SERVICES

MARKETING
Presentation by,
Dr. Basavaraj S.Kudachimath

Dr. Basavaraj S.Kudachimath VTU

Belgavi

Discussion Points

Module I Introduction to services:

1. Concepts.
2. Contribution and reasons for the growth
of services sector.
3. Difference in goods and service in
marketing
4. Myths about services
5. Characteristics of Services.
6. Concept of service marketing triangle,
7.Service marketing mix
8. GAP models of service quality
9. Marketing challenges in service industry
Dr. Basavaraj S.Kudachimath VTU
Belgavi

Concept of Services.
What are services?
A service is an act or performance that one party can
offer to another that is necessarily intangible and does not result
in the ownership of anything. Its production may or may not be
tied to a physical product.
By Philip Kotler.
Based on this the nature of service is.
1.Lack of physical output
2.Benefit to the receiver from the service rather than product
3.Services are intangible.
Because of the above special nature of service,
marketing of pure service needs special skills.
So it includes
Deeds ( Action of service provider),Processes ( Steps in
the provision of service), Performance. (Customers understanding
of how the service has delivered ie effect)
Dr. Basavaraj S.Kudachimath VTU
Belgavi

Contribution and reasons for

the growth of services sector.
A: Contribution of Service Sector to GDP

Source: http://statisticstimes.com/economy/sectorwise-gdpDr. Basavaraj S.Kudachimath VTU

contribution-of-india.php
Belgavi

Contribution of Service Sector to GVA

Industry
Sector

GVA (Rupees in Crore) at current

prices
2,713,46 2,954,56 3,219,94
3,466,99
30.73

30.02

7
5
2
Sect
%
2011
2012
2013
or
Agricultur
1,505,58 1,668,67 1,881,15 shar
-12 0 -13 6 -14 2 17.95
e Sector
e

%
2014
1,964,50 shar
17.01
-15
6
e

Services
Sector

6,118,73
8

3,976,49 4,628,81 5,376,04

8
0
5

51.31

52.97

GVA ( Gross
Value Added)
GDP ( Gross
Domestic
Product)
GDP=
GVA+TaxesSubsidies.

Source :http://statisticstimes.com/economy/sectorwise-gdp-contribution-ofindia.php

Dr. Basavaraj S.Kudachimath VTU

Belgavi

Reasons for Growth of Service

Sector in India

1. Increase in Wealth. ( Gardeners/ Car

drivers)
2. More Leisure time. (Tourism/ TV channels)
3. Greater Life Expectancy. ( Health industry/
Jim etc)
4. Greater Complexity of Products. (Car
repairs etc)
5. Higher Percentage of Working women
6. Increasing complexity of life. (Marriage
bureau/Legal cell etc).
7. Increasing number of new products.
( Source:
Computer
needs software industry)
http://managementgurukalpesh.blogspot.in/2008/10/major-reasons-forgrowth-of-service.html
Dr. Basavaraj S.Kudachimath VTU
Belgavi

Difference in goods and service

in marketing
1. Ownership is not transferred
2. Intangibility
3. Involvement of customer
4. Quality.
5. Evaluation of services is tougher
6. Inventories are absent
7. Time is very important in services
Source: http://www.marketing91.com/difference-between-goods-andservices/
Dr. Basavaraj S.Kudachimath VTU
Belgavi

Contribution and reasons for

the growth of services sector.
A: Contribution of Service Sector to GDP

GVA (Rupees in Crore) at current

prices
1

Sect
%
2011
2012
2013
or
Agricultur
1,505,58 1,668,67 1,881,15 shar
-12 0 -13 6 -14 2 17.95
e Sector
e

%
2014
1,964,50 shar
17.01
-15
6
e

Industry
Sector

2,713,46 2,954,56 3,219,94

7
5
2

30.73

3,466,99
6

30.02

Services
Sector

3,976,49 4,628,81 5,376,04

8
0
5

51.31

6,118,73
8

52.97

Dr. Basavaraj S.Kudachimath VTU

Belgavi

GVA ( Gross
Value Added)
GDP ( Gross
Domestic
Product)
GDP=
GVA+TaxesSubsidies.

Reasons for Growth of Service

Sector in India

1. Increase in Wealth. ( Gardeners/ Car

drivers)
2. More Leisure time. (Tourism/ TV channels)
3. Greater Life Expectancy. ( Health industry/
Jim etc)
4. Greater Complexity of Products. (Car
repairs etc)
5. Higher Percentage of Working women
6. Increasing complexity of life. (Marriage
bureau/Legal cell etc).
7. Increasing number of new products.
( Source:
Computer
needs software industry)
http://managementgurukalpesh.blogspot.in/2008/10/major-reasons-forgrowth-of-service.html
Dr. Basavaraj S.Kudachimath VTU
Belgavi

Difference between goods and

services
Goods

Services

Resulting Implications

Tangible

Intangible

Services cannot be inventoried.

Services cannot be patented.
Services cannot be readily displayed or communicated.
Pricing is difficult.

Standardized

Heterogeneous Service delivery and customer satisfaction depend on

employee actions.
Service quality depends on many uncontrollable factors.
There is no sure knowledge that the service delivered
matches what was planned and promoted.

Production
separate from
consumption

Simultaneous
production and
consumption

Nonperishable Perishable

Customers participate in and affect the transaction.

Customers affect each other.
Employees affect the service outcome.
Decentralization may be essential.
Mass production is difficult.
It is difficult to synchronize supply and demand with
services.
Services cannot be returned or resold.

Dr. Basavaraj S.Kudachimath VTU

Belgavi

Difference in goods and service

in marketing
1. Ownership is not transferred
2. Intangibility
3. Involvement of customer
4. Quality.
5. Evaluation of services is tougher
6. Inventories are absent
7. Time is very important in services
Source: http://www.marketing91.com/difference-between-goods-andservices/
Dr. Basavaraj S.Kudachimath VTU
Belgavi

Myths about services

1. Most customers complain when they
encounter problem.
2. If we receive more complaints we have
spend more money to keep our customers
happy.
3. Few complaints means we are giving better
services.
4. More complaints means lower profits.
5. It is better to invest in marketing and
advertising rather that good customer
services.
Source: http://www.desk.com/success-center/customer-service-mythsinfographic
Dr. Basavaraj S.Kudachimath VTU
Belgavi

Tangibility Spectrum

Dr. Basavaraj S.Kudachimath VTU

Belgavi

Characteristics of services

Dr. Basavaraj S.Kudachimath VTU

Belgavi

Extended characteristics of services

Dr. Basavaraj S.Kudachimath VTU

Belgavi

Services marketing triangle

Company
(Management)
Internal
Marketing

External
Marketing
setting the
promise

Employees

Interactive Marketing
delivering the promise
Dr. Basavaraj S.Kudachimath VTU
Belgavi

Customers

Service Marketing Mix

Dr. Basavaraj S.Kudachimath VTU

Belgavi

Service Marketing Mix

Dr. Basavaraj S.Kudachimath VTU

Belgavi

GAP model of service

quality

Dr. Basavaraj S.Kudachimath VTU

Belgavi

Marketing challenges in the service

industry
Defining and improving quality
Communicating and testing new services
Communicating and maintaining a consistent
image
Motivating and sustaining employee
commitment
Coordinating marketing, operations and human
resource efforts
Setting prices
Standardization versus personalization
Dr. Basavaraj S.Kudachimath VTU
Belgavi