PG Services Markting - M
PG Services Markting - M
PG Services Markting - M
Service marketing encompasses all the activities and processes that promote
and deliver intangible services to consumers. Unlike product marketing, where
tangible objects are marketed, service marketing focuses on intangible aspects
such as experiences, expertise, and customer interactions. Services can include
various offerings, such as healthcare, hospitality, consulting, education, and
various professional services.Service marketing relies heavily on building
strong customer relationships and providing exceptional service quality. It goes
beyond advertising and promotion, as the primary goal is to create value for
customers and meet their unique needs.
Definition
Philip Kotler in (1984 )– “any activity or benefit that one party can offer to
another that is essentially intangible and does not result in the ownership of
anything”
A few Examples of Service Marketing
characteristics of Services
Lack of ownership
Intangibility
Inseparability
Variability
Perishability
User participation
Fluctuating demand
Pricing of services
Direct channel
Irrelevance of certain marketing functions
Skill orientation
Lack of Ownership
Lack of ownership may be one of the most obvious ones of the characteristics of
service. It refers to the fact that you cannot own and store a service like you can
a product. This characteristic is strongly linked to several other characteristics of
services, such as intangibility, perishability, inseparability.
Intangibility
When thinking about the characteristics of services, intangibility may come to
your mind first. Service intangibility means that services cannot be seen, tasted,
felt, heard or smelled before they are bought. You cannot try them out. For
instance, airline passengers have nothing but a ticket and a promise that they will
arrive at a certain time at a certain destination. But there is nothing that can be
touched.
Inseparability
Characteristics of services include inseparability, which means that services are
produced and consumed at the same time. This also entails that services cannot
be separated from their providers. Contrary to services, physical goods are
produced, then stored, later sold, and even later consumed. Services are first
sold, then produced and consumed at exactly the same time. A product can, after
production, be taken away from the producer. However, a service is produced at
or near the point of purchase. For instance, when visiting a restaurant, you order
your meal, the waiting and delivery of the meal, theservice provided by the
waiter/ress etc. All these parts, including the providers,are part of the service and
therefore inseparable. In services marketing, a service provider is the product.
Variability
Variability does also belong to the important characteristics of services. It refers
to the fact that the quality of services can vary greatly, depending on who
provides them and when, where and how. Because of the labour-intensive nature
of services, there is a great deal of difference in the quality of service provided
by various providers, or even by the same providers at different times.
Perishability
Perishability means that services cannot be stored for later sale or use. In other
words, services cannot be inventoried. This is one of the most significant
characteristics of services, since it may have a major impact on financial results.
Doctors or dentists often charge patients for missed appointments because the
service value has foregone. The value existed only at that particular point and
disappeared when the patient did not come. When demand is steady, the
perishability of services is not a problem. However, in case of fluctuating
demand, service firms can have difficult problems. For this reason, transport
companies own much more equipment than they would if demand were even
throughout the day: the demand during rush-hours needs to be served at that
specific time, it cannot be served later or earlier. Consequently, service
companies use various techniques for creating a better match between demand
and supply: Demand shifting.
User participation
Finally, the characteristics of services include user participation. Indeed, users
participate in every service production. Even when the user is not required to be
at a location where the service is performed, users participate in every service
production. A service cannot be separated from its provider, but neither can it be
separated from its user.
Fluctuating demand
Fluctuating demand is the other feature of services. The demand for many
services fluctuates according the season. For example, demand for tourism is
highly seasonal in nature. There is a greater demand for hill stations during
summer. Similarly, there is a greater demand for tourist vehicles during summer
holidays, New Year, weekend etc.
Pricing of services
Pricing of services is influenced by perishability, fluctuation in demand and
inseparability. Quality of services cannot be standardized, price determination
for services cannot be standardized, price determination for services is
depending on demand and competition. Therefore variable pricing method is
adopted. For instance, room rent in tourist destination depends upon the demand
3pattern. Many times, during off-season. Hotel owners offer seasonal discount
also. The same is true in case of tour operators who run fleet of vehicles.
Direct channel
Generally, the services are delivered directly to consumers. Consumers directly
approach service providers to take the services. For example a customer who
needs a service from the bank, post office, hotel or a doctor visit the concerned
service provider and consume the service.
