SM 2022-24

2MARKS
What do you mean by "Zone of Tolerance"?
• The "Zone of Tolerance" is the range within which customers are willing to accept
variations in service quality without feeling dissatisfied.
• It lies between the desired service level (what the customer hopes for) and the
adequate service level (the minimum acceptable level).
• Services that fall within this zone are typically deemed satisfactory, while services
outside it result in either delight or dissatisfaction.
b) What do you mean by service Product?
• A service product refers to a bundle of tangible and intangible elements that together
satisfy customer needs.
• It includes the core service (main benefit offered) and supplementary services
(supporting features like customer support).
• Example: A hotel stay includes the core service (accommodation) and supplementary
services (housekeeping, room service, etc.).
c) What is Moment of truth?
• The "Moment of Truth" in service marketing occurs whenever a customer interacts with
a company and forms an impression about the service quality.
• Positive or negative, these moments shape customer perceptions and loyalty.
• Example: A restaurant server resolving an issue promptly creates a positive Moment of
Truth.
d) Differentiate between standardization and customization

e) Define and explain customer life time value.

• CLV is the total revenue a business can expect from a single customer over the entire
duration of their relationship.

• Importance: Helps businesses focus on high-value customers, tailor strategies, and

optimize marketing ROI.
f) How remote encounter is different from face to face encounter?
g) What are the components of service marketing triangle? Sketch their relationship.

h) Differentiate between augmented service and potential service. Give example.

