UNIT -I: Marketing Services:

Introduction - Growth of the service sector - The Concept of Service - Characteristics of Service -
Classification of Service – Designing of the Service, Blueprinting, Using Technology,
Developing Human Resources, and Building Service Aspirations.
INTRODUCTION
The world economy nowadays is increasingly characterized as a service economy. This is primarily
due to the increasing importance and share of the service sector in the economies ofmost developed
and developing countries. In fact, the growth of the service sector has long been considered as
indicative of a country’s economic progress. Economic history tells us thatall developing nations
have invariably experienced a shift from agriculture to industry and thento the service sector as the
main stay of the economy. This shift has also brought about a changein the definition of goods and
services themselves. No longer are goods considered separate from services. Rather, services now
increasingly represent an integral part of the product and this interconnectedness of goods and
services is represented on a goods-services continuum.

Service
Agriculture Industry
sector
DEFINITION OF SERVICES:

1. “Activities, benefits and satisfactions, which are offered for sale or are provided in
connection with the sale of goods” (American Marketing Association, Committee of
Definitions 1960).
2. “Services include all economic activities whose output is not a physical product or
construction, is generally consumed at the time it is produced, and provides added value
in forms (such as convenience, amusement, timeliness, comfort or health) that are
essentially intangible concerns of its first purchaser” (Quinn, Baruch and Paquette,
1987).

REASONS FOR GROWTH OF SERVICES:

Manufacturing industries grew because they produced tangible goods which satisfied man’s
physiological needs of food, shelter and clothing. As the basic need was fulfilled there was demand
for improved satisfaction, and this led to a proliferation of variations of the same product and a
number of companies involved in its manufacture. The growth of service
industries can be traced to the economic development of society and the sociocultural changesthat
have accompanied it. Changing environmental forces brought out the various types of services in
forefront of the economy. These environmental forces separately or in combinationcreate new type
of service. The following environmental factors are responsible to make a newservice.

(i) Consumer affluence: Due to the fast rise in the income of consumers, they are attracted
towards the new areas like clubs, health clubs, domestic services, travel and tourism,
entertainment, banking, investment, retailing, insurance, repairs, etc. and these are growing
much faster than ever before. There is a significant change in the pattern of family expenditure.

(ii) Working women: During the recent times a large number of women have come up in a variety
of professions. The work performance of women in most of services sector like bank, insurance,
airlines, etc. is highly appreciable. In short, women are getting involved in almost all male
dominated activities. Due to increasing involvement of women in commercial activities, the
services like domestic activities, fast food restaurants, marriage counselling, personal care,
financial services, retailing, etc. have emerged in the recent times.

(iii) Double income no kids (DINK): Dinks are the working couples who have consciously
postponed parenthood plans indefinitely or in an increasing number of cases, have decided not
to have any children ever. The dink culture is getting stronger and spreading wider day by day.
The realisation that parenthood is likely to result in more commitments at home and demands
on their time, thereby slowing down their career plans and ambitions, make them postpone
their parenthood plans. Whatsoever be their life style, they have double income and no kids,
resulting in the emerging and enhancing of services like, entertainment, hotels and restaurants,
career institutes, domestic services, travel resorts, personal care, etc.

(iv) Leisure time: People do get some time to travel and holiday, and therefore, there is a need
for travel agencies, resorts, hotels and entertainment. There are others who would like to utilise
this time to improve their career prospects, and therefore, there is a need for adult education,
distance learning, part time courses, etc.

(v) Greater life expectancy: According to the World Development Report and World Human
Resource Index, the life expectancy of people has increased significantly all over the world
barring few developing countries. It may be due to the advancement in the medical technology,
and greater awareness about health and education. Greater life expectancy invites opportunitiesin
services like hospitals, Nursing Homes, entertainment, leisure services, investment bankingand so
on.

(vi) Product innovations: In the changing time the consumers have become more conscious
of quality than cost. They need high quality goods at par with international standards. Having
this in mind the manufacturers have focused their attention on quality improvement,
innovations, etc. In this process many more services have emerged on account of product
innovation. Some of them are servicing services, repairs, computer, training and development,
education, etc.

(vii) Product complexity: A large number of products are now being purchased in households
which can be serviced only by specialised persons e.g. water purifiers, microwave oven,
computers, etc., giving rise to the need for services. The growing product complexities create
greater demand for skilled specialists to provide maintenance for these complex products and
brings out other services like expert advise, consultancy services, etc.

(viii) Complexity of life: Certain product and services have made human life more comfortable
and complex as well. Also, life itself has become more complex due to the socio-economic,
psycho-political, technological and legal change. This has brought about the emergence of
services like legal aid, tax consulting, professional services, airlines, courier services,
insurance, banking, etc.

(ix) New young youth: Every new generation has its own characteristics and enjoys a different
life style. There is a lot of difference between the generations in respect to their living
conditions/ styles, maturity, thinking, attitudes, behaviour, beliefs, satisfactions, performance
values and so on. Today’s generation with all these changes provide more opportunities to
services like entertainment, fast food, computers, travel, picnic resorts, educational institution,
counselling, retailing, etc.

(x) Resource scarcity and ecology: As the natural resources are depleting and need for
conservation is increasing, we have seen the coming up of service providers like pollution
control agencies, car pools, water management, etc.
 (xi) Corporate crowd: The phenomena of globalisation, privatisation and liberalisation
coupled with faster urbanization have created the corporate world crowd and its support
services. This crowd is responsible in bringing the new services, and redefining the old ones.
The services like hotels and restaurants, banking, insurance, travel and tourism, advertising,
airlines, courier services, marketing research, health care, legal services, etc. will emerge and
flourish more and more.

CONCEPT / NATURE OF SERVICES:

It is utmost important to explore the distinctive features of services, because recognition of these
special characteristics will provide insights for enlightened and innovative management.One reason
for the poor quality of service levels across different service industries is that managers often tend
to solve service marketing problems with tools and techniques that are essentially meant for tangible
products. It happens because of inadequate understanding about the nature of services. As our
knowledge of the characteristics of services grows, so does our ability to deal with them from both
an economic and marketing perspective. Services have a number of unique characteristics that make
them different from products.

