Service Marketing

NIEC 2012/ BY ASHIMA KAPOOR

Service Industry Contribution in an Economy

1. India ranks fifteenth in the services output .

2. Service sector provides employment to around 23% of the total workforce in the country.

3. The Sector of Services in India has the biggest share in the country's GDP for it accounts for around 53.8% in 2005.

4. the Services Sector in India accounts for over half of the country's GDP.

Services

“Any activity or benefit that one party can offer to another that is essentially intangible & does not result in the ownership of anything. It’s production may or may not be tied up to a physical product.”

Definition 2

Deeds, processes, performances

Open system view of services

Service Ki Duniya

• Professional services– Lawyer, architect, estate agent

• Medical services– Hospitals, clinics, ambulances

• Hospitality– Restaurants, hotels

• Travel and Tourism– Airlines, railways, guides

• Utilities– Reliance Energy, BEST

• Retail• Finance, IT, consulting, BPOs, couriers, advertising• Telecom

– Telephony, VAS providers, location-based operators• The Internet• The entertainment economy!• And the strange ones

– Sneaker washer, Dog food dabba, gaming grunt, life coach

Prodices & Serducts

• Very few pure services or pure products

• Most offerings are a varying mix of both

• Some products deliver intangible benefits; or add a smattering of service to differentiate.

• Some services have a physical component

‘‘Tangibility Tangibility Spectrum’Spectrum’‘‘Tangibility Tangibility Spectrum’Spectrum’

Prodices and Serducts: Exercise

• Hyundai i20• Yash Raj Films• Pakistan Cricket Team• Barack Obama• McDonald’s• MDH Chana Masala• Accenture• Bisleri

Spectrumated

• MDH Chana Masala• Bisleri• Hyundai i20

• McDonald’s

• Yash Raj Films• Accenture• Barack Obama/Pakistan cric

Why Service Marketing

• Some exam

• Your career

• The entire economy

Products vs. Services

• Tangible vs. Intangible

• Standardised vs. Heterogenous

• Production & Consumption– Separate vs. simultaneous

• Nonperishable vs. perishable

Cannot be inventoried, Cannot be inventoried, patented, displayed, pricedpatented, displayed, priced

Delivery, quality and Delivery, quality and satisfaction depend on many satisfaction depend on many factorsfactors

Customers participate, affect Customers participate, affect each other and transaction; each other and transaction; mass production is difficultmass production is difficult

Supply and demand; return and Supply and demand; return and second-hand salesecond-hand sale

Services Vs Goods

Services GoodsIntangible Tangible

Heterogeneous Homogenous

Produced in Buyer Seller interaction Produced in factory

Production, distribution & consumption takes place simultaneously

All three are separate & independent

Consumers participate in production Consumers don’t generally participate

Cannot be stored Can be stored

Transfer of ownership cannot take place Transfer of ownership does take place

Characteristics of Services

Classification of Services

• It is required to design & apply marketing techniques to completely satisfy the customer & increase profits & identify new emerging services. •Classifications can be done on following basis:• Classification by Industry• Classification by Target Effect• Skill level of service provider (Professional/ Nonprofessional)• Labor intensiveness (People-based/Equipment-based)• Degree of customer contact (High / Low)• Goal of the service provider (Profit /Nonprofit)

Classification By Industry

• Entertainment industry• Education• Telecommunications• Finance & Insurance• Transportation• Public utilities• Government services• Health• Hospitability Industry• Business services• Telecommunications• Trading

Classification of Services

• Based on Degree Of Customer Involvement: ( Lovelock)

• People Processing: Services aimed at physical care e.g. Healthcare, clinics, restaurant, hospitals, hair stylists, fitness centers

• Mental Stimulus Processing: Services aimed at mind of customer e.g. Education, information, entertainment, consulting, psychotherapy

• Possession Processing: Services aimed at physical possession & tangible assets e.g. repair & maintenance, laundry, repair services, landscaping, house cleaning services

• Information Processing : Services for intangible assets e.g. Banking, legal consultation, brokerage, financial services.

Skill level of service provider

•Teacher

•Doctor

•Engineer

•Accountant

Labor intensiveness

•Mechanic• •Electrician

•Labor

•Plumber

•Artisan

Degree of customer contact

•High Degree (Every day) – TV channels, mobile etc.

•Moderate Degree (Regular) – Teacher, Barber, washer man etc.

•Low Degree ( Occasional ) – Priest, Doctors etc.

Service/Product Bundle

Element CoreGoods Example

Core Service

Example

Business Custom clothier Business hotel

Core Business suits Rooms

Peripheral

Goods

Garment bag Bath robe

Peripheral

Service

Deferred payment plans

In house restaurant

Variant Coffee lounge Airport shuttle

The Service Process Matrix

Degree of labor Intensity

Degree of Interaction and Customization

Low High Low

Service factory: * Airlines * Trucking * Hotels * Resorts and recreation

Service shop: * Hospitals * Auto repair * Other repair services

High

Mass service: * Retailing * Wholesaling * Schools * Retail aspects of commercial banking

Professional service: * Doctors * Lawyers * Accountants * Architects

(Nature of the Service )(Nature of the Service )

Direct Recipient of the Service Nature of the Service

People

Things

Tangible actions

People’s bodies:

Health care Passenger transportation Beauty salons Exercise clinics Restaurants

Physical possessions:

Freight transportation Repair and maintenance Veterinary care Janitorial services Laundry and dry cleaning

Intangible actions

People’s minds:

Education Broadcasting Information services Theaters Museums

Intangible assets:

Banking Legal services Accounting Securities Insurance