i) What are the additional 'P's in Service Marketing? How do they differentiate products
and services?
In addition to the 4 Ps (Product, Price, Place, Promotion), services include:
1. People: Employees and customers directly impact service quality.
2. Process: Efficient workflows and systems ensure smooth service delivery.
3. Physical Evidence: Tangible cues (e.g., ambiance, brochures) that influence
perceptions.
Products vs. Services: Services rely heavily on these additional Ps because they are intangible,
inseparable, variable, and perishable.
j) Can service be packaged? Justify your answer.
Yes, services can be "packaged" by combining tangible and intangible elements to create a
cohesive offering.
• Justification: Packaging enhances clarity, appeal, and perceived value, especially for
intangible services.
• Example: A gym membership includes physical access (facility), a schedule (process),
and staff (people).
J) What constitutes the service blueprint?
Basic component of service blueprint are:
• Customer action
• Onstage contract employee action
• Backstage contract employee action
• Support processes
• Line of interaction
• Line of visibility
• Line of internal interaction
6MARKS
Discuss Branding and Packaging of Services.
Branding of Services
• Definition: Creating a unique identity for a service to differentiate it from competitors.
• Focus: Builds trust, communicates value, and ensures consistent customer perception.
• Key Strategies: Emotional connection, consistent communication, and employee
branding.
• Example: Marriott signifies luxury and reliability; Starbucks promotes a premium
coffee experience.
Packaging of Services
• Definition: Presenting services using tangible elements and processes to enhance
customer experience.
• Includes: Physical evidence (brochures, uniforms), atmosphere (décor, ambiance), and
digital tools (websites, apps).
• Purpose: Reduces intangibility, creates memorable experiences, and builds trust.
• Example: Netflix’s user-friendly interface, Emirates’ in-flight amenities.
Challenges
• Intangibility, variability, and managing customer expectations.
b) What is Service Marketing? Explain its basic characteristics.
• Service means taking action to create value for someone else
• Services are deeds, processes, and performances provided or coproduced by one entity
or person for another entity or person.
• Here the deeds are the 'actions' of the service provider, processes are the 'provisions of
the service, and performance is the 'customer's understanding of how the service has
been delivered.
In services
• There is lack of physical output or construction
• Benefit to the receiver from the service rather than the product offered
• The intangible nature of services
1. Intangibility
• This means that the service can't be heard, felt, touched, seen or tasted. The most basic
difference between a good and a service is intangibility.
• This causes services to be very difficult to evaluate and services should have good
search qualities.
• Many service companies should create tangible representations to help their consumers
understand what they are all about.
• For example, the doctor's office is considering for a checkup uses a photograph of
vitamins, processes to represent that their services will make you healthy
2. Inseparability
• Inseparability is the inability of the production and consumption of a service to be
separated. Services are impossible to separate in the purchase process.
• One advantage to the inseparability is that consumers can give constant feedback.
• For example, customer can tell his barber exactly what changes he wants as he is getting
his hair cut. One challenge for service companies is that they must be sure to have very
well trained employees who are adept at providing excellent services.
 • The quality must be consistent.
• Example-a lecturer, doctor and client, lawyer and client.
3. Variability or Heterogeneity
• It means that the service when delivered will be a little different from the previous
experience. Customer expects his pizza to be delivered exactly the same way and taste
just as delicious as the previous week.
• It is when services have problems being standardized.
• For example-A customer went to a barber shop and got excellent hair cut for two
months. Then the last two times he went for a cut, he ended up with a very poor result.
• This unintentional variability in service has now caused him to go elsewhere.
4. Perishability
• Perishability refers to the fact that services cannot be saved, stored, warehoused or
inventoried resold, or returned.
• Perishability is in contrast to goods that can be stored in inventory or resold another
day, or even returned if the consumer is unsatisfied.
• For example - A seat on an airplane or in a restaurant, an hour of a lawyer's time, or
space in a shipping container not used or purchased cannot be reclaimed and used or
resold at a later time.
c) Discuss marketing challenges in service Business.
Intangibility:
• Services can’t be seen or touched, making it hard to showcase their value.
• Solution: Use branding, reviews, and physical evidence to build trust.
Inseparability:
• Services are produced and consumed simultaneously, requiring customer-provider
interaction.
• Solution: Train employees for consistent and quality service delivery.
Variability:
• Service quality may differ based on providers or situations.
• Solution: Standardize processes and use technology for consistency.
Perishability:
• Services can’t be stored; unused capacity leads to losses.
• Solution: Use dynamic pricing and promotions to manage demand.
Customer Expectations:
• High or unpredictable expectations can lead to dissatisfaction.
• Solution: Communicate clearly and exceed expectations when possible.
Trust Building:
• Lack of tangible proof makes gaining customer trust harder.
• Solution: Use testimonials, guarantees, and strong branding.
Customer Involvement:
• Customers influence service outcomes through participation.
• Solution: Design user-friendly processes and guide customers.
Competition:
• Difficult to differentiate services in a crowded market.
• Solution: Offer unique experiences or personalized services.
d) What are the various ways by which service can be classified? Discuss.
1. Based on the Nature of Service Offering
• Core Services: Essential services that fulfill the primary need.
o Example: Education in schools, healthcare in hospitals.
• Supplementary Services: Additional services that enhance the core offering.
o Example: Room service in hotels, after-sales service for electronics.
2. Based on Customer Involvement
• High-Contact Services: Require significant interaction between customers and service
providers.
o Example: Hairdressing, healthcare consultations.
• Low-Contact Services: Minimal or no direct interaction with customers.
o Example: Online banking, utility services.
3. Based on Service Tangibility
• Tangible-Dominant Services: Services accompanied by tangible products.
o Example: Food in restaurants, car rentals.
• Intangible-Dominant Services: Pure services with no physical product.
o Example: Consulting, psychotherapy.
4. Based on Who or What is Being Served
• People-Based Services: Services targeted at individuals.
o Example: Education, spa treatments.
• Equipment-Based Services: Services delivered using machines or technology.
o Example: ATMs, automated car washes.
5. Based on Skill Level Required
• Professional Services: Require specialized knowledge or training.
o Example: Legal services, medical services.
• Non-Professional Services: Can be delivered without extensive training.
o Example: Housekeeping, delivery services.
6. Based on Service Delivery Location
• On-Site Services: Delivered at the customer’s location.
o Example: Plumbing, home tutoring.
• Off-Site Services: Delivered at the service provider’s location.
o Example: Restaurants, amusement parks.
7. Based on Industry or Function
• Consumer Services: Offered directly to end consumers.
o Example: Retail, travel, hospitality.
• Business-to-Business (B2B) Services: Cater to organizations or businesses.
o Example: IT services, logistics.
8. Based on Service Duration
• Short-Term Services: One-time or brief interactions.
o Example: Taxi rides, movie screenings.
• Long-Term Services: Require ongoing interaction or contracts.
o Example: Insurance, subscription services.
e) When a guest checks into a luxury five-star hotel, what are the different
points at which he or she is likely to have a service encounter? Explain.
When a guest checks into a luxury five-star hotel, they experience multiple "service