CHARACTERISTICS OF SERVICES: -

 Intangibility

 Inseparability of production and consumption

 Heterogeneity

 Perishability

Intangibility:- Services are activities performed by the provider, unlike physical products they
cannot be seen, tasted, felt, heard or smelt before they are consumed. Since, services are not
tangibles, they do not have features that appeal to the customers’ senses, their evaluation, unlike
goods, is not possible before actual purchase and consumption. The marketer of service cannotrely
on product-based clues that the buyer generally employs in alternative evaluation prior topurchase.
So, as a result of this, the services are not known to the customer before they take them. The service
provider has to follow certain things to improve the confidence of the client.The provider can try to
increase the tangibility of services. For example, by displaying a plasticor a clay model showing
patients an expected state after a plastic surgery. The provider can
emphasize on the benefits of the service rather than just describing the features. Not all the service
product has similar intangibility. Some services are highly intangible, while the others are low i.e.
the goods (or the tangible component) in the service product may vary from low to high. For
example: Teaching, Consulting, Legal advices are services which have almost nil tangible
components; While restaurants, fast food centers, hotels and hospitals offer services in which their
services are combined with product (tangible objective) , such as food in restaurants, or medicines
in hospitals etc.

Inseparability:- Services are typically produced and consumed simultaneously. In case of physical
goods, they are manufactured into products, distributed through multiple resellers, and consumed
later. But, in case of services, it cannot be separated from the service provider. Thus, the service
provider would become a part of a service. For example: Taxi operator drives taxi,and the passenger
uses it. The presence of taxi driver is essential to provide the service. The services cannot be
produced now for consumption at a later stage / time. This produces a newdimension to service
marketing. The physical presence of customer is essential in services. For School of Distance
Edcuation Service Marketing Page 7 example: to use the services of an airline, hotel, doctor, etc. a
customer must be physically present.

Heterogeneity: Services are highly variable, as they depend on the service provider, and where and
when they are provided. Service marketers face a problem in standardizing their service, as it varies
with experienced hand, customer, time and firm. Service buyers are awareof this variability. So, the
service firms should make an effort to deliver high and consistent quality in their service

Perishability: This is attained by selecting good and qualified personnel for rendering the service.
Services are deeds, performance or act whose consumption take place simultaneously;they tend to
perish me the absence of consumption. Hence, services cannot be stored. The services go waste if
they are not consumed simultaneously i.e. value of service exists at the point when it is required.
The perishable character of services adds to the service marketers problems. The inability of service
sector to regulate supply with the changes in demand; posesmany quality management problems.
Hence, service quality level deteriorates during peak hours in restaurants, banks, transportation etc.
This is a challenge for a service marketer. Therefore, a marketer should effectively utilize the
capacity without deteriorating the quality to meet the demand.
The difference between goods and services can be best understood from the table 1.1.
Table 1.1
Differences between physical goods and services
Physical Goods Services
A thing An activity or process
Tangible Intangible
Homogeneous Heterogeneous
Production and distribution are separated Production, distribution and consumption
from consumption are simultaneous process. Core
Core value produced in factory Core value produced in buyer-seller
interactions.
Customers do not participate in the Customer may participate in the production
production process.
Can be kept in stock. Cannot be kept in stock.
Transfer of ownership. No transfer of ownership.

Source: Christian Gronross, Service management and Marketing, Massachusetts: Lexington Books,1990,
p. 28.

CLASSIFICATION OF SERVICES:
Classification of services can be done on the basis of Tangible actions and Intangibleactions:

Classification of service based on tangible action

Wherever people or products are involved directly, the service classification can be
donebased on tangibility.
Services for people – Like Health care, restaurants and saloons, where the service
isdelivered by people to people.

Services for goods – Like transportation, repair and maintenance and others.
Whereservices are given by people for objects or goods.
 2) Classification of services based on intangibility

There are objects in this world which cannot be tangibly quantified. For example – the numberof
algorithms it takes to execute your banking order correctly, or the value of your life which is
forecasted by insurance agents. These services are classified on the basis of intangibility.

a) Services directed at people’s mind – Services sold through influencing the creativity of
humans are classified on the basis of intangibility.

b) Services directed at intangible assets – Banking, legal services, and insurance services are
some of the services most difficult to price and quantify.

DESIGNING OF SERVICE:
A service involves creation and delivery of core benefits in order to satisfy an identified need of the
customer. As a process, it refers as to how a service is provided or delivered to a customer. In a
competitive market, the importance of the actual process is service delivery has been recognized.
FACTORS INFLUENCE DESIGNING SERVICE PROCESS:
1. The Service Itself
2. Customer Participation in the Process
3. Location of service delivery
4. Level of customer contact
5. Degree of standardization
6. Complexity of the service
MANAGEMENT MODEL FOR SERVICE DESIGN / STAGES / PROCESS:

Developing Specifying Generating & Developing

Design Design Evaluating Design
Performance Design Concepts Details
Attributes
Standards

Improving Assessing Measuring Implementing

Performance Satisfaction Performance the Design

BLUEPRINTING:
A Service blueprint is a flow chart of the service process. It conveys the service concept by
showing all the elements or activities and their sequencing and interaction. It is pictorial
description of the service system showing the service at an overview level. It explains how each
job or department functions in relationship to the service as a whole. Blueprinting wasdeveloped
by Shostak in 1987.
STAGES IN PREPARATION OF BLUEPRINTING:
1. Put the service in the form of its molecular structure.
2. Divide the Process into logical steps
3. Recognize the variability in the process
4. Identify the backstage actions in the process.

