Unit 1

Introduction to Service Marketing

Define Service:
• It is an act or performance that one party
offers to another, that is essentially intangible
and does not result into ownership of
anything.
• It includes activities, benefits or satisfaction
which are offered for sale and are provided
with the sale of goods.
Service quality measurement:
• Technical quality: The efficiency with which
service is offered.

• Functional quality: The way in which the

service is delivered.
Service Marketing Triangle
Company

Employees Customers
Interactive
marketing
 Characteristics of Services
1. Intangibility
Marketing implication:
• Can not be stored to meet demand fluctuations
• Services can not be patented legally
• Can not be easily communicated so quality
assessment is difficult
• Pricing is also difficult to determine
2. Inseparability
Marketing implication:
• Mass production is difficult
• Customer satisfaction is highly dependent
upon the real time experience
3. Heterogeneity
Marketing implication:
• It is highly variable depending upon the
provider, time and the place
• Depends a lot upon the willingness of SP to
satisfy customers needs
4. Perishability and fluctuating demand

Marketing implication:
• Inability to store
• Demand forecasting and planning for capacity
utilization are very crucial
• Strong recovery strategies are required as
services can not be resold
 Difference between physical
goods and services
Physical goods Services

tangible intangible

homogeneous heterogeneous

Production and distribution are Production, distribution and

separated from consumption consumption 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 Customers participate in production
production process
Can be kept in stock Cannot be kept in stock

Transfer of ownership No transfer of ownership

 Lovelock’s classification of services
1. Nature of services Act:
• Intangibility and the service recipients are
considered
• It considers how customers presence is
required during service delivery
• Try to standardize the service so as to
provide some consistency in service delivery
2. Relationship with customer

• Healthy relations provide SPs with complete

knowledge about their customers
• Personal information assess can help them to
plan customized marketing efforts
• If the customers are anonymous, there will be
lack of information and hence market
opportunities will also be restricted
3. Customization and judgement in service delivery

• Customization may help but SPs have to

balance the cost of custom made service with
the std service
4. Nature of demand and supply for services:
• It emphasizes on establishing demand
patterns over time and to understand their
existence.
• This pattern can be used to make things more
favorable for the SPs
5. Method of service delivery

• It deals with the availability of service outlets

and the nature of interaction between the
customers and the SPs
• Distribution related decisions to be taken
considering customer convenience

Equipment based and labour

based classification