The document provides an overview of services marketing, defining services as intangible products fulfilling specific needs and highlighting their importance in various sectors like healthcare and education. It discusses the evolution of services marketing, the need for effective service management, and the unique strategies for marketing services compared to physical products. Key concepts covered include customer satisfaction, the service marketing mix, gaps in service quality, and the role of technology in enhancing customer interactions.

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Jayanti R Pande
email: jayantipande17@gmail.com
RTMNU MBA Sem 4 – RETAIL SALES
MANAGEMENT & SERVICES MARKETING
[MARKETING]
MODULE NO 4: INTRODUCTION TO SERVICES
MARKETING
SERVICES
Services are intangible products or actions
fulfilling specific needs or wants. They are
consumed at the point of production.
Effective service management ensures
satisfaction and success. Examples include
healthcare, banking, transportation,
education, consulting, hospitality,
entertainment, and customer support.
DEFINITION OF SERVICES
• Services are intangible products or actions
provided to fulfill specific needs or wants.
• Zeithaml & Bitner – “Services are deeds,
processes and performances”.
MYTHS ENCOUNTERED IN SERVICES
1. Lower value misconception: Services can
offer significant value through intangible
benefits, expertise, convenience, and
personalized experiences.
2. Low capital intensity: Many service
industries require substantial investments
in technology, infrastructure, talent, and
ongoing training.
3. Small scale misconception: Service-based
companies have successfully expanded
and scaled their operations globally.
4. Services cannot provide wealth:
Successful service-based companies in
finance, technology, consulting, and
entertainment have proven that services
can be highly profitable and contribute to
wealth creation.
CONCEPT OF SERVICES MARKETING:
Services marketing promotes and sells
intangible services, focusing on meeting
customer needs and delivering positive
experiences. It utilizes tangible cues to
demonstrate service quality. Building strong
customer relationships, exceeding
expectations, and ensuring satisfaction are
key. Services marketing differs from
marketing physical products, addressing
unique challenges and emphasizing
personalized experiences. Customer
satisfaction, loyalty, and positive word-of-
mouth drive success in the service industry.
EVOLUTION OF SERVICES MARKETING
Pre-Industrial Era: Services were localized,
based on personal relationships, and
marketing activities were limited within close-
knit communities.
Industrial Era: The focus shifted to mass
production of goods, and services were often
considered secondary. Service encounters
were standardized with limited customer
involvement.
Post-Industrial Era: Information technology
and globalization led to the recognition of
services as a distinct economic sector. Service
marketing became customer-centric,
emphasizing experience, customization, and
relationship-building. Technology facilitated
service delivery and enhanced customer
interactions.
GROWTH OF SERVICE ENVIRONMENT
 Evolution from selling services to building
lasting customer relationships.
 Services sector in India outperforming
agriculture and industry sectors.
 Shift towards digitally enabled healthcare
and telemedicine market growth.
 Initiatives to accelerate digital skills
training and AI skilling in India.
 Byju's acquisition strengthens presence in
the edtech sector.
 Services sector as the largest recipient of
FDI in India.
 Services sector accounts for around 55%
of GVA and GVA growth in India.
 Services exports contributing to India's
rising share in world's commercial
services exports.
 Strong recovery of gross FDI equity
inflows into the services sector.
 Reduction in shipping turnaround time at
ports in India.
 Successful launch of multiple satellites per
year.
 Moderation in services sector activity in
2019-20.
 Significant contribution to total FDI
inflows, exports, and Gross State Value
Added in India.

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Jayanti R Pande
email: jayantipande17@gmail.com
NEED OF SERVICE MARKETING:
1. Formation and expansion of job
opportunities: Service marketing attracts
customers, generates demand, and
expands service-related jobs.
2. Optimum resource utilization: Service
marketing helps businesses efficiently use
infrastructure, technology, and skilled
personnel to meet customer needs.
3. Capital formation: Service marketing
drives economic activity, attracting
customers, generating revenue, and
reinvesting profits for service expansion
and economic growth.
4. Improved living standards: Service
marketing enhances customer
experiences, satisfaction, and overall
living standards.