USING TECHNOLOGY AND SERVICE PRODUCTIVITY:

Service organizations can improve their productivity by introducing systems and technology intheir
operations. Under the systems approach to services marketing technology, engineering and
management sciences are implemented into service industries. The systems approach looksat the task
as a whole. The systems approach identifies the key operations to be performed, devises new ways
of performing each operation, eliminates superfluous practices through newmethods and improves
the coordination of process within the system.
APPLICATION OF TECHNOLOGY TO SERVICE ACTIVITIES:

Hard Technology Soft Technology Hybrid Technology

 1. Hard Technology:
Hard technology substitute machinery, tools and other engineering devices for labour intensive
performance of service work. The following examples can be offered for the application of hard
technologies in the service sector.
Example: Automatic car washes, Airport x-ray equipment, automatic car parking, automatic
vending equipment, audio visual equipment, computers, the consumer creditcard and bank balance
checking machine.
2. Soft Technology:
Soft technology means substituting pre-planned systems for individual service operations. Though
the systems involve some technology, the basic characteristic is thesystem itself.
Example: Fast food restaurants such as MC Donald, pizza hut follow rationale divisionof labour.
Use of sot technologies in these organizations ensures the benefits in the forms of high quality, cost
control, speed and efficiency, cleanliness and low prices.
3. Hybrid Technology:
Hybrid technologies combine hardware with carefully engineered systems to bring greater
efficiency, order and speed to the service process.
Example: The cost of energy can be substantially saved by careful programming for types and
grades of roads, location of stops, congestion of roads, tool road costs and maxing point access.

ROLE OF TECHNOLOGY IN SERVICE PROCESS:

1. Easy accessibility of service
2. New ways to deliver service
3. Higher level of service
4. Global reach of service
5. Cost Rationalization.

BUILDING SERVICE ASPIRATIONS:

The service generating organizations building service aspirations in the process of generating
demand for the services. The aspirations may be generated in two ways, namely, generating
aspirations to serve the users and generating aspirations to use the services.
Service aspirations of organization engaged in generating services focus on offering quality
services. Quality is generally conceptualised as an attitude towards service.
UNIT – II - Marketing Mix in Service Marketing

The Seven Ps; Product Decision, Pricing, Strategies and Tactics, Promotion of Service and
Placing of Distribution Methods For Services. Additional Dimension in Services Marketing -
People, Physical Evidence and Process.
SERVICE MARKETING MIX:
The traditional marketing mix is considered in the context of services. Since a different
marketing mix is needed for services some have expanded the traditional four Ps.
1. Product
2. Pricing
3. Promotion
4. Place
5. People
6. Process
7. Physical evidence

SERVICE MARKETING MIX – DEFINITION:

“The marketing mix concept is a well-established tool used as a structure by marketers. It consists
of the various elements of a marketing programme which need to be considered in order to
successfully implement the marketing strategy and positioning in the company’s market. It is
important internal elements or ingredients that make up an organization’s marketing programme.”
- Adrian Payne
 1. PRODUCT (SERVICE PRODUCT):

According to Adrian Payne, a product is an overall concept of objects or processes which provide
some values to customers. Goods and services are sub-categories of product. The termproduce is
used in a broad sense to denote either a manufactured good or product and a service. Strictly
speaking, customers are not buying goods or services but specific benefits and value from the total
offering. This total offering to the customer is termed as “offer”.

1. The core or generic product:

The core product represents the basic services of a product. This product is at its basic level. For
example, food served in a restaurant a bed in a hotel room for the night safetyof deposits and loanable
funds in a bank.

2. The expected product:

The expected product consists of the core product together with the minimal purchase conditions
which need to be met. For example in a restaurant in addition to basic food served, aspects such as
cleanliness, timely service polite and courteous service of bearer, availability of menu and
background music are expected.
 3. The augmented Product:
Augmented product refers to offerings (product benefit or services in addition to hat customers
expect). This concept enables a product to be different from another. For example, though IBM has
got technologically advanced core product they are praised for excellent customer service. This
adds value to their core product in terms of reliability and responsiveness.
4. The Potential Product:
Potential product refers to doing everything potentially feasible to hold and attract the customers.
The concept of potential product of a restaurant is viewed in terms of a pleasing flower arrangement,
manager’s word of thanks, readiness to go out of the wayto serve, etc.

2. PRICE:
Price plays a significant role in the marketing mix by attracting revenue to the marketer. Pricing
decisions are important for determining the value of the service as perceived by thecustomer and
building of an image for the service. Price serves as a basis for perception ofquality. The pricing
strategy should be in tune with the marketing strategy. Pricing strategy should gain competitive
advantage for the firm.

PRICING OBJECTIVES:

The price policies for service marketers should be on the lines of those used throughout thegeneral
field of marketing. The pricing policy to be followed should be based on pricing objectives.The
important pricing objectives are

 survival,
 profit maximization,
 sales maximization
 prestige
 Return on Investment.

PRICING AND MARKETING STRATEGY:

Integrated marketing strategies imply that the various elements of the marketing mix are
formulated and implemented with the objectives of those strategies clearly in mind.
Pricing decisions are no exception to this principle. In setting price objectives for services a number
of factors must be considered. The more significant of these are:
a. The planned market position for the service product;
b. The stage of the life cycle of the service product;
c. Elasticity of demand;
d. The competitive situation;
e. The strategic role of price.

(a). The Planned Market Position for the Service Product

Market position means the place the service product is intended to take up and does take up in the
customer’s eyes and in comparison, with competitors. It refers to the customer’s perceptual
positioning of the service product; in other words, how the service product is “seen” in relation to
others available. Clearly price is an important element in the marketing mix influencing this
position. Tangible products may occupy a particular position by virtue of their physical
characteristics (e.g. a grade of industrial steel tubing). Services, on the other hand, are more often
“positioned” on the basis of their intangible attributes.

(b) The Stage of the Life Cycle of the Service

Product The price of the service product will also relate to its life cycle. For example inintroducing
a new service an organization could opt to set low prices to penetrate markets and gain rapid market
share. Alternatively an organization could opt to charge high prices to make as much profit as
possible in a short time (skimming policy). This strategy is onlypossible if there is no immediate
competition and a high level of buyer need urgency (e.g. windscreen replacement services).
However, the value of the life cycle as an analytical toolin services marketing was questioned earlier
and the weaknesses identified there should beborne in mind.

(C). Elasticity of Demand

The discretion a service organization has to determine its pricing objectives will be influenced by
elasticity of demand in the market. Elasticity of demand refers to the responsiveness of demand to
changes in price. In some markets demand is much influenced byprice changes (e.g. urban bus
services) in others this is less so. Clearly it is vital for a service
organization to understand how elastic or inelastic demand for its services is in response to price
change. For example, if a service company reduces its prices and demand is elastic then the effect
would be to reduce margins with no School of Distance Education Service Marketing Page 28
compensating increase in demand. Elasticity may impose limitations on certain price options.

