INTRODUCTION

Over a decade we have seen several changes across the globe in the economy. Services have played a crucial role in these changes as they decide the way in which the organisations meet their desired markets. The quote, Services are going to move in this decade to being the front edge of the Industry by former CEO of IBM, Louis V. Gerstner, illustrates the changes sweeping across industry today. The huge and growing percentage of the Worlds Economy is represented by Services. Organisations have realised the importance of services they provide to the customers, which helped them in achieving a competitive edge over their forerunners. Service marketing is essential for the organisations as its target is people who can act and react. The concepts, strategies, and frameworks of services marketing were developed as a result of the combining forces of the industries and organisations, which have realised its importance in the present world economy. This has made service a necessity other than an option. Communication between the customers and service employees are important in enabling the delivery of the product in a successful way. Rendering of quality service depends upon the way in which the employees behave. Education of the customers is a major factor, as it makes them aware of the quality products and the services which they deserve. Therefore, service organisations must adapt themselves to the views of the customers. This evaluation will help them to assess whether the products provided by them is better than the ones that are provided by other service providers.
WHAT IS A SERVICE?

According to Philip Kotler service is an activity or an assistance offered by a party to another party that is intangible and does not result in the ownership of a particular thing. Its production may or may not be tied to a physical product. Shoestack consider services as the fulfilling of certain wants. Most of the services contain few goods elements as an insurance written policy by an insurance company, bank statement from a bank. There is a clear difference in the meaning of services and service sector of the economy. For example, trade is a service sector, where people provide services like transporting goods from the producer to the customer. Another example is, in an organisation clean-up belongs to the housekeeping service sector, and they provide the services of a maid by cleaning up the place to keep it clean and tidy. A simple definition of the services include all economic activities whose output is not a physical product or construction that is generally consumed at the time it is produced. It also provides added value in intangible forms, or non-monetary forms, be it as a convenience, an amusement, a timeless benefit, a comfort or a health benefit.

CHARACTERISTICS OF SERVICES 1. Intangibility: This forms the biggest constituent of service that cannot be presented in a concrete way before purchasing. As services are intangible, you cannot feel, smell, hear, see, taste, and experience the service before you purchase it. The company can conduct promotional programs that focus on the advantages that are derived from the service rather than exhibiting the service itself. Organisations use four promotional strategies to suggest the advantages of the service and helps in reducing the effect. They are: Visualisation: This can be explained with an example. Consider the amusement parks, they depict the benefits of their park with ads that show people enjoying various rides, dancing, dining, and experiencing some amazing things provided in the amusement park. Consider another example of a student taking classes on an instrument like guitar. The student can make an assessment of the guitar class not only by attending it, but also by trying it once the class is over. But, the student will not be able to play the guitar perfectly unless he or she goes through the complete course. o Association: an image of the service can be created by connecting the service with tangible object, person or a thing. o Physical representation: Organisations such as American Express use colours such as gold or platinum to represent wealth and prestige for its credit card services. While advertising, an auto rental firm known as Enterprise shows a car covered in package, to stress its unique delivery features. Thus, organisations adopt various symbols to communicate their unique delivery features. o Documentation: This is of two types past performance and future capability. For example, hospital staff can record its past performance by showing the number of babies born and can stress on its future capability by showing the images of special equipments available during an emergency situation. Website is considered as a valuable tool in minimising the intangibility of a specific service. They enable the marketers to give useful information containing animations and sound. They also provide a site where the marketers can answer to the queries of the clients via e-mails. 2. Inseparability: This means the simultaneous involvement of the service providers in the production and marketing efforts. Services are inseparable from the creator and the seller of the service. In other words, services are crated, allotted, and consumed at the same time. As per marketing standards, inseparability means the possibility of direct sale only through a proper channel of distribution. For example, a dentist creates and does all their services at the same time and they need the presence of a consumer to perform the services. Similarly, the presence of the customer is required for the fast food restaurant employee to offer service, in a physiotherapist clinic, and in an Automatic Teller Machine (ATM). The scale of

