Importance of marketing in service industry

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The powerpoint presentation describes about the Services as a whole and the importance of Marketing in services.

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Importance of marketing in service industry

  1. 1. Importance of Marketing in Service Industry 1 Shiv S Tripathi Assistant Professor Calcutta Business School
  2. 2. Service A Service is something that is essentially intangible, and does not result into ownership of anything. It may or may not have an element of product. 2
  3. 3. Service Tangibility Spectrum 3
  4. 4. Qualities of Services • Intangible • Inseparable • Variable • Perishable • Autonomy 4
  5. 5. Services Sector includes • IT & ITES • Education • Trade • Financial Services (BFSI) • Media • Hospitality • Tourism • Transportation & Warehousing • Public Utilities • Real Estate & Lease • Public Administration & Defence • Professional Services like legal, accountancy, audit, consulting etc. 5
  6. 6. Share of different services categories in GDP SST/ IMSS/25-01-2013/Jamshedpur 6
  7. 7. Services GDP vs. Overall GDP Growth Rate 7 Source: Economic Survey 2011-12
  8. 8. State-wise growth of Services sector in 2009-10 8 Source: Economic Survey 2011-12
  9. 9. Evaluation of Alternatives by a Customer 9 Most Goods Most Services
  10. 10. The Service Ps • People • Process • Physical Evidence Are added to the basic 4 Ps of Marketing i.e. Product Price Promotion and Physical Distribution 10
  11. 11. Importance of Marketing in Services Product • Goods are tangible, services are intangible. • Services impact customers more than goods do. • Goods’ features, ingredients, price etc. can be highlighted while marketing, whereas service being intangible requires credence factors 11
  12. 12. Importance of Marketing in Services Price • Price of Goods is justified in all cases whereas it is difficult almost everytime to justify the price of even the smallest service as there is no standard. • Price of goods can be increased or decreased and can be justified by improved features or discounts whereas if price of a service is reduced it points out poor quality. Similarly price hikes are very difficult to justify. 12
  13. 13. Importance of Marketing in Services Promotion • All sorts of mass media can be used for goods like cars, FMCG products, consumer durables etc., whereas only specific media can be used for promoting services. • Word of mouth publicity (nowadays social media marketing) is most credible vehicle for promoting services. 13
  14. 14. Importance of Marketing in Services Physical Distribution • The same goods can be delivered all across the globe without any variation whereas services are bound to differ from even shop to shop • The service provider needs to audit its resources and competencies and accordingly decide about a place 14
  15. 15. Importance of Marketing in Services People • People are not very important in marketing goods whereas they are most important in services • Due to the people element there is a variability in service as everybody can’t have the same talent/behaviour 15
  16. 16. Importance of Marketing in Services Process • Process of manufacturing, distribution etc is not important as long as the goods are working fine. In services the process like promptness, order/sequence, usefulness, simplicity etc. are very important to leave a lasting impression. 16
  17. 17. Importance of Marketing in Services Physical Evidence • Service Quality is often judged or misjudged by the physical setting of the place where the service is being provided e.g. transportation, education, hotels, restaurants etc. • Still if physical evidence is appealing, people are good but processes are messy, customers tend to be dissatisfied. Similarly if physical evidence is appealing, processes are good, people will make a difference. 17
  18. 18. Importance of Marketing in Services Segmentation • A broad segment can be selected to market goods as anybody can purchase them, whereas services cater to very specific segments • E.g. there are specific needs of each segment of education viz. school, college, university, whereas a bookseller can cater to everybody’s needs. 18
  19. 19. Importance of Marketing in Services Target Market • The exact idea of target market is essential before the launch of any service whereas a broad idea will do for goods. • Goods can shift its customers base very easily but in case of services it is difficult. 19
  20. 20. Importance of Marketing in Services Positioning • Positioning of services depends upon the people, process, physical evidence and word of mouth. • A failed product may still be tried by the consumers because of other reasons but a failed service will be tried rarely by them. 20
  21. 21. THANK YOU 21

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