(d) The Competitive Situation

The strength of competition in the market influences a service organization’s direction over its
prices. In situations where there is little differentiation between service products and where
competition is intense (e.g. a seaside resort during a poor tourist season) then price discretion is
limited. Competition of course has a number of dimensions apart from inter-brand or inter-type
competition. In transport services, for example, there is competition between different modes of
transport (e.g. rail v road), different brands as well as alternative uses of thepotential customers’
time and money (e.g. not to travel at all). Nevertheless a degree of price uniformity will be
established in those markets with little differentiation between service products and strong levels of
competition. In other settings tradition and custom may influenceprices charges (e.g. Advertising
agencies commission system).

(e) The Strategic Role of Price

Pricing policies have a strategic role aimed at achieving organizational objectives. Thusthe pricing
decision on any part icular service product should fit in with strategic objectives. For example, a
new holiday company intent upon establishing itself in the package holiday market might use a
deliberate policy of low prices to obtain substantial market share although this could mean
unprofitable trading for some time. Maximum sales would be won through penetration pricing as a
deliberate policy. Any pricing strategy must of course fit in with the way in which other elements
of the marketing mix are manipulated to attain strategic ends.

METHODS OF PRICING SERVICES

There are few schemes available which deal with pricing practices in services markets. Below is one
of the more popular. Services organizations may use:
 1. Cost-Based Pricing

(a) Profit orientated – aiming at a minimum profit target. Prices fixed by professional
and trade associations belong to this category. If entry is severely School of Distance Education
Service Marketing restricted, prices will be related more to the customer’s ability and
willingness to pay and less to costs.

(b) Government-controlled prices – aiming at consumer protection by fixing prices

on a cost-plus-a-modest-margin basis.

2. Market-orientated pricing

(a) Competitive – either accepting the going rate or maintaining or increasing market
share byan aggressive pricing policy.

(b) Customer oriented – prices set with regard to consumers’ attitudes and behaviour.
Qualityand costs of services may be varied to remain in harmony with prices.

In service businesses it is often difficult to establish, for cost purposes, what a “unit” ofservice is, let
alone to calculate its cost. Particular difficulties occur with highly intangible services where people
are the chief element of cost. For example it may be difficult to measurethe time spent in performing
a service; also overhead allocation may be problematic. Yet it is difficult to develop a pricing
strategy for a service business without some clear idea of costs; if only to establish how costs act as
a constraint on the lower limit of price discretion availableto the price maker. People intensive
services like professional services have to develop more accurate methods of identifying and
allocating costs to overcome the problems of costing in such service businesses, i.e. the product is
difficult to describe and measure; costs are primarilypeople costs; other costs (e.g. rent, travel) are
people-related costs; people are more difficult tocost than machines.

Price Tactics

Many of the tactical price techniques used to sell tangibles can be used to sell intangibles. In both
cases the particular tactics used are dependent upon the kind of service involved, the targetmarket
and general conditions prevailing in that marketplace at the time (e.g. supply shortagestherefore
possible over-demand for service products). Some of the frequently used pricing tactics in services
markets are now considered. They are:
 (a) Differential or flexible pricing;
(b) Discrete pricing;
(c) Discount pricing;
(d) Diversionary pricing;
(e) Guarantee pricing;
(f) High price maintenance pricing;
(g) Loss leader pricing;
(h) Offset pricing;
(i) Price lining.
3. PROMOTION:

Promotion is an important part of the marketing mix for many marketers. The promotion element
of the service marketing mix communicates the positioning of the service to customers.Promotion
adds tangibility and helps the customer evaluate the service offer. The promotion mix includes six
elements, namely

(a). Advertising
(b). personal Selling
©. Sales Promotion (d). Public
Relations(e). Word of Mouth (f).
Direct mail.
 (a). Advertising for Services:
Advertising is the impersonal communication used by service firms. Advertising in service
marketing adds to the customer’s knowledge of the service, persuades the customer to buy and
differentiates the service from other service offerings. Persistent advertising is, therefore, a must
for the success of the marketing of the service.

(b). Personal Selling:

Personal Selling has assumed much importance in service firms owing to the followingreasons.

(a). There is a personal interaction between the service provider and the customer

(b). The service is provided by a person not a machine.

©. People are becoming part of the service product.

©. Sales Promotion:

Those marketing activities other than personal selling, advertising and publicity that stimulate
customers and dealers effectively such as display shows, exhibitions, demonstrationsand various
non-recurrent selling efforts not in the ordinary routine are the sales promotional measures.
(d) Publicity or Public Relations:

Publicity consists of non-personal stimulation of demand for a product or service by way of

arranging commercially significant news to have appeared in mass media free of cost (not paid for
the sponsor). Publicity is a free news appearing in mass media about a companyand its products.

(e). Word of Mouth Promotion:

Customers who are already exposed to the delivery of a service, share their experienceswith other
potential customers. They offer advice on service providers and businesses who are established
already. Personal recommendations through word of mouth constitute the most important
information source. Service buyers trust a particular service when recommendations for buying
come from friends, associates colleagues or experts.

4. PLACE:

In order to bring the products to the customer, the marketer has to work with distributionchannels that
are the interdependent set of organizations involved in the process of making thegoods or services
available. Service marketers, like goods marketers, also have to handle distribution channel
problems. They too, have to make their services available to target customers without which
marketing cannot take place. Because of intangibility of services, they cannot be stored, transported
and inventoried. Similarly, because of inseparability, that is,in case of services production cannot
be separated from selling, services must be created and sold at the same time. These characteristics
of services make distribution strategy more complex and difficult.

There are three critical issues that must be sorted out while evolving the distribution channelsfor a
service:

(1) Location of the service:

Location is concerned with the decisions a firm makes about where its operations and staff are
situated. The importance of location for a service depends upon the type and degree of interaction
involved. When the customer has to go to the service provider, location becomesvery important. For
a service business such as a restaurant, location may be one of the mainreasons for patronage. In this
type of interaction, service providers seeking growth can
consider offering their services at more than one location. Where the service provider can go to the
customer, site location becomes much less important provided it is sufficiently close to the
customers for good quality service to be received. In some circumstances, the service provider has
no discretion in going to customer as certain services must be providedat the customer’s premises.
This is the case with a wide range of maintenance services such as, lift repair, cleaning services etc.
However, when the customer and service organization transact at arm’s length, location may be
largely irrelevant. Customers are not concerned with where the physical locations are of suppliers
of services such as electricity, telephone or insurance. There are three important questions that
would help service provider in deciding where to locate service:

• How important is the location of the service to the customers?

