Services marketing MODULE 1 as per new VTU syllabus

SERVICES MARKETING
Module 1 (14MBAMM303)
Prof. Mohammed Naveed
MBA, M.Com, PGDHRM, UGC-NET, (Ph.D.)
from Bangalore University

Introduction
Terms:-
 Market: A place where buyer and seller meet,
wherein a buyer with the intention and ability to buy
and the seller with the intention to seller his
merchandise (products) or services.
 Marketing: It is a science of dealing with market.
 Marketing Management: It includes the functions of
planning, organizing, staffing, directing, controlling
and coordinating the marketing activities.
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Prof. Mohammed Naveed. MBA, M.Com, PGDHRM, UGC NET. (Ph.D.) Bangalore University

Career in Marketing
 Advertising careers – available in three kinds of
organizations.
1. Advertisers ( manufacturing, retail stores, service
firms)
2. Media ( television, radio stations, magazines
newspapers)
3. Agencies ( account management, research, media and
creative services)
 Marketing Research (survey design, interviewing,
report writing and all aspects of the research process)
Its an opportunity for creative and challenging work.
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Topics covered
 What are services
 Why services marketing
 Difference btw goods and services
 Myths about services
 Concept of service marketing triangle
 Service marketing mix
 GAP model of service quality
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Why Service Marketing
 A service based economy
 Services as a business imperative in manufacturing.
 Deregulated industries & professional service needs.
 Services marketing is different
 Service equals profits
 But “service stinks”
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Reasons for the growth of Service sector
 Increasing affluence
 Higher percentage of women in labor force
 Greater life expectancy
 Greater complexity of products
 Increasing complexity of life.
 Greater concern about ecology
 Increasing number of new products
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Service Sector in India
 In India too, the service sector has been emerging as the
dominant component of the economy.
 Certain types of services have been growing particularly
rapidly.
 Importance of the services sector for India can be gauged
by looking at its contributions to different aspects of the
economy:
1. Services GDP
2. Services employment in India
3. Better standard of living
4. Contribution to better environment
5. Contribution to country’s exports
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Contd…
 The major impact of the services sector has been in
its contribution to the nations wealth creation and
the provision for better employment opportunities
all over the globe.
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Services Marketing
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 It is a sub field of marketing.
 It also refers to both business to consumer and business to
business.
 Services are every where we turn.
 All concepts, principles & techniques of marketing apply equally
to product and service marketing.
 Service marketers have to develop and offer services that meet
the needs of the customers just as product marketers have to do.
 Service marketing is different because services are characterized
by certain unique features, which, in their turn, have some
unique implications in the matter of marketing.

Service - Definitions
 Services are deeds, processes and performances.
 Services are defined as “a form of product that
consists of activities, benefits or satisfactions
offered for sale that are essentially intangible and
do not result in the ownership of anything” - Philip
Kotler
 All economic activity whose output is not a physical
product and is generally consumed at the time it is
produced is called services.
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Contd…
 A service is the action of doing something for
someone. It is largely intangible (i.e. not
material),you cannot touch, you cannot see, you
cannot taste it, you cannot hear it.
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Goods vs. services
goods
 Physical objects
 Are solid & can be
touched
 Occupy space and
substance
 Ownership can be
transferred
 Goods can be stored for
future use
 Easy to evaluate
services
 Non physical objects
 Can be felt cerebrally
 Share to be experienced there
& then
 Cannot be stored or carried
away for future use nor it can
be resold
 Customers may be involved in
the production process
 Difficult to evaluate
 There is greater variability on
operational inputs & outputs.
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Characteristics of Services
 Intangibility
 Inseparability
 Heterogeneity
 Perishability
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Myths about services
 The first myth is that a service economy produces
services at the expense of other sectors.
 The second myth is that service production is
mainly labor intensive.
 The third myth about services is that people
satisfy their product needs before the need for
services.
 The fourth myth is that service business are
“cottage industries” & service jobs are low paying.
 The other myth is that services are only offered by
the government sector.
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Service Marketing Triangle
 It is said that services mktg is a game of “promises”
played amongst three entities engaged in the service
transition.
 The three entities in a service transaction are:
1. The Company
2. The Customer
3. The Provider
 Three different types of mktg take place during the
service transaction amongst the three entities:
1. External Marketing
2. Internal Marketing
3. Interactive Marketing
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Service Marketing Mix
 Additional P’s have been mentioned by service
marketers to take into account the special nature of
services marketing
1. People
2. Process
3. Physical evidence
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PEOPLE:
 Services are delivered by people in many cases.
 Even technology is used, people to form a very
important part of the ‘service experience’.
 All human actors who play a part in service
delivery & thus influence the buyer’s perceptions:
namely the firm’s personnel.
 This situation creates a lot of scope for work-
related anxiety, constantly feeling “evaluated”.
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Contd…
 If the service worker does not have the right attitude
towards his job, this situation of constant interaction
with customers can be very stressful.
 Therefore, it has become inevitable to look into
issues involved in recruitment, training & motivation
of employees, for the service sector jobs in a deeper
manner.
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PROCESS
 The actual procedures, mechanisms and flow of
activities by which the services are delivered – i.e. the
service delivery and operating systems.
 Some services are very complex, requiring the
customer to follow a complicated and extensive series
of actions to complete the process.
 The way it is done can sometimes determine the
customer satisfaction with the entire service
experience.
 It is important to view the process in terms of a visual
map with various activities & stages listed preferably
from customer viewpoint.
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Physical Evidence
 The environment in which the service is delivered and
where the firm and customer interact, and any tangible
components that facilitate performance or
communication of the service.
 The appearance of buildings, landscaping, vehicles,
interior furnishing, equipment, staff members, signs,
printed materials, and other visible cues all provide
tangible evidence of a firm’s quality.
 Services need to manage physical evidence carefully, as
it can have a profound impact on customer’s
impressions.
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Contd…
 In many situations, customers may be attracted by
the looks of a restaurant, a retailers façade and may
decide to try it out.
 Physical evidence cues provide excellent
opportunities for the firm to send consistent and
strong messages regarding:
a) The org’s purpose,
b) The intended market segments, and
c) The nature of the service.
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Facade (an element of Physical evidence)
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Facade (an element of Physical evidence)
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Challenges for service marketers
 Because of the basic characteristics of services,
marketers of services face some very real and
distinctive challenges.
How can service quality be defined and improved?
How can new services be designed and tested
effectively?
How can the firm be certain in communicating a
consistent and relevant image?
How the firm accommodate fluctuating demand?
How can firm best motivate and select service
employees?
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Contd…
How should prices be set?
How should the firm be organized so that good strategic
and tactical decisions are made?
How can the balance btw standardization and
personalization?
How can the org protect new service concepts from
competitors?
Hw does the firm communicate quality and value to
consumers?
How can the org ensure the delivery of consistent quality
service?
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Thank You

Services marketing MODULE 1 as per new VTU syllabus

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