SERVICE MARKETING

By
Arijit Datta
 Services Marketing

“Services are going to

move in this decade
to being the front edge
of the industry.”
 Services
• A Service is the action of doing something for someone or
something.

• “A service is an activity or benefit that one party can offer to

another that is essentially intangible and does not result in the
ownership of anything. Its production may or may not be tied
to a physical product” – Kotler and Armstrong (1991)

• “A Service as any primary or complimentary activity that does

not directly produce a physical product, i.e., the non goods
part of transaction between buyer (customer) and seller
(provider)” – Service Industries Journal
 NATURE OF SERVICES
SERVICES GOODS

• Intangible in Nature • Tangible in Nature

• Inseparability of production • Separability of production

and consumption and Consumption

• Variability in Specifications • Uniformity in Specifications

and Delivery and Delivery

• Perishable in Nature • Non-perishable in nature

• Lack of Ownership • Ownership

 GOODS AND SERVICE CONTINUUM
100%
90%
80%
70%
60%
50%
Service Based
40% Product Based
30%
20%
10%
0%
Tangible Goods with Goods and Service with Pure Service
Goods Some Services minor
Services Equal Goods
SERVICE SECTOR TO INDIAN ECONOMY
YEAR PRIMARY SECONDARY TERTIARY GROWTH OVER
SECTOR SECTOR SECTOR PERIOD (% in
services)

1950-51 55.4 16.1 28.5 -

1960-61 50.9 20.0 29.1 +2.1

1970-71 44.5 23.6 31.9 +9.6

1980-81 38.1 25.9 36.0 +12.9

1990-91 30.9 30.0 39.1 +8.6

1999-2000 27.5 24.6 47.9 +22.5

CHARACTERISTICS OF SERVICES
• Intangibility

• Inseparability
– Self Services
– Co-production
– Isolated production

• Inconsistency (Variability)

• Inventory (Perishability)

• Ownership
 Characteristics Of Services
Compared To Goods
Goods Services Resulting Implications

Tangible Intangible •Services cannot be inventorised

•Services cannot be readily displayed
•Services cannot be patented

Standardized Heterogeneity Service quality depends on many

uncontrollable factors

Production Simultaneous production Customer participate in and affect the

seperate from and consumption transcations
consumption Decentralization may be requied

Nonperishable Perishable Services cannot be resold or returned

 Service Strategy to Counter Problems
for Characteristics Of Services
Characteristics Services
Intangibility •Cannot be easily displayed
•Cannot be patented
Inconsistency •Standardisation hard to achieve
•Hard to set up quality control
•Can only predict quality or determine it
after the service is performed
Inseparability •Harder to mass produce
•Less efficient than production goods
Inventory •Customers must be present
Resulting Implications
•Provide tangible clues
•Stimulate word of mouth
•Use personnel sources
•Use post purchase communication
•Stress on standardisation & performance
•Focus on employee training
•Programmes, performance evaluation
•Licensing & other forms of credential
requirements
•Need strong training programmes,
incentives
•Focus on personal attention
•Focus on convenience, saving time, faster
service
•Extended hours
•Focus on competence & expertise
•Predict fluctuating demand
•Manage capacity to balance supply &
demand
SERVICE MARKETING TRIANGLE
 4 Ps OF MARKETING

Product

Place

Price

Promotion
 7 Ps OF SERVICE MARKETING
Product

Place

Price

Promotion

People

Process

Physical Evidence