Introduction-1.ppt

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I hope you know

• Management comprises planning, organizing, staffing, leadingor directing, and controlling an organization (a group of one ormore people or entities) or effort for the purpose of accomplishing a goal.

• First stage of business had a production orientation. Businesswas concerned with production, manufacturing, andefficiency issues.

• By the mid 1950's a second stage emerged, the salesorientation stage. Business's prime concern was to sell what it

produced.

• By the early 1970's a third stage, the marketing orientationstage emerged as businesses.

http://www.nowsell.com/marketing-guide/production-orientation.html

http://www.nowsell.com/marketing-guide/sales-orientation.html




http://www.nowsell.com/marketing-guide/production-orientation.html



Marketing X Selling

• Market is the place where buyers and sellers gatherto exchange their goods.

• “Marketing is all about creating a pull and sales is

all about push” • Selling is one activity of the entire marketing

process. Selling is the act of persuading orinfluencing a customer to buy (actually exchange

something of value for) a product or service.Marketing is “meeting needs profitably” and itrevolves around the needs and the interest of thebuyers.



What is a service?

A service is any act or performance that one

party can offer to another that is essentially

intangible and does not result in the

ownership of anything.

It may or may not be attached with a physical

product for which the customer is willing to

see value and pay for it.



The Service Experience

“It is the sum of all encounters,

feelings about a service during

purchase, immediately after and

sometimes long after buying/using a

service”



Services could meet

• Personal needs – haircuts, tuition, massage

parlours

• Business needs – courier services, office

cleaning services, delivering fresh flowers



Playing Out of a Role as per a Script

• Services can be treated as a script to be played

out by the service provider and the customer.

• If these roles are played according to the

script, it creates a satisfied customer and

service provider.



“There are no such thing as serviceindustries. There are only industries

whose service components are

greater or less than those of otherindustries. Everybody is in service.”

-Theodore Levitt-



The Nature of Services

• Government Services

• Private Services

• Pure Services

• Product Support/Maintenance/After Sales

services



Importance of Services

• Many developed countries have 70 percent or higher GDPcoming from services

• Among the top 15 countries with highest overall GDP in 2011,

India ranked 9th in overall GDP and 10th in services GDP

• In India, around 60 percent of our GDP now comes from theservice sector

• This sector dominates with the best jobs, best talent and bestincomes

•Companies seek to develop a reputation for superiorperformance in delivery

This makes it important to understand services marketing



Indian service sector

The Indian service sector accounts for a large part of the Indian economy – beit in terms of employment potential or its contribution to the nationalincome making-up for almost 60 per cent.

As per the National Sample Survey Office’s (NSSO) report on Employment and

Unemployment Situation in India 2009-10, on the basis of usually working

persons in the principal and subsidiary statuses, for every 1000 peopleemployed in rural India, 679 people are employed in the agriculture sector,

241 in the services sector (including construction), and 80 in the industrial

sector.

In urban India, 75 people are employed in the agriculture sector, 683 in the

services sector(including construction) and 242 in the industrial sector.

Construction; trade, hotels, and restaurants; and public administration,

education, and community services are the three major employment

providing services sectors.



The industry spans from sophisticated fields liketelecommunications, satellite mapping, and computersoftware to simple services like those performed by the

barber, the carpenter, and the plumber; highly capital-intensive activities like civil aviation and shipping toemployment-oriented activities like tourism, real estate, andhousing; infrastructure-related activities like railways,roadways, and ports to social sector related activities like

health and education.The share of services in India’s gross domestic product (GDP) atfactor cost (at current prices) has expanded from 33.3 percent in 1950-51 to 56.5 per cent in 2012-13 as per AdvanceEstimates (AE). Including construction, the contribution wouldincrease to 64.8 per cent for 2012-13.

