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What is Service Marketing?

Definition: Activity or benefit that one party can offer toanother 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

Examples: Defense, Postal, Education, health, Religious

Services, Hospitals, Airlines, Hotels, Law Firms,

Entertainment, etc

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Why Services Marketing???

Services marketing is significant because:-

Service is seen as a business imperative in

manufacturing and I.T.

Deregulated industries and professional service

needs.

Service marketing is different.

Service equals profits.

Today the economies have become service based.

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Country % of GDP Attributed to Services

US 78.6

UK 73.4

Japan 73.1

Sweden 70.9

Australia 70

Germany 70

New Zealand 68.8

Canada 68.5

Singapore 66.2

India 60.7

China 40.0

Source : the world fact book by central intelligence agency 2007

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Service Categorization in 4 distinct categories

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a) Service industries

Service industries includes those industries andcompanies typically classified within the service sectorwhose core product is service.

For e.g. TAJ PALACE HOTELS (LODGING) , IndianAirlines (aviation)

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b) Services as a product

Service as a product represents a wide range of intangibleproducts offering that customers value and pay for in themarket place. Service products are sold service companies

and by non service companies such as manufacturer andtechnology companies

For e.g. IBM and HP

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c) Customer service

It is the service provided in support of a companys core product.companies generally does not charge for the customer service.

For e.g. Call centers facility

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d) Derived services

Drawing on the work of respected economists, marketers andphilosophers the two authors suggest that the value derived form thephysical good is really the service provided by the good.

For e.g. a razor provides barbering service , computers provideinformation and data manipulation service

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Tangibility Spectrum

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Characteristics of services compared to goods

Goods Services Result Implications

Tangible Intangible Services cannot be inventoried Services cannot be easily patented Services cannot be readily displayed

Standardized Heterogeneous Service delivery and customer satisfaction depend on

employee and customer actions. Service quality depends on many uncontrollable factors there is no such knowledge that the services delivered

matches what was planned and promoted.

Production separatefrom consumption

SimultaneousProduction and

consumption

Customers participate and affect the transaction Customer affect each other Employees affect the service outcome

Decentralization may be essential Mass production is difficult

Non Perishable Perishable It is difficult to synchronize supply and demand

with services Service cannot be returned or resold.

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7 Ps OF MARKETTING

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Service market strategies

Understanding the customers

Building the service model

Managing the customer Interface

Implementing Service Strategies.

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Challenges of service marketing

Relationships are Key effective relationships inservice marketing will lead to repeat sales andpositive word-of-mouth.

Multiple Touch pointsInteractions with people + experiences that are les

tangible than when buying an actual product all impacthe consumer perspective of the purchase process.

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Feedback Improves Service

Service marketing actually involves the consumer in themarketing process. He is engaged in the process and contributes to apositive outcome. Hence, it is important to seek consumer feedbackand use it to improve service marketing effectiveness

Technology Impacts

Technology can be used to streamline service activities andprovide do-it-yourself options for consumers. Internet-based

services, for instance, allow consumers to participate actively in theservice marketing process.

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Ref:- Service marketing - By JochenWirtz and Jayanta Chatterjee

Service Marketing- By Valarie A Zeithaml and Mary Jo Bitner