This document provides information on a services marketing course for an MBA program. It includes the course code, title, objectives, outcomes, units of the syllabus, and references. The course aims to help students understand concepts of services marketing, develop skills in dealing with service customers, and analyze factors like service design, employee roles, and pricing of services. The syllabus covers 4 units on topics such as the concept of services, customer behavior and expectations, relationship marketing, service delivery processes, and the role of marketing communications.

1. MBA, REVA BUSINES S SCHOOL
SERVICES MARKETING

2. Program: MBA
Course Title: SERVICES MARKETING
Course Code: M20MB3250
Course Type: SC (MKT Spl.)
Course Presenter: Dr. Anshu Rani
Course Mentor: Nil
Semester & Section: III MBA
Academic Year: 2021-2022
Course Pre-requisites: Marketing Management
L T P: 2 1 0
Pedagogy: Direct Method, ICT, Case study, Role Play

3. Course Objectives:
1. Acquire an understanding of the concept and meaning of services management and the relationship process.
2. Enhance skills and knowledge in dealing effectively with a portfolio of services customers in a business setting
3. Understand the consumer expectation towards services and their role in service delivery process
4. Know the importance of effective marketing communication to influence the customers.
Course Outcomes:
CO1: Interpret the concept and characteristics of Services Marketing
CO2: Illustrate the concept of Service Design and standards
CO3: Analyze the employee role in Service Design
CO4: Identify the factors which determine the pricing of Services.

4. Syllabus:
Unit5 Topics
Course
Outcomes
Program
Outcomes
I
Introduction to services: Concepts, Contribution & reasons for the growth of services sector, Difference in goods and
service in marketing, Characteristics of Services, Concept of service marketing triangle, Service marketing mix, GAPs
model of service quality. Marketing challenges in service industry. Consumer Behavior in Services: Search, Experience
and Credence properties, Customer expectation of services, Two levels of expectation, Zone of tolerance. Customer
Perception of Services- Factors that influence customer perception of service, Service encounters, Service Quality, Service
failure, Impact of service failures versus product failures, service recovery, and service recovery paradox.
1 5
II
Understanding customer expectation through market research: Using marketing research to understand customer
expectations, Types of service research. Relationship Marketing: Benefits of relationship marketing, Strategies for
building relationships, Four levels of retention strategies. Service design and Positioning – New service development
process, Service blue printing, blue print components. Customer defined service standards: “Hard” & “Soft” standards,
Process for developing customer defined standards.
2 5
III
Employee role in service designing: Importance of service employee, Problems faced by service personnel, Emotional
labour, Source of conflict, Boundary spanning roles, People Strategies for closing GAP 3. Customer’s role in service
delivery- Importance of customer & customer’s role in service delivery, Strategies for enhancing Customer participation.
Managing demand and capacity – Understanding demand patterns, Capacity constraints, Strategies & Tools for matching
capacity and demand, waiting line strategies
3 5
IV
Role of marketing communication – Communications and the services marketing triangle, four categories of strategies to
match service promises with delivery Pricing of services- Role of price and value in provider GAP 4, Role of non-
monetary cost, Price as an indicator of service quality, pricing strategies. Physical evidence in services: Elements of
physical evidence, Roles of service scape, Significance of physical evidence, Guidelines for physical evidence strategies
4 5

5. Program outcomes:
1. Manage operations of an organization

6. Reference Books:
1. Services Marketing: Integrating Customer Focus Across the Firm- Valarie A. Zeithaml, Mary Jo Bitner, Dwayne
D. Gremler,4/e, McGraw-Hill Education, 2020.
2. Services Marketing- William Chitty, Steven D'Alessandro, Andrew Hughes,2/e, Oxford University Press, 2019
3. Essentials of Services Marketing, - Jochen Wirtz, Christopher H. Lovelock,3/e, Pearson Education Limited,
2017
E-Resources:

7. Presentation Topics:
Take up a company of your choice and analyse its strategies.
Assignment:
• Case study
Suggested Reading:
eBook on IB

8. Introduction
• What are services?
• Why services marketing?
• Differences in Goods vs. Services Marketing
• Services Marketing Mix
• The Gaps Model of Service Quality

