Services Marketing

C
SERVICES MARKETING
ENVIRONMENT
Semester: BBA CAM SIXTH Semester
Name of the Subject:
SERVICES MARKETING
Semester: BBA CAM SIXTH Semester
Name of the Subject:
SERVICES MARKETING

Service Marketing
Environment
All organizations operate within the
marketing environment. The marketing
environment is made up of two parts –
• Macro environment
• Micro environment
Chanderprabhu Jain College of Higher Studies & School of Law
Plot No. OCF, Sector A-8, Narela, New Delhi – 110040
(Affiliated to Guru Gobind Singh Indraprastha University and Approved by Govt of NCT of Delhi & Bar Council of India)

Macro Environment
•It represents all the outside influences
which have impact on an organization’s
marketing or business activity.
• It includes economic and political
factors and socio-cultural trends,
•for example the external environment
influences will effect all organizations
within a sector to a greater or lesser
degree.

Micro Environment
• It is the internal environment of the organization
.
•The internal environment relates to a particular
organization and its publics
•The factors to be analyzed in the internal
environment will include the following :
• Company management structure
• Customers
• Suppliers
• Channel members

• Competitors
• Other publics which may include
• Government and political bodies
• Pressure groups
• Financial institutions
• Shareholders
In effect any person or organization which
can influence the company’s marketing
activities and marketing success in way
should be included here.

The political legal , economic , social and
technological forces exert the same type
of effect on services as they do on
products ; however certain environment
features have a greater impact on service
These environmental factors are :--
• Political –legal environment
• Economic environment
• Socio-cultural environment
• Technological environment

Political –Legal
Environment
•There is considerable influence of the political –
legal environment on service marketing .
•Service industries are often more closely regulated
than most other forms of private enterprise.
•Many service firms are being subject to
government regulations in addition to the usual
taxes and legislation.
• Service providers must understand and recognize
the impact of such regulation on their competitive
strategies.

Regulation generally influences service business in four
ways.
• Regulation generally influences the range and type of
competition.
• Regulation reduces the marketer’s array of options and
introduces certain rigidities into the marketing
process.
• Decision of the regulatory agencies being the binding
part of the marketing decision –making process must
be focused at understanding and predicting those
agencies action
• Pressure groups may be established to lobby and
effect change or modify , the directions being taken by
the regulatory bodies.

Economic Environment
• In economic environment changing life style,
changing world, changing economies, changing
technological advances and changing
consumer needs have contributed to increase
spending on consumer services.
• Technological innovations have also helped to
create a higher standard of living for a common
man, who presently spends a larger portion of
his or her increased disposable income of
services.

•But the role of technology has also aided in
circumventing barriers to trade , especially in its
role in designing and delivering services.
•The urbanization has widened the demand for
personal and public services .
•The demographic shift towards an older
population in some countries has resulted in new
service demands such as better healthcare,
convenience products etc.
•In the global environment , due to cross country
cultural issues , trade barrier ( both tariff and non-
tariff) tend to become more restrictive in
marketing of services.

Socio-Cultural
Environment• Socio- cultural forces are set factors including life
style , social values and beliefs that affect the
marketing activities of an organization.
•These factors have significant impact on the
marketing of services .
•The marketers have found the intensive use of
consultants and counselors in their personal family
and working lives.
•Health, Beauty, travel, culture, and higher
education have partly replaced durable goods as
status symbols in the mind of many consumers .

• Increased trend in the services like security ,
insurance, legal, medical and investment.
• Globally , the cultural dimensions affect services
in a more pronounced manner than do goods.
•Due to inseparability characteristic of services the
firms may need to adapt their offerings to suit local
taste and preferences .
•KFC and Mc’Donald’s had to adapt its products in
India to suit local potatoes.
•Business negotiations are very much subject to
local norms and local systems.
•Language - a major cultural influence

Technological Environment
• Technology has influenced our life styles, consumption
pattern and our economic well being tremendously.
• Internet , worldwide web (www) , E-commerce video
conferencing.
•World has become too small and boundary less.
• The service economies will be technologically driven
soon.
•Instead of expecting service providers to improve
results ; management must see what kind of
organizational structure , incentives , technology and
skills can improve overall productivity.