• Is the service, technology - based or people-based?
• How important are complementary services to the location decision?
The selection of location and site for a service depends on a number of factors and trade-offs among
benefits and costs. The table 2.2 depicts the critical factors affecting the location decisions, vary
from one service to another.

Table 2.2

Critical factors affecting choice of location

Critical Factor Services

Convenience Retail stores, health centres, banks, repair

services, theatres, personal care.
Cost operating Specialty shops, wholesalers, clerical services.
Proximity with Furniture, fast food, antique shops,
Competition to share tailors, designers.

Support system availability Hotels, jewelers, tourism.

Geographic of environmental factors Beach resorts, Ski resorts
mental factors
Business climate Insurance companies, private
educationalinstitutions, gambling resorts.
Communication Networks Banks, financial services.
Transport facilities Mail order houses, couriers, ware houses.

Source: Harish V. Verma, “Marketing of Services”, (Delhi; Global Business Press),1993,p.62.

 (ii) Channels through which services are provided:
The second decision variable in the distribution strategy is whether to sell directly to the customers
or through intermediaries. Traditionally it has been argued that direct sales are the most appropriate
form of distribution for services. Whilst this form of distribution is common in some service sectors,
e.g., professional services, companies in other areas of the service sector are increasingly seeking
other channels to achieve improved growth and to fill unused capacity.

Many services are now being delivered by intermediaries and these can take a variety of forms. The
broad channel options for services are direct sales, agent or broker, sellers’ and buyers’ agents,
franchises or contracted service deliverers, etc. Table 2.3 provides an illustrative list of the
intermediaries who sell services.

Table 2.3
Typical intermediaries for services
Service Intermediaries
Hotels Travel agents, Tour operators, Airlines
Airlines Travel Agents, Hotels
Life Insurance Agents
Shares Stock Brokers
Employment Employment agencies
Financial Services Banks, Financial Institutions.
Source : L. Johari “Marketing of services : Conceptual framework”, (New Delhi : IGNOUStudy
Material on Service marketing) 1996, pp-22.
(iii) How to provide service to maximum number of customers:
The third decision variable in the distribution strategy is how to provide the service to a maximum
number of customers in the most cost-effective manner. Some of the innovations in the area are:

• Rental or leasing-leasing or rental offers an easy solution for companies which want to expand
and diversify but do not have the necessary resources to buy the required plant and machinery.
This trend is now also becoming popular in services. Today we have the concept of time-
sharing for holiday resorts.

• Franchising-franchising is the granting of rights to another person or institution to exploit a

trade name, trade mark or product in return for a lump-sum payment or a royalty. In service
industries franchises operate in the area of hotels, restaurants, car rentals, fast food outlets,
beauty parlours, travel agencies, couriers, computer education, etc.
 • Service integration - recent times have also witnessed the growth of an integrated service
system. Hotels offer local tours and airlines offer holiday resort services. Travel agencies offer
‘package tours’ in which they take care of all formalities such as visa, foreign exchange,
reservations, local travel, etc.

All these trends highlight the importance of using innovative methods to overcome the inherent
characteristics of service products which make their distribution a complex affair.

5. PEOPLE:

In services, ‘People’ refers to all human actors who play a part in service delivery and thus influence
the buyer’s perceptions; namely, the firm’s personnel, the customer, and other customers in the
service environment. All of human actors participating in the delivery of a service provide cues to
the customer regarding the nature of the service itself. How these peopleare dressed, their personal
appearance, and their attitudes and behaviours all influence the customer’s perception of the service.
If the service personnel are cold and rude, they can undermine all the marketing work done to attract
the customers. If they are friendly and warm, they increase customer satisfaction and loyalty.
Employee behaviour is often an integral part of the service product. This is not true in a
manufacturing operation, where employee behaviour may affect product quality, but is not a part of
the product.

People constitute an important dimension in the management of services in their role both as
performers of services and as customers. People as performers of service are importantbecause, a
customer sees a company through its employees. The employees represent the first line of contact
with the customer. They must, therefore, be well informed and provide the kindof service that wins
customer approval. The firm must recognise that each employee is a salesman for the company’s
service. If these employees are not given training in how to go about face-to-face customer contact,
the entire marketing effort may not prove to be effective. The importance of customers in services
stems from the fact that most services imply active and involved customer-organization interface.
In many service situations, customers themselves can also influence service delivery, thus affecting
service quality and their own satisfaction. Customers not only influence their own service outcomes,
but they can influenceother customers as well. People can be sub-divided into:
 (1) Service personnel:
Service personnel are important in all organizations but more so in an organization involved in
providing services. The behaviour and attitude of the personnel providing the service is an important
influence on the customer’s overall perception of the service and he canrarely distinguish between
the actual service rendered and the human element involved in it. Customer contact is very
important concept in services, which refers to the physical presence of the customer in the system.
The extent of contact refers to the percentage of time a customerought to be in the system out of the
total time it takes to serve him. The low contact services include bank, post offices or retailing and
the high contact services include hotels, educationalinstitutions, restaurants and hospitals. Services
with high contact are more difficult to control and manage because a longer customer contact is
more likely to affect the time of demand, andnature of service and its quality; whereas, in low contact
services such contact has much less impact on the service. Therefore, the high contact personnel
must be dexterous in public relations and interpersonal skills, and the low contact personnel must
have high technical and analytical attributes. The quality and performance of service personnel can
be improved through:

• Careful selection and training of personnel;

• laying down norms, rules and procedures to ensure consistent behaviour;
• ensuring consistent appearance; and
• reducing the importance of personal contact by introducing automation and
computerization wherever possible.
(ii) Customers:

Customers are important because they are a source of influencing themselves, being actively
involved in service delivery, and other customers as well. In case of doctors, lawyers, consultants
one satisfied customer will lead to a chain reaction, bringing in his wake a number of other
customers. So, it is an important task of service marketers to ensure complete satisfaction of the
existing customers. The kind of customers that a firm attracts exerts an important influence on
prospective customers. The prospective customer may feel attracted towards the organization e.g.,
club, restaurant, school, because it has his type of customers or the customer may turn away if he
perceives the existing customers to be a kind with whom hewould not like to associate.
 6.PROCESS:

Process in services refers to the actual procedures, mechanisms, and flow of activities by which the
service is delivered- the service delivery and operating systems. In a service organization, the
system by which customer receives delivery of the service constitutes the process. In fast food
outlets the process comprises buying the coupons at one counter and picking up the food against
that at another counter. The process of a delivery function which can be compared with that of
operations management implies the conversion of input into the finished product. But, in a service
organization, there is no clear cut input or output. Rather, itis the process of adding value or utility
to system inputs to create outputs which are useful forthe customers.