9. Introduction to services: Concepts, Contribution &
reasons for the growth of services sector

11. Importance of services
• Services-based economics
• Services as a business imperative in manufacturing and IT
• Deregulation industries and professional needs

13. SERVICES AND TECHNOLOGY
• Potential for new service offerings
• New ways to deliver services
• Enabling both customer and employees
• Extending global reach of services
• The internet is a service

14. Examples of Service Industries
• Health Care
• hospital, medical practice, dentistry, eye care
• Professional Services
• accounting, legal, architectural
• Financial Services
• banking, investment advising, insurance
• Hospitality
• restaurant, hotel/motel, bed & breakfast,
• ski resort, rafting
• Travel
• airlines, travel agencies, theme park
• Others:
• hair styling, pest control, plumbing, lawn maintenance, counseling services, health
club

15. Tangibility Spectrum
Tangible
Dominant
Intangible
Dominant
Salt
Soft Drinks
Detergents
Automobiles
Cosmetics
Advertising
Agencies
Airlines
Investment
Management
Consulting
Teaching
Fast-food
Outlets
Fast-food
Outlets













16. Industries Classified within the Service Sector

17. reasons for the growth of services sector/
Key drivers of growth in the Service sector
• Low cost of operation and tax advantages
• Rapid industrialization and growth of IT parks in the country
• Supportive government policies
• Availability of technically skilled manpower and readily available resources
in the country.
• Rapid introduction of IT technologies in major sectors such as telecom,
BFSI.
• Strong growth in export demand
• Use of new technologies like cloud computing
• Government established SEZs

18. Differences Between
Goods and Services
Intangibility
Perishability
Simultaneous
Production
and
Consumption
Heterogeneity

19. Implications of Intangibility
• Services cannot be inventoried
• Services cannot be patented
• Services cannot be readily displayed or communicated
• Pricing is difficult

20. Implications of Heterogeneity
• Service delivery and customer satisfaction depend on employee
actions
• Service quality depends on many uncontrollable factors
• There is no sure knowledge that the service delivered matches what
was planned and promoted

21. Implications of Simultaneous Production and
Consumption
• Customers participate in and affect the transaction
• Customers affect each other
• Employees affect the service outcome
• Decentralization may be essential
• Mass production is difficult

22. Implications of Perishability
• It is difficult to synchronize supply and demand with services
• Services cannot be returned or resold

23. Services are Different
Goods Services Resulting Implications
Tangible Intangible Services cannot be inventoried.
Services cannot be patented.
Services cannot be readily displayed or communicated.
Pricing is difficult.
Standardized Heterogeneous Service delivery and customer satisfaction depend on
employee actions.
Service quality depends on many uncontrollable factors.
There is no sure knowledge that the service delivered
matches what was planned and promoted.
Production
separate from
consumption
Simultaneous
production and
consumption
Customers participate in and affect the transaction.
Customers affect each other.
Employees affect the service outcome.
Decentralization may be essential.
Mass production is difficult.
Nonperishable Perishable It is difficult to synchronize supply and demand with
services.
Services cannot be returned or resold.
Source: Adapted from Valarie A. Zeithaml, A. Parasuraman, and Leonard L. Berry, “Problems and Strategies in Services Marketing,”
Journal of Marketing 49 (Spring 1985): 33-46.

24. Services Marketing Mix:
7 Ps for Services
• Traditional Marketing Mix
• Expanded Mix for Services: 7 Ps
• Building Customer Relationships Through People, Processes, and
Physical Evidence
• Ways to Use the 7 Ps

25. Traditional Marketing Mix
• All elements within the control of the firm that communicate the
firm’s capabilities and image to customers or that influence customer
satisfaction with the firm’s product and services:
• Product
• Price
• Place
• Promotion

26. Expanded Mix for Services --
The 7 Ps
• Product
• Price
• Place
• Promotion
• People
• Process
• Physical Evidence

27. Table 1.4
Expanded Marketing Mix for Services
PRODUCT PLACE PROMOTION PRICE
Physical good
features
Channel type Promotion
blend
Flexibility
Quality level Exposure Salespeople Price level
Accessories Intermediaries Advertising Terms
Packaging Outlet location Sales
promotion
Differentiation
Warranties Transportation Publicity Allowances
Product lines Storage
Branding

