SBS 11-13 - Services Mktg - 01 - Intro to Services Marketing

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Introduction to Services Marketing

Session 01

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Agenda

Evolution and growth of services

Nature, characteristics and classification of services

Marketing challenges

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Reading

Services Marketing: Integrating Customer Focus Across The Firm

(Zeithaml, Bitner, Gremler, Pandit)

– Chapter 1: Introduction to Services

Services Marketing: People, Technology, Strategy (Lovelock, Wirtz, Chatterjee)

– Chapter 1: Introduction to Services Marketing

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Reading

Services Marketing: The Indian Perspective (Ravi Shanker)

– Chapter 1: Understanding Services Phenomenon

– Chapter 2: Role of Services in Economy

– Chapter 3: Service Characteristics and Marketing Implications

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Additional Reading

“Marketing Intangible Products and Product Intangibles” – by Theodore Levitt

• Harvard Business Review, May-Jun’81

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Evolution and Growth of Services

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Oldest Extant Banks in the World

Name Founded

in Place

Banca Monte dei Paschi di Siena 1472 Siena, Italy

Berenberg Bank 1590 Hamburg, Germany

C. Hoare & Co. 1672 London, England

The Bank of Scotland 1695 Edinburgh, Scotland

Bank of New York (now Bank of New York Mellon)

1784 New York, USA

Source: http://www.mint.com/blog/finance-core/the-five-oldest-banks-in-the-world/

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Oldest Extant Universities in the World

Name Founded

in Current location

University of Al-Karaouine 859 Fes, Morocco

Al-Azhar University 975 Cairo, Egypt

Nizamiyya 1065 Isfahan, Iran

University of Bologna 1088 Bologna, Italy

University of Paris 1090 Paris, France

University of Oxford 1096 Oxford, UK

Source: http://collegestats.org/articles/2009/12/top-10-oldest-universities-in-the-world-ancient-colleges/

http://en.wikipedia.org/wiki/List_of_oldest_universities_in_continuous_operation

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Economy – The 3 Sectors

Question: Are there quaternary and quinary sectors too?

Primary

• Agriculture

• Fishing

• Mining

• Forestry

• Hunting

• Quarrying

Secondary

• Manufacturing

• Processing

• Construction

Tertiary

• Services

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Economy – The 3 Sectors

Today, most countries’ economies are dominated by “services”

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

GDP – Composition by Sector

Country Agriculture Industry Services

United States 1.2% 22.2% 76.6%

Canada 2.2% 26.3% 71.5%

Argentina 8.5% 31.6% 59.8%

Brazil 5.8% 26.8% 67.4%

Mexico 3.9% 32.6% 63.5%

China 10.2% 46.9% 43.0%

Russia 4.0% 36.8% 59.1%

Source: https://www.cia.gov/library/publications/the-world-factbook/fields/2012.html (accessed on 17 Dec 11)

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

GDP – Composition by Sector

Country Agriculture Industry Services

United Kingdom 0.7% 21.7% 77.6%

France 1.7% 18.6% 79.7%

Germany 0.9% 27.8% 71.3%

Greece 3.3% 17.9% 78.8%

Hungary 2.4% 36.9% 60.7%

Iceland 5.5% 24.7% 69.8%

Poland 3.4% 33.0% 63.5%

Sweden 1.9% 26.6% 71.5%

Switzerland 1.3% 27.2% 71.5%

Source: https://www.cia.gov/library/publications/the-world-factbook/fields/2012.html (accessed on 17 Dec 11)

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

GDP – Composition by Sector

Country Agriculture Industry Services

Hong Kong 0.0% 7.4% 92.5%

Japan 1.4% 24.9% 73.8%

Australia 3.9% 25.5% 70.6%

Malaysia 10.5% 41.4% 48.2%

Singapore 0.0% 28.3% 71.7%

South Korea 2.6% 39.3% 58.2%

Taiwan 1.4% 31.1% 67.5%

Source: https://www.cia.gov/library/publications/the-world-factbook/fields/2012.html (accessed on 17 Dec 11)

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

GDP – Composition by Sector

Country Agriculture Industry Services

India 19.0% 26.3% 54.7%

Sri Lanka 12.8% 29.4% 57.8%

Pakistan 21.2% 25.4% 53.4%

Bangladesh 18.6% 28.5% 53.0%

Saudi Arabia 2.6% 61.8% 35.6%

United Arab Emirates 0.9% 55.5% 43.6%

Afghanistan 31.6% 26.3% 42.1%

Bahrain 0.5% 58.0% 41.5%

Source: https://www.cia.gov/library/publications/the-world-factbook/fields/2012.html (accessed on 17 Dec 11)