encounters" or touchpoints, which contribute to their overall experience. These encounters
can be classified as pre-arrival, arrival, stay, and departure phases.
1. Pre-Arrival Encounters
• Booking/Reservation: Interaction via the hotel’s website, mobile app, or call center.
o Example: Assistance with choosing rooms, confirming dates, or handling
special requests.
• Communication: Pre-stay emails or calls to confirm reservations, provide information,
or upsell services.
2. Arrival Encounters
• Greeting at the Entrance: Valet or concierge welcomes the guest and assists with
luggage.
• Reception/Check-In: Interaction with front-desk staff for registration and room
allocation.
o Example: Personalized greetings, welcome drinks, or express check-in for
regular guests.
• Escort to the Room: Bellboy or staff member guiding the guest to their room while
explaining hotel facilities.
3. During the Stay
• Housekeeping: Interaction with staff maintaining cleanliness and fulfilling special
room requests.
o Example: Providing extra pillows, replenishing amenities.
• Dining Services: Encounters with restaurant staff during meals or room service
delivery.
o Example: Personalized menu suggestions, ensuring dietary preferences.
• Spa and Recreation: Interactions during the use of the spa, pool, gym, or recreational
activities.
• Concierge Services: Assistance with local sightseeing, bookings, or special
arrangements.
o Example: Booking theater tickets, arranging private transportation.
• Technical Support: Resolving issues with room appliances, Wi-Fi, or other facilities.
• Special Events: Interaction during in-hotel events such as conferences, parties, or
celebrations.
4. Departure Encounters
• Check-Out Process: Interaction with reception for settling bills and feedback
collection.
• Assistance with Luggage: Bellboy helping with luggage and arranging transportation.
• Farewell: Final goodbyes by staff, often with a token gesture (e.g., parting gift or
loyalty program invitation).
f) Explain the role of visibility in service design...
Visibility in service design refers to how much of the service process and delivery is visible to
the customer. It plays a critical role in shaping the customer’s perceptions, satisfaction, and
trust in the service. By strategically managing visible and invisible aspects, businesses can
create seamless and memorable service experiences.
Key Roles of Visibility in Service Design
1. Enhancing Customer Perception of Value
• Visible actions reassure customers that the service is being delivered efficiently.
o Example: Open kitchens in restaurants allow customers to see food preparation,
creating a perception of quality and hygiene.
2. Managing Customer Expectations
• By showing only the essential parts of the service process, businesses can set realistic
expectations.
o Example: Airlines display boarding processes but keep backstage operations
like luggage sorting hidden.
3. Creating Transparency and Trust
• Visible service elements build customer trust by demonstrating accountability.
o Example: Real-time package tracking in delivery services increases confidence
in timely delivery.
4. Reducing Customer Anxiety
• Visibility of certain processes reduces uncertainty or anxiety during the service
experience.
o Example: At hospitals, updates on patient treatment stages reassure families.
5. Distinguishing Frontstage and Backstage Activities
• Frontstage Activities: Visible to the customer, impacting their direct experience.
o Example: Interaction with staff at reception.
• Backstage Activities: Hidden from the customer, ensuring smooth service delivery.
o Example: Kitchen operations in a hotel or IT infrastructure in online banking.
Strategic design ensures backstage inefficiencies don’t affect the customer’s
perception.
6. Improving Service Recovery
• Visible corrective actions during service failures demonstrate effort and responsibility.
o Example: A waiter apologizing for a delay and offering a complimentary dish.
g) How can a service marketer make use of data mining to improve its
performance?
Customer Segmentation: Identify customer groups based on behavior and preferences for
targeted marketing.
• Example: Tailoring offers for business vs. leisure travelers.
Predicting Customer Lifetime Value (CLV): Focus on high-value customers with loyalty
programs or personalized services.
Churn Prediction: Spot customers likely to leave and offer retention incentives.
• Example: Telecom providers offering discounts to reduce cancellations.
Personalized Recommendations: Suggest services/products based on customer history.
• Example: Streaming services recommending shows.
Feedback Analysis: Use reviews and social media to improve service quality and address
complaints.
Demand Forecasting: Predict service demand to optimize staffing and resources.
• Example: Restaurants adjusting schedules for peak times.
Fraud Detection: Identify unusual patterns to prevent fraud.
• Example: Monitoring suspicious financial transactions.
Optimizing Campaigns: Analyze past marketing data to focus on successful strategies.
h) Define service quality. Explain the GAP Model of service quality in the
context of Indian Railways.
Definition of Service Quality
Service quality is the customer’s perception of how well a service meets or exceeds their
expectations. It is evaluated based on factors like reliability, responsiveness, assurance,
empathy, and tangibles.
GAP Model of Service Quality
The GAP Model identifies gaps between customer expectations and perceptions of service,
helping organizations improve service delivery. Here’s how the model applies to Indian
Railways:
1. GAP 1: Knowledge Gap
Difference: Between customer expectations and management’s understanding of those
expectations.
Example in Indian Railways:
• Passengers expect clean coaches and timely trains, but management may underestimate
the importance of cleanliness or punctuality.
Solution: Conduct surveys and collect feedback to better understand passenger needs.
2. GAP 2: Policy Gap
Difference: Between management’s understanding of customer needs and the service standards
set.
Example in Indian Railways:
• Policies for train punctuality or hygiene exist but may not be practical or enforced
effectively.
Solution: Align policies with customer expectations and ensure they are actionable.
3. GAP 3: Delivery Gap
Difference: Between service standards and actual service delivery.
Example in Indian Railways:
• Delays in train arrivals/departures despite a policy for punctuality, or unhygienic
washrooms despite cleanliness drives.
Solution: Monitor performance, train staff, and ensure accountability in service delivery.
4. GAP 4: Communication Gap
Difference: Between what is promised through communication and what is delivered.
Example in Indian Railways:
• Promotional campaigns might promise modern facilities or punctual trains, but
passengers may find outdated infrastructure and delays.
Solution: Set realistic expectations in advertisements and ensure consistent service.
5. GAP 5: Perception Gap/ Service Gap
Difference: Between customer expectations and their perception of the service received.
Example in Indian Railways:
• Passengers may expect world-class facilities like those in private airlines but perceive
the services as substandard due to frequent delays or unclean environments.
Solution: Regularly manage and measure passenger satisfaction to bridge the gap.
i) Explain the process of service delivery by "Zomato".(REPEAT)
Zomato’s service delivery is designed to ensure a seamless and efficient food ordering
experience for its users. The process involves multiple stages that include interaction with
customers, restaurants, and delivery partners.
1. Customer Interaction
• App/Website Usage:
Customers log into the Zomato app or website to browse restaurants, menus, and
reviews.
o Features: Filters for cuisine, price range, offers, and ratings.
• Order Placement:
Customers select items, customize orders, and proceed to checkout.
o Payment Options: Multiple options like UPI, credit/debit cards, wallets, and
cash on delivery.
2. Order Confirmation
• Restaurant Notification:
Once an order is placed, Zomato notifies the chosen restaurant to accept and prepare
the order.
• Real-Time Updates:
Customers are notified when the restaurant confirms the order and begins preparation.
3. Delivery Partner Assignment
• Auto-Matching:
Zomato’s algorithm assigns the nearest available delivery partner to minimize delivery
time.
• Navigation and Pickup:
