The document discusses the evolution and importance of service marketing in the 21st century, emphasizing various aspects such as the characteristics of services and the managerial process involved. It also delves into the market segmentation of the service industry, highlighting geographic, demographic, psychographic, and behavioral factors. Additionally, the document provides an overview of Indian Railways, including its operational structure, services, and market segmentation strategies for both passenger and freight services.

1. 1
Chapter-1
Introduction
SERVICE MARKETING
Gone are the days when the perception of services remained confined to work with only service
motto. In the 21st
century, the business environmental conditions are likely to be more volatile the multi-
dimensional developments in the information technology, activated and energized by the developed
countries, have made ways for sophistication in almost all the areas. It is against this background that
leading service organizations of the world have been found believing in making things happen. It is
against this background that we talk about the marketing services.
Services refer to social efforts which include even government to fight for giant evils like want,
disease, ignorance, squalor and illness in the society. In common parlance the term service can’t be only
personal services it also includes B to B services and services rendered to govt and so on. Thus the
present day service can be defined as an action of organization that maintains the well being of people,
govt and other organizations.
In the above perspective marketing of services possess the salient features like intangibility,
perish ability, inseparability, heterogeneity, simultaneity etc.,
We term marketing a function by which a marketer plans promotes and delivers goods and
services to the customers or clients. Where as the perception of service marketing focuses on selling the
services in the best interest of users or customers. It is concerned with a scientific and planned
management of services which makes possible a fair sync of the interests of service providers as well as
users.
Marketing is also defined as a managerial process by which the products are matched with market
and through with the consumer is enabled to use or enjoy the product. In the present definition the product
is an all inclusive term which includes services as well as physical goods. Thus marketing a service meant
marketing something intangible. By the above statements about marketing a service we cannot deny a
statement that service marketing is marketing a promise.
In view of the above we observe the following key points regarding the perception of service marketing
 It is a managerial process of managing the services.
 It is an organized effort for providing a soul foundation for the development of an organization.
 It is a social process helping an organization to understand the emerging social problems and to
take part in the social transformation to justify its existence in the society.

2. 2
marketing segments
geographic demographic pyschographic behavioral
Chapter-2
Market segmentation of service industry
Marketing segmentation is subdividing a market into distinct and homogeneous sub group of
customers where any group can be selected as a target market to be met with distinct marketing
mix.
-Philip Kotler
Market segmentation is the starting step in applying the marketing strategy once
segmentation takes place the marketer targets the identified consumer group with proper
marketing mix so as to position the product as perceived by the target segments.
Bases of marketing
segmentation:
Consumer markets can be segmented into various segments by using different basis this
basis is broadly classified into 4 categories.
Geographical segmentation:
This is generally he starting point of all marketing segmentation strategies the geographic
location of the customers does help the firm in planning its marketing offer. It refers to
segmenting markets by region of a country or the world, market size, market density or climate.
Market density means the no. of people within a unit of land. Climate is commonly used for
geographic segmentation because of its dramatic impact in residents’ needs and purchasing
behaviour.
Demographic segmentation:
In Demographic segmentation the market is divided into groups on the basis of variable
such as age, family, gender, income, occupation, education, religion, race, generation, nationality
and social class. Demographic variables are the most popular base for distinguishing customer
groups. These Demographic variables show a major impact on the buying behaviors of the
consumers for instance the social class makes an influence to buy products like cars, home
furnishing, leisure activities etc.
Psychographic segmentation:
Often it has been seen that two consumers with same demographic characteristics may
act in an entirely different manner. Even though the two may be of the same generation, same
occupation and same income. This is because of the following psychographic factors like life
style, personality, value, beliefs. Psychographic refers to information about consumers’ attitude,
values, motivations and life style as they relate to buying behaviors in a particular product
category. Numerous marketing research forms psychographic studies offer individual clients.
Behavioral segmentation:
In Behavioral segmentation buyers are divided into groups on the basis of the knowledge
and response to the product. Many marketers believe that Behavioral variables are like
occasions, benefits, user status, usage rate, loyalty status, buyers-readiness and attitude are the
best starting points for constructing marketing segments.