Trade, hotels and restaurants as a group is the largestcontributor (18 per cent) among the various services sub-sectors, followed by financing, insurance, real estate, andbusiness services with a 16.6 per cent share



Government Efforts

• The government is making all the efforts to sustain thecountry’s position as a strategic service industry on the globalplatform with liberalizing the policy on foreign investment forcompanies operating in the broadcasting sector, likeincreasing the foreign investment limit from 49 per cent to 74

per cent in teleports (setting up up-linking HUBs/teleports)and direct to home (DTH) and cable networks, and permittingforeign investment of up to 74 per cent in mobile TV.

• Foreign airlines have also been permitted to make investmentup to 49 per cent in scheduled and non-scheduled air

transport services.• It has permitted FDI, up to 51 per cent, in multi-brand retail

trading and amended the existing policy on FDI in single-brand product retail trading.



Road Ahead

Food service

'India Food Service Report 2013', prepared by

the National Restaurant Association of India

(NRAI) estimates that the Indian food service

industry (having current size of about Rs

2,47,680 crore (US$ 44.54 billion) would be

around Rs 4,08,040 crore (US$ 73.39 billion)by 2018.



Online advertising

The online advertising market in India,

comprising search, display, mobile, social

media, email and video advertising, which was

valued at Rs 1,750 crore (US$ 314.85 million)in March, 2012 has grown by 29 per cent over

the previous year to reach Rs 2, 260 crore

(US$ 406.62 million) by March, 2013



Mobile

On the other hand, India’s mobile servicesmarket is expected to touch Rs 1.2 lakh crore(US$ 21.58 billion) of revenues in 2013, an 8

per cent increase from Rs 1.1 lakh crore (US$19.78 billion) posted in 2012.

Mobile connections would grow to 770 millionin 2013, an 11 per cent increase from 712million connections of 2012, according to areport by research and analysis firm Gartner.





The fastest growing services in India

According to a survey by the ASCON, in 2003,

these 3 ranked highest-

1. Cellular phone service, with 115 % growth,

2. Housing finance, with 35 % growth, and

3. IT services, with 20 % growth



• India is one of the top tourism destinations in Asia,as per a CNN global travel survey.

Export of gems and jewellery from India is expectedto grow by 10-12 per cent in 2013-14 on back of revival in demand in the US and other major markets

India's domestic IT market will touch Rs 1.75 trillion(US$ 31.93 billion) by 2016, according to a study byBoston Consulting Group and Confederation of Indian Industry (CII)

India's mobile services market will touch Rs 1.2trillion (US$ 21.90 billion) in 2013, registering agrowth of 8 per cent from Rs 1.1 trillion (US$ 20.07billion) in 2012, highlighted a report by Gartner



The online advertising market in India is projected to reach Rs2,938 crore (US$ 536.13 million) by March 2014 , according tothe findings of Digital Advertising in India report, by theInternet and Mobile Association of India (IAMAI) and IMRB

International. The mobile value-added services (MVAS) market is expected

to reach US$ 9.5 billion in 2015, from US$ 4.9 billion in 2012,as per a joint research report by Wipro Technologies and theInternet and Mobile Association of India (IAMAI). The Indian

MVAS market is predicted to grow at a compounded annualgrowth rate (CAGR) of 25 per cent between 2012 and 2015



Goods X Services

• Distinction between goods and service are

blurring. Whatever intangible or a mix

available in the market for the customer tobuy is SERVICE.

• Predominantly Intangible are services &

Predominantly Tangible are goods.

h l f k



The scale of Market Entities



Difference between physical

goods and servicesPhysical goods Services

tangible intangible

homogeneous heterogeneous

Production and distribution areseparated from consumption

Production, distribution andconsumption are simultaneous

processes

A thing An activity or process

Core value processed in factory Core value produced in the buyer-seller

interaction

Customers do not participate in the

production process

Customers participate in production

Can be kept in stock Cannot be kept in stock

Transfer of ownership No transfer of ownership



Characteristics of Services

1. Higher intangibility

2. Lack of ability to store them for future sale

3. Greater interaction between the customer

and the service factory

4. Greater variability in service delivery

5. Greater variability among service

customers’ expectations



The Molecular Model

• A pictorial representation of the relationship

between the tangible and intangible elements

of a firm’s operation.