The process by which services are created and delivered to the customer is a major factor within
the services marketing mix, as services customers will often perceive the servicedelivery system as
part of the service itself. Thus, decisions on operations management are of great importance to the
success of the marketing of the service. In fact, continuous coordination between marketing and
operations is essential to success in most services businesses. Identification of process management
as a separate activity is a prerequisite of service quality improvement. The importance of this
element is especially highlighted in service businesses where inventories cannot be stored. Through
the introduction of automatic teller machines (ATMs) banks have been able to free staff to handle
more complex customer needs by diverting cash only customers to the ATMs. If the processes
supporting service delivery cannot, for example, quickly repair equipment following a breakdown
or provide a meal within a definedperiod, an unhappy customer will be the result. This suggests that
close cooperation is neededbetween the marketing and operations staff who are involved in process
management. By identifying processes as a separate marketing mix element, its importance to
service quality isduly recognized.
 7.PHYSICAL EVIDENCE:

It refers to the environment in which service is delivered and where the firm and customer interact,
and any tangible components that facilitate performance or communication of the service. The
physical evidence of service includes all of the tangible representations of the service such as,
brochures, letterhead, business cards, report format, signage, equipment, etc.

Packaging importance stems from the fact that it is what comes in between the productand the
customer’s eye. The product package is a visual representation of the whole marketingeffort. The
customer judgement and evaluation are often based on the product packaging.

Physical evidence is to a service, what the packaging is to a product. In services, the product itself
being intangible, the need is to tangibles it as far as possible. Thus, physical entities can be
successfully employed to describe the service product and its distinguishing qualities. Since the
potential customers form impressions about the service organizations on the basis of physical
evidence, like building, furniture, equipment, stationery and brochures, it becomes imperative that
the marketers manage the physical evidence in a manner that reinforces the proposed position and
image of the organization.

Cleanliness in a doctor’s clinic, the exterior appearance and interior decor of a restaurant, the
comfort of the seating arrangement in a cinema hall, adequate facility for personal needs at the
airport, all contribute towards the image of the service as perceived by the customer. The common
element in these is that they are all physical, tangible and controllable aspects of a service
organization. There may be two kinds of physical evidence:

(i) Peripheral evidence:

It is actually possessed as a part of the purchase of service but by itself is of no value. An airline
ticket, cheque book, or receipt for a confirmed reservation in a hotel are examples of peripheral
evidence. A cheque book is of value only if customer has money in the bank, withoutthat it is of no
significance. Peripheral evidence adds on to the value of essential evidence, suchas writing pad, pen,
match box, complimentary flowers and drinks, etc. in a hotel, which customer may take away. Such
evidence must be designed keeping in mind the overall image which the organization wishes to
project and the reminder value of the evidence in its ability to remind the customer about the
organization.
 (ii) Essential evidence:

Whereas the peripheral evidence is possessed and taken away by the customer, the
essential evidence cannot be possessed by the customer; the building, its size and
design, interior layout and decor, logo, etc. of the organizations are constituents of
essential evidence.The essential evidence is a very critical input in determining the
atmosphere and environmentof the service organization.

Physical evidence can be used to build strong association in the customers’ minds
andservice can be differentiated from the competitor’s similar offering. By making
the service more tangible and making it easier for the customer to grasp the concept
of the service, marketers can create the ideal environment for the service offering.
 Unit – III - Effective Management of Service Marketing

Marketing Demand and Supply through Capacity Planning and Segmentation – Internal
Marketing of Services – External versus Internal Orientation of Service Strategy.

MANAGING DEMAND AND SUPPLY:

Service marketers encounter challenges of matching supply and demand in a dynamic

environment. Services are perishable. Production and consumption of service take place
simultaneously. Services also cannot be transported from one place to another or transferred
from one person to another. So, service firms are not able to build inventories during periods
of slow demand to use later when the demand increases.

1. Excess Demand:

Every service firm has a maximum capacity to serve customers. Maximum capacity
represents the absolute limit of service availability, When demand for the service of a particular
firm exceeds its maximum capacity, it results in undesirable consequences. First, the existing
customers of the firm may cross over to the competitor, selling similar service. As a result, the
service firm may lose considerable business. Second, in case of excess demand for service, the
working hours of staff may be stretched.
2. Demand exceeds optimum capacity:

Both optimum and maximum capacity may not be the same. At optimum capacity level,
resources are fully employed but not over-used. As a result, customers will receive quality
service on time. But when demand exceeds optimum capacity, the staff and facilities are
stretched, resulting in poor service.

3. Demand and supply are balanced at the level of optimum capacity:

Optimum capacity refers to the efficient use of the capacity from the point of view of both
the customers and the company. When demand and supply are balanced at the level of optimum
capacity, staff and facilities are regarded to be occupied at an ideal level. No employee is over-
stretched and facilities are maintained well. As a result, customers stand to benefit. Moreover,
utilization of optimum capacity gives a psychological satisfaction to customers too.

4. Excess Capacity:
Excess capacity means the demand is below the optimum capacity. Staff and facilities will
be under-utilized. Under – utilization of facilities like labour and equipment results in loss
of profit to the firm. However, customers may prefer such a situation as they can avail full
facilities at will. On the other hand, customers may be disappointed by low demand too in
the long run. They may even worry that they have chosen an inferior service provider.

STRATEGIES FOR MANAGING DEMAND AND SUPPLY:

1. Understanding capacity constraints

2. Understanding demand patterns
3. Capacity Planning
4. Managing capacity to match capacity
5. Managing demand to match capacity
6. Strategies to be used when demand and capacity cannot be matched.