5. Eco-friendly technology: Service
marketing promotes eco-friendly
practices in service industries to
contribute to sustainability efforts.
TRADITIONAL SERVICE MARKETING MIX:
Product: Intangible service features, benefits,
and differentiation.
Price: Monetary value customers pay for the
service.
Place: Distribution and accessibility of the
service.
Promotion: Communication and promotion of
the service.
AUGMENTED SERVICE MARKETING MIX:
People: Service provider personnel and
customer engagement.
Process: Customer journey, personalization,
and friction reduction.
Physical Evidence: Touchpoints and
interactions that shape customer perception.
Marketing Mix [7Ps]: Product, Price, Place,
Promotion, People, Process, Physical
Evidence.
THE GAP MODEL of Services,
also known as the "SERVQUAL" model,
identifies gaps between customer
expectations and perceived service quality,
providing insights for service providers to
improve their offerings.
Gap 1: Customer Expectations vs. Perceived
Service Quality Gap
• Absence of direct customer
communication
• Failure to ask customer expectations
• Unpreparedness to meet expectations
• Lack of market segmentation
Gap 2: Quality Standard Gap
• Absence of customer-driven
standards
• Lack of formal quality control
objectives
• Undefined service design
• Management indifference
Gap 3: Service Performance Gap
• Defective recruitment
• Difficulty in managing demand
fluctuations
• Non-participation from customers
• Lack of training
Gap 4: Promises vs. Performance Gap
• Poor customer education
• Ineffective communication channels
• Overpromising
• Inadequate sales and operations
coordination
PRESCRIPTIONS FOR CLOSING QUALITY GAP:
1. Shared Service Vision: Develop and
communicate a clear vision for service
excellence throughout the organization.
2. Locating Service Points: Strategically
position service points closer to
customers for improved accessibility.
3. Product Design: Invest in product design
that meets or exceeds customer
expectations.
4. Performance Measurement and Reward
System: Implement a robust system to
measure service quality and reward
employees accordingly.
5. Unconditional Guarantee: Offer a
guarantee that addresses customer
concerns promptly and effectively.
MODELS OF SERVICE MARKETING
Service Triangle: The Service Triangle model
emphasizes the interrelationships between
the company, customers, and
employee’s/service providers in delivering
exceptional service experiences. a) Company:
Responsible for designing and delivering
services that meet customer needs. b)
Customers: Recipients of the service, whose

3. 3
Jayanti R Pande
email: jayantipande17@gmail.com
needs and preferences should be understood
for personalized experiences. c)
Employees/Service Providers: Frontline
representatives responsible for delivering the
service and creating positive customer
experiences.
Variants of Service Marketing Triangle: a)
Internal Marketing: Treating employees as
internal customers to ensure their satisfaction
and engagement in delivering quality services.
b) External Marketing: Traditional marketing
efforts to attract and acquire customers
through advertising, promotions, and
branding. c) Interactive Marketing: Focuses on
the interactions between service providers
and customers during the service encounter
to shape perceptions and satisfaction.
INTERNAL MARKETING STRATEGIES:
1. Alignment of Organizational Attitude and
Employee Attitude: Ensuring shared
values, goals, and vision between the
organization and employees.
2. Rewarding: Implementing recognition and
reward systems to motivate employees
and create a positive work environment.
3. Employee Empowerment: Providing
authority and resources to employees,
enabling them to make decisions and
deliver personalized service.
4. Coordination: Establishing effective
communication and coordination
channels for seamless teamwork and
collaboration.
5. Friendly Atmosphere: Cultivating a
supportive and inclusive workplace
culture that fosters teamwork, trust, and
open communication.
EXTERNAL MARKETING STRATEGIES:
Advertising: Utilizing various media channels
to create awareness, target specific customer
segments, and communicate the value
proposition.
Sales Promotion: Implementing short-term
incentives and offers to stimulate customer
interest and drive immediate action.
Personal Selling: Engaging in direct, face-to-
face interactions to understand customer
needs, provide personalized information, and
build relationships.