The delivery partner navigates to the restaurant, picks up the order, and ensures proper
handling during transit.
4. Order Tracking
• Live Tracking:
Customers can track the delivery partner’s location and estimated arrival time through
the app.
• Communication:
Customers and delivery partners can communicate via in-app calling or chat for
clarifications.
5. Delivery and Customer Feedback
• Order Delivery:
The delivery partner ensures timely and safe delivery at the customer’s address.
• Post-Delivery Feedback:
Customers can rate the food, delivery service, and overall experience. Complaints or
issues are addressed through Zomato’s support team.
6. Restaurant and Delivery Partner Feedback
• Restaurant Ratings:
Zomato collects feedback from restaurants about delivery partner behavior.
• Delivery Partner Ratings:
Zomato monitors delivery performance based on timeliness and customer feedback.
J) Why service providers link employee satisfaction and customer
satisfaction to company's profit? Justify the inter-
relatedness with example(REPEAT)
Service providers recognize that employee satisfaction directly impacts customer
satisfaction, which in turn influences the company's profitability. This interrelationship is
often referred to as the Service-Profit Chain, highlighting how happy employees lead to better
service experiences and, ultimately, improved financial outcomes.
1. Employee Satisfaction → Customer Satisfaction
Satisfied employees are:
• More Engaged: They are motivated to provide high-quality service, leading to positive
customer experiences.
• More Empathetic: They address customer needs with care, building trust and loyalty.
• Less Likely to Quit: Lower turnover ensures consistency in service quality.
Example: A luxury hotel with well-trained and happy staff creates a welcoming and efficient
environment, leaving guests more satisfied.
2. Customer Satisfaction → Repeat Business and Loyalty
Satisfied customers:
• Return Frequently: They become repeat buyers, increasing lifetime value.
• Recommend Services: Positive word-of-mouth attracts new customers without high
marketing costs.
• Pay Premiums: Happy customers are willing to pay more for reliable, quality service.
Example: An airline with friendly cabin crew and punctual service retains customers who book
future flights and recommend the airline to others.
3. Customer Satisfaction → Increased Profit
• Higher Revenue: Repeat business and new referrals boost income.
• Reduced Costs: Retaining existing customers is cheaper than acquiring new ones.
• Stronger Brand: Positive experiences improve reputation, allowing premium pricing.
Example: Starbucks invests in employee training and satisfaction, leading to exceptional
customer service. Loyal customers visit frequently, driving high revenues and profitability.
4. Feedback Loop: Profit → Employee Satisfaction
Profitable companies:
• Reward Employees: Offer better pay, benefits, and career growth opportunities.
• Invest in Training: Empower employees with skills to perform effectively.
• Provide Better Tools: Streamline work processes, reducing stress.
Example: Google emphasizes employee well-being through perks and development programs,
ensuring happier employees who innovate and delight customers.
b) What is single window service concept? Explain.
The single window service concept refers to a system where customers can access multiple
services or fulfill various requirements through a single point of contact, rather than visiting
multiple departments or locations. It simplifies processes, enhances convenience, and reduces
time and effort for customers.
Key Features of Single Window Service
1. Centralized Access: All related services are provided from one physical or digital
platform.
2. Streamlined Processes: Reduces bureaucracy and simplifies procedures.
3. Improved Customer Experience: Minimizes waiting times and offers quick
resolutions.
Examples of Single Window Service
1. E-Seva Centers in India:
o Offer payment services for utilities (electricity, water, taxes) and government
schemes in one location.
 2. Banking:
o Modern banks provide loans, deposits, credit cards, and investment advice at a
single branch.
3. Online Platforms:
o Portals like DigiLocker and MCA21 allow users to access government
documents and services digitally.
Benefits of Single Window Service
1. Time-Saving: Reduces the need to interact with multiple service points.
2. Efficiency: Speeds up processes by integrating services.
3. Convenience: Enhances customer satisfaction by providing comprehensive support.
c) What do you mean by service encounter? Discuss the various types of
service encounters.
• A service encounter occurs every time a customer interacts with the service
organization.
• A customer may experience any of these types of service encounters, or a combination
of all three in his/her relations with a service firm.
Types of service encounters
a) Remote Encounter:
• Encounter can occur without any direct human contact is called as Remote Encounters.
• Such as, when a customer interacts with a bank through the ATM system, or with a
mail-order service through automated dial-in ordering.
• Remote encounters also occur when the firm sends its billing statements or
communicates others types of information to customers by mail. Although there is no
direct human contact in these remote encounters, each represents an opportunity for a
firm to reinforce or establish perceptions in the customer.
• In remote encounter the tangible evidence of the service and the quality of the technical
process and system become the primary bases for judging quality. Services are being
delivered through technology, particularly with the advent of Internet applications.
• Retail purchases, airline ticketing, repair and maintenance troubleshooting, and
package and shipment tracking are just a few examples of services available via the
Internet. All of these types of service encounters can be considered remote encounters.
b) Phone Encounters:
• In many organizations, the most frequent type of encounter between a customer and the
firm occurs over the telephone is called as phone encounter.
• Almost all firms (whether goods manufacturers or service businesses) rely on phone
encounters in the form of customer-service, general inquiry, or order-taking functions.
The judgment of quality in phone encounters is different from remote encounters
because there is greater potential variability in the interaction.
• Tone of voice, employee knowledge, and effectiveness/efficiency in handling customer
issues become important criteria for judging quality in these encounters.
C) Face-to-Face Encounters:
• A third type of encounter is the one that occurs between an employee and a customer
in direct contact is called as Face-to-Face Encounter.
• In a hotel, face-to-face encounters occurs between customers and maintenance
personnel, receptionist, bellboy, food and beverage servers and others. Determining and
understanding service equality issues in face-to-face context is the most complex of all.
 • Both verbal and non-verbal behaviors are important determinants of quality, as are
tangible cues such as employee dress and other symbols of service (equipment's,
informational brochures, physical settings).
• In face-to-face encounters the customer also play an important role in creating quality
service for herself through his/her own behavior during the interaction.
• For example, at Disney theme parks, face-to-face encounters occur between customer
and ticket-takers, maintenance personnel, actors in Disney character costumes, ride
personnel, food and beverage servers, and others. For a company such as, IBM, in a
business-to-business setting direct encounters occur between the business customers
and salespeople, delivery personnel, maintenance representatives, and
professional consultants
d) State the implications of service characteristics in financial sector with
suitable examples.
The unique characteristics of services—intangibility, inseparability, variability, and
perishability—significantly influence the delivery and management of financial services like
banking, insurance, and investment.
1. Intangibility
Implication: Financial services are intangible, meaning they cannot be seen, touched, or
stored. This makes it challenging to showcase their value to customers.
• Example: A bank offers a savings account, but customers evaluate its worth based on
interest rates, convenience, and security, not a tangible product.
• Solution: Use strong branding, testimonials, and clear communication to build trust and
make services "feel" real.
2. Inseparability
