PGDM

1. S er vices
M ar keting
Pradeep Giri
Sem -III

2. Growth or Services Sector
• Reasons: An the physiological need of the people get fulfilled, there is a
demand for more satisfaction.
• The changing lifestyle, changing word, changing economies, technological
advances modernization, liberalization, privatization & globalization polices
are same of the factors for stimulating the dramatic growth in services.
Growth of services industry : Cause & effect.
Cause Effect Illustrations
Technological High complexity of Maintaince Services eg:AMC’s for
Advances products computers, services center for
cellular phones .
Globalization More business International shipping & Couriers
internationalization Company
De regulation Privatization of Govt. Telecom & internet services birth of
police owned sectors Pvt. Airlines
More leisure Shift toward pleasure Resorts recreation clubs tour
time & entertainment operators multipliers etc.
Greater life To live long special Health club & Five Star hospital have
expectectancy care facilities flourished

3. Service need product as consequence
Service need Product as consequence
Age (old age Care) Senior citizen home, wheel Chairs
Eye –care Eye career glasses , eye testing machine
Hospital Medical equipment , medicines etc.
Photography Cameras, video, cameras films.
Education Aids likes OHP LCD projector etc.
Copyright service Fax machine, photo copies
Hair styling Hair coloring, shaping, fixing produce & hair dryer.
Classification / Type of service :
Service can be classified broadly as follows-
Transportation Service – railway, airline water, road.
Communication Service – telephone, post, & courier tele & video
conferencing, radio, television.
3

4. • Marketing related service – advertising sale promotion, products
development & testing, market research etc.
• Financial & insurance service –banking leasing, brokerage, life and
health insurance.
• Entertainment service – movies channel, cinema, game parlors.
• Hospitability services – hotels & restaurants catering & home delivery.
Scope of good and services:
• Good is get tangible physical attribute assembled in an identifiable from
to provide want satisfaction to customers.
• Services is an identifiable, intangible activity that is the main object of
transaction designed to provide that want satisfaction to customer.
Service profit –seeking organization
Industries Classification Example
Medical & health care Diagnostic services, hospitalization nursing & all
other medical related service.
Communication Telephone fax, e –mail, internet
Transportation Private state transport.
Recreation & entertainment Amusement parks, cinema halls, DJ service etc.
4

5. Growth & importance of services
• Growth of service industries:-can be attributed to the changing life
style, changing word, changing industrial economies, changing
population & changing technology.
• There is drastic change in the industrial & business environment
because of two vital components ie services a information technology.
• Open –market economy has integrated India with the world economy &
currently the services sector of India accounts for over 40% its GDP.
• In India the service industries is highly employee oriented and heavily
overstaffed & organization like bank insurance companies etc are
dominated by procedures rather than services of customers.
Importance of service marketing
• Most services marketing involves some good and there is explosive
growth in service industry an account of increased complexity specially
and competitive nature of business.

6. Service & Marketing environment –
the pest impact
Political legal forces
Economic Condition Pest Impact Technology
Socio –cultural Forces
• Pest exert same pressure on service. As it does on products. Pest is
useful tool for helping us to decide what the key factor in the marketing
environment are for a particular organization whether their impact is
opportunity or that.
Good-services continuum :
• Today, no tangible goods are offered to a customer without same
associated service.
• No services is marketed without same physical good’s associated with
product.
6

7. • They study of goods – Services = Continuum facilitates marketers to
know and plan their market offering.
• Restaurants for example are services oriented & provide tangible goods
like DOSA, PIZZA or Mughlu Foods.
• In the same way computer manufacturing firm sell hardware but major
part of the profit come from maintenance contracts or software
solutions ( a services ) e.g.: IBM’s Focus is providing “Solution to the
small Planet”.
Planet
• Exercise equipment as an example of goods –Service Continuum.
• An exercise equipment say a stationary bicycle can be:-
• A). When a user buy it and obtains its ownership it is called Pure
Goods.
• B). If a customer procures it on rent he or she obtains the use of the
product temporarily.
• C). If a hotel gust uses the same at hotels health club we call it the gym
facilities.
• D). If a person uses it at a fitness club it is not only the bicycle, the
space of the club also the service of the instructor that are clubbed and
there is how the continuum concept can be under staed.

