This document provides an introduction to services and service marketing. It defines services as intangible products that are deeds, processes, or performances provided by one entity to another. The key concepts of service industries, products, and customer service are explained. Services are described as intangible, inseparable, perishable, heterogeneous, and simultaneously produced and consumed. The challenges of managing services and differences between services and goods are outlined. The large contribution of the service sector to Nepal's GDP and employment is noted. The 7Ps of service marketing and development of the service marketing concept are described. Internal, external, and interactive aspects of the service marketing triangle are explained.

1. Introduction to Services and Services
Marketing
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2. Service
• Services are intangible products
• Services are deeds, processes, and performances provided or
co-produced by one entity or person for another entity or person
• Services include all economic activities whose output is not a
physical object
• According to Philip Kotler, “Service is any 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.”
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3. Service Concepts
• Service Industry and Companies
• It involves those industries and companies which are typically
classified within the service sector and whose core product is
service
• Service as a Product
• It represents a wide range of intangible product offerings that
customers value and pay for in the marketplace.
• Customer Service
• It is the service provided in support of a company’s core
products.
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4. • Derived Service
• It is an abstract view
• Value derived from physical goods is the service provided by
the good, not the good itself.
• E.g. A pharmaceutical product provides medical service.
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5. Nature of Services
Intangible
Inseparable
Perishable
Heterogeneous
Non-Measurable
Simultaneous Production and Consumption
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6. Challenges in Management of Services
• Understanding the changing needs, demands and expectations
of customers
• Effective communication of services
• Selection of quality manpower and motivating them
• Maintaining the fluctuating demands
• Effective balancing between standardization and customization
• Organizing the firm for effective decision making in all three
levels
• Protecting new service concepts from competitors
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7. Difference Between Services and Goods
Services
1. Services are intangible products
2. Services can not be inventoried
3. It lacks standardization
4. Services are inseparable from
service provider while selling
them
5. The place of production and
consumption of service is same
6. Minimum scope for physical
distribution
7. Consumer acts as a co-producer
of service
Goods
1. Goods are tangible products
2. Goods can be inventoried
3. Goods are standardized in nature
4. Goods are separable from the
producer while selling them
5. The place of production and
consumption of goods is not same
6. There is large scope of physical
distribution
7. Goods are not co-produced by
consumer
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8. Service Sector in Nepal
• Sectoral Contribution to GDP of Nepal (Estimated 2016)
• Agriculture 29.4%
• Industry 13%
• Services 50.4%
(Source: CIA World Fact Book)
• Share of Sectoral Employment in Nepal
• Agriculture 73.9%
• Industry 10.8%
• Services 15.3%
(Source: Nepal Labor Force Survey 2008)
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9. Service Marketing
• Marketing word derived from Latin word “Mercatus” which
means place of buying and selling.
• Service marketing is to manage, develop, promote and
exchange service to attain organizational objectives.
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10. 7Ps of Service Marketing
Product
Price
Place
Promotion
People
Process
Physical Evidence
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11. Development of Service Marketing
Self
Sufficient
Economy
Barter
Economy
Production
Orientated
Economy
Product
Orientated
Economy
Marketing
Concept
Societal
Marketing
Concept
Service
Marketing
Holistic
Marketing
Concept
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12. Reasons for Development of Service Marketing
• Customer service became essential tool for management to
satisfy the changing needs
• Products can be copied easily however it is relatively hard to
copy service for competitors because service offers
experiences
• Service act as point of differentiation
• Change in family system
• Economic prosperity
• Concept of service, leisure, pleasure got changed
• Technological development
• Urbanization 12

13. • Increase in awareness of people
• Demand of after sales service, trust, guarantees
• Free market economy
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14. Service Marketing Triangle
Organization
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Employees CustomersInteractive Marketing

15. External Marketing
• Between organization and customers
• Involves setting the promises through promotion to raise
expectations
• Service employees, organizations image and visible structure
and service delivery process forms the basis for customer
expectations
• Realistic promises causes satisfaction and vice versa
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16. Interactive Marketing
• Between Employees and Customers
• It is most important stage of service delivery process
• This is called Moment Of Truth (MOT) or service encounter
• It is about keeping the promise by the organization to the
customers
• Relationship marketing plays vital role
• Huge role of employees in determining the quality of service
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17. Internal Marketing
• Between Organization and Employees
• Success of external marketing depends on the effectiveness of
internal marketing
• Employee satisfaction and customer satisfaction are interlinked
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