1. Understanding capacity constraints:

a. Time
b. Labour
c. Equipment
d. Infrastructure
2. Understanding demand patterns:
a. Charting demand pattern
b. Predicting cycles
c. Identifying random demand fluctuations
d. Disaggregating demand pattern by market segment.
3. Capacity Planning:
Types of capacity panning:
a. Long term capacity planning
b. Short term capacity planning

Social
Factors

Technical
Economy
Factors
Long term
Capacity
decisions
Political
Markets
factors

Competit
ors

4. Managing Capacity to match demand:

The strategic approach to matching supply and demand focuses on adjusting

capacity. So, the service firm should build into its capacity some degree of flexibility.
The extent of flexibility depends upon the type of service offered, cost, labour
availability and other factors.

5. Managing Demand to Match Capacity:

This strategy involves shifting demand to match capacity when demand exceeds
capacity. Then, the organization tries to shift customers to periods of slow demand. This
is just convincing the customers to use the service during periods of slow demand. So
people who cannot shift their demand represent lost business for the firm.
6. Strategies to follow when demand & capacity cannot be matched:

Sometimes, it may not be possible for the services organizations to manage capacity to
match demand or vice versa. For example, in a health clinic patient wait longer to be examined
by the doctor during monsoon/inclement weather when more people catch “flu”. The demand
is flexible but the service capacity is inflexible and it is not economical for health clinics to add
additional facilities or physician to handle peaks in demands.
INTERNAL MARKETING – DEFINITION:

1. “The means of applying the philosophy and marketing to people who serve the external
customers so that:

a) The best possible people can be employed and retained; and

b) They do the best possible work”.
- Berry

2. “Treating with equal importance the needs of the internal market (the employees) and the
external market (customers) through proactive programmes and planning to bring about
organizational objective by developing employee and customer satisfaction”.

- Helen Woodruffe
ROLE OF INTERNAL MARKETING:

1. Internal marketing motivates the personnel to work better and satisfy customers.
2. Every employee needs information for his effective functioning in an organization.
Internal marketing builds a good communication network which provides
information to all employees thereby supporting the service environment.
3. Internal marketing enables the service organization to gain additional market share.
4. It signifies the role of every employee and reduces conflict between the functional
areas of business.
5. Customer service gets a high priority and the entire organization focuses on a
customer- oriented approach.
6. Internal Marketing helps to develop committed personnel who can provide best
possible service to customers.
7. Internal marketing equips people with technical skill and knowledge required for
their effective functioning.
8. It builds the corporate image by creating awareness and appreciation of the
company’s aims and strength.

COMPONENTS OF INTERNAL MARKETING:

1. Latest methods of training

2. Continuous interaction with the management
3. Internal communication
4. Marketing research
5. Other human resource management activities.

STEPS IN DEVELOPING INTERNAL MARKETING:

1. Market Definition
2. Market Research
3. Market Segmentation
4. Selection of Techniques
5. Marketing Communication
6. Marketing Orientation
EXTERNAL MARKETING:

The objective of external marketing is to attract every customer to participate in the

service process. All consumers are over exposed to marketing communication. Service
companies should design an effective promotional campaign to inform, educate, persuade,
train, and encourage buying and experiencing the service offered. Consumers do have certain
service expectations. Managing these expectations is one of the major purposes of external
marketing. ‘Services promised’ in external marketing should be delivered effectively.
Developments of promotional mix strategies are vital to the success of external marketing. The
most powerful media in services is word of mouth communication. Service organization should
be careful of negative word-of-mouth. In the absence of relevant and effective communication,
consumers may have doubts and suspicions about the service offering. Campaigns through
appropriate media provide customer with evidence. Service quality depends, to a large extent,
on the ability and effective participation of customers. Participation ability, skill, involvement,
etc. of consumers depend upon the way they are informed, educated, and trained through
external marketing.

COMPONENTS OF EXTERNAL MARKETING:

External marketing in services is popularly known as promotion in traditional

marketing. There are five major components of external marketing:

(i) Advertising: It is any kind of paid, non-personal method of promotion by an identified

organization or individual. The role of advertising in service marketing is to build awareness
of the service, to add to customer’s knowledge of the service, to help persuade the customer to
buy, and to differentiate the service from the other service offerings. Relevant and consistent
advertising is therefore, of great importance to the success of the marketing of the service.
Advertising has a major role in helping deliver the desired positioning for the service. Since
the core product is intangible, it is difficult to promote and service marketers therefore,
frequently choose tangible elements within the product for promotion. Thus, airlines promote
the quality of their cuisine, seat width, and the quality of their in-flight services. Certain
services such as entertainment, transportation, hotel, tourism and travel, insurance, etc. have
been advertising heavily in newspapers, magazines, radio, TV to promote greater usage and
attract more customers. However, certain service professionals such as doctors and lawyers
rarely use advertising as a means of increasing their clientele. But, this situation is changing
and one can occasionally see an advertisement in the newspapers giving information about the
location and timings that a particular doctor is available for consultation. These advertisements
may also carry the message ‘Honorary doctor to the president of India’ or ex-director of a
prestigious medical college, etc. Such messages help create a positive image and credibility.

Relationship enhancement- The frequent and sometimes intimate contact in many service
businesses provides a great opportunity to enhance the relationship between the seller/ service
provider and the customer.

Cross selling- The close contact frequently provides the opportunity for cross-selling other
services. The sales persons are also in a good position to communicate details of other services
which they may offer to customers.