8. 4 I’s Services –
• There are 4 distinctive Characteristic of service which
create special marketing challenges and opportunities
these 4 element are called as:-
1. Intangibility 2. Inseparability
3. Inconsistency 4. Inventory
• Services marketers must cope up with the above
characteristic and devise marketing strategies So that the
related marketing problems are overcome.
1. Intangibility :
• Intangibility is a characteristic of service indicating that it is
has no physical attributes & as a result impossible for a
customer to test, feel or smell before buying it thus in
most cases services are bought on trust.
8

9. • Services product are mostly intangibility, they have to be marketed with
tangible evidence. This is referred to as tangiblizing the intangibles.
This means that the services has been performed and delivered at
particular level of quality
• Eg- 1) University degree is a tangible evidence of the education
services and knowledge acquired by you.
• 2) certificate issued a pollution control agency is a tangible evidence of
the required checks done on the vehicle prove that emission levels are
under control.
2. Inconsistency
• Inconsistency is characteristic of services that makes them less
standardized & uniform than goods inconsistency is called as
variability
• The consistency occurs largely on account of –
• Different services provides perform a given services at different
occasions.
• The services performed by an individual provider may differ overtime.
• Interaction b/n customer and provider may vary by customer,
companies which are highly equipment & system based & less people
based on reduce insistency in services.
• Eg- 1) Bank ATM provides consistent services.

10. • 2) Mc Donald’s have been able to achieve consistency in services
delivery by adopting production line approach to services and
standardizing every aspect of services operation down to the width of
the smile that each customer should be greeted with.
3. Inseparability
• Inseparability is characteristic of services. Including that it cannot be
separated from the creator – seller of the product
• Many services are created delivered & consumed simultaneously
through interaction b/n customer and services product e.g.- dental care
by a dentist.
• In most of the case the customer receives and consumes the services
at the service producer premises, so called the services factory.
Type of services production:-
• Co – production ( tutoring services both student & faculty are present.)
• Isolated production (movie production / processing center)
10

11. • Self services (customer use equipment & services provided by the
seller without direct interaction e.g.–videogame machine and bank
ATM )
4. Inventory
• The inventory relates to perishability Characteristics in services
marketing . The services cannot be easily saved stored for the future
use.
• e.g. –empty seat in a 10 am flight to Mumbai from Delhi cannot be
carried over to provide more seating in next flight.
• The combination of perishability & Fluctuating demand present
challenges for marketers engaged in product planning, pricing,
promotion, distribution of services.
• A). Restaurants offer “Happy Hour” rates to invite customer for easily
dinner hours.
• B). Mc Donald use part –time employee (contester person ) to mid the
peak hour rush.
•
11

12. • Goods VS Services: At A Glance
Characteristic Goods Services
Product Tangible Intangible
Ability to measure Objective Subjective
Custo perception Standardized Must be can summed to evaluate
Form Manufacturing Created
Self life Days to year Zero (perishable)
Delivery Consistent Variable
Product flexibility Limited Broad
Marketing Traditional / External Non traditional largely internal
• Marketing Mix –
• What is marketing mix?
• Marketing mix describe the specific combination of marketing
elements used to achieve an organization / individuals objectives
and satisfy the target market.
12

13. Marketing Mix –
• It is customary to accept that marketing mix is made up of 4 P’s –
Product, Price, Promotion, Place (Distribution)
• Over a period of time the special need of services have led to the
extension of the mix to 7 P’s . The additional 3 P’s listed below are
known as augmented service mix.
1). People 2). Physical evidence 3). Process
People Process
Physical evidence
Extended services marketing mix (augmented marketing mix)
• The above additional 3P’s help services manager to deal with the 4I’s
of services.
• Marketing a services is no different from marketing a product but the
4I’s make it more complex and difficult because
• a). Customer perceive much higher risk while buying services
• b). Customer is on your premises so customer care becomes the focus.
13

14. • Inconsistency in quality
Restaurant
Intangibility Inseparability Inconsistency Inventory
Rating P/ Services Time/responsibility Seat
Cinema Hall
Intangibility Inseparability Inconsistency Inventory
Sound-Pic clearity
Tkt/ People +P Tkt / Physical Evid. / Peo+ Process Physical Evid.
14

15. Target Market
• For certain succeful marketing mix strategy market must
define the target market very clearly.
• The target market is of paramount importance and is the
focus for all marketing mix activity.
Benefit of targeting:-
1. fuller knowledge and understaing of the unique characteristic
and need of the group to be satisfied.
2. Better knowledge and understaing of who your competitors are
• 3. Better knowledge and understaning of change and
development in the wants and demands of the target market.
Segmentation
Age Gender Demographic income
What do customer buy?
• Customer by solution their problems. Customer have a set of
need and wants which will satisfy their need. Thus one can
say customer are searching for benefits.

