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SERVICE MARKETING

Designing and ManagingServices

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INDIAN SCENARIO

Indias services sector has matured considerably duringthe last few years and has been globally recognized for

its high growth and development.

Presently services sector account for about 55% of IndiasGDP

This sector dominates with the best jobs, best talent andbest incomes

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INDIAN SCENARIO

Sectors 1984 1994 2003 2004

Agriculture 35.2 30.4 22.8 21.2

Industry 26.2 27.1 26.4 27

Manufacturing 16.4 16.9 15.6 16.1

Services 38.7 42.5 50.7 51.8

% of GDP

Sectors 1984-94 1994-04 2003 2004Agriculture 3.4 2 9.6 1.1

Industry 6.3 5.6 7.0 7.7

Manufacturing 6.2 5.6 6.9 7.7

Services 6.7 8.2 8.9 8.9

Average Annual Growth

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INDIA vs. OTHERS

Country Share of GDP (%) 2007

India 55%

USA 78.5%

EU 65 75%

Australia 72%

Japan 73.1

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SERVICE MARKETING

There are no such thing as service industries. There areonly industries whose service components are greater orless than those of other industries. Everybody is in

service. Theodore Levitt

A service is any act or performance that one party canoffer to another that is essentially intangible and does

not result in the ownership of anything. Its productionmay or may not be tied to a physical product

Kotler, 2004

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THE NATURE OF SERVICES

Regardless of the product, there is a servicescomponent to the offerings of all firms

In some cases, a service is the principal purpose of thetransaction, as in the rental of a car, a haircut, or legalservices -- we refer to this as the corecore serviceservice

In others, service is performed in support of the sale of atangible product -- these are referred to as

supplementarysupplementary servicesservices

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CATEGORIES OF SERVICE MIX

Pure tangible good

Tangible good with accompanying services

Hybrid Major service with accompanying minor goods

Pure services

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THE GOODS-SERVICES CONTINUM

FMCGs Restaurants Repairs:auto, AirTravel

InsuranceConsultingTeaching

MOSTLY GOODS MOSTLY SERVICES

ReadymadeClothes

Auto-mobiles

MOSTLY GOODS MOSTLY SERVICES

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CHARECTERSTICS OF SERVICES

INTANGIBILITY

Cannot be seen, tasted, felt, heard or smelt before

Difficult to sample and to evaluateFor example, how could you sample a haircut or a

flight to Mauritius?

Service companies demonstrate their service qualitythrough physical evidence and presentation

Tangibilizing the Intangibles Through proper designing of place, people, equipment,

communication material, symbols, price

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ELEMENTS OF PHYSICAL EVIDENCE

PHYSICAL FACILITY

Exterior Building design

Architecture Signage

Parking

Surrounding environment

Landscape

Interior Design

Equipment and facilities Dcor Layout Atmosphere (lighting,music, air temperature,etc.)

Other tangibles Staff Uniforms Brochures Stationery Company logo

Tickets, Business cards

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CHARECTERSTICS OF SERVICES

VARIABILITY

Indicates that a service performance is unique to thecustomer, or group of customers, being serviced.

A level of inconsistency is inherent in service provision.

Steps to increase service quality control Good hiring and Training

Standardize the service performance

Monitor customer satisfaction

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PERISHABILITY

Offerings that cannot be saved, stored, resold, orreturned.

It is not possible to delay the consumption of services.

Those not sold can not be stored Demand fluctuatesfirms have problem

Strategies on the demand side Differential Pricing

Non peak Demand Complementary services

Reservations

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CHARECTERSTICS OF SERVICES(cont)

PERISHABILITY

On Supply side

Part-time employees Peak time efficiency

Increased consumer participation

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MARKETING MIX FOR SERVICES

Product

Price

Place

Promotion

Process

Physical Evidence

Personnel / People

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Determinants of service quality

Reliability Delivering on promises

Responsiveness Willing to help, prompt

service Assurance Inspiring trust and confidence

Empathy Individualized attention tocustomers

Tangibles- physical representation

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MOMENTS OF TRUTH

It is the customer service encounter

Every positive or negative experience of the

consumer would have fall-out on the overallservice experience

In services, the last experience remainsuppermost in your mind. Therefore, it is not

enough to be good, you have to be consistentlygood

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CUSTOMER COMPLAINTS

It pays to resolve customer complaints

On an average only 5 % dissatisfied customers complain.

Others simply go over to the competitor A satisfied consumer speaks to an average of 3 people on

his her experience

A dissatisfied consumer gripes to on an average 11

persons about his/her unpleasant experience