COMPETITION
• IN addition to PEST, it is helpful to analyze the
competitive environment which affects the
development of Marketing plans for services.
Competitive environment should be studied in
light of following five forces:
a. Intensity of competitive rivalry
b. Threat of substitutes
c. Threat from new entrants
d. Bargaining power of buyers
e. Bargaining power of suppliers

INTRODUCTION TO SERVICES
• What are services?
• Why services marketing?
• Characteristics of Services Compared
to Goods
• Services Marketing Mix
• Staying Focused on the Customer

DEFINITION
• Services are ‘deeds, performances, efforts’.
• Is a glass of cola a service?
• Is a DVD a service?
• Is a ride in a taxicab a service?
• Other terms that includes the word ‘service’
• Service industry, service economy
• Consumer services
• Customer service

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

Examples of Customer Service
• Free car wash with fill-up
• Calling the customer by name
• Easy return policy
• Updated map of the area or GPS in rental cars
• On-time delivery
• Courtesy
• Enthusiasm
• Suggesting a less expensive option
• Package carry out

TANGIBILITY SPECTRUM

OVERVIEW: WHY SERVICES MATTER
• Services dominate U.S. and
worldwide economies
• Services are growing dramatically
• Service leads to customer retention
and loyalty
• Service leads to profits
• Services help manufacturing
companies differentiate themselves

COMPARING GOODS & SERVICES

THE SERVICE SECTOR
• The services sector has been growing
at a rate of 8% per annum in recent
years
• More than half of our GDP is
accounted for from the services
sector
• This sector dominates with the best
jobs, best talent and best incomes

• “There are no such thing as service
industries.There are only industries whose
service components are greater or less
than those of other industries. Everybody
is in service.”
Theodore Levitt

What is a Service
• It is the part of the product or the full
product for which the customer is
willing to see value and pay for it.
• It is intangible.
• It does not result in ownership.
• It may or may not be attached with a
physical product

WHY DO FIRMS FOCUS ON SERVICES?
• Services can provide higher profit
margins and growth potential than
products
• Customer satisfaction and loyalty are
driven by service excellence
• Services can be used as a
differentiation strategy in
competitive markets

Difference between Goods & 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 buyer-seller
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

THE SERVICES MARKETING
TRIANGLE
Internal
Marketing
Interactive Marketing
External
Marketing
Company
(Management)
CustomersEmployees
“enabling the
promise”
“delivering the promise”
“setting the
promise”
Source: Adapted from Mary Jo Bitner, Christian Gronroos, and Philip Kotler

WHY STUDY SERVICES MARKETING?
• Service-based economies
• Service as a business imperative in manufacturing
and IT
• Deregulated industries and professional service
needs
• Services marketing is different
• Service equals profits

• Service is a technical after-sale function that is
provided by the service department.
Old view of service =
Customer Service Center
Old:
Service =
wrench time
What is Service? The Old View

WHAT IS SERVICE? THE NEW VIEW
• Service includes every interaction
between any customer and anyone
representing the company, including:
Dealers
Salespeopl
e
Receptionis
ts and
Schedulers
Managemen
t and
Executives
Service
Employees
Billing and
Accounting
Personnel
Web site
and any e-
channel
Interaction

SERVICE CAN MEAN ALL OF THESE
• Service as a product
• Customer service
• Services as value add for goods
• Service embedded in a tangible
product

The three additional ‘P’s of Service
Marketing
• People
• Physical evidence
• Process

QUALITIES OF SERVICES
• Search qualities
• Experience qualities
• Credence qualities

DIFFERENTIATION IN SERVICES
• Offering
• Faster and better delivery
• Image

In services, the last experience remains
uppermost in your mind. Therefore, it is
not enough to be good, you have to be
consistently good

Characteristics of Services
Compared to Goods
Intangibility
Perishability
Simultaneou
s
Production
and
Consumptio
n
Heterogeneity

Services
Unique characteristic - 1
INTANGIBILITY
Customer is unable to experience
the‘product’ prior to ‘purchase’
Implications:
• Services cannot be inventoried
• Services cannot be easily patented
• Services cannot be readily displayed or
communicated
• Pricing is difficult

Services
PERISHABILITY
Can’t be stored
Implications:
• It is difficult to synchronize supply
and demand with services
• Services cannot be returned or resold

Services
INSEPERABILITY
Production & consumption
happen at the same place and cannot be
separated
Implications:
• Customers participate in and affect the transaction
• Customers affect each other
• Employees affect the service outcome
• Decentralization may be essential
• Mass production is difficult

Services Unique characteristic - 4
VARIABILITY
• Difficulty in establishing consistency in
quality
– across Providers or within providers
– across Time
– across Delivery Centers
Implications:
• 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

