This document discusses key concepts related to service marketing. It begins by comparing goods and services, noting that services are intangible processes while goods are tangible outputs. It then examines the unique challenges of marketing services due to their intangibility, inseparability from production, inconsistency, and perishability. The document also explores the roles of the service sector in the Indian economy and its contributions to GDP and employment. Finally, it covers positioning, the process of creating a distinct image in the consumer's mind, and the steps involved in effective positioning.

1. SERVICE MARKETING
By- Anuj

2. GOODS
 Tangible
 Uniform output
 A thing
 Ownership possible
 Stock or can have as inventory
 Mass distribution is possible
 Customer involvement either
high or low
SERVICES
 Intangible in nature
 Variable output
 A process
 Ownership not possible
 Cannot stock, no inventory
 Mass distribution is not possible
 Customer involvement is
generally high

3. GOODS
 Customers usually are not
involved in production process
 Goods are easy to evaluate
 High demand for goods can be
met due to inventory facility
 Distribution channel may remain
intact
SERVICES
 Customers are involved in
production process
 Services are difficult or at times
some pure services cannot be
evaluated
 Demand for services are highly
volatile in nature
 Distribution channel may take
different forms

4. MARKETING CHALLENGES OF SERVICES
 Intangibility of Services
 Inseparability of Services
 Inconsistency of Services
 Perishability of Services
 Creating a need
 High Service Development
 Developing Trust
 Demonstrating Empathy

5. MARKETING CHALLENGES OF SERVICES
 Differentiation of Service
 Competitive pricing
 Competition
 Improving quality
 Employees’ Passion and Commitment
 Challenges of Employees retention

6. ROLE OF SERVICE SECTOR IN MODERN
INDIAN ECONOMY
 Service Sector has the highest growth rate more than 50%
of GDP.
 It is the east volatile sector.
 Growth is particularly marked in public services, IT and
financial services.
 The annual growth rate of service sector in India was above
9% since 2001, which contributed to 57% of GDP in 2012-
13.
 India is the major exporter of IT services, BPO services and
software services.

7. ROLE OF SERVICE SECTOR IN MODERN
INDIAN ECONOMY
 The IT industry continues to be the largest private sector
employer in India.
 India is also the fourth largest start-up hub in the world
with over 3,100 technology start-ups in 2014-15.
 Employment in service sector is around 50%.
 Service tax collection is to the tune of 5000 crore. 83% of
this is contributed by Service sectors.

8. CONTRIBUTION OF SERVICE SECTOR TO GDP
Year Percent
1950-51 28.0
1990-91 42.5
2000-01 50.5
2013-14 60.0

9. SHARE OF EMPLOYMENT OF SERVICE SECTOR
Year Percent
1993-94 20
1999-00 23
2011-12 27
2013-14 30

10. SERVICES MARKETING ENVIRONMENT
All organizations operate within the marketing environment.
The marketing environment is made up of two parts –
1) Internal environment 2) External environment
Internal : It consists of all factors which are internal to company. These
environmental factors are controllable ex: mission, vision, objectives,
human resources, physical resources, financial resources, labor
management relations etc.
External : It consists of all factors which are external to company. These
environmental factors are beyond the control of marketers. The external
marketing environment is made up of two parts – Micro Environment
and Macro Environment

11. Micro Environment/Internal Environment
The micro environment represents all the internal influences
which relates to a particular organization and its publics.
Factors close to the company that affect its ability to serve its
customers.
Macro Environment/External Environment
The macro environment represents all the outside influences
which have impact on an organization’s marketing or business
activity.
 These are larger societal forces that affect the
microenvironment.

12. FACTORS IN THE MICROENVIRONMENT

13. MICRO ENVIRONMENT
Company:
 It includes Management, finance,
research & development,
purchasing, manufacturing,
accounting, and human resources

14. MICRO ENVIRONMENT
Suppliers:
 Provide resources needed to produce
goods and services.
 Important link in the “value delivery
system.”
 Most marketers treat suppliers like
partners.
 They can control the success of the
business when they hold the power.