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

India’s GDP – Composition by Sector

Year Agriculture Manufacturing Services

1950-51 59.19 13.29 27.52

1960-61 54.74 16.61 28.65

1970-71 48.12 19.91 31.97

1980-81 41.82 21.59 36.59

1990-91 34.92 24.49 40.59

1991-92 34.08 23.93 41.99

1992-93 34.17 23.74 42.09

1993-94 33.54 23.69 42.77

1994-95 32.94 24.35 42.71

1995-96 30.58 25.47 43.95

1996-97 30.86 25.45 43.69

1997-98 29.03 25.20 45.77

1998-99 29.03 24.51 46.46

1999-2000 27.49 24.63 47.88

Source: Ministry of Statistics and Programme Implementation, Government of India (http://mospi.nic.in/nscr/sss.htm)

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

India – Employment by Sector

Extracted from: "Employment Trends in India"

Prof T S Papola Director, Institute for Studies in Industrial Development, New Delhi

Source: http://isidev.nic.in/pdf/EmployTrenz.PDF

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Services

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Services

Two facets

– Services as products (Service industry) • Intangible product offerings that customers value and pay

for

– Services linked to products • Service offerings by product (manufacturing) companies

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Services as Products: Some Examples

Cargo, Transportation, Logistics

Financial Services

Courier IT Services

Travel & Transportation

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Services as Products: Some Examples

Education

Hospitality

Entertainment Housekeeping

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Services Linked to Products

Increasing importance of services to product (manufacturing) companies

– Services as product differentiators

– Services as growth opportunities

– Sustainability through servicizing

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Services Linked to Products

Increasing importance of services to product (manufacturing) companies

– Services as product differentiators

– Services as growth opportunities

– Sustainability through servicizing

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Services as Product Differentiators

Differentiation

Product Differentiation

Personnel Differentiation

Channel Differentiation

Image Differentiation

Services Differentiation

Source: “Marketing Management: A South Asian Perspective” by Philip Kotler, et al

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Services as Product Differentiators

Source: “Marketing Management: A South Asian Perspective” by Philip Kotler, et al

Service Differentiation

Ordering Ease

Delivery

Installation

Customer Training

Customer Consulting

Maintenance and Repair

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Services as Product Differentiators

Core Need Core Benefit

Typically, “services” would be an integral part of “expected product”. “Services” can help you evolve the product from “expected” to “augmented” to “potential”.

Theodore Levitt

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Services as Product Differentiators

For the third straight year, service quality is the leading

reason why consumers decide to leave a provider —

not only in developed economies such as the United

States and United Kingdom but globally.

Overall, service outweighs price by 20 percentage points

as a reason for switching.

“Customer Satisfaction in the Multi-polar World” Accenture 2007 Global Customer Satisfaction Survey

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Services as Product Differentiators

“Customer Satisfaction in the Multi-polar World” Accenture 2007 Global Customer Satisfaction Survey

Companies are failing to differentiate themselves

based on service.

Nearly 60 percent of our respondents say customer

service is the key differentiating factor when choosing a

new provider — ahead of even price (55 percent),

product (34 percent) and convenience (34 percent).

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Services Linked to Products

Increasing importance of services to product (manufacturing) companies

– Services as product differentiators

– Services as growth opportunities

– Sustainability through servicizing

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Services as Growth Opportunities

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Services as Growth Opportunities

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Services as Growth Opportunities

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Services as Growth Opportunities

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Services as Growth Opportunities

Across the manufacturing companies we have benchmarked,

services revenues today represent an average of more than

25 percent of the total business. In many companies, as for

Rolls-Royce plc and Xerox Corporation, the service business

contributes 50 percent or more of total revenues.

“The Service Revolution in Global Manufacturing Industries” Deloitte Research, 2006

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Services as Growth Opportunities

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Services as Growth Opportunities

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Services as Growth Opportunities

Even more importantly, the average profitability of the

service businesses benchmarked is more than 75 percent

higher than overall business unit profitability, and accounts

for an estimated 46 percent of total profits generated today.

In fact, in many manufacturing companies there would be

little or no profitability without the service business.

“The Service Revolution in Global Manufacturing Industries” Deloitte Research, 2006

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Services as Growth Opportunities

Adding services to products can help in – Increasing top line

• Services as a source of revenue

– Increasing bottom line • Services as a source of high profits

– Improved customer satisfaction and loyalty • Services improve perceived value (appeal, utility and life) of

the product

– Reduced cyclical variations in business • Demand for products can be cyclical, but demand for

corresponding services may be uniform

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Services as Growth Opportunities

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Services as Growth Opportunities

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Services as Growth Opportunities

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Services as Growth Opportunities

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Services Linked to Products

Increasing importance of services to product (manufacturing) companies

– Services as product differentiators

– Services as growth opportunities

– Sustainability through servicizing

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

What is “Sustainability”?

