Introduction to Services Marketing Prepared by: Ms. MeghaMody Assistant Professor Marwadi Education Foundation
Overview • What are services? • Why services marketing? • Role of services in the economy • Powerful forces that are transforming service Markets • Service and Technology • Distinctions between Services and Goods; Services • Services Marketing Mix • Framework for effective services marketing strategies
What are services? • Services : • Are economic activities offered by one party to another • Most commonly employ time-based performances to bring about desired results in: • Recipients themselves • Objects or other assets for which purchasers have responsibility • In exchange for their money, time, and effort, service customers expect to obtain value from • Access to goods, labor, facilities, environments, professional skills, networks, and systems; • But they do not normally take ownership of any of the physical elements involved.
What are services? • Any activity or benefit that one party can offer to another which is essentially intangible and does not result in the ownership of anything. • Services are deeds, processes and performances. • Services involve a form of rental, offering benefits without transfer of ownership • Include rental of goods • Marketing tasks for services differ from those involved in selling goods and transferring ownership
Examples 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 airline, travel agency, theme park Others hair styling, pest control, plumbing, lawn maintenance, counseling, services, health club, interior design
Cont… • Five broad categories within non-ownership framework: • Rented goods services • Defined space and place rentals • Labor and expertise rentals • Access to shared physical environments • Systems and networks: access and usage
Cont… Distinction between.. • Service Industries and Companies… • Services as a Product • Customer Services • Derived Services…
Characteristics of Services Compared to Goods Intangibility Heterogeneity Simultaneous Production and Consumption Perishability
Cont… • Higher Intangibility • Lack of ability to store them for future use • Greater interaction between the customer and the service factory • Greater variability in service delivery • Greater variability among service customer’s Expectations..
Implications of Intangibility • Services cannot be inventoried • Services cannot be easily patented • Services cannot be readily displayed or communicated • Pricing is difficult
Implications of Heterogeneity • Service delivery and customer satisfaction depend on employee and customer actions • Service quality depends on many uncontrollable factors • There is no sure knowledge that the service delivered matches what was planned and promoted
Implications of Simultaneous Production and Consumption • Customers participate in and affect the transaction • Customers affect each other • Employees affect the service outcome • Decentralization may be essential • Mass production is difficult
Implications of Perishability • Itis difficult to synchronize supply and demand with services • Services cannot be returned or resold
Tangibility Spectrum Salt Soft Drinks Detergents Automobiles Cosmetics Fast-food Outlets Intangible Dominant Tangible Dominant Fast-food Outlets Advertising Agencies Airlines Investment Management Consulting Teaching
Role of services in the economy • Contribution of Services Industries to Global GDP
Contribution Of The Service Sector To GDP In INDIA • India's services sector Contributes around 60% to the GDP of the country, 35% to employment, 25% to total trade, around 40% to exports, 20% to imports and accounts for more than 50% of FDI into the country.
Social Changes Government Policies Business Trends Globalization • New markets and product categories • Increase in demand for services • More intense competition Advances in IT Innovation in service products & delivery systems, stimulated by better technology Customers have more choices and exercise more power Success hinges on: • Understanding customers and competitors • Viable business models • Creation of value for customers and firm Forces Transforming the Service Economy