28. Expanded Marketing Mix for Services
PEOPLE PHYSICAL
EVIDENCE
PROCESS
Employees Facility design Flow of activities
Customers Equipment Number of steps
Communicating
culture and values
Signage Level of customer
involvement
Employee research Employee dress
Other tangibles

29. Ways to Use the 7 Ps
Overall Strategic Assessment
• How effective is a firm’s services
marketing mix?
• Is the mix well-aligned with overall
vision and strategy?
• What are the strengths and
weaknesses in terms of the 7 Ps?
Specific Service Implementation
• Who is the customer?
• What is the service?
• How effectively does the services
marketing mix for a service
communicate its benefits and
quality?
• What changes/ improvements are
needed?

30. Service Marketing Triangle

31. Service Marketing Triangle

32. The Gaps Model of Service Quality

33. Perceived
Service
Expected Service
CUSTOMER
COMPANY
Customer
Gap
GAP 1
GAP 2
GAP 3
External
Communications to
Customers
GAP 4
Service Delivery
Customer-Driven Service Designs
and Standards
Company Perceptions of Consumer
Expectations
Part 1 Opener
Gaps Model of Service Quality

34. Gaps Model of Service Quality
• Customer Gap:
• difference between expectations and perceptions
• Provider Gap 1:
• not knowing what customers expect
• Provider Gap 2:
• not having the right service designs and standards
• Provider Gap 3:
• not delivering to service standards
• Provider Gap 4:
• not matching performance to promises
Part 1 Opener

35. Expected
Service
Perceived
Service
GAP
The Customer Gap
Part 1 Opener

36. GAP-1
Customer expectations
.
Company perception of customer expectations
• Inadequate marketing research orientation
• Lack of upward communication
• Insufficient relationship focus
• Inadequate service recovery

37. GAP-2
Customers-driven service designs and standards
Management perception of customer expectations
Poor service design
Absence of customer-driven standards
Inappropriate physical evidence and services cape

38. GAP-3
Customer-driven services design and standards
Service delivery
• Deficiencies in human resource policies
• Customer who do not fulfill roles
• Problems with services intermediaries
• Failure to match supply and demand

39. GAP-4
Service delivery
External communications to customers
• Lack of integrated service marketing communication
• Ineffective management of customer expectations
• Over promising
• Inadequate horizontal communication

40. Challenges for Services
• Defining and improving quality
• Communicating and testing new services
• Communicating and maintaining a consistent image
• Motivating and sustaining employee commitment
• Coordinating marketing, operations and human resource efforts
• Setting prices
• Standardization versus personalization

41. Consumer Behavior in Services
Consumer Behavior in
Services

42. Consumer Behavior in Services
• Overview the generic differences in consumer behavior between
services and goods.
• Introduce the aspects of consumer behavior that a marketer must
understand in five categories of consumer behavior:
• Need recognition.
• Information search.
• Evaluation of service alternatives.
• Service purchase and consumption.
• Postpurchase evaluation.
• Understand the roles of culture and group consumer behavior in
services

43. Continuum of Evaluation for Different Types
of Products
Difficult to evaluate
Easy to evaluate
High in search
qualities
High in experience
qualities
High in credence
qualities
Most
Goods
Most
Services

44. Stages in Consumer Decision Making and
Evaluation of Services

45. Categories in Consumer Decision-Making and
Evaluation of Services
Information Search Evaluation of
Alternatives
Purchase and
Consumption
Post-Purchase
Evaluation
 Use of personal sources
 Perceived risk
 Evoked set
 Emotion and mood
 Service provision as drama
 Service roles and scripts
 Compatibility of customers
 Attribution of dissatisfaction
 Innovation diffusion
 Brand loyalty

46. Categories in Consumer Decision-Making and
Evaluation of Services
Information Search Evaluation of
Alternatives
Purchase and
Consumption
Post-Purchase
Evaluation
 Use of personal sources
 Perceived risk
 Evoked set
 Emotion and mood
 Service provision as drama
 Service roles and scripts
 Compatibility of customers
 Attribution of dissatisfaction
 Innovation diffusion
 Brand loyalty
Culture
 Values and attitudes
 Manners and customs
 Material culture
 Aesthetics
 Educational and social
institutions

47. Search , experience and credence properties
• Search quality:- attributes that a customer can determine before
purchasing of the product.
• Experience quality:- attribute that can be discovered only after
purchase or during consumption.
• Credence quality:- includes characteristics that the consumer may
find impossible to evaluate even after purchase.