3. 3
Chapter-3
Marketing mix of service industry
Successful marketing depends upon addressing a number of key issues. These include:
what a company is going to produce, how much it is going to charge, how it is going to deliver
its products and how it is going to tell its customers about its products and services. The above
said things constitute a traditional marketing mix. But later 3 more things are added and made
seven. These are called 7P’s of marketing mix.
Product:
There is no point in developing a product or service that no one wants to buy, so the
successful companies will find out what customers need or want and then develop the right
product with the right level of quality to meet those needs now and in the future. The key
features of a product should be it provide value to customers, it may not be tangible(service),it
should be maintained with supportive systems and it should not go far beyond customers’ needs.
Price:
A product is only worth what customers are prepared to pay for it. The price also needs to
be competitive, but this doesn’t necessarily mean the cheapest; the small business may be able to
complete with larger rivals. The price should also provide profit. Price is the only element of the
marketing mix that generates revenue. The price positions a company in the market. Existing
customers are generally less sensitive to price than new customers.
marketing
mix
product
price
place
promoti
on
people
process
physical
Evidence

4. 4
Place:
The place where customer byes a product and the means of distributing the product to
that place. Must be appropriate and convenient to the customer. The product must be in the right
place at the right time and in the right quality. Customers surveys have shown that delivery
performance is one of the most important criteria for choosing a product. Place also means ways
of displaying your product to customer groups. This could be a shop window or internet.
Promotion:
Promotion is the way a company communicates what it does and what it can offer to
customers. It includes activities such as branding, advertising, corporate identify etc., it must
gain attention and be appealing. Promotion should communicate the benefits that a customer
obtains from the product. A good promotional activity will be easy to understand and enables the
customer to identify the reasons why they should buy the product.
People:
Anyone who comes into contact with customers will make an impression and that can
have a profound effect either it may be positive or negative on a customer. The reputation of the
brand rests in the people’s hands. It is essential to ensure that the employees who have contact
with the customers should be properly trained. The level of after sale support and advise
provided is a way of adding value. There should be a good reaction by the business men to the
people whether they may be customers or general public.
Process:
The process of a giving service and the behavior of those who deliver the service are
crucial to customer satisfaction. Customers are not interested in the derail of how a business
runs, what matters to them is that the systems works. Process is one of the P that is frequently
overlooked. If the process what costs to a customer fails there is no value in making rest of the
company run perfectly. As a consequence, this P could be a greatest source of advantage if used
wisely.
Physical evidence:
A service can’t be experienced before it is delivered. This means that choosing to use a
service can be perceived as a risky business because you are buying something intangible. This
uncertainty can be reduced by helping the customers to see what they are buying. Case studies
and testimonials can provide evidence that an organization keeps its promises. Facilities such as
a clean and well decorated reception area can reassure. Although a customer cannot experience
the service before purchase, he or she can talk to other people with experiences of the service
Each of the ingredients of marketing mix is a key to success. No one element can be
considered in isolation. For instance, developing a product without considering a price or
without any promotion.

5. 5
Chaper-4
Industry profile
The railway industry encompasses not only the operating railway companies and transit
authorities, but also the various government regulatory agencies, railway associations,
professional organizations, manufacturers and suppliers of locomotives, railcars, maintenance
work equipment and track materials, consultants, contractors, educational institutes and, most
important of all, the shipping customers.
The information in this chapter is of a general nature and may be considered as typical of
the industry. However, each railway company is unique and as such it must be understood what
is included in this chapter may not be correct for a particular company.
Government owned freight railways are nowadays limited to some regional lines where
transportation service must be protected for the economic well being of the communities.
Passenger railways, on the other hand, are generally owned by governments. Transcontinental
services, such as the Amtrak or VIA Rail in Canada, are corporations solely owned by the
respective Federal Governments. These passenger railway companies normally do not own the
trackage infrastructures. Except for certain connecting routes and dedicated high-speed corridors,
they merely operate the passenger equipment on existing tracks owned by freight railways. Local
rapid transit systems are usually operated as public utilities by the individual municipalities or
transit authorities on their own trackage. Commuter services may be operated by government
agencies or private sector on either their own or other railway owned trackage.
Freight railways in North America, including those owned by government, are usually
incorporated as separate legal entities from their owning shareholders. The major railroads are
usually owned by public companies with shares traded through the various stock exchanges. Due
to their age, most of these companies were incorporated under special charters or acts of
Congress. Private companies, the shares of which are not openly traded, may own the smaller
regional or short line railroads.