Classification of Services
People-Based Services
People-based services are when people primarily deliver the service, rather than
equipment or machinery . It’s the individuals delivering the service, and the
knowledge and skills that they possess, that add value and allow the service to be
performed. People-based services can be broken down further into these
subcategories:
Equipment-Based Services
The service industry forms the backbone of the social and economic
development of a region. It has emerged as the largest and fastest-
growing sector in the world economy, making higher contributions to
global output and employment. Its growth rate has been higher than that
of the manufacturing and agriculture sectors. It is the largest and most
dynamic part of the Indian economy both in terms of employment
potential and contribution to national income. It covers a wide range of
activities, such as transportation, trading, financial, real
estate, communication and business services, as well as community,
social and personal services. The service sector is an essential aspect of
the economy that produces intangible goods. It consists of services such
as messenger services, transportation and warehousing. Jobs in this sector
produce services rather than goods with examples being teaching and
nursing.
The service sector has evolved through different stages viz., pre-industrial
stage, industrial stage and post-industrial stage. While in the pre-
industrial stage, service was restricted only to households, the industrial
stage was characterised by the dominance of factories and manufacturing
processes. Hence the service sector has started being recognised in the
post-industrial stage encompassing rapid growth in transportation,
utilities, banking, real estate, insurance and higher education.
The various stages through which the service sector has evolved are as
follows:
1. Pre-Industrial Stage
2. Industrial Stage
3. Post-Industrial Society
1) Pre-Industrial Stage
The essence of life revolved around the concept of a game against nature.
Working with muscle power and tradition, the labour force had been
engaged in mining, agriculture, and fishing. Life was conditioned by the
elements, such as the weather, the quality of the soil, and the availability
of water The rhythm of life was shaped by nature, and the pace of work
varied with the seasons. Productivity has been low and bears little
evidence of technology. Social life revolves around the extended
household, and this combination of low productivity and a large
population results in high rates of underemployment (workers not fully
utilised). Many seek positions in the service industry, particularly those
pertaining to personal or household assistance. Pre-industrial societies are
agrarian and structured around routine, tradition and authority.
2) Industrial Stage
The timeframe spanning the 18th and 19th centuries holds significance as
the era of the Industrial Revolution on a global scale. There were many
inventions, technological breakthroughs, new transportation modes, and
scientific discoveries that took place during this period, especially in
European countries. The predominant activity in an industrial society
revolved around the production of goods. The focus of attention was on
achieving greater results with fewer resources. Energy and machines
multiply the output per labour hour and structure the nature of work.
3) Post-Industrial Society
Over the years, the service sector has witnessed a remarkable evolution in
the type and quality of services offered to customers. Service providers
have grown to realise that change is the only constant thing and if they do
not evolve with the market, they risk losing market share to their
competitors. Increasing competition in the service sector in India has
made it necessary for service firms to grow from purely selling services
to building lasting relationships with their customers.
To gain insight into the growth of India’s service sector and its
implications for the economy, analyze the following points:
1. Services GDP
2. FDI in the Services Sector
3. State-Wise Comparison of Services
4. India’s Services Trade
5. Services Employment in India
6. Performance of Some Major Services
1) Services GDP
The survey reveals that the share of services in India’s GDP at factor cost
(at current prices) increased from 33.5% in 1950-51 to 55.1% in 2010-11
and to 56.3% in 2011-12 as per Advance Estimates (AE). Taking
construction into account, the Service Sector’s contribution expanded to
63.3% during 2010-11 and saw a subsequent rise to 64.4% in 2011-12.
Projecting the employment figures, the survey says that while agriculture
continues to be the primary employment-providing sector, the service
sector (including constriction) is in second place.
FDI inflows into the service sector and the involvement of transnational
corporations play a pivotal role in driving the growth of this sector. While
the ambiguity in classifying various activities within the services sector
continues. In 2011-12, FDI inflows to the services sector (top five sectors
including construction) grew robustly at 57.62 per cent to U.S. $12.14
billion compared to the growth of overall FDI inflows at 33.6 per cent.
However, in 2012-13 (April – November), overall FDI inflows fell by
433 per cent to U.S., $15.85 billion from US. $27.93 billion in the
corresponding period of the previous year.
Following this trend, FDI inflows in the top five services also fell by 9.7
per cent to the US. $8.19 billion. Among them, while FDI inflows to the
top four service sectors fell in the range of 14 to 97 per cent, FDI inflows
to the hotel and tourism sector increased by a very high 328 per cent over
the corresponding period in the last year.
1. Traditional Activities.
2. Modern Activities.
Scope of Financial Services
Traditional Activities
Financial intermediaries have been offering a large range of services
traditionally