Challenges for Services
• Defining and improving quality
• Ensuring the delivery of consistent quality
• Designing and testing new services
• Communicating and maintaining a consistent
image
• Accommodating fluctuating demand
• Motivating and sustaining employee
commitment
• Coordinating marketing, operations, and human
resource efforts
• Setting prices
• Finding a balance between standardization
versus customization

Traditional Marketing Mix
• All elements within the control of the
firm that communicate the firm’s
capabilities and image to customers
or that influence customer satisfaction
with the firm’s product and services:
– Product
– Price
– Place
– Promotion

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

Reasons for Growth in Service Sector
• CHANGING LIFESTYLE- increase in
affluency, increase in leisure time,
women in working places
• CHANGING WORLD- increased complexity
of life, increased life expectancy, ecology
& resource concerns.
• CHANGING ECONOMIES- globalization,
Privatization, Deregulation
• CHANGING TECHNOLOGY- range of new
products, product complexity

TYPES OF SERVICES
• Transportation services
• public utility services
• communication
• trading services
• financial & insurance services
• real estate services
• marketing related services
• govt. provided services
• engineering service
• Entertainment services
• Business & professional services
• Hospitality services
• Other services

Why do Individual Consumer Select
a particular service say a Bank
• It is conveniently located.
• My father has an account in this bank
• My friend is working here
• My neighbor introduced me.
• And so on.

MOTIVATION & CONSUMER
BEHAVIOR
• MASLOW’S HIERARCHY OF NEEDS
A. PHYSIOLOGICAL NEED
B. SAFETY
C. BELONGINGNESS
D. ESTEEM
E. SELF ACTUALISATION

Physiological Need
• Core product or service that works.

Safety need
• Basic reliable services associated
with core product or services
• Eg: a bank addressing safety need
through an ad- Going on Vacations?
Will your valuable be safe while you
are away? For only some rupees a
day you can rent a safe deposit box.

Belongingness
• Human interactions facilitating
selcetion and use of existing
products and services
• Eg: when a bank markets credit cards
through organization such as alumni,
affinity groups

ESteem
• Superior developed new business
solutions
• eg: practice of assigning a personal
banker to each customer.

Self Actualization
• Partnerships
• Eg: the tremendous growth in the
use of credit card is in the segment
where standard of living is high
because people acquire this tool that
help them attain fuller self
actualisation.

PERCEPTION & CONSUMER
BEHAVIOR
• SELECTIVE EXPOSURE-
• people most likely to notice stimuli that relate
to current need
• People are likely to notice stimuli that they
expect or anticipate
• People are more likely to notice stimuli that
are large in relation to normal size of stimuli
• SELECTIVE DISTORTION
• SELECTION RETENTION

CONSUMER DECISION MAKING FRAMEWORK
• SOCIAL FACTORS
a. Family influence
b. Reference group influence
c. Roles & status
•. CULTURAL FACTORS
a. Culture
b. Sub culture
c. Social class

• PSYCHOLOGICAL FACTORS
a. Beliefs & attitudes
b. learning
•. PERSONAL FACTORS
a. Age & family life cycle
b. Economic circumstances
c. Occupation
d. Personality & self concept
e. psychographics

LEARNING THEORY
A. DRIVE
B. CUES
C. RESPONSE
D. REINFORCEMENT

FAMILY LIFE CYCLE & BANKING NEEDS
STAGE FINACIAL
SITUATION
BANKING NEEDS
YOUNG , SINGLE
PROPLE
FEW FINNACIAL
BURDENS,
RECREATION
ORIENTED
LOW COST
CHECKING, AUTO
LOAN, CREDIT CARD
FULL NEST:
YOUNGEST CHILD
UNDER SIX
HOME PURCHASING
PEAK, LIQUID ASSETS
LOW, MANY WORKING
MOTHERS
MORTGAGE, CREDIT
CARD, REVOLVING
CREDIT LINE, BILL
CONSOLIDATION
LOAN
FULL NEST: OLDER
COUPLES WITH
DEPENDENT
CHILDREN
GOOD FINANCIAL
POSITION, MANY
WORKING MOTHERS
HOME IMPROVEMENT
LOANS, EQUITY
CREDIT LINES,
CERTIFICATES OF
DEPOITS, MONEY
MARKET DEPOSITS
EMPTY NEST: OLDER
COUPLES, NO
CHILDREN AT HOME
SIGNIFICANTLY
REDUCED INCOME
MONTHLY INCOME
CHECKS ON CDs,
estate planning,

CONSUMER BUYING
PROCESS
• STAGE 1: AWARENESS
• STAGE 2: SEARCH &
COMPEREHENSION
• STAGE 3: ATTITUDE DEVELOPMENT
• STAGE 4: EVALUATION OF
ALTERNATIUVES
• STAGE 5: PURCHASE
• STAGE 6: ADOPTION & POST
PURCHASE BEHAVIOR