operation in a service firm can be limited. For example an orthopaedic can treat only limited number of patients a day. Sometimes you as a customer may also receive a service from the firms production site or the factory where the product is manufactured. Customers opinion about a service is formed based on their communication with the production sales personnel and the impression they get from the atmosphere in the factory. For example, if we consider education as a service, students develop a good opinion depending on the way the teacher teaches and also the atmosphere offered by the school or college. An exception does exist in the inseparability feature, where the people representing the creator-seller also promote and sell some services. Insurance broker, travel agent, and so on represents these personals and is also known as inter-mediators. They sell services that will be provided later as specified by the instructions producing them. In such services, the inter mediators behaviour and appearance does affect the customers opinion about the service. 3. Heterogeneity: It is not possible for a service organisation or a seller to standardise the output. Due to the human factor in production and delivery, each unit of service is different from the other units of the same service. As a buyer is concerned, it is difficult to understand the quality of a product before consumption. To avoid this confusion, companies must focus more on the product planning and implementation of the programs. For example, Air India flight provides high quality service for passengers travelling in executive class, compared to the quality of service provided for passengers travelling in economical class. The passengers cannot be sure of its quality before the completion of the journey. 4. Perishability: One of the distinct features of services is perish ability as it cannot be stored for future usage. This creates disparity in the supply and demand. Moreover, the demand for more services varies based on the season. For example the air tickets, railway tickets and bus tickets are completely booked during long vacations. The service firms have adopted new methods to attract consumers during off seasons. They make use of advertisements to increase demand during relaxed periods. During peak seasons, when the prices will be high, they offer discounts and holiday packages. BASIC DIFFERENCES BETWEEN GOODS AND SERVICES Customers Do Not Obtain Ownership Perhaps the key distinction between goods and services lies in the fact that customers usually derive value from services without obtaining permanent ownership of any substantial tangible elements. In many instances, service marketers offer customers the opportunity to rent the use of a physical object like a car or hotel room, or to hire the labor and skills of people whose expertise ranges from brain surgery to knowing how to check customers into a hotel. As a purchaser of services yourself, you know that "while your main interest is in the final output, the way in which you are treated during service delivery can also have an important impact on your satisfaction.

Service Products as Intangible Performances Although services often include tangible elementssuch as sitting in an airline seat, eating a meal, or getting damaged equipment repairedthe service performance itself is basically an intangible. The benefits of owning and using a manufactured product come from its physical characteristics (although brand image may convey benefits, too). In services, the benefits come from the nature of the performance. The notion of service as a performance that cannot be wrapped up and taken away leads to the use of a theatrical metaphor for service management, visualizing service delivery as similar to the staging of a play with service personnel as the actors and customers as the audience. Some services, such as rentals, include a physical object like a car or a power tool. But marketing a car rental performance is very different from attempting to market the physical object alone. For instance, in car rentals, customers usually reserve a particular category of vehicle, rather than a specific brand and model. Instead of worrying about styling, colors, and upholstery, customers focus on price, location and appearance of pickup and delivery facilities, extent of insurance coverage, cleanliness and maintenance of vehicles, provision of free shuttle buses at airports, availability of 24-hour reservations service, hours when rental locations are staffed, and quality of service provided by customer- contact personnel. By contrast, the core benefit derived from owning a physical good normally comes specifically from its tangible elements, even though it may provide intangible benefits, too.