• It is a management tool that offers the

opportunity to visualize the firm’s entire

bundle of benefits that its product offers to

customers



The Molecular Model



Service Experience

• Consumers can sample tangible dominant

products but cannot sample an intangible

dominant products such as haircut, a surgical

procedure, or a consultant’s capability prior toutilizing the service.

• Service knowledge is gained through the

experience of receiving the actual serviceitself.



The Servuction Model

A model that illustrates factors that

influence the service experience is called

Servuction Model.

• The servicescape (visible)

• Contact personnel/service provider (visible)

• Other customers (visible)

• Organization and systems (invisible)



Some Examples of Service Businesses

• An airline• A courier service

• A hotel

• A restaurant

• A beauty saloon

•

A theme park• Marketing research

• Advertising

• Consultancy

• Education (schools, colleges, tutorials)

• Legal services

• Medical services (labs, hospitals, doctor’s consulting rooms)



Examples contd..

Retailing Maintenance and repair of equipment, goods, homes,

offices, etc.

Information Technology services (software, IT Enabled

Services) R&D services

Product design or industrial design

Banking services

Investment advising Accounting and tax services



Some ways of classifying services

• Degree of tangibility of the service

• Whether the service is directed at the customer or hispossessions

• The time and place of service delivery

• Level of customization versus standardization

• Formal or Informal relationship with Customers

• Extent to which demand and supply fluctuate

•

Interaction with people or inanimateobjects/environment



Search, Experience and Credence

Attributes

• Services are high on Experience and Credenceattributes, while goods are high on Search attributes.

• Attributes that can be evaluated before purchase arecalled search attributes.

• In services, usually the experience is needed beforeyou can evaluate them. Sometimes, you cannot be sureeven after the experience.

• For example, after servicing your car, you may still feel(justifiably or otherwise) that the mechanic or servicecompany has ripped you off.



Five categories of offerings can be

distinguished• Pure tangible good- such as soap, coffee powder,

toothbrush, or clothing etc. Easy to evaluate.

• Tangible with accompanying services- The sale of cars,computers etc.

• Hybrid- For example, both food and service in a restaurantis important to the customer.

• Major Service with accompanying goods- For example,airline provides transportation as the major service but thetangibles like food and drinks are served.

• Pure Service- Teaching, auto repair, doctors consultancy,baby-sitting are pure intangibles. Difficult to evaluate. Highin credence qualities.



Tangible dominant Hybrids I ntangible dominant

Salt,

detergents,

soft drinks

Automobiles

Cosmetics

Fastfood

outlets,

Vacation,

Advertising

agency

Airlines

Tele-

vision

repair

Teaching, auto

repair, doctors

diagnosis,

consulting

Most goods Most services



7 Ps of Services Marketing

34

PlacePhysical

Evidence

PeoplePromotion

Product

Price

Process



Shifting of customer relations

• Pricing-High, increased price, unfair pricing, deceptive pricing• Inconvenience- location, wait for appointment, wait for service

• Core service failure- Service mistakes, Billing errors

• Service encounter failures-Uncaring, impolite, unresponsive,unknowledgeable

• Response to service failure-negative response, no response,reluctant response

• Competition-Found better service

• Ethical problems-Cheat, hard sell, unsafe, conflict of interest

• Involuntary switching –customer moved, provider closed



In services, the last experienceremains uppermost in your mind.

Therefore, it is not enough to be

good, you have to be consistently

good



Do you suite

• Ability to get along

• Work in a team as well as according to

certain minimum standards set by the

employer

• Taking responsibility beyond the call of duty

when necessary

• Work-related anxiety, stressfulness dealing

with a variety of customers everyday



EXERCISES

• List out the best business houses in each type

of Service Sector

• List out the service business located in your

locality and get the details

• Present in next class what you have learnt

today on one of the selected business

Introduction-1.ppt

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