ORGANISATIONAL BUYING
BEHAVIOR
• STAGE 1: NEED IDENTIFICATION
• STAGE II: DEFINE OBJECTIVES &
SPECIFICATIONS
• STAGE III: IDENTIFY ALTERNATIVES
• STAGE IV: EVALUATE ALTERNATIVES
• STAGE V: SELECT SUPPLIER

ITEM CONSUMER BUYER
BEHAVIOR
ORGANISATION
AL BUYER
BEHAVIOR
INVOLVEME
NT
ONE OR TWO PEOPLE
INVOLVED IN BUYING
PROCESS
SEVERAL PEOPLE
INVOLVED
TYPE RELATIVELY SIMPLE
PROCESS BUT INFORMAL
DEPENDING ON
NATURE OF
PURCHASE, CAN BE
COMPLICATED
FORMALISED
PATTERN NO SET FORMULA SYSTEMATIC
SEQUENCE
BEHAVIOR LEARNT BEHAVIOR PROFESSIONAL
SKILL & TRAINING
BUYER-
SELLER
RELATIONSH
IP
INDEPENDENT
RELATIONSHIP BETWEEN
BUYER & SELLER
INTERDEPENDENT
RELATIONSHIPChanderprabhu Jain College of Higher Studies & School of Law

SEGMENTATION
STRATEGIES
• GEOGRAPHIC SEGMENTATION
• DEMOGRAPHIC SEGMENTATION
• PSYCHOLOGICAL SEGEMENTATION
• VOLUME SEGMENTATION
• BENEFIT SEGMENTATION

GEOGRAPHIC
SEGMENTATION
• Division on the basis of countries,
regions, states, cities & towns.
• Eg: a bank practices geographic
segmentation when it decide on the
location of a new branch. It must
carefully choose locations to meet
the business goals.

DEMOGRAPHIC
SEGMENTATION
• Segmentation on the basis of size, age,
sex, income, occupation & family life cycle.
• Eg: a bank establishes an executive
banking group specifically for accountants,
doctors etc.
• A bank that develops equity credit line
aimed at house owners with income more
than Rs 75000 is targeting another specific
demographic segment.

PSYCHOGRAPHIC
SEGMENTATION
• Classifies on the basis of lifestyles,
social class or personality profile by
investigating how people live, what
interests them and what they like.
• Eg: a bank might identify the “young
professional on fast track” as prime
market for credit card sales.

Lifestyle: Urban Indian
HousewifeTYPE LIFESTYLE
Gregarious Hedonist Self indulgent, spends on new products
Contemporary
housewife
Aspires of modernity but still uses fairness
cream
The affinent
sophisticate
‘Have money, will spend’ type
Tight fisted
traditionalist
Leads a sheltered life, dresses like the film
stars
Troubled homebaby Believes in destiny
Anxious rebel Would much rather work than stay at home
Archetype provider Satisfied being a housewife- very hospitable
Contented
conservative
Believes in advertising
Mrs up-to-date Tries new products, is trendy and highly ad
prone
Mrs. Non- Sense Individualistic, conservative, self centered

SOCIAL CLASS
• Division of society on the basis of education,
occupation, and type of residential
neighborhood.
• Can be categorized as upper class, the upper
middle class, the lower imiddle class , the
upper lower class and lower lower class
• Eg: a young lawyer’s monthly income may be
equal to a middle aged foreman in a textile firm
but they may have different family
backgrounds, tastes and aspirations

PERSONALITY
• Individuals can be segmented on the
basis of shared personality traits
which influence decisions as
consumers in relations to service
offerings.
• Eg: a large number of people at
theme park would be gregarious
extroverts.

VOLUME SEGMENTATION
• Marketers segment the final consumers based on
usage rate, usage expenses and brand loyality.
• Amongst the uses they distinguish segments
based on volume: Heavy usage (heavy half),
medium usage, light usage and non users.
• PARETO PRINCIPLE:
A SMALL PROPORTION OF CUSTOMERS (SAY
20%) GENERATE LARGE PROPORTION OF SALES
(SAY 80%)

BENEFIT SEGMENTATION
• On the basis of different benefits
sought from the product.
• Eg: British Motors car co. is offering
benefit of providing 10% extra on
your old cars from market price, 30
min loan approval and open on
Sunday.