Customer Involvement in the Production Process

Performing a service involves assembling and delivering the output of a combination of physical facilities and mental or physical labor. Often, customers are actively involved in helping create the service product, either by serving themselves (as in using a laundromat or ATM) or by cooperating with service personnel in settings such as hair salons, hotels, colleges, or hospitals. People as Part of the Product In high-contact services, customers not only come into contact with service personnel, but they may also rub shoulders with other customers (literally so, if they ride a bus or subway during the rush hour).The difference between service businesses often lies in the quality of employees serving the customers. Similarly, the type of customers who patronize a particular service business helps to define the nature of the service experience. As such, people become part of the product in many services. Managing these services encountersespecially those between customers and service employees is a challenging task. Greater Variability in Operational Inputs and Outputs The presence of personnel and other customers in the operational system makes it difficult to standardize and control variability in both service inputs and outputs. Manufactured goods can be produced under controlled conditions, designed to optimize both productivity and quality, and then checked for conformance with quality standards long before they reach the customer. (Of course, their subsequent use by customers will vary widely, reflecting customer needs and skills, as well as the nature of the usage occasion.) However, when services are consumed as they are produced, final "assembly" must take place under real-time conditions, which may vary from customer to customer and even from one time of the day to another. As a result, mistakes and shortcomings are both more likely and harder to conceal. These factors make it difficult for service organizations to improve productivity, control quality, and offer a consistent product. Harder for Customers to Evaluate Most physical goods tend to be relatively high in "search attributes ."These are characteristics that a customer can determine prior to purchasing a product, such as color, style, shape, price, fit, feel, and smell. Other goods and some services, by contrast, may emphasize "experience attributes" that can only be discerned after purchase or during consumption (e.g., taste, wear ability, ease of handling, quietness, and personal treatment). Finally, there are "credence attributes" characteristics that customers find hard to evaluate even after consumption. Examples include surgery and auto repairs, where the results of the service delivery may not be readily visible. No Inventories for Services Because a service is a deed or performance, rather than a tangible item that the customer keeps, it is "perishable" and cannot be inventoried. Of course, the necessary facilities, equipment, and labor can be held in readiness to create the service, but these simply represent productive capacity, not the product itself. Having unused capacity in a service business is rather like running water into a sink without a stopper. The flow is wasted

unless customers (or possessions requiring service) are present to receive it. When demand exceeds capacity, customers may be sent away disappointed, since no inventory is available for backup. An important task for service marketers, therefore, is to find ways of smoothing demand levels to match capacity. Importance of the Time Factor Many services are delivered in real time. Customers have to be physically present to receive service from organizations such as airlines, hospitals, haircutters, and restaurants. There are limits as to how long customers are willing to be kept waiting and service must be delivered fast enough so that customers do not waste time receiving service. Even when service takes place in the back office, customers have expectations about how long a particular task should take to completewhether it is repairing a machine, completing a research report, cleaning a suit, or preparing a legal document. Todays customers are increasingly time sensitive and speed is often a key element in good service. Different Distribution Channels Unlike manufacturers that require physical distribution channels to move goods from factory to customers, many service businesses either use electronic channels (as in broadcasting or electronic funds transfer) or combine the service factory, retail outlet, and point of consumption at a single location. In the latter instance, service firms are responsible for managing customer-contact personnel. They may also have to manage the behavior of customers in the service factory to ensure smoothly running operations and to avoid situations in which one person's behavior irritates other customers who are present at the same time. REASONS FOR GROWTH IN SRVICE SECTOR Change in Government Policies Actions by governmental agencies at regional, national, and international levels continue to shape the structure of the service economy and the terms under which competition takes place. Traditionally, many service industries were highly regulated. Government agencies mandated price levels, placed geographic constraints on distribution strategies, and, in some instances, even defined the product attributes. After the introduction of LPG (Liberalization, Privatization, Globalization) policy in 1991, Reduced government regulation has already eliminated or minimized many constraints on competitive activity in such industries as airfreight, airlines, railroads, trucking, banking, securities, insurance, and telecommunications. Barriers that had pre vented new firms from entering the industry have been dropped in many instances: Geographic restrictions on service delivery have been reduced, there is more freedom to compete on price, and existing firms have been able to expand into new markets or new lines of business. Social Changes The demand for consumer servicesand the ways in which people use themhave been strongly influenced by a host of social changes. More people are living alone than before and there are more households containing two working adults (including telecommuters who work from in-home offices); as a result, more people find themselves short on time.