6. 6
Chapter-5
Company profile
Indian Railways (reporting mark IR / भा. रे) is an
Indian state-owned enterprise, owned and operated by
the Government of India through the Ministry of Railways. It is
one of the world's largest railway networks comprising
115,000 km of track over a route of 65,436 km and 7,172
stations. Indian Railways carried 8,425 million passengers
annually or more than 23 million passengers daily and 1050.18
million tons of freight in the year.
In 2013–2014 Indian Railways had revenues of
1441.67 billion which consists of 940.0 billion from freight
and 375.0 billion from passengers’ tickets.
Railways were first introduced to India in the year 1853 from Bombay to Thane. In 1951
the systems were nationalized as one unit, the Indian Railways, becoming one of the largest
networks in the world. IR operates both long distance and suburban rail systems on a multi-
gauge network of broad, meter and narrow gauges.It also owns locomotive and coach production
facilities at several places in India and are assigned codes identifying their gauge, kind of power
and type of operation. Its operations cover twenty nine states and seven union territories and also
provides limited international services to Nepal, Bangladesh and Pakistan.
Indian Railways is the world's seventh largest commercial or utility employer, by number
of employees, with over 1.307 million employees. As for rolling stock, IR holds over
239,281 Freight Wagons, 62,924 Passenger Coaches and 9,013 Locomotives (43 steam, 5,345
diesel and 4,568 electric locomotives). The trains have a 5 digit numbering system and runs
12,617 passenger trains and 7421 freight trains daily. As of 31 March 2013, 20,884 km of the
total 65,436 km route length was electrified. Since 1960, almost all electrified sections on IR
use25,000 Volt AC traction through overhead centenary delivery.
Services delivered:
 Passenger railways
 Freight services
 Parcel carrier
 Catering and tourism services
 Parking lot operations
 Other related services
Life Line Of The Nation

7. 7
Railway zones:
Sl.
No
Name of zone Abbr
.
Headquarters Divisions
1. Central CR Mumbai Mumbai, Bhusawal, Pune, Solapur, Nagpur
2. East Central ECR Hajipur Danapur, Dhanbad, Mughalsarai, Samastipur,Sonpur
3. East Coast ECo
R
Bhubaneswar Khurda Road, Sambalpur, Waltair[10]
4. Eastern ER Kolkata Howrah, Sealdah, Asansol, Malda
5. North Central NCR Allahabad Allahabad, Agra, Jhansi
6. North Eastern NER Gorakhpur Izzatnagar, Lucknow, Varanasi
7. North Western NW
R
Jaipur Jaipur, Ajmer, Bikaner, Jodhpur
8. Northeast Frontier NFR Guwahati Alipurduar, Katihar, Rangia, Lumding, Tinsukia
9. Northern NR Delhi Delhi, Ambala, Firozpur, Lucknow, Moradabad
10. South Central SCR Secunderabad Secunderabad, Vijayawada, Hyderabad, Guntakal, Guntur,
Nanded
11. South East Central SEC
R
Bilaspur Bilaspur, Raipur, Nagpur
12. South Eastern SER Kolkata Adra, Chakradharpur, Kharagpur, Ranchi
13. South Western SWR Hubli Hubli, Bangalore, Mysore
14. Southern SR Chennai Chennai, Tiruchirappalli, Madurai, Palakkad, Salem,
Thiruvananthapuram
15. West Central WCR Jabalpur Jabalpur, Bhopal, Kota
16. Western WR Mumbai MumbaiCentral, Ratlam, Ahmedabad, Rajkot, Bhavnagar,
Vadodara
17. Kolkata Metro MR Kolkata
Overview:
Type Public sector undertaking
Founded 16th
April 1853
Head quarters New Delhi
Area served India (also limited services to Pakistan Nepal & Bangladesh)
Revenue 1441.6 billon(2013-2014)
Profit 157.8 billon (2013-2014)
Owners Government of India (100%)
Employees 1.55 millon(2013)
Divisions 17 Railway Zones
Website www.indian railways.gov.in

