The document discusses the challenges faced by service marketers in a changing business environment. It outlines traditional challenges like intangibility, inconsistency, inseparability, and perishability of services. Modern challenges include managing the gaps between customer expectations and perceptions, setting standards due to customization, adopting a 4th dimensional approach, managing social media, dealing with prosumer customers, transitioning from mass to niche marketing, and managing interactive markets. The document concludes that service marketers must learn more about customers, be clear and authentic, create engagement programs, leverage social media, and address complaints to succeed in today's challenging environment.

1. Challenges of Service Marketers in
Changing Business Environment
Submitted To: Submitted By:
Prof. Sanjeev Kumar Singh Partha Sinha
Subject: C-301; Services Marketing Roll No. : M2011086
PGDM (G) 2011-13

2. Certificate of Authenticity
I, Partha Sinha, roll no. M2011086, student of 1st year Post Graduate Diploma In
Management (PGDM) at Apeejay Institute of Technology hereby certify that the following
paper is my original work and it is not copied from any source of literature, books or articles.
Regards,
Partha Sinha
(M2011086)

3. Abstract
Services marketing include an ever expanding wide range of personal services and business
services focusing on the interaction of customer and service provider. Due to the ever
changing environment and the features of services marketing, it is challenging for service
marketing professionals to deliver in a consistent manner. This paper discusses challenges
faced by service marketers in changing business environment.
Introduction
Challenges are integral part of any business environment. It gets more complex with services
because of its nature and the participants in it. Therefore, the features of services are its
challenges itself.
To begin with, let us look at the traditional challenges or the challenges that are imbibed in
the nature of services itself.
1. Intangibility: The service is not physical in nature, thus service marketers have no
physical evidence to support their claim of the services. Example: A Portfolio
manager has only empirical data to prove his words of service levels and not anything
in substance.
2. Inconsistency: Services delivered generally vary in quality based on different
situations so they are not always consistent. Example, A pizza delivery boy may
deliver pizza at your home in 20 minutes and also sometimes on 30th minute.
3. Inseparability: Services and customers cannot be separated. Thus service marketer has
to transact or be present at the time of service delivery because it is produced and
consumed at the same time. Thus service marketers face a big challenge to deliver on
time due to this feature.
4. Perishibility: Services perish with the delivery. Thus service marketers do not have
evidence of the service provided. They rely on feedback from customer which may
vary due to customer’s mood.
Further there are various other traditional challenges of service marketing such as ownership
issue, as there is no ownership transfer in ownership.

4. Modern challenges for service marketers are the concepts that play an important role in
service delivery by a service marketer.
1. Gaps Model: Gaps model discusses the gap between customer’s expectation of
services and service marketer’s perception of the customer. This results in incorrect
designing and standards of service product. Further, this results in inappropriate
service delivery and finally communication gap due to incorrect service product
design and delivery. This makes service marketer overvalue or undervalue customer
expectations.
2. Setting standards due to customization: It is very difficult for a service marketer to
define standards due to customization of the service product. For example, we have
ISO standards in products and Egmark for products that define standardization.
However, for services, the service delivery varies from place to place, from person to
person.
The topic focuses on challenges due to changing business environment. Thus let us now look
at the emerging challenges of the service marketing and how the modern service marketer
handles these challenges.
1. 4th Dimensional approach to management: Service marketers need to be proactive
and focused on all aspects of customer perception, whether internal or external.
Fourth dimensional approach is the suppliers, distributors, customers, employees all
are to be cared and focused with responsiveness.
2. Managing Social media: Social media influence is very contagious. For the matter of
fact : “78% of people trust recommendations of other consumers”- AC Nielson; Trust
in advertisement report, 2009. Thus making it challenging for service marketers to
influence customer behaviour by facts and advertisement as people have a platform
now to communicate and discuss brands and products.
3. Prosumer Concept: Consumer is not just consumer now, with social media and mass
media development, service marketer cannot ignore the customer. Customer now
participates in production of goods. Example; customer feedback forums over social
media, complaints all are tracked and focused by service marketers to understand
customers and their requirements.
4. Mass marketing becomes Niche marketing: As markets are getting saturated, selection
of right mode of marketing is extremely important due to focus on “R.O.I “in
advertisements. Example: Dell Generated $6.5 million sales from twitters in 2010.

5. 5. Managing interactive markets: Markets are interactions now, not merely transactions.
Thus service marketer has to focus on reputation management, complaint resolutions
etc to make sure service disruptions are not exaggerated in media and to other
consumers. This service marketer needs to be proactive in handling reputation and
complaints. We can see development of programmes related to reputation
management. Example: “Om Logix, a marketing consultancy company has
programmes such as Online Reputation Management“ to meet these challenges of
organisations.
Thus we discussed about few of the emerging issues that service marketer face in the
challenging business environment. Service marketer should keep few aspects in mind in this
challenging business environment to be successful. A few of them are briefly discussed here.
1. Learn more about consumers: It’s time that service marketer knows their customer
even better. Run Customer relationship programmes (CRM), gather customer
feedback, knowledge, tastes, after sales service etc.
2. Be clear and authentic: False claims and big brand ambassador do not earn huge
bucks anymore. It’s interactive market due to development in communication
networks. Example: Airtel rebranding failed even after 200 cr. of advertisement
budget, where as their HFZ (Har Ek Friend Zaruri) campaign of Airtel at a cost of 35
cr. made gave higher viewer penetration and R.O.I as compared.
3. Create audience driven engagement programmes: This will promote healthy
interactions among customers and also customers feel engaged with the brands. This
creates loyalty. Example: In March 2010, when HBO planned Bond month focusing
on Bond movies for the month of march, It attracted popularity by having “Dress the
Bond girl concept” online, which engaged people visiting HBO website with average
user engagement of 15 minutes.
4. Make social media work for organization: Understand the potential of social media
and leverage it sophistically to make it work positively for the business.

6. Case:
In 2011, HP focused engagement of commercial clients and to encourage business
professionals to recommend HP products to their peers.
So it in association with Linkedin affiliates programme, created a company page to
engage professionals in business context.
Results were impressive; 2,000 product recommendations in two weeks, 20,000 new
followers on HP company page, 5,00,000 Viral updates about HP products and services.
5. Honour Complaints: Complaints and feedbacks need to be respected immediately by
the service marketers in order to retain business and maintain it’s reputation as a
brand.
Conclusion
Service marketer faces big challenges now with the 4th dimension of marketing teasing the
marketers with surprises. Communication network has grown manifold in last 5 years.
Internet penetration, online shopping, online complaints and customer expectation have
changed the service marketing scenario rapidly. Like it or hate it, a service marketer cannot
ignore the emerging challenges in this environment. Therefore, being quick, on the toes,
being flexible to changes in the markets, being alert to customer voice, feedbacks etc. are the
forerunners of the 4th dimension.
Bibliography
1. Govind Apte, Services Marketing, Oxford University Press,
2. Services Marketing,15/e, Zeithaml V A, TATA MC-GRAW HILL PUBLISHING
CO.LTD
3. Linkedin Case studies, Linkedin.com (HP case study)
4. Ac Nielson research report on "Trust in Advertisement", 2009.
5. Speech by “Mr. Kapil Gupta, CEO, OM LOGIC” in National Marketing conference 2012,
Held on March 17th, 2012 at LBSIM, New Delhi. (Airtel Case)