15. MICRO ENVIRONMENT
Marketing Intermediaries
– Help the company to promote,
sell, and distribute its goods to
final buyers
• Resellers
• Physical distribution firms
• Marketing services agencies
• Financial intermediaries

16. MICRO ENVIRONMENT
Customers:
 They are the purchasers for company’s
goods and services.
 They include Consumer, business,
reseller, government, local or
international markets.

17. MICRO ENVIRONMENT
Competitors: :
 Those who serve a target market with
products and services that are viewed
consumers as being reasonable
substitutes
 Company must gain strategic
against these organizations

18. MICRO ENVIRONMENT
 Publics:
 Group that has an interest in or impact on
an organization's ability to achieve its
objectives. They can be:
 Financial
 Media
 Government
 Citizen-action groups
 Local
 General
 Internal

19. FACTORS IN THE MACRO ENVIRONMENT

20. MACRO ENVIRONMENT
Demographic:
– The study of human populations in
terms of size, density, location, age,
gender, race, occupation, and
other statistics.
– Marketers track changing age and
family structures, geographic
population shifts, educational
characteristics, and population
diversity.

21. MACRO ENVIRONMENT
Natural/Physical :
– Involves the natural resources that
are needed as inputs by marketers
or that are affected by marketing
activities.
Renewal resources such as Forests,
Agricultural products, marine
products etc., and non-renewal
resources such as oil, coal,
minerals, etc.

22. MACRO ENVIRONMENT
Technological :
– Most dramatic force now shaping our
destiny.
 Changes rapidly.
 Creates new markets and opportunities.
 Challenge is to make practical, affordable
products.
 Safety regulations result in higher
research costs and longer time between
conceptualization and introduction of
product.

23. MACRO ENVIRONMENT
Political and Legal :
 Laws, government agencies, and pressure
groups
 Influence and limit organizations and
individuals within a society
 Increasing legislation
 Increased emphasis on ethics and social
responsibility
 Cause-related marketing
 Business legislation is used to protect
consumers, businesses, and the interests of
society

24. MACRO ENVIRONMENT
Cultural and Social:
 Institutions and other forces that influence
 Society’s basic values, perceptions, preferences, and
behaviors
 Core beliefs passed on through family, reinforced by
institutions
 Secondary beliefs are more open to change
 People’s views of:
 Themselves
 Others
 Organizations
 Society
 Nature
 The universe

25. MACRO ENVIRONMENT
Economic:
– Economic forces influence both marketers and
the consumers.
Economic forces include –
 Competition, Buying power, Willingness to spend
Economic Conditions include --
 Economic development
 National income
 Standard of living
 State of agriculture
 Business cycles, Interest rates, Price levels, Fiscal policies

26. THE GOODS-SERVICE
CONTINUUM

27. WHAT IS A PRODUCT?
Product:
An idea, a physical entity (a good), a
service, or any combination of the three
that is an element of exchange to satisfy
individual or business objectives .

28. GOODS AND SERVICES
 Goods:
 Physical products.  Services:
 Nonphysical
products.

29. THE GOODS/SERVICES CONTINUUM
The goods-service continuum refers to the range of product-
service combinations companies bring to market.
The goods-services continuum enables marketers to see the
relative goods/services composition of total products.
A product’s position on the continuum, in turn enables
marketers to spot opportunities.
The continuum categorizes products along a scale, pure
goods at one endpoint and pure services at the other
endpoint.