70
Benefit Segmentation
Product
category
Generic /
Primary
utility
Secondary / Evolved
utilities
Salon Personal
care
services
Good environment and
staff, less priced
services,
Hotel Rest &
sleep
Self esteem, recreation,
vacation,

TARGETING
GUIDELINES FOR SELECTING TARGET MARKET
1. Target market should be consistent, should meet
the goals of the organization. A tourism org which
is leading in group tours can not suddenly target
individuals.
2. Organizations should look for markets that are
consistent with the resources.
3. An org should look for markets which will generate
not sufficient sales volume but profit volume.
4. An org should look for a target market where the
number and size of competitor is small

TARGETING
• Market Targeting:
– The process of evaluating each
market segment’s attractiveness
and selecting one or more
segment to enter.
• A target market is a set of buyers
sharing common needs or
characteristics that the company
decides to serve.Chanderprabhu Jain College of Higher Studies & School of Law

Market Targeting
– Three Alternative Market Strategies
• (by Philip Kotler)
Undifferentiated
Marketing Company
Marketing
Mix
The Market

Market Targeting
Differentiated
Marketing Mix 1
Mix 2
Mix3
S1
S2
S3
– Three Alternative Market Strategies
• (by Philip Kotler)

Market Targeting
Company
marketing
mix
Company
marketing
mix
MarketMarket
Company
marketing mix 1
Company
marketing mix 1
Company
marketing mix 2
Company
marketing mix 2
Company
marketing mix 3
Company
marketing mix 3
Segment 1Segment 1
Segment 2Segment 2
Segment 3Segment 3
Segment 1Segment 1
Segment 2Segment 2
Segment 3Segment 3
Company
marketing
mix
Company
marketing
mix
Undifferentiated
marketing
Differentiated
marketing
Concentrated
marketing

FACTORS UNDIFFERENT
IATED
MARKETING
CONCENTRATE
D MARKETING
DIFFERNTIATE
D MARKETING
SERVICE
PRODUCT
Limited no. of
service
offering under
one brand for
many type of
consumers
One brand
which has
been aimed to
one to one
consumer
group.
Distinct brand
for each
consumer
group
DISTRIBUTION All possible
outlets
All suitable
outlets
All suitable
outlets differs
by segment
PROMOTION Mass media All suitable
media
All suitable
media- differs
by segment
PRICE On popular
price range
One price
range aimed
to the
consumer
group
Distinct price
range for each
consumer
group

STRATEGY
EMPHASIS
appeal to
large no. of
consumers
via a uniform
broad based
marketing
programmes
Appeal to
one specific
consumer
group via a
highly
specialised
but uniform
marketing
programme.
Appeal to
two or more
distinct
market
segments via
different
marketing
plans
catering to
each
segment.
TARGET
MARKET
Broad range
of
consumers
One well
defined
consumer
group.
Two or more
well defined
consumer
groups
FACTORS UNDIFFEREN
TIATD
MARKETING
CONCENTRATE
D MARKETING
DIFFERNTIATE
D MARKETING

INTRODUCTION
• Service marketers needs to develop
a special focus for the marketing mix
to account for special problems from
four special characteristics (4I’s) of
services.

SPECIAL CHARACTERISTICS &
STRATEGIES
Characterist
ics
Potential
problems
Appropriate strategies
for marketing services
Intangibility Difficult to evaluate
in advance
•Build brand benefit
linkages.
•Associate with tangible
cues
Inventory Inadequate
availability at
desired times
•Use of peak pricing
•Offer flexible delivery
Inconsistency Hard to assume
consistent quality
•Substitute equipment for
people.
•Establish set rules &
routines
Inseparability Perception of
services is based on
perception of
provider
•Build membership
relationships
•Personalize the service
•Provide sensitivity
training

Strategies for Marketing
of Service
• Strategies to stay proactive by
differentiation.
• Strategies for dealing with
Intangibility
• Strategies for dealing with Inventory
(Perishability).
Inconsistency (heterogenity)
Inseparability.

Pro- activity: a strategic tool to
outservice competition
• Service providers must understand
the distinctions between one’s CORE
SERVICE OFFERING & SUPPLEMENTAL
SERVICES (VALUE ADDED OR
PERIPHERAL SERVICES).

CORE PRODUCT/
SERVICE OFFERING
SUPPLEMENTAL
SERVICE
•Safe transport from
one city to another
via aeroplane.
•Doctor’s proper
diagnosis &
treatment
•Lawyer’s sound legal
advice
•Hotel Room with
comfortable bed &
clean bath.
•Movie or meal on
board the aeroplane.
•Doctor’s friendly
bedside manner
•Trustworthiness of
Lawyer.
•Bathroom amenities
and mini bar in the
hotel room.