48. Continuum of Evaluation for Different Types of
Products
.
Difficult to evaluate
Easy to evaluate
High in search
qualities
High in experience
qualities
High in credence
qualities
Most
Goods
Most
Services

49. Customer expectation of services
• The level of expectations can vary widely depending on the reference
point the customer holds.

50. Possible Levels of Customer Expectations

51. Dual Customer Expectation Levels
Desired level:- the level of service the customer hopes to receive.
Adequate services:- the level of service customer will accept.
Adequate Service
Desired Service

52. Zone of tolerance
• The extent to which customer willing to accept this variation Is called
the zone of tolerance.
• The zone of tolerance a the range or window in which customer do
not particularly notice the performance

53. Factors that influence customer expectation
of services
• Marketer would also like to have control over these factors that shape
them. But many of the forces the influences customer expectations
are uncontrollable.

54. Factors That Influence
Desired Service

55. Factors That Influence
Adequate Service

56. Factors That Influence
Desired and Predicted Service
.
Predicted
Service
Explicit Service
Promises
Implicit Service
Promises
Word-of-Mouth
Past Experience
Zone
of
Tolerance
Desired Service
Adequate Service

57. Customer perception of services
• How customer perceived services??
• Customer perceived services in terms quality of the service and how
satisfied they are overall with their expectations.

58. Customer perception of service quality

59. Factors Influencing
Customer Satisfaction
• Product/service quality
• Product/service attributes or features
• Consumer Emotions
• Attributions for product/service success or failure
• Equity or fairness evaluations

60. Outcomes of
Customer Satisfaction
• Increased customer retention
• Positive word-of-mouth communications
• Increased revenues

61. Service Quality
• The customer’s judgment of overall excellence of the service provided
in relation to the quality that was expected.
• Service quality assessments are formed on judgments of:
• Outcome quality
• Process quality
• Physical environment quality

62. The Five Dimensions of
Service Quality

63. SERVQUAL Attributes

64. The Service Encounter
• is the “moment of truth”
• occurs any time the customer interacts with the firm
• can potentially be critical in determining customer satisfaction and loyalty
• types of encounters:
• remote encounters, phone encounters, face-to-face encounters
• is an opportunity to:
• build trust
• reinforce quality
• build brand identity
• increase loyalty

65. A Service Encounter
Cascade for a Hotel Visit

66. A Service Encounter
Cascade for an Industrial Purchase

67. Common Themes in Critical
Service Encounters Research

68. Service Failure and Recovery

71. Recovery
• Acknowledge problem
• Explain causes
• Apologize
• Compensate/upgrade
• Lay out options
• Take responsibility
• Ignore customer
• Blame customer
• Leave customer to fend for
him/herself
• Downgrade
• Act as if nothing is wrong
DO DON’T

72. Adaptability
• DO
• Recognize the seriousness of
the need
• Acknowledge
• Anticipate
• Attempt to accommodate
• Explain rules/policies
• Take responsibility
• Exert effort to accommodate
• DON’T
• Promise, then fail to follow
through
• Ignore
• Show unwillingness to try
• Embarrass the customer
• Laugh at the customer
• Avoid responsibility

73. Spontaneity
• DO
• Listen
• Try to accommodate
• Explain
• Let go of the customer
• DON’T
• Take customer’s dissatisfaction
personally
• Let customer’s dissatisfaction
affect others

74. Evidence of Service from the
Customer’s Point of View
People
Process
Physical
Evidence
 Contact employees
 Customer him/herself
 Other customers
 Operational flow of
activities
 Steps in process
 Flexibility vs. standard
 Technology vs. human
 Tangible communication
 Servicescape
 Guarantees
 Technology
 Website

75. Myths about service industries
• The first myth is that service produces service at the expense of the
other sectors.
NO !! E.g.:- airlines, fast food outlets, educational institution.
• The second myth is that production is primarily labor intensive
NO !! FACT is capital intensive
• The third myth about the service sector is that service business are
‘cottage industries’ and service jobs are low paying.
• The other myth about the service is that services are only offered by
the government sector.
privatization

77. REVISION