30. Pure Goods
Food Products
Chemicals
Book publishing
Core Goods
Appliances
Data Storage System
Automobiles
Core Services
Hotels
Airlines
Internet Service Providers
Pure Services
Teaching
Medical advice
Financial Consulting
THE GOODS/SERVICES CONTINUUM
GOODS SERVICES

31.  Pure Goods: At the pure end of the continuum, goods that have no related
services are positioned. Ex: tomatoes, books, pen, chemicals, soaps,
jewellery etc., they are very tangible and would fall in he pure goods at the
end of the continuum.
 Pure Services: At the pure services end of the continuum, we find services
that are not associated with physical products. Ex: a teacher, a doctor, a
consultant, a financial adviser etc., they provide very intangible benefits
and would fall in the pure service at another end of the continuum.
 Core Goods and Core Services: Products that are a combination of goods
and services fall between the two ends. Entities such as automobiles
industries, hotels, airlines, etc., provide a service and a product and
therefore would be located near the middle of the continuum. They fall in
core goods or core service category.

32. CONSUMER BEHAVIOUR
AND POSITIONING

33. CONSUMER BEHAVIOUR
 Consumer Behaviour consists of the human behaviour that go to make
purchase decisions.
 Consumer behaviour is the reactions of individuals in obtaining and using
goods and services of a particular type.

34.  Walter & Paul, “Consumer behaviour is the process whereby individual
decide whether, what, when, where, how and from whom to purchase
goods and services.
 Consumer behaviour is the study of individuals, groups, or
organizations and the processes they use to select, secure, use, and
dispose of products, services, experiences, or ideas to satisfy their needs
and wants.

35. CHARACTERISTICS AFFECTING
CONSUMER BEHAVIOR
Buyer
Psychological
Personal
Social
Culture

36. FACTORS AFFECTING CONSUMER BEHAVIOR:
SOCIAL
Groups
•Membership
•Reference
Family
•Husband, wife, kids
•Influencer, buyer, user
Roles and Status
Social Factors

37. FACTORS AFFECTING CONSUMER BEHAVIOR:
PERSONAL
Personal Influences
Age and Family Life Cycle
Stage
Occupation
Economic Situation
Lifestyle Identification
Activities Opinions
Interests
Personality & Self-Concept

38. FACTORS AFFECTING CONSUMER BEHAVIOR:
CULTURE
Social Class
• People within a social class
tend to exhibit similar buying
behavior.
• Occupation
• Income
• Education
• Wealth
Culture
 The accumulation of values, knowledge, beliefs,
customs, objects, and concepts that a society uses to
cope with its environment
Subculture
• Groups of people with shared
value systems based on common
life experiences.
• North Indian Consumers
• African American Consumers
• Asian American Consumers
• Mature Consumers

39. Factors Affecting Consumer Behavior:
Psychological
Psychological
Factors
Motivation
Perception
Learning
Beliefs and
Attitudes

40. THE BUYER DECISION PROCESS
Need Recognition
Information Search
Evaluation of Alternatives
Purchase Decision
Postpurchase Behavior

41. The Buyer Decision Process
Step 1. Need Recognition
• TV advertising
• Magazine ad
• Radio slogan
•Stimuli in the
environment
• Hunger
• Thirst
• A person’s normal
needs
Need Recognition
Difference between an actual state and a desired state

42. •Family, friends, neighbors
•Most influential source of
information
•Advertising, salespeople
•Receives most information
from these sources
•Mass Media
•Consumer-rating groups
•Handling the product
•Examining the product
•Using the product
Personal Sources
Commercial Sources
Public Sources
Experiential Sources
The Buyer Decision Process
Step 2. Information Search

43. The Buyer Decision Process
Step 3. Evaluation of Alternatives
Product Attributes
Evaluation of Quality, Price, & Features
Degree of Importance
Which attributes matter most to me?
Brand Beliefs
What do I believe about each available brand?
Total Product Satisfaction
Based on what I’m looking for, how satisfied
would I be with each product?
Evaluation Procedures
Choosing a product (and brand) based on one
or more attributes.