Why customers evaluate
service on Supplementals
• A good core extension alone is not
sufficient.
• Within & across competitors , the
core product offerings hardly have
variations eg: the core offering of
airlines are the same.
• For many customers/ consumers it is
very difficult to judge the core
offering. Eg: to differentiate between
lawyers.

PROACTIVE SERVICING
• Differentiating the services based on
supplementals.
• What is the need of the customers?
• What best our organization does?
• What is being offered by the
competitor?

PROACTIVE SERVICE MODEL
Proactive Services
Reactive Services
Primary
Services
Core
product

PROACTIVE SERVICE
MODEL
• CORE SERVICE: A seat from one destination to
another in Indian Airlines.
• PRIMARY LEVEL SERVICE: A seat, a seat belt, an
oxygen mask, a floatation device or parachute.
• REACTIVE SERVICE: that developed due to
competitor’s offering eg: discount fare, choice of
refreshments, frequent flier programmes.
• Each reactive service was once a proactive service.
• Longer a service remains proactive more economic
benefits it gets.

STRATEGIES FOR DEALING WITH
INTANGIBILTY
• Services being intangible it is difficult for the
prospective customers to evaluate it in advance as
there are no features of services that demonstrates
existence of benefits
• Search quality: characteristics that can be assessed
before purchase.
• Experience Quality: characteristics that can be
assessed after use.
• Credence Quality: that can not be easily assessed
even after purchase & experience. Eg: Consultancy

TANGIBILISING THE INTANGIBLES
• Creating Trust by Providing Tangible
Evidence.
1. VISUALISATION: a hotel depicts the
benefits of dining at its restaurants
with its ads which show beautiful
interiors, well laid facilities etc.

2. ASSOCIATION: associate the
service with a tangible good, person,
object or place
• Eg: Air India- ‘the Maharaja’ to depict
the friendly image.
3. PHYSICAL REPRESENTATION:
citibank in its credit card services use
colors- gold or platinum – symbolise
wealth & status.
• Uniform in Airlines, restaurants,
hospitals

4. DOCUMENTATION:
Cite facts
& figures in their
promotions
to support the claim of
their
performance in terms
of
dependability,
reliability &
responsiveness.Chanderprabhu Jain College of Higher Studies & School of Law

5. PEOPLE : critical elements of service
delivery
Eg: in a hotel it is the people who create the
difference in the good & bad service delivery
6. PLACE: Quality of service is perceived by
the customer from the place of delivery. Eg:
a clean and well laid down interiors of a
hotel/ hotel room
7. PROMOTION: Dramatize the benefits of
services eg: many hotels send promotional
videotapes of facilities and benefits available
at the resort for preview of customer before
they decide to buy a service.

8. BRANDING: It helps in
differentiating the services from its
competitors in terms of name, logo &
other identifying features and forms
an important component of
communication mix.

9. SELLING SERVICES: face to face
selling tends to be more prevalent in
service industry. Eg: IN a courier
service the quality of service
perceived by the customer depends
on how package deliverer acts during
face to face interaction.
10. TANGIBILIZING SERVICES
THROUGH BENEFITS: Times card
announce an exclusive tie up with
Pizza Hut and provided lucrative
benefits to its card members.

11. TANGIBILISING THROUGH
POSITIONING:
a. Develop a tangible representation of its
services eg: credit card, library card.
b. Focus on the relationship between the
company and its customers.
c. Site third party endorsements.
d. Offer a tangible benefit eg: times card
offers discount on pizza
e. Establish unique product positioning
such as 24hrs on service.

INCONSISTENCY
• It is the characteristic of services
that makes them less standardized
and uniform than goods.
a. Industrialize Services
b. Establish set rules and procedure

a. Industrialize services
through
• Hard Technologies- substituting machinery for
people. Can not be used for labor oriented
services like medical, legal , accountancy etc.
Eg: Mc’ Donalds
• Soft Technologies- way to industrialize services
by substituting preplanned systems
(prepackaged vacation tours)
• Hybrid Technologies- combination of hard & soft
technologies for eg: computerized truck routing

b. Establish Set Rules & Procedures
Routine
• Use of preplanned systems with
specific set of rules & routines can be
used to manage human performance
effectively in service delivery.
• Eg: Limited menu restaurants like
Pizza Hut & TGI Friday ensure high
consistency from one visit to next
because they have standardised
preparation procedures.Chanderprabhu Jain College of Higher Studies & School of Law

INVENTORY (Perishability)
• Services cannot be inventoried like
products.
• Inadequate availability at desired
time.
• Marketers must focus on balancing
supply and demand.
• Eg: the queue is too long at the bank
teller’s counter.
• The parking is full.Chanderprabhu Jain College of Higher Studies & School of Law

WHAT IS AN EDUCTIONAL SERVICE?
• Education encompasses teaching
and learning specific skills , and also
Something less tangible but more
profound the impart of knowledge,
positive judgment and well
developed wisdom .

