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Introduction to Services Marketing

A SERVICE IS ANY ACT OR PERFORAMANCE THAT ONE PARTY CAN OFFER TO ANOTHER THAT IS ESSENTIALLY INTANGIBLE AND DOES NOT RESULT IN THE OWNERSHIP OR ANY THING.

An act or performance offered by one party to another

An economic activity that does not result in ownership

A process that creates benefits by facilitating a desired change in: customers themselves physical possessions intangible assets

A PURE SERVICE

OWN GOOD SERVICE

RENTAL GOOD SERVICE

Banking

Consulting

Training

Education

Maintenance

Car Repairs

Computer Hire

Rent – A Car

Equipment Leasing

CO-

PRODUCTION

ISOLATED

PRODUCTION

SELF

SERVICE

Health Club

FILMS

ATM

Government Policies (e.g., regulations, trade agreements)

Social Changes (e.g., affluence, lack of time, desire for experiences)

Business Trends Manufacturers offer service Growth of chains and franchising Pressures to improve productivity and quality More strategic alliances Marketing emphasis by nonprofits Innovative hiring practices

Advances in IT (e.g., speed, digitization, wireless, Internet)

Internationalization (travel, transnational companies)

Customers do not obtain ownership of services Intangible elements dominate value creation Greater involvement of customers in production process Greater variability in operational inputs and outputs Many services are difficult for customers to evaluate Service products perish once consumed and cannot be inventoried Time factor is more important--speed may be key Delivery systems include electronic and physical channels

61% of GDP Contribution 28% employment generation Highly People Oriented Heavily Overstaffed No comparison with other countries Ignorant and Socially Irresponsible

Consumer Highly Technology oriented

More than half of consumers’ expenditure on services

Increasing Complexity Specialization Competitive Nature Nothing Tangible to Offer Very tough concept selling

How Important is the Service Sector in Our Economy?

• In most countries, services add more economic value than agriculture, raw materials and manufacturing combined

• In developed economies, employment is dominated by service jobs and most new job growth comes from services

• Jobs range from high-paid professionals and technicians to minimum-wage positions

• Service organizations can be any size—from huge global corporations to local small businesses

• Most activities by government agencies and nonprofit organizations involve services

Types of ServicesTransportation Services Railway, Airlines, RoadPublic Utility Services Water Supply, ElectricCommunication Telephone, Courier, TV Trading Wholesaling, RetailingFinance and Insurance Banking, Leasing, InsuranceReal Estate Renting, Building Health Care Hospitals, Nursing HomesTourism Hotels, Tour OperatorsIT and IT Enabled Services Software Consultancy, BPOEducation Educational InstitutionsConsultancy Market ResearchOthers Advertising, Event Management

“ Something that can be bought and sold but which cannot be dropped on your foot !”