44. Purchase Intention
Desire to buy the most preferred brand
Purchase Decision
Attitudes
of others
Unexpected
situational
factors
The Buyer Decision Process
Step 3. Purchase Decision

45. The Buyer Decision Process
Step 5. Postpurchase Behavior
Consumer’s Expectations of
Product’s Performance
Dissatisfied
Customer
Satisfied
Customer!
Product’s Perceived
Performance
Cognitive Dissonance

46. TYPES OF BUYING DECISIONS
Complex
Buying
Behavior
Dissonance-
Reducing Buying
Behavior
Variety-
Seeking
Behavior
Habitual
Buying
Behavior
High
Involvement
Significant difference
Between brands
Few differences
between brands
Low
Involvement

47. COMPLEX BUYING BEHAVIOUR
 High consumer involvement
 Significant perceived difference between brands
 Usually happens when product is expensive, risky, purchased
infrequently like a PC
 Learning happens
 Marketers must understand the information gathering and
evaluation behaviour

48. DISSONANCE REDUCING BUYING
BEHAVIOUR
 High involvement
 Less perceived difference
 Expensive, risky and infrequently purchased products
like carpets
 Learning happens but the purchase decision is quick
 Heed is paid to purchase convenience and price
 Post purchase communication is important

49. HABITUAL BUYING BEHAVIOUR
 Low consumer involvement
 Little significant brand difference
 Purchase is out of habit not customer loyalty
 Low cost, frequently purchased products like salt
 Brand familiarity is important
 Ad campaigns with repetition and short duration

50. VARIETY-SEEKING BUYING BEHAVIOUR
 Low consumer involvement
 Significant perceived difference
 Lot of brand switching happens
 Ex: Cookies, biscuits
 Switching happens to seek variety and not out of
dissatisfaction
 Different marketing strategy for market leader and
challenger

51. POSITIONING

55. Think about your product or service

56. Unique position that a product
occupies in the mind of a consumer

57. Web Search
“Reliable” - Google
“New” - Bing
My mind space
E-Commerce
“Reliable” - Flipkart
“Saves time” - IRCTC
“Simple” - Cleartrip
Email
“Emotional” - Yahoo!
“Productive” - Gmail

58. Created using http://www.wordle.net

59. WHY?
"Positioning is the single largest
influence on the buying decision.”

60. POSITIONING
 Positioning is a process that companies use in marketing to create
an image in the mind of the consumer.
 Philip Kotler “ Positioning is the act of designing the company’s offer
and image so that it occupies a distinct and valued price in the
target customers mind.”
A couple of other definitions
 Creating distinct and valued physical and perceptual differences
between one’s product and its competitors, as perceived by the
target customer.
 The act of designing the firm’s market offering so that it occupies
a distinct and valued place in the minds of its target customers.

61. FedEX
Fast, reliable on-time delivery
Jet Airlines
Affordable, no-frills air travel
Rolex
Status-symbol fashion accessory
Ebay
The virtual marketplace to buy or sell anything

62. STEPS INVOLVED IN POSITIONING
1) Identifying the Competitors
2) Determining how competitors are perceived and evaluated
3) Determining the competitor’s position
4) Analysing customer’s preferences
5) Making the positioning decision
6) Monitoring the position

63. STEPS INVOLVED IN POSITIONING
1) Identifying the Competitors – A first step is to identify the competition.
This step is not as simple as it seems to be. For example, ‘Pepsi ‘ might
define its competitors as follows:
 (1) Other cola drinks
(2) Non-diet soft drinks
(3) All soft drinks
(4) Non-alcoholic beverages,
(5) All beverages except water

64. (2) Determining how the Competitors are Perceived and Evaluated –
 The second step is related to determining the product positioning which
is basically done so as to see, when the competitors products are
purchased by the customers. It is to see comparative view.
(3) Determining the competitor’s positions –
 Our next focus should be to determine how different brands (including
our own brand) are positioned with respect to the relevant attributes
selected under the previous step. At this point we should be clear about
what is the image that the customer has about the various product
brands?