Implication: Financial services are produced and consumed simultaneously, requiring close
interaction between customers and service providers.
• Example: A customer seeking financial advice relies on the expertise of a relationship
manager at the moment of consultation.
• Solution: Train employees to provide personalized and professional services during
interactions.
3. Variability
Implication: The quality of financial services can vary depending on who delivers the service
and under what conditions.
• Example: The quality of customer service at a bank branch might differ based on the
staff's mood, training, or workload.
• Solution: Implement standardized processes and regular staff training to ensure
consistent service quality.
4. Perishability
Implication: Financial services cannot be stored or inventoried. Missed opportunities for
selling or delivering services result in lost revenue.
• Example: An unutilized bank counter during peak hours represents lost potential
transactions.
• Solution: Use technology to optimize staffing and offer digital services like online
banking to reduce dependency on physical counters.
e) Explain the different types of intermediaries in service distribution
channel.
a) Direct Channel
• Direct channel of distribution describes a situation in which the producer sells a product
directly to a consumer without the help of intermediaries.
• Example-naukri.com, Snapdeal.com
(b) Electronic channels
Electronic communication is defined as any type of communication using technology-like
computer, phone or fax, kiosks.
• Consistent delivery for standardized services
• Low cost
• Customer convenience
• Wide distribution
• Customer choice and ability to customize
• Quick customer feedback
e.g., Websites, e-Kiosks, ATMs, university video courses, Justdial.com, mobile banking, apps.
c) Franchising
• Granting the right to engage in offering, selling, or distributing goods or services under
a developed marketing format which is designed by the franchisor
• The franchisor permits the franchisee to ause it ause its trademark, name, and
advertising
• Higher survival rates
For Example -Pizza Hut, McDonalds, Baskin Robins
d) Agents:
Party that has express (oral or written) or implied authority to act for another (the principal) so
as to bring the principal into contractual relationships with other parties.
• An agent works for the principal continuously
• An agent receives commissions (usually two to six percent of selling price)
• An agent delivers the rights to services
• An agent is entrusted with influence over prices, terms, and conditions of sale.
For example - A Travel agent, Insurance agents
e) Brokers
• They make the buyers and sellers meet.
• charges a fee or commission for executing commercial negotiations or tran
• Buy and sell orders submitted by an investor.
Example-99 acres.com, magicbricks.com, stock service brokers.
The service scape creates a mood, an attraction or a desire to visit the service
provider. Explain with examples.
The servicescape refers to the physical and ambient environment where a service is delivered.
It plays a crucial role in shaping customer perceptions, emotions, and behavior by creating a
mood, attracting customers, and encouraging repeat visits.
How Servicescape Influences Customer Behavior
1. Creates Mood
The design and ambiance of the service environment can evoke positive emotions that
enhance the overall service experience.
o Example:
 ▪ Cafes like Starbucks: Use warm lighting, comfortable seating, and
soothing music to create a relaxed and inviting atmosphere, encouraging
customers to linger longer.
▪ Luxury Spas: Use calming scents, soft lighting, and tranquil décor to
promote relaxation.
2. Attracts Customers
A well-designed servicescape can grab attention and draw customers in by being
visually appealing and memorable.
o Example:
▪ Retail Stores like Apple: Minimalistic yet modern layouts with sleek
displays attract tech-savvy customers.
▪ Theme Parks like Disneyland: Vibrant colors, themed architecture, and
lively music create a magical and enticing atmosphere.
3. Encourages Desire to Visit or Stay
Customers are more likely to visit and spend time in environments that meet their
aesthetic, functional, and emotional needs.
o Example:
▪ Hotels like The Oberoi or Taj: Use grand lobbies, elegant interiors, and
personalized spaces to make guests feel valued and luxurious.
▪ Fine-Dining Restaurants: Use candlelight, elegant table settings, and
soft music to create a romantic or sophisticated ambiance.
Key Components of Servicescape
1. Ambient Conditions: Lighting, music, scent, temperature (e.g., a cool, aromatic
environment in a gym).
2. Spatial Layout: Ease of navigation and comfortable spaces (e.g., well-organized
seating in movie theaters).
3. Aesthetic Elements: Colors, design, and visual appeal (e.g., themed decorations in
restaurants).
4. Functional Elements: Signage, waiting areas, and accessibility (e.g., self-service
kiosks in airports).
h) Companies often find pricing of services more difficult than pricing of
goods. Explain various approaches for pricing of services.
Pricing services is often more complex than pricing goods due to their unique characteristics:
1. Intangibility: Customers cannot assess the value of a service before experiencing it.
2. Inseparability: Service delivery and consumption happen simultaneously, adding
variability in value perception.
3. Perishability: Unused service capacity (e.g., empty hotel rooms) cannot be stored or
resold later.
4. Variability: Quality of services may differ based on who delivers them and under what
circumstances.
Approaches for Pricing Services
a) Cost-Based Pricing-
• In cost-based pricing, a company determines expenses from raw materials and labor,
adds amounts or percentages for overhead and profit, and arrives at price.
• Used by-industries such as utilities, contracting, wholesaling and advertising.
Formula:
Price=Direct costs +Overhead costs +Profit margin
• Fee for service is the pricing strategy used by professionals; it represents the cost of the
time involved in providing the service. Consultants, psychologists, accountants, and
lawyers among other professionals, charge for their services on an hourly basis.
B) Competition based Pricing (Going rate pricing)
• Focuses on the prices charged by other firms in the same industry or market.
• Competition-based pricing does not always imply charging the identical rate others
charge but rather using others prices as an anchor for the firm' price.
This approach is used predominantly in situations:
• when services are standard across providers, such as in the dry cleaning industry, and
• in oligopolies with a few large service providers, such as in the airline or rental car
industry.
Example - Rental car services, Banking services.
(C) Value based pricing or Demand-based pricing
• pricing of services on the basis of perceived value of service to customers.
• Prices are based on what customers will pay for the services provided. (Refer to Insight)
1) "Matching capacity and demand is difficult in Service Marketing as
services cannot be stored". Explain different strategic approaches for
Managing Supply and demand for services.
Services are perishable and cannot be stored for future use, making it difficult to align supply
with fluctuating demand. For example, unsold hotel rooms or empty seats on flights result in
lost revenue. To address this, companies use various strategic approaches to balance supply
and demand.
Strategies to Manage Demand
1. Differential Pricing
• Explanation: Adjusting prices to influence customer demand at different times.
• Example: Airlines and hotels use dynamic pricing, offering lower rates during off-peak
periods and higher rates during peak seasons.
2. Promotion and Advertising
• Explanation: Targeted campaigns can stimulate demand during low seasons.
• Example: Restaurants offer "happy hour" discounts to attract customers during non-
peak hours.
3. Creating Reservations or Appointments
• Explanation: Booking systems help distribute demand evenly over time.
• Example: Healthcare services use appointment systems to avoid overcrowding.
4. Encouraging Non-Peak Usage
• Explanation: Incentivizing customers to use services during off-peak times.
• Example: Gyms offer discounted memberships for off-peak hours to spread usage
throughout the day.
5. Developing Complementary Services
• Explanation: Offering additional services to divert demand during busy times.
• Example: Cafes in airports provide waiting areas and refreshments during flight delays.