They may be obliged to hire firms or individuals to perform tasks like childcare, housecleaning, laundry, and food preparation that were traditionally performed by a household member. Per capita income has risen significantly in real terms for many segments of the population (although not all have benefited from this trend). Increasing affluence gives people more disposable income and there has been an observed trend from purchasing new physical possessions to buying services and experiences.A combination of changing lifestyles, higher incomes, and declining prices for many hightechnology products has meant that more and more people are buying computers, thus enabling them to use the Internet to send and receive e-mail and access Web sites from around the world. In the meantime, the rapid growth in the use of mobile phones and other wireless equipment means that customers are more "connected" than ever before and no longer out of touch once they leave their homes or offices. Business Trends Over the past 25 years, significant changes have taken place in how business firms operate. For instance, service profit centers within manufacturing firms are transforming many well-known companies in fields such as computers, motor vehicles, and electrical and mechanical equipment. Supplementary services once designed to help sell equipment including consultation, credit, transportation and delivery, installation, training, and maintenanceare now offered as profit-seeking services in their own right, even to customers who have chosen to purchase competing equipments. The financial pressures confronting public and nonprofit organizations have forced them to develop more efficient operations and to pay more attention to customer needs and competitive activities. In their search for new sources of income, many "non-business" organizations are developing a stronger marketing orientation that often involves rethinking their product lines; adding profit-seeking services such as shops, retail catalogs, restaurants, and consultancy; becoming more selective about the market segments they target; and adopting more realistic pricing policies. Advances in Information Technology New and improved technologies are radically altering the ways in which many service organizations do business with their customers, as well as altering what goes on behind the scenes. Many types of technology have important implications for service, including biotechnology, power and energy technology, methods technology (how people work and how processes are organized), materials technology, physical design technology, and information technology. In some cases, technology enables service firms to substitute automation for service personnel. Perhaps the most powerful force for change in service businesses comes from information technology, reflecting the integration of computers and telecommunications. Digitization allows text, graphics, video, and audio to be manipulated, stored, and transmitted in the digital language of computers. Faster and more powerful software enables firms to create relational databases that combine information about customers with details of all their transactions and then to "mine" these databases for insights into new trends, new approaches to segmentation, and new marketing opportunities. Greater

bandwidth, made possible by innovations such as fiber-optic cables, allows fast transmission of vast amounts of information so that customer-contact personnel can interact almost instantly with a central database, no matter where they are located. The creation of wireless networks and the miniaturization of electronic equipmentfrom cell phones to laptops and scannersallow sales and customer service personnel to keep in touch while on the move. Companies operating information-based services, such as financial service firms, have seen the nature and scope of their businesses totally transformed by the advent of global electronic delivery systems. Globalisation of services in international business India has a huge number of highly skilled professionals whose skills are of high demand in most of the English speaking countries. The demand and the supply for the product have been united by: Telecommunications that results in a substantial level of outsourcing from other nations to India. The migration of the workers from India to United States, United Kingdom and to other countries India plays an important role in the globalisation of white-collar work. The most impressive areas of growth and development in Indian economy have been in the ICT (Information and Communication Technologies) and software services. Even other sectors have been impressively affected such as media, advertising, retail, personal financial services, entertainment, leisure and tourism. The Indian retail market which is known as MSCI India index has grown to 72.2% over 3 years. Though the Indian market accounts for 0.24% of the world stock market, several analysts saw it growing on a substantial basis. Plenty of Indian companies have found themselves a place on the New York stock Exchange.

ROLE OF SERVICES IN AN ECONOMY The economy of a country can be divided into three sectors namely primary sector, secondary sector, and tertiary sector. It is also known as the three sector hypothesis that was developed by Colin Clark and Jean Fourasti. Agriculture, fishing, and mining come under primary sector, manufacturing of goods, machinery, equipments and so on falls under the secondary sector and service or service industry forms the tertiary sector of the economy. Service sector involves activities where people share their knowledge and dedicate their time for improving the productivity, performance, potential, and sustainability. The first two (primary and secondary) sectors of the economy are the wealth producing sectors, where as the tertiary sector is the wealth consuming sector. This is because the primary characteristic of the service sector is that individuals and businesses produce services to customers. Here people interact with other people to provide services instead of end products or goods. The soft part of the economy such as tourism, education, retail industry, banking and so on together form the service sector.

