangibility Heterogeneity
Simultaneous
Production
and
Consumption
Perishability
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20. Comparing Goods and Services
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21. Implications of Intangibility
 Services cannot be inventoried
 Services cannot be easily patented
 Services cannot be readily displayed or communicated
 Pricing is difficult
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https://patents.google.com/

22. Implications of Heterogeneity
 Service delivery and customer satisfaction depend on
employee and customer actions
 Service quality depends on many uncontrollable factors
 There is no sure knowledge that the service delivered
matches what was planned and promoted
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23. Implications of Simultaneous Production
and Consumption
 Customers participate in and affect the transaction
 Customers affect each other
 Employees affect the service outcome
 Decentralization may be essential
 Mass production is difficult
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24. Implications of Perishability
 It is difficult to synchronize supply and demand with services
 Services cannot be returned or resold
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25. Search, Experience, and Credence
Qualities
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26. Challenges and Questions for Service
Marketers
 Defining and improving quality
 Designing and testing new services
 Communicating and maintaining a consistent image
 Accommodating fluctuating demand
 Motivating and sustaining employee commitment
 Setting prices
 Organizing to facilitate strategic and tactical decision-making
 Finding a balance between standardization and personalization
 Protecting new service concepts from competitors
 Communicating quality and value to customers
 Ensuring the delivery of consistent quality service
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27. Traditional Marketing Mix
Elements an organization controls that can be used to satisfy or
communicate with customers:
 Product
 Price
 Place
 Promotion
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28. Expanded Mix for Services – The 7 Ps*
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
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29. Expanded Marketing Mix for Services
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30. Ways to Use the 7 Ps
Overall Strategic Assessment
How effective is a
firm’s service
marketing mix?
Is the mix well-
aligned with overall
vision and strategy?
What are the
strengths and
weaknesses in terms
of the 7 Ps?
Specific Service Implementation
Who is the customer?
What is the service?
How effectively does
the service marketing
mix for a service
communicate its
benefits and quality?
What changes/
improvements are
needed?
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31. Thank you!
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