FACTOR RESPONSIBLE FOR
COMMERCIALSATION EDUCATION
• CHANGING LIFESTYLE :
education product
,jewellery design
travel & tourism , hospitality
management
nursery education
Increase in
affluency
Increase in
leisure time
Women in
working
places
Changing
lifestyle

• CHANGING WORLD : education
product , law , charted accountancy
medical stream ,
physical education
environmental
related courses , financial mgt.
• CHANGING ECONOMICS :
• education
product, export /import management
international marketing
e-commerce ,web
designing
Changing
world
Increased
complexity
of life
Increased
life
expectanc
y
Ecology &
resource
concerns
Globalisati
on
Privatisatio
n/
Deregulati
on
Changing
economics

• CHANGING TECHNOLOGY :
Education product, IT, s/w programming
•
Maintenance
management ,ERP, Material
management
Range of
new
products
Product
complexit
y
Changing
technolog
y

MARKETING STRATEGIES

PRODUCT : Product is a set of benefit
 knowledge
 ideas
 course
 degree
PRICE
 The Main source of income – Fee
 Various components
 The penetration pricing strategy

PLACE: It refers to the place where the customers
can buy the product and how the product reaches
out to that places.
 Points to Delivery
 Usually requires large classrooms
 Cost-visibility trade off
 Ideally away from cities
 Virtual classrooms

PROMOTION : It includes the various ways
communicating to the customers of what the services
provider has to offers .
 Growth in the sector has called for promotion
 Reputation matters
 Channels of communication
PEOPLE: refers to the customers, employees
,management & everyone else involved in it .
 Teachers ,staff members ,students , suppliers ,etc.
 Face to face teaching
 Open house meeting
 Reputation of the brand rest in your people’s hands
 Reputation of teachers can add to the institution’s
reputationChanderprabhu Jain College of Higher Studies & School of Law

PROCESS: The process of giving a service and the
behaviour of those deliver are crucial to customers
satisfaction .
Best viewed as something that yours customers
participates in at different points in time
 Course plan
 Internal mark policy
PHYSICAL EVIDENCE: choosing to use a service can
perceived as a risky business because you are buying
something intangible .
Uncertainty can be reduce by helping potential
customers to “see” what they are buying
 Infrastructure
 Teaching equipments
 Transportation

HOSPITALITY INDUSTRY
• The hospitality industry is a broad category of
fields within service industry that includes
lodging, event planning, theme parks,
transportation, cruise line, and additional fields
within the tourism industry.
• A hospitality unit such as a restaurant, hotel, or
an amusement park consists of multiple groups
such as facility maintenance and direct
operations (servers, housekeepers, porters,
kitchen workers, bartenders, management,
marketing, and human resources etc.).Chanderprabhu Jain College of Higher Studies & School of Law

TOURISM INDUSTRY
• The service industries which benefit from tourism
include transportation services, such as airlines,
cruise ships, and taxicabs; hospitality services,
such as accommodations, including hotels and
resorts; and entertainment venues, such as
amusement parks, casinos, shopping malls, music
venues, and theatres.

TOURISM INDUSTRY
• Reasons why tourism is important
• Factors that influence number of tourists
• Reasons for growth/increase in tourism

TOURISM INDUSTRY IN
INDIA
 Tourism in India accounts for 7.5 per cent of GDP
and is the third largest foreign exchange earner
for the country.
 Tourism in India has significant potential
considering the rich cultural and historical
heritage, variety in ecology, terrains and places
of natural beauty spread across the country.
 Tourism is also a potentially large employment
generator besides being a significant source of
foreign exchange for the country.

India has moved up 13 positions to 52nd rank from
65th in Tourism & Travel competitive index@.

TOURISM MARKETING
• Marketing tourism products is different from most
other products because what is being sold is
“consumption of an experience” rather than a
tangible product. The product is primarily service
based. This means that customer often walks
away from the tourism offering with only a
memory or experience.

