This document provides an introduction to services marketing. It defines what constitutes a product and service, highlighting that a service is an act or performance offered by one party to another. It also outlines some key differences between goods and services. The document discusses the importance of the services sector in modern economies and provides examples of different types of service industries. It examines factors influencing the growth of the services sector and important characteristics of services. Finally, it looks at some of the challenges in marketing services compared to goods.

1. Introduction to service Marketing
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Unit.1

2. Module I
Faculty: J.Rai, IIPM-School of Management,
Kansbahal2
Introduction to
Services Marketing

3. Module I
Faculty: J.Rai, IIPM-School of Management,
Kansbahal3
What is a Product?What is a Product?
Anything that can be offered to a market
for attention, acquisition, use, or
consumption and that might satisfy a
want or need.
–Includes: Goods, services, events,
persons, places, organizations, ideas,
or some combination thereof.

4. Module I
Faculty: J.Rai, IIPM-School of Management,
Kansbahal4
What is a Service?
An act or performance offered by one party to another
(performances are intangible, but may involve use of
physical products)
An economic activity that does not result in ownership
A process that creates benefits by facilitating a desired
change in customers themselves, physical
possessions, or intangible assets

5. Definition of services
“In exchange for their money, time, and effort, service
customers expect to obtain value from access to goods,
labor, professional skills, facilities, networks, and systems;
but they do not normally take ownership of any of the
physical elements involved”. ____
Christopher Lovelock

6. Module I
Faculty: J.Rai, IIPM-School of Management,
Kansbahal6
Basic Differences between
Goods and Services

7. Module I
Faculty: J.Rai, IIPM-School of Management,
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Evolving of Services
Changing pattern of government regulations.
Privatization of some public/ nonprofit service
Technological innovations.
Internationalization & Globalization.
Expansion of leasing & rental business.
Manufacturers as service providers.
Hiring of employees.

8. Module I
Faculty: J.Rai, IIPM-School of Management,
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Important of the Service Sector in
Our Economy?
In most countries, services add more economic value than
agriculture, raw materials and manufacturing combined
In developed economies, employment is dominated by
service jobs and most new job growth comes from
services
Jobs range from high-paid professionals and technicians to
minimum-wage positions
Service organizations can be any size—from huge global
corporations to local small businesses
Most activities by government agencies and nonprofit
organizations involve services

9. Types of service sectors
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Government sectors
Business sectors
Manufacturer sectors

10. Module I
Faculty: J.Rai, IIPM-School of Management,
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Services
Government Sector
Courts
Employment. Exchanges
Hospitals
Municipal Services
Post Office
Schools, Colleges etc

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Faculty: J.Rai, IIPM-School of Management,
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Services
Business Sector
Airlines
Banks
Insurance
Management
Consultants
Lawyer's
Doctors
Motion Pictures

12. Module I
Faculty: J.Rai, IIPM-School of Management,
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Services
Manufacturers
Computers Operators
Legal Staff
Accountants
Administrative Staff
Supportive Staff
Security Staff

13. Module I
Faculty: J.Rai, IIPM-School of Management,
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Examples of Service IndustriesExamples 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

14. Factor Influencing the Growth of
the Service Sector.
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Demographic Changes.
Social Changes
Economics Changes.
Technological Changes.
Political & Legal Changes.
Policy Changes

15. Characteristics of Services
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Intangibility:- which can not be touched.
Heterogeneity:- not in uniform.
Inseparability:- delivery & consumption of a service are
inseparable.
Perishability:-can not be inventoried or stored.

16. Classification of Services
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 Classification based on Degree of Involvement of
the Customer
 People Processing:- The customer is highly involved in the services process & needs
to be physically present in order to experience the service. Ex. School or training
centers.
 Possession Processing:-the customer doesn't require to be present but has to submit
his property to the service provider. Ex car
 Mental Stimulus Processing:-the attention of the customer must be directed on the
service in order to experience the service. Ex advertising
 Information Processing: this type of service requires services personnel to collect
information, analyze it, interpret & appropriate advice to the client.
Ex. market research

17. Classification based on the
Service Tangibility
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 Highly Tangible:- the customer obtains a tangible Product in
hand. As cell phone on rent.
 Service Linked to tangible goods:- some organization offer
on warranty period to customer who purchase products from
them. As photocopying machine.
 Tangible goods linked to Services:- some service offer a
tangible product along with the service requested by the
customer. As Airlines services offer food & magazines to
passengers.
 Highly intangible:- the services which do not provide
customers with any tangible product. As massage parlor

18. Classification based on Skills &
Expertise Required
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 Professional Services:- the service provider to be
formally trained to deliver the service. Ex Doctor, Pilot.
Non Professional services:- these Service do not require the
service provider to undergo any training to deliver the service.

