SERVICES MARKETING

UNIT 01

What is services?

Service: A service is an intangible activity, benefit, or item offered for economic value

Services marketing: Service marketing is simply the process of promoting and selling a service or an intangible good to a specific group of people. It is a new way of marketing that has become very popular and helps companies all over the world promote their services.

Characteristics of Service Marketing:

Intangibility
Services cannot be touched, tasted, or seen like physical products. This intangibility makes it challenging for customers to evaluate the service before purchasing, leading to greater reliance on reputation, reviews, and word of mouth.
Inseparability
Unlike products that can be manufactured and consumed later, services are typically produced and consumed simultaneously. This means the service provider's interaction with the customer is crucial to the overall experience.
Variability
The quality of services can vary greatly depending on who provides them, where, when, and how. Factors such as the service provider's skill level, mood, and environment can impact the service experience.
Perishability
Services cannot be stored or saved for later use. For example, an empty seat on a flight cannot be stored and sold later, leading to potential revenue loss if the service isn't utilised at the time.
Lack of Ownership
Customers do not own the service they purchase; they merely experience it. This contrasts with products, where ownership is transferred upon purchase.
Customer Participation
Services often require active participation from the customer. For example, in a haircut, the customer must be present and communicate their preferences for the service to be satisfactory.

Importance of Service Marketing:

A key differentiator:
As products become more similar, the services that go along with them are becoming a key differentiator in the minds of consumers. For example, Pizza Hut and Domino's both serve pizza, but they are different from each other more because of the quality of their service than because of the pizza itself. So, marketers can use the services they offer to set themselves apart from the competition and draw in customers.
Importance of relationships: Relationships are a key part of marketing services, so it's important to keep them in good shape. Since the product can't be seen or touched, a lot of the customer's decision to buy will depend on how much he trusts the seller. So, it's important to listen to what the customer wants, meet those needs with the right service, and build a long-term relationship that will lead to repeat sales and good word of mouth.
Customer retention:
In today's highly competitive market, where many companies compete for a small number of customers, keeping customers is even more important than getting new ones. Since services are usually made and used at the same time, the customer is actually involved in the process by taking his needs and feedback into account. So, they give customers more options for customisation based on their needs, making them happier and more likely to stick with the company.

UNIQUE CHARACTERISTICS AND MARKETING CHALLENGES OF SERVICES:

Services marketing comes with its own set of unique challenges compared to product marketing. Here are some key marketing challenges of services:

Intangibility: Services cannot be seen, touched, or owned in the same way physical products can. This makes it difficult for customers to evaluate them before purchase. Marketers need to create tangible cues, such as testimonials, case studies, and service guarantees, to help customers understand the value of the service.
Inseparability: Services are often produced and consumed simultaneously. This means that the quality of service can be affected by the interaction between the service provider and the customer. Training and managing staff to ensure a consistent and high-quality customer experience is crucial.
Variability: The quality of services can vary greatly depending on who provides them, when, and where they are provided. This variability can lead to inconsistencies in customer satisfaction. Service providers need to standardize processes and train employees to deliver a consistent experience.
Perishability: Services cannot be stored for later sale. For example, an empty seat on a flight or a missed appointment represents lost revenue that cannot be recovered. Marketers must manage supply and demand effectively, often using strategies like dynamic pricing or promotions to fill capacity.
Customer Participation: In many service contexts, customers are active participants in the service delivery process. This can lead to challenges in managing customer expectations and experiences. Marketers need to educate customers on their roles and responsibilities in the service process.
Building Trust and Relationships: Given the intangible nature of services, building trust is essential. Marketers must focus on relationship marketing, emphasizing customer service, follow-up, and communication to foster long-term relationships with clients.
Differentiation: With many services being similar, it can be challenging to differentiate one service from another. Marketers need to find unique selling propositions (USPs) that set their services apart from competitors.

By addressing these challenges, businesses can effectively market their services and build a loyal customer base.

GROWING IMPORTANCE OF SERVICES SECTOR IN INDIA:

The services sector in India has grown rapidly in recent years and has become a critical part of the country's economy. Here's why it is important and how it relates to services marketing,

Major Contributor to the Economy
• The services sector contributes more than 50% to India's GDP.
• This includes industries like IT, banking, healthcare, tourism, education, and retail.
• Services marketing helps these industries attract customers, create value, and build trust.
Employment Generation
• It provides jobs to millions, especially in areas like IT, customer service, and hospitality.
• Marketing in these sectors focuses on showcasing the quality and reliability of services to maintain customer loyalty and attract skilled employees.
Global Demand for Indian Services
• India is a global leader in IT and outsourcing services, offering cost-effective and high-quality solutions.
• Services marketing helps Indian companies build a global reputation and attract international clients.
Urbanization and Changing Lifestyles
• With urbanization, people prefer convenient services like food delivery, online shopping, and e-learning.
• Marketing plays a key role in promoting these services and making them accessible to customers.
Focus on Customer Experience
• Services are intangible and depend on customer satisfaction.
• Marketing emphasizes delivering excellent experiences, using strategies like personalized offers, online reviews, and customer care.
Digital Revolution
• Digital platforms have made services more accessible. For instance, apps for cab booking, telemedicine, and online banking are now widely used.
• Marketing through social media, apps, and websites ensures these services reach the right audience effectively.

The services sector in India is thriving due to its contribution to the economy, global demand, and changing lifestyles. Services marketing plays a vital role by helping businesses understand customer needs, build trust, and create strong customer relationships. This ensures sustainable growth in this dynamic sector.