16. • Customer choose on the basis for value of money criteria and not price
alone.
• Customer services user and the clients are wall motivated to find offering
which give them the most benefit / value for the least out you.
• The value for money is given by the following equation
Value = Product / promotion / place / Process / Physical Evid
Money Price
= Non- Price variable / Price
• 6 P’s add to the perceived value and the 7th P (Price) Brings the revenue.
• The image of the services its availability functionality reliability customer
care, friendly services /delivery system contribute to the satisfaction of
customer.
People:-
• Organizational structure may be defined “ a set of assumption or ideologies
shared by the member of the organization.
• People are these assumptions to identify what is important and how things
works in the company.
• When these assumptions get formalization roles of behavior are established
so that people know how to act.
16

17. Service Encounter
• For service marketers the core of the service elements is the interation
between providing services & the customer which is known as the
service encounter.
• To deliver satisfactory service of the company employees have to play
an important role and poises personal qualities & ability to understand
& satisfy customer needs flexibility skill & knowledge.
• The management in order to deliver satisfactory service must develop
job to satisfy the individual needs of the employees and address the
following issues:-
• A) Employee:- employees are the impression managers becomes a
customer perceives the quality of the service from the appearance inter
personal behavior attitude of the contract personal.
• Like investing resoures in improving the product companies must invest
in recruiting right people. Training them to deliver the satisfaction &
motivate them to retain the customers.
• B). Recruitments:- for recruiting right type of people a criteria should
be laid down to reflect the human dimensions of the job as well as
technical requirement. E.g.- Pizza Hut, mission “ Enjoy having fun while
delivering word wide standards of service & hospitality.
17

18. • C). Training & Development :- Training is the process of providing the
employee with specific skill in helping them correct deficiencies in their
current performance.
• Development is the process of providing the employee with the experience
and attitude needed for success E.g.-Radisson hotel which trains
employee on 3 principles.
• 1) Show yes I can Attitude.
• 2) Take personal responsibility
• 3) Use teamwork.
• D) Motivation :- Motivation is a set of foreces that cause the employees to
behave in certain ways. However it is important to know that really
motivates peoples.
• Along with financial incentive phycholigical reward like price & recognition
are often more powerful and long lasting reward than more money.
• Most service organizations use a combination approach to motivation
Monetary awarded may be granted for an outstanding services and call for
employee participation through inviting ideas to important.
• E) Empowerment :- In the past front live employee views and opinions
were not recognized however now management have started giving
employee more information & knowledge reward based on company
performance and most important the power to take decisions.
18

19. • Empowerment is a choice of 3 options based amount of knowledge
information reward and power.
• 1) Suggestion involvement – employees are only empowerment to
recommend and power.
• 2) Job involvement –This call for extensive job redesign so that
employee use a variety of skills often in teams because in services
organization like hospital and airline individual can not offer the whole
services from beginning to end.
• 3) High Involvement –employee through job enrichment develop
extensive skill in teamwork problem solving and business operations.
There is profit shearing and the employees feel a sense of ownership.
• D) Process & Services Quality: -Process is the way of understanding
transaction, supplying, information and providing service in the way
which is acceptable to the customer and effective to the organization.
• Services are rendered and expericed simultaneously and the process
through which consumers have interaction with the service provider is
of paramount importance e.g.- the use to credit card, booking system
for the transport and accommodation.
• The process design has to maintain a balance b/n functionality, security
aesthetics and the case of use by the customer.
19

20. Services Quality
• The dimension of quality.
• To develop design produce or deliver a product or services we must look
into the dimension of quality.
• Garvin process 8 dimension of quality for products.
• 1) Performance – On the core product primary operating characteristic for
e.g.- sound, pasture, clarity in a television, cleaning abilities of a soap or
detergent.
• 2) Feature – Secondary characteristic which augment the basic function.
e.g. surround sound remote facility.
• 3) Reliability – Probability of product breaking down. e.g. refrigerator,
washing machine.
• 4) Conformance – The degree to which a product’s design and operating
characteristic mach standards e.g.- ISI Mark, or ISO standards.
• 5) Durability –How long a product continues to be useful lie life of a
product.
• 6) Serviceability –The speed and come tence with which it can be
repaired and the courtesy factor.
• 7) Aesthetics –How to product look, feel sound tastes smells ( appeal of
a product to
• 8) Perceived – image reputation brand name are in direct measure which
customer use when comparing product.
20

21. The PZB Model (Parasuram, Ziethaml, Berry)
The model identifies 5 gaps that can cause unsuccessful services delivery
• Gap 1 – Gap between customer expectation and Management
perception e.g.-newspaper in hotel room.
• Gap 2 – Gap between management perception and services quality
specification. Management lacks commitment or vision to adopt
certain standard e.g.- a star hotel has to keep certain standard.
• Gap 3 – Gap between services quality specification and services
delivery this is essentially on account of ill trained employee.
• Gap 4 – Unrealistic expectation gap between services delivery and
external communication.
• Gap 5 – Services gap this gap between perceived service and deliver
services.
Product –
• One of the basic difficulties in marketing particularly services
marketing is product formation ie deciding what service product actually
is , and how it should be marked.
1) Service Product 2) Feature and benefits
3) Quality Level 4) Guarantees
21