8. 8
Chapter-6
Indian railways market segmentation
The marketing segmentation of Indian railways should be classified in to two major
categories which are passenger market segmentation and freight market segmentation.
Passenger market segmentation:
The passenger market segmentation is broadly classified in to two which have
subsections in them. They are shown in the below table.
Passenger Market Segmentation
Geographic segmentation Demographic segmentation
 Zonal segmentation  Age
 Climatic  Gender
 Income
 Occupation
 Special quotas
Geographic segmentation:
Indian railways have segmented their market geographically on the basis of zones and
climate. On the basis of zones the Indian railways have been divided into 17 zones like south
central railway, southern railway, northern railway, western railway etc. these 17 zones have
their separate head offices and divisions which work continuously 24*7. All these 17 divisions
come under the head office located in new delhi. These zonal segments makes their tracks track
plans according to the requirements of the people in their zone and co-ordinate with each other.
On the basis of climate IR have segmented their market like in the heavy cold areas of
India they provide air conditioned coaches not cool but hot. As we use room heaters in our home
in the same way those coaches provide comfort to passengers by giving warmth. As the hot or
normal geographical areas are considered railways provide air conditioned coaches of cool
breeze for passengers.
Demographic segmentation:
Indian railways demographic market segment is based on various like
 Age: IR has divided people in to three age groups under 2 years with no fare, 2-5 years
with 50% fare, 5-60 years with full fare and finally above sixty i.e. senior citizens with
75% of fare.
 Gender: IR has divided public on basis of gender as male and female though there is no
concession regarding the ticket fare but they can reserve their seats for future journey
with the 33% reservation provided by Govt.

9. 9
 Income: IR has divided the people in to 3 income groups high, medium and low. These
segments are provided with different classes of travel like HAC, 2AC, 3AC, Sleeper and
general coaches for travel.
 Occupation: people have been divided into employees of railways, employees of railway
subsidiaries, employees of railway schools and hospitals etc.
 Special quotas: In the above bases of Demographic segmentation though there are given
many concessions to different categories of people IR also provides some special quotas
to different categories of people these are small in number. The different kinds of
passenger come under this category are sports persons, Govt. servants, people’s
representatives, physically disabled persons, group concessions in pro-booking, monthly
passes for travelers who travel to same destination frequently etc.
Freight market segmentation
Indian railways have segmented the freight services market into the same as above
passenger market segmentation when considered broadly that is about geographic and
demographic.
Geographic:
The geographic segmentations is of same as passenger market segmentation with 17
zones with head quarters and divisions of each working under the main headquarters in New
Delhi.
Demographic:
When it comes to demographic segmentation considering freight services there is a
bigger classification in which some of the most familiar ones are
 Public & private: some of the companies have their own wagons and tracks into the
manufacturing units and are connected to main track for transport these are called private
and all other freight services comes under public.
 Distance: long, short and medium.
 Weight: very heavy, heavy, medium, low
 Chemical state of product: solid, liquid, gas, flammable, not flammable, perishable etc.
 Size: big, small, very small, when there are very big freight a separate wagon is put for
smaller ones all the things are put in one wagon.
Thus these are some of the segments of the freight services of the Indian railways.
Remaining all the services provided by IR are related to passengers so these follow the
passenger segmentation.