In simple words, it means…

– Fulfilling the needs of the present, without compromising the ability of future generations to fulfill theirs!

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Sustainability – The Three R’s

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Tell me…

As a marketer, would you like to encourage your customers to

use more of your products???

or

use less of your products???

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Sustainability through Servicizing

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Sustainability through Servicizing

By “servicizing,” suppliers may

change the focus of their business

models from selling products to

providing services, thereby turning

demand for reduced material use

into a strategic opportunity.

Sandra Rothenberg "Sustainability through Servicizing" MIT Sloan Management Review, Winter 2007

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Sustainability through Servicizing

Examples

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Service: Definitions and Characteristics

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Service: Some Definitions

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. Its production may or may not be tied to a physical product.

Kotler and Keller

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Service: Some Definitions

Services are the application of specialized competences (knowledge and skills) through deeds, processes, and performances for the benefit of another entity or the entity itself (self-service).

Vargo and Lusch

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Service: Some Definitions

A service is a time-perishable, intangible experience performed for a customer acting in the role of a co-producer.

Fitzsimmons and Fitzsimmons

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Service: Some Definitions

Services is something which can be bought and sold but which you cannot drop on your foot.

Evert Gummesson

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Characteristics of Services

Services (in contrast with goods) are – Intangible

• Services can’t be touched, seen, tasted, lifted, smelt…

– Heterogeneous (variable) • Due to human involvement in rendering services…

– Each occurrence of service is unique

– Service can’t be exactly repeated at another time, or at another place, or for another customer

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Characteristics of Services

Services (in contrast with goods) are – Inseparable

• Services can’t be separated from – the producer of the service

– the place where the service is generated

– Produced and consumed simultaneously • Services are generated, rendered and consumed during the

same period of time

– Perishable • Services can’t be stored, returned, resold…

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Characteristics of Services

Some more differences between goods and services

Parameter Goods Services

Facility location Close to supply of raw material, labour, etc.

Close to customer

Involvement of customer in creation

Low or none High

Ownership Possible Not possible

Role of customer Only as customer Also as co-producer

Core value Built into the goods during manufacturing

Created during supplier-customer interaction

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Characteristics of Services – The 4 I’s

Intangibility

Inconsistency – Same as “heterogeneity” or “variability”

Inseparability

Inventory – Same as “perishability”

Source: “Service Marketing: Concepts, Applications and Cases” (Rampal, Gupta)

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Goods-Services Continuum

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Differences between Goods and Services

Not like black & white!

Do “pure” goods exist?

Do “pure” services exist?

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Do “Pure” Goods Exist?

No!

All goods have an “intangible” component – For example:

• Delivery services

• Installation

• Training

• After-sales service

• Warranties, guarantees

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Do “Pure” Services Exist?

No!

All services have a “tangible” component

Healthcare Education

Travel & Tourism

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Good-Services Continuum

Pure goods Pure services

Iron ore Psychotherapy Restaurants

Airlines Consultancy

Telecom

Automobiles

Furniture

Toothpastes

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Services Marketing Challenges

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Services Marketing Challenges

Characteristic Challenges

Intangibility • Services cannot be stored

• Patenting is not feasible

• Services cannot be readily displayed

• Prices are difficult to set

• Consumers cannot easily assess quality before buying

the service

Heterogeneity • Difficulties in standardization

• Difficulties in quality control

• No guarantee that actual service delivery and quality

will match what was planned and promised

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Services Marketing Challenges

Characteristic Challenges

Inseparability;

Simultaneous

production and

consumption

• Centralized mass production of services is difficult

• Consumer participates in production, and hence

impacts the quality of service

• Quality of service for one consumer dependent on

other consumers

Perishability • Difficulties in synchronizing demand and supply

• Cost of underutilized capacity

- Hotel can’t sell today’s “unsold” rooms tomorrow

• Cost of lost opportunities

- Can’t stock up services to meet future increase in demand

• Consumers cannot return or resell services

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Service Classification

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Service Classification

Services as products

Customer services

Derived services

Source: “Services Marketing – Integrating Customer Focus Across The Firm” (Zeithaml, Bitner, et al)

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Services as Products

Intangible product offerings that customers value and pay for

Examples – Financial services

– Telecommunication services

– Housekeeping services

– IT services

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Customer Services

Services provided in support of a company’s core products

Examples – Installation, maintenance and repair

– Help desk, call center

– Customer training

– Customer consulting

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Derived Services

Services provided by goods

Customers derive value from what the goods do for them, not from the goods per se

Examples – Air-conditioner provides cooling service

– Overhead crane provides material movement service

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Derived Services

Importance of physical products lies not so much in owning them as in obtaining the services they render.