65. 4) Analyzing the Customer –
 Now you need to analysis the customers habits and behaviour in a particular market
segment.
 The following questions need attention while understanding the customer and the
market – (i) how is market segmented? (ii) What role does the product class pay in the
customers life style? What really motivates the customers? And what habits and
behavior patterns are relevant?
5) Making the positioning Decision –
the following guidelines can be offered to reach a positioning decision:
(i) An economic analysis should guide the decision.
 (ii) Positioning usually implies a segmentation commitment.
 (iii) If the advertising is working, the advertiser should stick to it.
 (iv) Do not try to be something, your are not.
 (v) In making a decision on position strategy, symbols or set of symbols must be
considered

66. (6) Monitoring the position –
 An image objective, like an advertising objective should be measurable.
 It is necessary to monitor the position overtime, for that you have variety of
techniques that can be employed it can be on the basis of some test and
interviews which will help to monitor any kind of change in the image.

67. POSITIONING STRATEGY ADOPTED BY
SERVICE MARKETERS
1) Positioning by Features
2) Positioning by Comparison
3) Position by Benefit to Consumer
4) Positioning through Guarantees
5) Positioning as a Leader
6) Positioning through Smart Tag Lines
7) Positioning by Emotions

68. VARIATIONS IN CUSTOMER INVOLVEMENT
Consumer Involvement
Consumer Involvement is a state of mind that motivates
consumer to identify with product/service offerings, their
consumption patterns and consumption behaviour.
Schiffman, “ Consumer involvement is a heightened state of
awareness that motivates consumers to seek out, attend to,
and think about product information prior to purchase.

69. HIGH VERSUS LOW INVOLVEMENT
High Involvement purchase occasions can be
expensive, have serious personal consequences,
and/or reflect one’s social image. These occasions
typically involve extensive information search,
consideration of several product attributes and
brands.
An example would be the purchase of an
automobile or stereo system.
Presented by MelonxRou

70. HIGH VERSUS LOW INVOLVEMENT
Low Involvement purchase occasions typically
involve little information search or consideration of
various brands, except on the basis of price. They
usually don’t involve any personal consequences.
They tend to be privately consumed.
An example would be the purchase of soap or
toothpaste.
Presented by MelonxRou

71. TYPE OF CONTACT
Service encounter range from high contact to low.
High Contact Services
 In high contact (or pure) service, a greater level of contact exists between
service providers and customers.
 Ex: health centres, hotels, educational institutions, public transportation, retail
establishments, counselling services etc.
Low Contact Services
 In low contact services little, if any, physical contact between customers and
service providers.
 Also known as Quasi-manufacturing, is characterized by the low level of direct
contact with customers.
 Ex: banks, post offices, courier services, real estate firms etc.

72.  More Attention
 Advanced
Understanding of needs
 Higher Post
Consumption evaluation
 Slow Decisions
 Less Attention
 Basic Understanding of
needs
 Lower Post
Consumption evaluation
 Fast Decisions
HIGH
INVOLVEMENT
LOW
INVOLVEMEN
T

73. SERVICE RECOVERY
 Service recovery is a procedure for dealing with customers’
problems and complaints. An effective & timely recovery
procedure will turn a complaining customer into a satisfied,
loyal customer most of the time.
 It is trying to do something Right from a situation that went
wrong.

74.  Solving customer’s problem quickly & fairly
 Giving the customer something of value as compensation
 Keep your promise & follow up
WHAT DOES SERVICE RECOVERY
INVOLVE?

75. WHAT A CUSTOMER FEELS ABOUT THEIR
COMPLAINTS

76. Service
Recovery
Strategies
3) Act quickly
4) Provide
adequate
explanations
5) Treat
Customers
fairly
6) relationships
with customers
7) Learn form
recovery
experiences
8) Learn from
lost customers
1) Make the
service fail safe
2) Encourage
and track
complaints

77. SENSITIVITY TO CUSTOMERS RELUCTANCE TO
CHANGE
1. Develop customer Trust
2. Understand customers Habit and Expectations
3. Pre-test New procedures and Equipment
4. Publicize the Benefits
5. Teach customers
6. Monitor Performance and Continue to seek
improvements