Module I- Services an Overview

Prof. (Dr.) Swaroop Mohanty

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Agenda / Contents
01 Services: concept, characteristics

02 Marketing of goods v/s marketing of services.

03 Significance of services marketing.

04 Classification of services.

05 Introduction to service marketing mix

06 Role of services sector in economy

07 Growth of service - Global and Indian Scenario

08 Case Study

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01 Services: concept, characteristics

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 Definition of Services
Services are economic activities performed by one party to
another. Often time-based, these performances bring about
desired results to recipients, objects, or other assets. In
exchange for money, time, and effort, service customers
expect value from access to labor, skills, expertise, goods,
facilities, networks, and systems. However, they do not
normally take ownership of the physical elements involved.

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02 Marketing of goods v/s marketing of services.

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Difference between Goods and Services

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03 Significance of services marketing.

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 WHY SERVICE MARKETING?

• Why is it important to learn about service marketing, service quality, and service
management?

• What are the differences in services versus manufactured-goods marketing that

have led to the demand for books and courses on services?

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 WHY STUDY SERVICES?
• Services Dominate the Global Economy

Figure 1.4 shows how the evolution

of a service-dominated economy is likely to take place over time as the per capita income rises. In
developed economies, knowledge-based services — defined as having intensive users of high technology or
relatively skilled workforces — have been the most dynamic component.2
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04 Classification of services.

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 Identify the four broad “processing”
categories of services.
• People Processing
• Possession Processing
• Mental Stimulus Processing
• Information Processing

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05 Introduction to service marketing mix

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Pg. 28
THE 7 PS OF SERVICES MARKETING
• When developing strategies to market manufactured goods,
marketers usually address four basic strategic elements: product,
price, place (or distribution), and promotion (or communication).
As a group, these are usually referred to as the “4 Ps” of the
marketing mix
• Furthermore, the traditional marketing mix does not cover the
customer interface. We, therefore, need to Figure 1.20 Relative
value added by physical versus intangible elements in goods and
services Source: Adapted from Lynn Shostack.
• Extend the marketing mix by adding the three Ps associated with
service delivery — process, physical environment, and people

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 A Framework for Developing Effective
Service Marketing Strategies
The 7 Ps and the Service-Profit Chain are integrated into the wider organizing framework of
this subject. It shows how each of the units fits together with the others as they address
related topics and issues. Figure 1.27 presents the organizing framework for this subject, which
is divided into five parts:
(1) Understanding service products, markets, and customers;
(2) Applying the 4 Ps of marketing to services;
(3) Designing and managing the customer interface (i.e., the additional 3 Ps of services
marketing);
(4) Developing customer relationships; and
(5) Striving for service excellence.

Note that the arrows link the different boxes in the model. They stress the interdependences
between the different parts. Decisions made in one area must be consistent with those taken
in another, so that each strategic element will mutually reinforce the rest.

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06 Role of services sector in economy

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 Service-Based Economies (1)
• Service sector represented more than 80 percent of total
employment in 2014 and 81 percent of the gross domestic
product of the United States in 2016.
• U.S. balance of trade in goods remains in the red, exports of
services have jumped 84 percent since 2000 and there was a
$227 billion trade surplus in services in 2015. In fact, the U.S.
ranks number one in the world in sales of services abroad.
• There is a growing market for services and increasing dominance
of services in economies worldwide (see the accompanying
table).

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Service-Based Economies (2)

Exhibit 1.1 Is the Marketing of Services Different? A Historical

Perspective – Pg. 11

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Growth of service - Global and Indian Scenario

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Figure 1.5 shows that the service sector already accounts for
almost two-thirds of the value of the global GDP.

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• Most New Jobs are Generated by Services
• Understanding Services Offers Personal Competitive Advantage
• Powerful Forces Are Transforming Service Markets

• Exhibit 1.1 Is the Marketing of Services Different? A Historical Perspective – Pg. 11.
• Global Feature The Migration of Service Jobs – Pg. 18
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Government policies, social
changes, business trends,
globalization, and advances
in information technology
and communications, in
particular, are among the
powerful forces transforming
today’s service markets
(Figure 1.9).

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 Discussion Questions
1. What distinguishes service offerings from customer service? Provide specific examples.
2. How is technology changing the nature of customer service and service offerings?
3. What are the basic characteristics of services compared with goods? What are the
implications of these characteristics for Airbnb, GE, Southwest Airlines, or the company you
work for?
4. One of the underlying frameworks for the text is the expanded marketing mix for services.
Discuss why each of the three new mix elements (process, people, and physical evidence) is
included. How might each of these communicate with or help
to satisfy an organization’s customers?
5. Think of a service job you have had or currently have. How effective, in your opinion, was or
is the organization in managing the elements of the service marketing mix?
6. Again, think of a service job you have had or currently have. How did or does the
organization handle relevant challenges listed in Table 1.1?
7. How can quality service be used in a manufacturing context for competitive advantage?
Think of your answer to this question in the context of automobiles, computers, or some other
manufactured product you have purchased.

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 Case Study

• Group 1: Co-creating Value with Online Banking Services: The

Case of Maybank

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Thank You

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