Strategies to Manage Supply

1. Flexibility in Workforce
 • Explanation: Adjusting staff levels to match demand.
• Example: Retail stores hire part-time or seasonal employees during festive periods to
handle increased customer traffic.
2. Sharing Capacity
• Explanation: Collaborating with other service providers to manage excess demand.
• Example: Hospitals refer patients to partner facilities when fully booked.
3. Using Technology
• Explanation: Implementing automated systems to manage high demand.
• Example: Banks use ATMs and mobile banking to reduce reliance on physical
branches.
4. Cross-Training Employees
• Explanation: Training staff to handle multiple roles to improve flexibility.
• Example: Hotel staff can handle reception, concierge, or housekeeping roles during
peak times.
5. Outsourcing
• Explanation: Delegating non-core functions to external vendors during peak demand.
• Example: IT companies outsource customer support during high-demand periods.
j) Give three important reasons behind the huge growth of service economy
in India with justifications.
1. Economic Liberalization and Globalization
• Explanation: Post-1991 economic reforms opened India’s markets to foreign
investment and international trade. This led to the growth of industries like IT,
telecommunications, and financial services.
• Justification:
o Companies like Infosys, TCS, and Wipro became global leaders in IT services.
o Outsourcing and BPO services flourished as India became a hub for cost-
effective solutions.
2. Rising Urbanization and Disposable Income
• Explanation: Urbanization and an expanding middle class with higher disposable
incomes increased demand for lifestyle services such as healthcare, education,
entertainment, and travel.
• Justification:
o Growth in sectors like e-commerce (Amazon, Flipkart) and food delivery
(Zomato, Swiggy).
o Rising demand for private healthcare (Apollo, Fortis) and education services.
3. Technological Advancements
• Explanation: Increased internet penetration and smartphone adoption revolutionized
service delivery, making it accessible and scalable.
• Justification:
o Telecom services (Jio, Airtel) and digital payment platforms (Paytm, PhonePe)
transformed daily transactions.
o Startups in fintech, edtech, and e-learning contributed to rapid service sector
expansion.
k) Why extra 3Ps are required in addition to the traditional marketing-mix
for the marketing of services? Explain your answer keeping in view the
recent condition of telecommunication services.
In addition to the traditional 4Ps of marketing (Product, Price, Place, Promotion), the service
industry requires People, Process, and Physical Evidence to address the unique characteristics
of services: intangibility, variability, inseparability, and perishability. These additional 3Ps
help in delivering high-quality services and managing customer expectations.
Application to Telecommunication Services
1. People
• Importance: Services are delivered and managed by people. Skilled and motivated
employees ensure customer satisfaction in service delivery.
• Example in Telecom:
o Call center executives and technical support teams play a key role in resolving
customer queries and complaints.
o A poorly trained support team can lead to dissatisfaction despite good network
coverage.
2. Process
• Importance: A well-designed process ensures consistent and efficient service delivery.
• Example in Telecom:
o The process of activating a SIM card, recharging, or resolving network issues
must be quick and hassle-free.
o Complex or slow procedures, such as unresolved complaints about call drops or
billing errors, can frustrate customers.
3. Physical Evidence
• Importance: As services are intangible, physical evidence provides assurance and
credibility to the customer.
• Example in Telecom:
o Physical Stores: Branded retail outlets, kiosks, or customer service centers
enhance trust and accessibility.
o Digital Evidence: Easy-to-navigate apps, SMS confirmations, and detailed
billing statements reassure customers about the transparency and reliability of
services.
1) What is the importance of distribution channel for the marketing of
services? Explain different types of channel conflict.
Distribution channels are critical for the marketing of services because they ensure the efficient
delivery of services to customers and enhance their accessibility and convenience. Unlike
goods, services require tailored distribution strategies due to their unique characteristics, such
as intangibility, inseparability, and perishability.
Key Roles of Distribution Channels in Service Marketing
1. Improving Accessibility
o Ensures that services are available at the right time and place for customers.
o Example: Online banking allows customers to access financial services anytime.
2. Enhancing Convenience
o Simplifies the service acquisition process, reducing effort for customers.
o Example: Food delivery platforms like Zomato offer services directly to
customers’ homes.
3. Expanding Reach
o Extends the service provider’s geographic and demographic reach.
 o Example: Airlines use travel agents and online platforms to attract global
customers.
4. Building Relationships
o Provides touchpoints for direct interaction, improving trust and loyalty.
o Example: Healthcare providers use hospitals, clinics, and telemedicine
platforms to connect with patients.
5. Facilitating Customization
o Intermediaries can offer personalized services to meet specific customer needs.
o Example: Event planners design unique solutions for clients using multiple
vendors.