Philip Kotler

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Service Classification

Services as products

Customer services

Derived services

Source: “Services Marketing – Integrating Customer Focus Across The Firm” (Zeithaml, Bitner, et al)

Note:

The textbook mentions another category – “Service industries and companies”.

I haven’t mentioned it in the list above.

Why?

Value Added Services

Core Service

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Value Added Services

Services that add value to core services – Examples

• Caller tunes and ring tones

• Retailing in the air… In-flight duty free shopping

Sometimes, these could be more profitable than the core services

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Value Added Services

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Value Added Services

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Value Added Services

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Value Added Services

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Value Added Services

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Value Added Services

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Value Added Services

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Value Added Services

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Value Added Services

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Value Added Services

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Value Added Services

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Value Added Services

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Service Classification

Services as products

Customer services

Derived services

Source: “Services Marketing – Integrating Customer Focus Across The Firm” (Zeithaml, Bitner, et al)

Value Added Services

Core Service

Note:

The textbook mentions another category – “Service industries and companies”.

I haven’t mentioned it in the list above.

Why?

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Service Classification: Another Perspective

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Service Classification: Another Approach

Education Psychotherapy

Mental stimulus processing

Accounting Securities investment

Information processing

People processing Fitness center Passenger transportation

Possession processing

Office cleaning services Materials transportation

Intangible actions

Tangible actions

What is the

nature of the

service act?

People Possessions

Who or what is the direct recipient of the service?

Source: “Services Marketing: People, Technology, Strategy” (Lovelock, Wirtz, Chatterjee)

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Service Industry Classification

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Service Industry Classification

WIPO’s Nice Classification (9th Edition) – International classification of goods and services

• by World Intellectual Property Organization

– Specialized agency of the United Nations

– Dedicated to developing a balanced and accessible international IP system

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Service Industry Classification

Class Description

35 Advertising; business management; business administration; office functions

36 Insurance; financial affairs; monetary affairs; real estate affairs

37 Building construction; repair; installation services

38 Telecommunications

39 Transport; packaging and storage of goods; travel arrangement

40 Treatment of materials

41 Education; providing of training; entertainment; sporting and cultural activities

42 Scientific and technological services and research and design relating thereto; industrial analysis and research services; design and development of computer hardware and software

43 Services for providing food and drink; temporary accommodation

44 Medical services; veterinary services; hygienic and beauty care for human beings or animals; agriculture, horticulture and forestry services

45 Legal services; security services for the protection of property and individuals; personal and social services rendered by others to meet the needs of individuals

Source: http://www.wipo.int/classifications/nivilo/pdf/eng/nice/engp1.pdf

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Service Industry Classification

Services Sectoral Classification List – by World Trade Organization

– Document: MTN.GNS/W/120

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

Service Industry Classification

Sr. No. Description

1 Business services

2 Communication services

3 Construction and related engineering services

4 Distribution services

5 Educational services

6 Environmental services

7 Financial services

8 Health related and social services

9 Tourism and travel related services

10 Recreational, cultural, and sporting services

11 Transport services

12 Other services not included elsewhere

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

What We Covered Today

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

What We Covered Today

Growth of services – Oldest extant banks and universities in the world

– Economy - The 3 sectors • GDP composition by sector

– Indian economy • GDP composition by sector

• Employment by sector

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

What We Covered Today (contd.)

Services – Services as products

– Services linked to products • Services as product differentiators

• Services as growth opportunities

• Sustainability through servicizing

Service definitions

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

What We Covered Today (contd.)

Characteristics of services – Intangibility, Heterogeneity, Inseparability,

Simultaneity of production & consumption, Perishability

– 4 I's

Goods-services continuum

Service marketing challenges

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

What We Covered Today (contd.)

Service classification – Services as products

• Core services

• Value added services

– Customer services

– Derived services

Services classification – Another approach – People processing, Possession processing, Mental

stimulus processing, Information processing

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Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

What We Covered Today (contd.)

Service industry classification – WIPO's Nice classification

– WTO's services sectoral classification list

Girish Ketkar Session 01 Services Marketing @ BIIB, BIMHRD (Sem 2, Batch 2011-13)

End Quote

Theodore Levitt

“Production-Line Approach to Service” (Harvard Business Review, Sep-Oct’72)

There are no such things as service industries. There are only industries whose service components are greater or less than those of other industries. Everybody is in service.