10. 10
Chapter-7
Marketing mix of Indian railways
The successful marketing strategies of the Indian railways are based on its marketing mix i.e.
7’Ps. The IR has a good formulated marketing consisting of product, promotion, price, place,
people, process, physical evidence. The IR with its great experience of more than 150 years has
known the pulse of the market and it keeps on changing according to the market and external
situations. Thus he marketing mix of the railway industry is
Product:
As a service industry product here refers to service. The various services offered by IR
are passenger services freight services, parcel courier services, catering and tourism services,
parking lot services and remaining all other services like cloakroom, restroom, railway kooli etc.
Thus the IR provides vide variety of products for travelling and comforts in travelling and to
send couriers from one place to other postal department uses its freight services to send their
freight.
Price:
The IR follows price discrimination policy. It offer different prices for different
customers traveling the same distance with some value added service like pre-booking, sleeper
class, AC class now latest introduction Tatkal for which they charge a premium price. Even there
are some special quotas for passengers who get a concession on the price like physically
challenged MLA’s MP’s sports persons, people from some trust etc.
It is somewhat same with the freight services based on weight, type, size and other bases
the price charged differs though it is of same distance. This way the IR has formulated a good
price policy which brings a great amount of profit to it.
Place:
The place refers to the availability of the firm. The 14,300 trains all over India covers a
distance of almost 3.5 times the distance of moon. The IR have 63,028 KM of track all over
India. IR has 7000 stations. All the above shows the availability of Indian railways to every nook
and corner of the country with 17 zones and its divisions. Thus IR has a great strategy in the
place i.e. is availability factor.
Promotion:
As it is a monopoly market for IR there is no need of promotion. Still it promotes its
brand through social responsibility factors like cleanliness, educational fares on train and
promotes the local monuments printed on trains running through those areas. Price
discrimination is the other promotion policy adopted by IR through various discrimination policy
it targets various types of customers.

11. 11
For IR there is no need to promote or advertise the changes in it the reason is that the
media any way telecast’s the news about the updates in IR. It also promotes itself through its
websites like www.indianrail.gov.in, www.irctc.co.in, www.trainenquiry.com, www.erail.in. It
also provides an app in android windows and ios for its users for all the information and booking.
People:
The people refer to employees, subsidiary employees, customers and general public. IR
has 1.55 million employees working for IR in various ways and these people help its passengers
in various ways from ticket booking to travel, safety etc. the subsidiary employees work for
betterment of railways. All these people have a good talk on IR as it is a cheap mode of transport
though there is a criticism that trains run late but on all above people play a good role in the mix
of the IR. IR is the only organization in India which includes almost all the citizens in to one of
the mixes people.
Process:
The processes of bringing the services to the customers by the IR are very user friendly as
the online system is introduced in ticket booking process the process of getting tickets are
minimized and we can get tickets 24*7. The freight process is also become very easy as IR
maintains a separate office for freight in every station. The manufacturing process and track
laying process have never given any trouble to public. The delivery process is also good as IR
has storage rooms and the person can go at his/her wish for the delivery of freight. All other
process which are directly related to customer are made simpler day by day.
Physical evidence:
People need not worry about the physical evidence about the services of the IR. Its more than
150 years of track record is the greatest evidence as the present generations great grand fathers
also experienced the services of IR. Largest establishment all over India with 700 stations 14,300
trains, 1.55 million employees are also the proof for the good service provided by IR. The tickets
issued for travel and the booking receipts given for freight services are the evidence which
assures customers about the travel. All the above things add to the physical evidence factor of the
marketing mix.

12. 12
Chapter-8
Findings
 Railways impact area is limited and doesn’t reach all the corners and neglect areas of a
country
 It is one of the world’s largest railway system that is providing employment for more
than 1 million people
 It is solely owned by Govt. of India unlike all the other railway services in the world and
also provides multiple variety of services to its customers
Suggestions
 It needs to improve its marketing strategies in order to reach each and every person
 IR needs to also improve its customer service strategies
 Hygiene factors should be concentrated and improved
 Provision of services should be done with improved speed of delivery
 Time punctuality is one of the factors that is neglected. Hence it must be maintained and
improved.
Conclusion
 Over all IR is a complete government owned service, which is not managed effectively
 Yet Resources are utilized to their optimal level and wastage is kept minimal
 IR is one of the services that reach the people who are below the poverty line and is
affordable by all the sectors.
 It provides not only transport services but also intellectual and educational information to
people of all ages.