1 2 Unit No CONTENTS Unit Name Page Number I II III IV Lesson1 Introduction to Service Marketing Lesson 2 Growing Importance of Service Sector in India Lesson 3 Service Marketing management Process Lesson 1 Consumer Behaviour for Services Lesson 2 Service Recovery Lesson 1 The 7 Ps of services marketing Lesson 2 Service Product Lesson 3 The Service Process Meaning and Classification Lesson 4 Pricing Strategies Lesson1 Service Distribution Management Lesson2 Franchising Lesson 3 Integrated Marketing Communication Lesson 4 Services Marketing Triangle Lesson 5 Managing Physical Evidence and Servicescape 4 12 13 18 19 32 33 59 60 74 75 80 81 85 86 91 92 106 107 114 115 125 126 134 135 139 140 156 References C Bhattacharjee Services Marketing Excel Books New Delhi Christopher H Lovelock Services Marketing third edition Prentice Hall US Douglas Hoffman and John E G Bateson Essentials of Service Marketing Concepts Strategies and Cases 2nd Edition India Thomson Asia 2002 Leonard L Berry Great Service A Framework for Action the Free Press 3 UNIT 1 4 Lesson 1 Introduction to Service Marketing As India moves increasingly toward a services economy marketers need to know more about marketing service products On a simplistic note one can say that services are activities or benefits that one party can offer to another that are essentially intangible and do not result in the ownership of anything Thus we see how services are different from goods During the past decade services have increasingly assumed an important role in the Indian economy Ever since this trend was set in the nineties services have gained dominance The competition simultaneously these organisations have to have a more professional approach to managing their businesses Perhaps it is in this context that the role of marketing is gaining importance in service organisations In this unit you will be introduced to the concept of services is becoming intense and severe As a result in service organisations 1 1 Defining Services One of the first to define services was the American Marketing Association which as early as in 1960 defined services as activities benefits or satisfactions which are offered for sale or provided in connection with the sale of goods This definition took a very limited view on services as it proposed that services are offered only in connection with the sale of goods The other definition which was proposed in 1963 by Regan suggested that services represent either intangibles yielding satisfaction directly transportation housing or intangibles yielding satisfaction jointly when purchased either with commodities or other services credit delivery For the first time services were considered as pure intangibles capable of providing satisfaction to the customer which could be marketed like tangible products the market Robert Judd defined service as a market transaction by an enterprise or entrepreneur where the object of than the transfer of ownership of a tangible commodity Lehtinen in 1983 defined services as an activity or a series of activities which take place in interactions with a contact person or a physical machine and which provides consumer transaction is other 5 satisfaction Kotler and Bloom in 1984 defined services as any activity or benefit that one party can offer to another 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 Gummesson highlighted the intangible nature of services defined services as something which can be bought and sold but which you cannot drop on your foot This definition also pointed out one basic characteristic that the services can be exchanged even though they are not tangible According to Gronross service is an activity or series of activities of more or less intangible nature that normally not necessarily take place in interactions between the customer and service employees and or physical resources or goods and or system of the service provider which are provided as solution to customer problems This definition takes into account the following important features of services Services are by and large activities or they are a series of activities rather than things As a result services are intangible They take place in the interaction between the customer and the service provider which means that services are produced and consumed simultaneously Customer has a role to play in the production process as the services are provided in response to the problems of customers as solution 1 2 Understanding Service Characteristics As our knowledge of the characteristics of services grows so does our ability to deal with them from both an economic and marketing perspective Services are intangible inseparable variable and perishable Each characteristic poses problems and requires strategies to deal with those problems 6 Intangibility means that unlike goods services can t be seen touched and felt tasted or smelled or even heard before they are purchased Inseparability suggests that services are produced distributed and consumed simultaneously In the case of manufactured goods production takes place in the production unit thereafter the goods are kept in inventory and transported to the distribution outlet from where the consumers pick them up for consumption Heterogeneity means that services delivered generally vary in quality time consumed in delivery and the extent of service provided Since people deliver most services they are variable Perishability means that services can t be stored 7 Example For Airlines in a particular flight vacant seats remain unsold whereas in the case of manufactured goods unsold items can be put into inventory and can be sold the next day Marketers have to find ways to tangibalise the intangible to increase the productivity of providers who are inseparable from the product to standardise the quality in the face of variability and to influence demand movements and supply capacities better in the face of service perishability Services are relatively intangible produced and consumed simultaneously and often less standardised than goods These unique characteristics of services have specific marketing implications and accordingly service marketer must adopt appropriate marketing strategies Although service industries are quite heterogeneous ranging from beauty salons to utilities 1 2 1 More Intangible than Tangible A good is an object a device a thing A service is a deed a
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