DEFINITION
• According to Krippendort “Tourism marketing is to
be understood as the systematic and coordinated
execution of business policy by tourist
undertakings whether private or state owned at
local, regional , national or international level to
achieve the optimal satisfaction of the needs of
identifiable consumer groups, and in doing so to
achieve an appropriate return.”

CHARACTERISTICS
• Intangible
• Perishable
• Heterogeneous
• Feeling and touch based
• KERALA – God’s own country
• Rajasthan – Padharo maahro desh

Marketing in Hospitality and
Tourism..
• As the production and consumption experiences
are inseparable, it is impossible to sample a
tourism service before purchase.
• Marketing of tourism is based on
– Trust
– Relationship
– Delivering value

Hospitality marketing
Hospitality Marketing is the process for getting
a company's product or service out to
consumers.
How segments of the hospitality industry, such
as:
• hotels,
• restaurants,
• resorts,
• amusement parks and other entertainment
and accommodations businesses

PRODUCT PRICE PLACE
PROMOTION PEOPLE PROCESS
PHYSICAL
EVIDENCE
RAINBOW OF SERVICE MARKETING MIX

1. PRODUCT
 The tourism product differs from other products due to the
wide range it covers
•Accommodations
•Transportation
•Food
•Recreation
•Attractions.
 Often the product includes intangibles such as history,
culture and natural beauty.
 Many times the hospitality or tourism product is viewed as
a “service” in the customer’s eyes.
 The closer we can determine how to satisfy the customer’s
needs, the more successful the destination will be.

Giving a Feel For The “Product” Inside a Service
Wrapper .
•Consumers are demanding not products, or
features of products but the benefits they will be
offered.
•The airline product includes of two types of
services:
On the Ground Services & In-Flight Services.
PRODUCT MIX
Airlines service products
 CABIN SERVICE.
 CATERING SERVICE
 RAMP SERVICE.
 OTHER SERVICE.

2. PRICE
 Amount customers’ pay for the product or
service provided.
 A quality tourism experience at a fair price is
what the customer is looking for in most cases .
 Pricing should be based upon clear-cut goals and
objectives: Survival
Profit maximization
Market share
Competition or positioning

PRICE MIX
Premiu
m
Pricing
Value
For
Money
Pricing
Econ
omic
Value
Prici
ng
APE
X
Fare
s
Low-
Prici
ng

3. PLACE
• The place where customers purchase the tourism
product can vary greatly.
Travel agents, tour operators and tour
wholesalers are a few examples of the
distribution points for tourism products.
• Direct distribution: own website or direct
purchase in place
• Indirect distribution: third party operators:
agencies/affiliates
online websites: travelocity.com,
edreams.com, etc.
auctionsChanderprabhu Jain College of Higher Studies & School of Law

Online 24-hour reservation
Systems.
Consolidation.
Tour Operator/ Travel Agent.
Affiliated with companies.
PLACE MIX

4. PROMOTION
• A range of activities can be used to convince
customers to buy the product, including
information kits
web sites
advertising
personal selling
sales promotion
travel shows
public relations.
• Utilize tourist information centers, such as
welcome centers. Participation with your state,
regional and local tourism offices and
associations.

PROMOTION MIX
Advertising
Publicity
Sales promotion
Word of mouth
Advertisi
ng

5. PEOPLE
People in the travel and tourism industry
travel agents
tourist guides
hotel and restaurant staff
transport personnel
Play an important role in brand building and
customer satisfaction.

Competence.
Reliability.
caring Attitude.
Responsiveness.
Initiative.
Problem Solving
Ability.
Goodwill.
PEOPLE MIX

6. PROCESS
Detailed and well documented procedures for addressing
every situation and service context supported by
infrastructure and IT systems = consistent and good
quality service.
Administration
Training
Planning and strategizing
Recruitment
Purchasing
Distribution
Service delivery

Detailed Information.
Reservation.
Facilities.
Personal belongings.
Meal Service.
Entertainment.
Deliver Quality Service.
131
PROCESS MIX

7. PHYSICAL EVIDENCE
Good customer experience is extremely important
for generating repeat business and also business
from new customer through positive word-of-
mouth.
“Tangibalizing the product is a good way of giving
positive and attractive hints or clues to potential
customers.
First service, then installations and facilities.

On the go:
Booking offices or
ticket counters.
Paperwork.
Brand Logo.
Tickets or
reservations.
133
PHYSICAL EVIDENCE
MIX
In the place:
•Service
professionalism .
•Display
configuration.
•Good Inner-exteriors.
•Cleanliness.
•Uniforms.
•Ambience.
•Comfortable .
•Labels and
descriptions.

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