16MARKS
What is SERVQUAL? Using this scale how can you measure and compare
public and private hospitals of your city? Explain appropriate components
of each scale.(REPEAT)
• SERVQUAL, later called RATER, is a management framework to measure quality in
the service sector.
• It is developed to assess customer perceptions of service quality
Application
• These dimensions represent how consumers organize information about service quality
in their minds. retail, hospitals, restaurants, hotel, banking, insurance, appliance repair
and maintenance, securities brokerage, long-distance telephone service, automobile
repair service, and others.
The five SERVQUAL dimensions are: R-A-T-E-R:
1. RESPONSIVENESS - Willingness to help customers and provide prompt service
2. ASSURANCE - Knowledge and courtesy of employees and their ability to convey trust and
confidence
3. TANGIBLES - Appearance of physical facilities, equipment, personnel, and communication
materials
4. EMPATHY - Caring, individualized attention the firm provides its customers pers
5. RELIABILITY - Ability to perform the promised service dependably and accur accurately

a) Reliability:(Delivering on Promises (Dependable and accurate performance)

• Reliability is the ability to perform the promised service dependably and accurately-
promises about delivery, service provision, problem resolution, and pricing.
• One company that effectively communicates and delivers on the reliability dimension
is Federal Express (FedEx). The reliability message of FedEx-when it "absolutely,
positively has to get there"-
• Reflects the company's service positioning All firms need to be aware of customer
expectations of reliability. Firms that do not provide the core service that customers
think they are buying fail their customers in the most direct way.
b) Assurance: Inspiring Trust and Confidence (Competence, courtesy, credibility,
security)
• Assurance is defined as employee's knowledge and courtesy and the ability of the firm
and its employees to Inspire customer trust and confidence.
• This dimension is important for high risk services which they customers feel uncertain
about their ability to evaluate outcomes-for example, banking, insurance, brokerage,
medical, and legal services.
• Trust and confidence may be embodied in the person who links the customer to the
company, such as securities brokers, insurance agents, lawyers, or counselors. In such
service contexts the company seeks to build trust and loyalty between key contact
people and individual customers.
• Example - FedEx uses the tag line "Relax, it's FedEx, Bank's relationship manager.
Companies go beyond its traditional reliability message to focus on assurance and trust.
c) Tangibles: Representing the Service Physically (Appearance of physical elements)
• Tangibles are defined as the appearance of physical facilities, equipment, personnel,
and communication materials. Tangibles provide physical representations or images of
the service that customers, particularly new customers, will use to evaluate quality.
• Tangibles are used to enhance their image, provide continuity, and signal quality to
customers, most companies combine tangibles with another dimension to create a
service quality strategy for the firm.
• For example - A Hotel employs a guard at the parking lot and main door, reception desk,
employee dress, waiting, signage. A dentist puts various photographs of teeth,
procedures in the waiting area.
d) Empathy: Treating Customers as Individuals (Easy access, good communication,
understanding of customer)
• Empathy is defined as the caring, individualized attention that the firm provides its
customers. The essence of empathy is conveying, through personalized or customized
service, that customers are unique and special and that their needs are understood.
 • Customers want to feel understood by and important to firms that provide service to
them.
• Example-Personnel at small service firms often know customers by name and build
relationships that reflect their personal knowledge of customer requirements and
preferences.
e) Responsiveness Being Willing to Help (Promptness; helpfulness)
• Responsiveness is the willingness to help customers and to provide prompt service.
• It relates to attentiveness and promptness in dealing with customer requests, questions,
complaints, and problems. Responsiveness is communicated to customers by the length
of time they have to wait for assistance, answers to questions, or attention to problems.
• Example time taken by a customer care executive to pick the call, call should be
answered in two rings

Using SERVQUAL to Compare Public and Private Hospitals

To measure and compare service quality in public and private hospitals, you can use the
SERVQUAL scale with these steps:
1. Develop a SERVQUAL Questionnaire
Design a questionnaire with items representing each dimension of SERVQUAL. For example:
• Tangibles: "The hospital has modern medical equipment."
• Reliability: "The hospital staff deliver services as promised."
• Responsiveness: "The hospital responds quickly to emergencies."
• Assurance: "I feel confident in the skills of the hospital staff."
• Empathy: "The staff understand my specific needs."
2. Collect Data
• Survey patients or their families about their expectations and perceptions for both
public and private hospitals.
• Use a Likert scale (e.g., 1 = strongly disagree, 5 = strongly agree) to capture responses.
3. Calculate SERVQUAL Scores
• Subtract expectation scores from perception scores for each dimension.
o Positive gap: Perceptions exceed expectations (high service quality).
o Negative gap: Perceptions fall short of expectations (low service quality).
4. Compare Public and Private Hospitals
Analyze scores across the five dimensions for public and private hospitals to identify strengths
and weaknesses.
• Public Hospitals: May score higher on reliability (availability of basic services) but
lower on tangibles (outdated infrastructure) and empathy (overburdened staff).
• Private Hospitals: Likely to score higher on tangibles and assurance (modern facilities
and skilled professionals) but may have issues with empathy (perceived
commercialization).