22. 6) Range 7) Brand Name
Service Offer – The mix ingredients should be so planed that the customer
has to believe that product / service offers added value in order for it to be
successful.
Services Product –
• The term “Product” is defined as bundle of attributes capable of exchange
or use usually a mix of tangible and intangible forms. It may be an idea,
physical, entity on a service or combination of the 3.
• The service product is concerned with creating levels of service to be
offered the following quotation need to be answered by the service
providers.
• Q.1* How much of the services should the dient be expected to perform?
• Q.2* How much should be provided by the staff ? e.g.-Self service of food
in restaurants offering buffer lunches is an acceptable practice.
• E.g.- Carrying of hand luggage by the customer and managing clock in
baggage by airline staff is the practice.
Quality Levels – Deciding on quality standard and its implementation and
performance level of the staff decide the quality level of the services. 5
Stares of quality.
1) Reliability 2) Assurance
22

23. 3) Tangible 4) Empathy
5) Responsiveness
• The ward RATER can be used to remember the core aspect of service
quality.
• Range (variety) – The customer decision to buy a product is potentially
influenced by 1) Range 2) Style , Presentation of product.
• Thus manufacturing and services organizations offer a variety of
different products and service normally referred to as product line
product Mix.
• Feature and Benefit – Marketer know that consumers buy a product for
the benefits they delivers.
• It is imperative for the marketers to understand how customers organize
information about service perceive the quality and value of the service.
• Value – added service are perceived by customers a increasing the
benefit they are receiving. These benefit can take a number of different
forms. e.g.-1).Hotel –Faster check in and check-out services. Free use
of health club. 2).Restaurant –special menu for children, price discount
for seniors citizens.
23

24. • Brand – Service customers do not switch brand frequently as
compared to while switching products.
• Services firms like hotels and airline aim to achieve zero defection by
providing pro-active services.
• Brand Name –A brand name which is well know and associated with
high satisfaction level adds value of the service product and makes
customer less price sensitive. e.g.- Taj hotel, citi bank, LIC.
• Brand of service – Marketers goal should be creating a good brand
image and the strategy to achieve the goal is to develop a theme in
totality.
• The following tacts may be used in implementing the strategy.
• Include a tangible goods as part of the brand image. E.g.- LIC lamp
between two hands, Welcome group - folded hands.
• Service Guarantee –Tool of value addition –
• For the firm to become a value added business firm it must develop a
reputation of service guarantee. 1).Unconditional 2). Easy to
understand and communication 3). Meaningful 4). Easy to invoke 5).
Quick and easy to collect.
24

25. Services development is different – why ?
• New services development faces the following challenges.
• Services are intangible experiences
• Services customers want individual experiences.
• Services are product and consumed at the same time.
• Services quality is imperative yet highly invariable.
Physical Evidence –
• Customer judge services quality thought the physical evidence.
• The physical evidence is defined as the environment in which the
services is delivered and where the firm and customer in tract and any
tangible commodities that facilitate performance or communicate the
services.
• It plays a role a enhancing customer perception of the service quality.
• How important is the physical evidence for essel world or Appu Ghar ”
• He bright colorful neon sign displays, the music and fantastic rides,
reinforce the perception of the people about the fun and excitement, they
expect from the visit to these park.
• They communicate the environment in which the services to being
delivered.

26. Physical evidence from customer point
view –
Services Physical facilities Other benefits tangible
Airline lounge & airplane interiors Ticket & Boarding
Theme Park Gate, Area rides lighting & Ticket & brochures
Signage
Insurance Policy document & Boucher
Speed Post Post Office Uniforms & rehides
• Summery
• Marketers tangible the intangible of service by providing the physical
evidence.
• The physical element for a hotel include exterior elevation of building.
• Interior facilities like furniture décor ambience to attract customers
and give them physical evidence for communicating service quality
attributes and build trust.
• Customer evaluate the service initially though physical evidence
before purchase and the other tangible provide satisfaction during
use the services.

27. Place ( Distribution)
• The place or distribution of service refer to availability of a service ie
when & where it can be purchase (rail/w)
• Service product are mostly those where no transfer of ownership take
place & the service is simply rented or consumed.
• But it is essential that it must be available and accessible before it
consumption, hence this needs a distribution system.
1) Location 4) Distribution facility
2) Accessibility 5) Service inventory
3) Channel of distribution 6) Managing Channel
1) Location – location involving considering where to deliver the service of
the customer and whether the service organization, should be single
location
• L
27