Publicity: Generating positive media coverage
and leveraging public relations efforts to
enhance reputation and visibility.
Public Relations (PR): Managing relationships
with media and stakeholders to shape the
organization's image and maintain positive
perception.
Direct Marketing: Reaching out to targeted
customers through direct channels, tailoring
messages and offers to specific segments.
ACTIVITIES OF INTERACTIVE MARKETING:
1. Design and Development: Understanding
customer needs and preferences, and
designing services that meet those
requirements.
2. Production: Efficiently and consistently
executing the service delivery process to
ensure high-quality service.
3. Marketing: Engaging in customer
interactions, communication, and
relationship-building activities during the
service encounter.
4. Consumption: Allowing customers to
utilize and experience the value and
benefits delivered by the service.
5. Destruction: Handling post-service
interactions, including feedback,
complaint resolution, and service
recovery, to maintain customer
satisfaction and loyalty.
SERVICE DESIGN:
Service design involves conceptualizing and
organizing the elements of a service to ensure
its effective delivery and create value for
customers. It includes structural elements
such as the delivery system, facility design,
and location, as well as managerial elements
such as quality, information management,
and service encounters.
Service Design includes both structural and
managerial elements.
Structural Elements:
Delivery System: Method or channel used to
deliver the service.
Facility Design: Physical layout and design of
the service facility or environment.
Location: Strategic selection and positioning
of service facilities or outlets.
Managerial Elements:

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Jayanti R Pande
email: jayantipande17@gmail.com
Quality: Designing service processes,
standards, and protocols to ensure consistent
and superior service quality.
Information: Management and utilization of
information throughout the service delivery
process.
Service Encounter: Designing interactions and
experiences between service providers and
customers.
COMPONENTS OF NEW SERVICE DESIGN:
1.Core Services: The fundamental or basic
services that meet customers' primary needs
or solve their core problems. They form the
foundation of the service offering, such as
accommodation in a hotel.
2.Supplementary Services: Additional services
or features that enhance the overall value and
customer experience beyond the core service.
These can be categorized into facilitating
services and enhancing services.
a. Flower of Service: A visual representation
of supplementary services that surround the
core service. It includes facilitating services
and enhancing services.
b. Facilitating Services: Services that support
the core service delivery process and make it
easier for customers to use the core service.
Examples include reservation management or
valet parking in a restaurant.
c. Enhancing Services: Services that add extra
value and exceed customer expectations,
creating a memorable and unique experience.
Examples include personalized greetings or
complimentary upgrades in a hotel.
3.Delivery Process: The step-by-step
procedures and activities involved in providing
the service to customers. It encompasses all
interactions, touchpoints, and stages of the
customer journey, from initial contact to post-
service follow-up. Designing an efficient and
effective delivery process is essential for
seamless service delivery and customer
satisfaction.
SERVICE DELIVERY/DISTRIBUTION:
The process of providing services to
customers and meeting their needs or
requirements. It involves the interaction
between service providers and customers,
playing a crucial role in customer satisfaction
and perception of service quality.
DEFINITION of SERVICE
DELIVERY/DISTRIBUTION
A channel of distribution or marketing
channel is a structure that facilitates the
marketing of a product or service through
intra-company organization, agents, dealers,
wholesalers, and retailers.
American Marketing Association – “A channel
of distribution o marketing channel is a
structure of intra-company organisation, units
and intra-company agents and dealers,
wholesalers and retailers through which a
commodity product or service is marketed”.
SERVICE DELIVERY PROCESS:
The sequence of activities and interactions
involved in delivering a service to customers.
Pre-Service Interaction: Communication and
interactions before the service encounter,
such as reservations and gathering customer
information.
Service Encounter: Direct interaction where
the service is delivered and experienced by
customers and service providers.
Service Performance: Execution of the
service, including core service delivery,
supplementary services, and ensuring quality.
Service Recovery: Addressing service failures,
resolving issues, and taking corrective actions
to restore customer satisfaction.
Post-Service Interaction: Follow-up
interactions like collecting feedback, seeking
opinions, and providing post-service support.