Q4 What do you mean by service blue printing? Map a flow chart or service
blue print of an Automated Teller Machine (ATM) for delivery of
cash.(REPEAT)
Service Blueprint for ATM Cash Withdrawal
Below is a service blueprint or flow chart for the cash withdrawal process at an ATM:
1. Physical Evidence
• ATM machine, screen interface, card slot, cash dispenser, receipt printer.
2. Customer Actions
1. Insert ATM card.
2. Enter PIN.
3. Select "Withdraw Cash."
4. Enter the amount to withdraw.
5. Collect cash and receipt (optional).
6. Retrieve card.
3. Frontstage (Visible) Interactions
• ATM prompts on the screen: "Insert card," "Enter PIN," "Choose transaction type,"
"Enter amount."
 • Display of confirmation messages.
• Cash and receipt dispensing.
4. Backstage (Invisible) Interactions
• ATM authenticates card details with the bank server.
• Validates PIN and account balance.
• Approves or rejects the withdrawal request.
• Sends data to the cash dispenser mechanism.
5. Support Processes
• Bank server communicates with the ATM.
• Maintenance of ATM hardware and cash refilling.
• Customer data encryption for security.
Q5 "Services are deeds, acts or Performances". Explain the statement in the
perspective of Service Marketing. Make a comparative analysis between
Goods and Services highlighting the characteristics of services.(REPEAT)
"Services are deeds, acts, or performances" means that services involve activities or processes
provided by one party to another. Unlike tangible goods, services are intangible offerings that
fulfill customer needs or solve problems through performance or action rather than through
ownership of a physical product.
• Example: A doctor's consultation (service) is the act of diagnosing and advising a
patient, not a tangible product that can be purchased and owned.
In the context of Service Marketing, this statement emphasizes the importance of:
1. Customer Experience: Service quality and delivery play a crucial role in customer
satisfaction.
2. Relationships: Building trust and long-term relationships through consistent
performance.
3. Customization: Services often require personalization to meet unique customer needs.
Q6 Explain the role of CRM and outline the customer retention strategies in service
marketing in the context of hotel industries.
Role of CRM in Service Marketing (Hotel Industry)
Customer Relationship Management (CRM) plays a crucial role in the hotel industry by
fostering strong, long-term relationships with customers. It involves using data and strategies
to understand customer preferences, improve service quality, and enhance customer
experiences. Key roles of CRM include:
1. Customer Data Management: Hotels use CRM systems to collect and analyze
customer data such as preferences, booking history, and feedback. This helps in
personalizing services.
2. Improved Customer Experience: CRM enables hotels to tailor offerings, provide
customized room settings, and offer personalized packages.
3. Loyalty Program Management: CRM systems streamline the management of loyalty
programs, helping hotels reward frequent guests and encourage repeat visits.
4. Enhanced Communication: Hotels use CRM to maintain regular communication with
customers through emails, SMS, or mobile apps, keeping them informed about
promotions and offers.
5. Complaint Resolution: CRM helps hotels track and address customer grievances
efficiently, leading to improved satisfaction and retention.
6. Revenue Growth: By improving guest satisfaction and loyalty, CRM contributes to
increased bookings and upselling opportunities.

Customer Retention Strategies in the Hotel Industry

1. Personalized Services
o Offering personalized experiences such as preferred room type, meal choices,
or exclusive packages based on customer profiles.
o Use of guest history and preferences to surprise customers with thoughtful
gestures.
2. Loyalty Programs
o Creating tier-based loyalty programs with rewards such as free stays, discounts,
or upgrades.
o Encouraging membership to foster a sense of belonging.
3. Consistent Service Quality
o Ensuring high standards of cleanliness, amenities, and hospitality.
o Regular training of staff to maintain service excellence.
4. Technology Integration
o Offering seamless booking experiences via mobile apps or websites.
o Using AI and chatbots to provide instant support and address queries.
5. Proactive Feedback Collection
o Soliciting customer feedback through surveys and reviews.
o Acting on suggestions to show that their input is valued.
6. Exclusive Offers and Promotions
o Providing special deals or discounts to repeat customers.
o Celebrating customer milestones (e.g., anniversaries, birthdays) with tailored
offers.
7. Emotional Engagement
 o Building strong emotional connections through storytelling and personalized
communication.
o Recognizing loyal guests publicly or through exclusive recognition programs.
8. Social Media and Digital Marketing
o Engaging customers through social media platforms with interactive content,
contests, and updates.
o Using digital remarketing to target past guests with enticing offers.
Draw the Gap Model and explain various types of gaps in delivery of services
with suitable examples. Also state the advantages and limitations
of the Gap Model.

The Gap Model, developed by Parasuraman, Zeithaml, and Berry, identifies the key
discrepancies between customer expectations and perceptions in service delivery.
Types of Gaps in Service Delivery
1. Gap 1: Knowledge Gap
o Definition: The difference between what customers expect and what
management perceives their expectations to be.
o Example: A hotel assumes customers value luxury over affordability, while
most guests prioritize competitive pricing.
2. Gap 2: Policy Gap
o Definition: The difference between management's understanding of customer
expectations and the service quality specifications they set.
o Example: A restaurant identifies that speed is important to customers but fails
to set staff targets for quick order fulfillment.
3. Gap 3: Delivery Gap
o Definition: The gap between service quality standards and the actual service
delivered.
 o Example: A hotel promises 24/7 room service but delays occur due to staff
shortages.
4. Gap 4: Communication Gap
o Definition: The difference between what is promised in external
communications and what is delivered.
o Example: A travel agency advertises “luxury buses” but provides poorly
maintained vehicles.
5. Gap 5: Perception Gap
o Definition: The gap between customers’ expectations and their perception of
the service delivered.
o Example: A spa offers premium-quality treatments, but the ambiance doesn't
align with customer expectations for a "luxurious" experience.

Advantages of the Gap Model

1. Identifies Weaknesses: Helps organizations pinpoint areas where service quality fails
to meet expectations.
2. Enhances Customer Satisfaction: By addressing gaps, businesses can improve
customer loyalty and satisfaction.
3. Guides Training: Offers insights for employee training to align service delivery with
expectations.
4. Focuses on Continuous Improvement: Encourages regular assessment and
improvement of service processes.
5. Applicable Across Industries: Versatile framework suitable for diverse sectors,
including hospitality, retail, and healthcare.

Limitations of the Gap Model

1. Overemphasis on Customer Perspective: May neglect operational or cost-related
challenges.
2. Static View: Assumes customer expectations are stable, whereas they may evolve over
time.
3. Lack of Quantitative Metrics: Provides qualitative insights but may not offer precise
numerical data for decision-making.
4. Implementation Complexity: Requires substantial resources to assess and close
multiple gaps.
5. Subjective Nature: Relies heavily on subjective evaluations of customer expectations
and perceptions.