19. Classification based on Business
Orientation of Service Provider
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 Not-for-profit organization:- the main objectives of the
service providers is to serve society & not to make profits.
Ex. Government schools, Social service organizations.
 Commercial organization:- the main objectives of the
service provider is to earn revenues & make profits. Ex
Airlines Insurance firms.

20. Classification based on Type of
End-User
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Consumer services:- purchased by individuals
customer for their own consumption. Ex Beauty Care,
Hair Cutting.
Business to Business:- These service are purchased
by the organization. Ex Market research, Advertising.
Industrial services:- Based on a contract between
organization & service providers. Ex Machine
installation, plant maintances.

21. COMPANY
CUSTOMERFRONT-LINE
EMPLOYEES
The service marketing TrianglesThe service marketing Triangles
External marketingInternal marketing
Interactive Marketing
(i)(ii)
(iii)
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22. The service marketing triangle Consist of three
components of the service delivery process, namely
the company, the front-line employees & the
customers. In the service marketing triangles , the
company, front lines employees & the customer
make up three corners of the triangles.
(i) Company & customer External marketing)
The company communicates information about its
products & service to the external customers by
means of marketing communication mix comprising
advertisement, sales promotion, personal selling,
direct marketing & public relations.
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23. (ii) Company – front line ( Internal marketing).
The interaction between the company & the front-lines
employees constitute internal marketing by means of which
the company enables its employees to deliver quality
service to customer.
The internal marketing process makes use of tools such as
newsletters, video shows etc.
(iii) Front-Lines Employees & Customer (Interactive
Marketing) this is the most important one that finally
determines customer retention by service firms by
interactive marketing
All three-internal, external & Interactive marketing-play an
important role in service marketing neglecting any of these
will result in the failure of a service organization in achieving
its marketing goals.23

24. The Services Marketing Mix
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The marketing mix for service is considered to consists
of 7P’s which are:-
Product
Price
place
promotion
People
Physical evidence
Process.

25. Marketing Issues Before a
Service Organization
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 Managing Differentiation among services.
 Managing Productivity.
 Managing services quality.

26. Managing Differentiation among
services
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 The intangible nature of service marketing it difficult for service
providers to differentiate themselves from their competitors on aspect
other than plan.
the following tangible elements may be used to differentiate service
businesses.
i. Service premises.
ii. Packaging
iii. Service personnel.
iv. Tools & equipment used.
v. Customers.
vi. Convenience.
vii. Name of the service establishment.

27. Managing Productivity
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Managing productivity in service organization is difficult
task due to the multifunctional nature of service jobs.
For ex. In a fast food outlet, the service personal
perform various task which include preparing the food
(production), delivering the food to the customers
(retail service), ensuring that the customer have an
enjoyable eating experience (customer service), &
accepting payment & tendering the change (transaction
processing).

28. Managing services quality
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The intangibility, heterogeneity, & inseparability
characteristics of service make it difficult to control the
service quality since the service cannot be tested,
measured & verified accuracy before it delivering it to
the customer.
managing quality in service firms require an
understanding & identification of the service
characteristics that make it difficult to control service
quality.

29. Module I
Faculty: J.Rai, IIPM-School of Management,
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Challenges for ServicesChallenges for Services
Defining and improving quality
Communicating and testing new services
Communicating and maintaining a consistent image
Motivating and sustaining employee commitment
Customer Relation Management.
Bridging Demand- Supply
Coordinating marketing, operations and human resource efforts
Setting prices
Standardization versus personalization

30. Goods and Services: Scale of
Elemental Dominance