Service sector covers a major area of finance, insurance, transportation, public utilities, health care, trade, personal services and so on. Following are the service sectors of Indian economy that have grown faster than the economy: Information Technology is the most leading service sectors in Indian economy. The software services marked a 33% increase in the services sector. IT-enabled services (ITeS). This marked a 27 percent growth in the services sector in the year 2010. Telecommunications sector marked a 21 percent growth in the service sector in the year 2010. Hotels and Restaurants The hotel industry is witnessing a growth of 15 percent per year. Financial Services Financial services sector witnessed a growth of 9.7 percent in the year 2009-10. Community Services It marked a growth of 5.6 percent in the year 2009-10. SERVICE CHALLENGE Balancing Productivity and Quality Concerns Managers need to recognize that operational processes, however important, are basically just a means to an end. The key is to understand the specific benefits that a service provides for its users. Many firms bundle together lots of different activities as part of their effort to provide good service. But innovation in service delivery requires constant attention to the processes underlying delivery of the core producta bed for the night in the lodging industry, fast transportation of people in the airline industry, or cleaning and pressing clothes in the laundry industry. New processes may allow service organizations to deliver the same (or improved) benefits to customers through distinctly different approaches. But firms need to be clear about their objectives and the implications for customers. Sometimes, adopting a new process improves productivity by cutting costs at the expense of service quality. In other instances, customers are delighted to encounter faster, simpler, and more convenient procedures. So, operations managers need to beware of imposing new processes, in the name of efficiency, on customers who prefer the existing approach (particularly when the new approach replaces personal service by employees with automated procedures that require customers to do much of the work themselves). By collaborating with marketing personnel, operations specialists will improve their chances of designing new processes that deliver the benefits desired by customers in user-friendly ways. Among other things,

customers may need to be educated about the benefits of new procedures and how to use them. Evaluating Alternative Channels for Service Delivery Today's managers need to be creative, because information technology and modern package transportation services offer many opportunities to rethink the place and time of service delivery. Some manufacturers of small pieces of equipment allow customers to bypass retail dealers when a product needs repair. Instead, a courier will pick up the defective item, ship it to a repair site, and return it a few days later when it has been fixed. Electronic distribution channels offer even more convenience because transportation time can be eliminated. For instance, using telecommunication links, engineers in a central facility (which could even be on the other side of the world) may be able to diagnose problems in defective computers and software at distant customer locations and send signals to correct the defects. advances in telecommunications and in the design of user-friendly terminals have played an important role in creating new services and new delivery channels for existing services. Rethinking service delivery procedures for all but people processing may allow a firm to get customers out of the factory and transform a high-contact service into a low-contact one. When the nature of the process makes it possible to deliver service at arm's length, the design and location of the factory can focus on purely operational priorities. For example, some industry observers predict that the traditional bank branch will eventually cease to exist and we will conduct most of our banking and credit union transactions through ATMs, telephones, or personal computers (PCs) and modems. The chances of success in such an endeavor will be enhanced when the new procedures are user-friendly and offer customers greater convenience. Balancing Demand and Capacity Sharp fluctuations in demand pose a problem for many organizations, although manufacturing firms can inventory supplies of their product as a hedge against fluctuations in demand. This strategy enables manufacturers to enjoy the economies derived from operating factories at steady production levels. Few service businesses can easily do the same. For example, the potential income from an empty seat on an airliner is lost forever once that flight takes off. Hotel rooms are equally perishable, and the productive capacity of an auto repair shop is "wasted if no cars come in for servicing on a day when the shop is open. Conversely, when demand for service exceeds supply, the excess business may be lost. If someone cannot get a seat on one flight, another carrier gets the business or the trip is canceled. In other situations, customers may be forced to wait in line until sufficient productive capacity is available to serve them. Managing People as Part of the Service Product The more involved customers become in the service delivery process, the more visible service personnel and other customers become (this is the people element of the 7Ps). In many people-processing services, customers meet lots of employees and often interact with them for extended periods of time. They are also more likely to run into other customers.

After all, many service facilities achieve their operating economies by serving large numbers of customers simultaneously. When other people become a part of the service experience, they can enhance it or detract from it. Direct involvement in service production means that customers evaluate the quality of employees' appearance and social skills, as well as their technical skillsconcerns that are important for human resource managers and front-line supervisors. And because people also make judgments about their fellow customers, managers find themselves trying to shape customer behavior, too. Service businesses of this type tend to be harder to manage because of the human element. Susan enjoyed the comments made by other students in her marketing class. But at the food court, lazy customers had failed to clear their table. Even though they had already left, their behavior still detracted in a small way from the experience of Susan and her friends. The poor attitude and appearance of the employee at the dry cleaner compounded the problem of delays in cleaning Susan's suit and may lead to the loss of her business in the future. As a manager, how would you get customers to clear their tables after eating at the food court? How would you make the staff at the dry cleaner more friendly?