(ii) Personal selling: Personal selling has a vital role in service making as a large number of
service businesses involve personal interaction between the service provider and the customer,
and service is provided by a person, not a machine. The problem with using personal selling to
promote services is that the service cannot be separated from the performer. Moreover, it is not
a homogeneous service in which exact standards of performance can be specified. In such
situations, personal selling implies using an actual professional rather than a salesman to sell
the service. A firm of management consultants may send one of its consultants for soliciting
new business. This kind of personal selling is certainly effective but also very expensive. One
way of making personal selling more cost effective is to create a derived demand by tying up
with associated products and services. A management consultant may associate with a bank,
so that the bank recommends his name as a consultant to any new entrepreneur coming for a
loan. A chain of hotels may team up with an airline to offer a concessional package tour. The
other way is to maintain a high visibility in professional and social organizations, getting
involved in community affairs and cultivating other professionals so as to maximize personal
exposure and the opportunities for getting work from new sources. Personal selling has a
number of advantages over other promotion mix elements, such as, Personal contact- Three
customer contact functions have been identified; selling, servicing and monitoring. These
personal contacts should be managed to ensure that the customer’s satisfaction is increased or
maintained at a high level.
(iii) Sales promotion: In the case of services, the sales promotion techniques which are used
are varied and various in number. Traditionally, sales promotion has been used mainly in the
fast moving consumer goods market. However, in the recent past we have seen a trend for
many service firms to use sales promotion. Sales promotion tools are aimed at these audiences:

Customers - Free offers, samples, demonstrations, coupons, cash refunds, prizes, contests and
warrantees, early bird incentive etc.

Intermediaries- Discounts, advertising allowances, cooperative advertising, distribution

contests and awards.

Sales force- Bonuses, awards, contests and prizes for best performer.

A number of activities can be undertaken which aim at providing incentive to encourage

sales. A doctor may charge lesser amount as fee on subsequent visits to encourage patient’s
loyalty, a car mechanic may offer a guarantee for repairs undertaken up to three months, a
chartered accountant may offer his services free for the first two visits to allow the customer to
evaluate his work.

In services, sales promotion techniques are also used to offset their perishability
characteristic, e.g., family discounts offered by hotels in off-season in which two children under
twelve are allowed free of charge. Sales promotion helps to overcome the problem faced by
customers in evaluating and judging the quality before making the purchase, thus, it reduces
the risk associated with the purchase.

(iv) Publicity: It is unpaid for exposure which is derived by getting coverage as a news or
editorial item. It is possible to get publicity when the service offering is unique and, therefore,
newsworthy, by holding a press conference in which offered services can be associated with
some issues of greater social relevance or by involving the interest of the newspaper or its staff
in covering the service. The important point about publicity is that the choice of medium should
be correct. The vehicle which is chosen must be credible and enjoy a reputation of being
trustworthy. A wrong choice of media vehicle will result in adverse publicity.

(v) Word of mouth: One of the most distinctive features of promotion in service businesses is
the ‘word of mouth’. This highlights the importance of the people factor in services promotion.
Customers are often closely involved in the delivery of a service and then talk to other potential
customers about their experiences. Research points to personal recommendations through word
of mouth being one of the most important information sources. Where people are the service
deliverers personal recommendation is often the preferred source of information. Thus, word
of mouth can have a more important impact than other promotion mix elements in a number of
services, including professional and health care services. Positive or negative word of mouth
communication will then influence the extent to which others use the service. However,
negative experiences tend to have a greater impact than positive experiences. Customers who
are dissatisfied tend to tell more than twice as many people of their poor experiences as those
who are satisfied relate good experiences.

Each of these components of external marketing has distinctive capabilities and also
limitations of suitability. The major task for service marketers is to design a proper mix of it.
The effectiveness of external marketing depends upon how effectively the mix of components
is designed.

THEMES OF EXTERNAL MARKETING CAMPAIGNS:

Service organizations need to focus on the different themes of external marketing in
order to achieve organizational objectives. The important themes are given below:

(a) Information: Information relating to the service offering package will be the focal theme
in different situations. When a service company introduces a new or modified service; or
introducers the service in a new market through a new channel; or introduces change in
marketing mix, information becomes the central theme of the communication programme.

(b) Education: customers need to be educated properly before they participate in service
production and consumption. In service organizations production and consumption are
simultaneous, so educated customers may help in improving service quality. The educational
theme aims at managing service promises and influencing consumer expectations of the
service. The management of service promises involves coordinating all promises made by the
company and the employees in order to ensure that execution is consistent and feasible. Service
organization should make only realistic promises. It is necessary to offer service guarantees in
order to strengthen the organization’s stand on the service promise. In case of any deficiency
or failure in service, the company should assure compensation on the loss suffered by the
customer. Innovation is a continuous process in services. The changes brought in the service
package and process need to be communicated to consumers, otherwise there may be a danger
of misunderstanding between the company and customers.
 ‘Customer expectation management’ is another important responsibility of the service
organization that can be achieved through customer education. It is necessary to study the level
of service expectations by the customers and design a communication programme to influence
the customers to have proper and correct expectations. Some customers develop unrealistic
expectations. The organization should negotiate these unrealistic expectations and bring them
down to realistic propositions without hurting customer’s feelings. Service employees should
have transactional skills to effectively negotiate customer expectations.

When a company wants to down size its activities or shift focus to such services which yield
more revenue, it is necessary to reset consumer expectations gracefully without affecting sales
potential.

(c) Persuasion: Persuasive communication aims at influencing the decision making process of
consumers. By showing the reasons for preferring a service and particular service provider, as
well as the special benefits and values to consumers, service organizations persuade the target
market to become the customers of the organization. Persuasive communication is used against
the defensive or offensive approaches of competition.

(d) Reinforcement: This aims at developing loyalty among the customers. It focuses on the
credibility, reliability, and continuity of all the quality factors and gives an assurance to the
target market that they can have similar or better experiences by using the service.
Reinforcement reduces cognitive dissonance among consumers. It supports and strengthens the
earlier decision of using a service and encourages consumers to continue with the same service.

(e) Training: In services, production and consumption are simultaneous and consumers are co-
producers. The expertise and involvement of the service provider coupled with the expertise
and involvement of the consumer in service production process results in better service quality.
Service organizations cannot expect all consumers to have the ability and expertise to
participate in service production process. Service organizations are responsible for training the
customers. They are the joining phase, production process phase, and detachment phase. The
series of activities the consumer has to pass through and the activities he has to perform need
to be communicated and proper assistance provided to ensure that consumers are performing
their tasks affectively. Designing consumer support systems and training customers to access
such systems is an important dimension of service communication programme.
 (f) Efficiency: Service organizations may choose several parameters to communicate their
efficiency. The growth achieved over a period in market expansion and networking, the loyal
consumer network, the success percentage in service, the relationship networking with other
services, and the size and strength of the corporate group in the economy are some of the themes
used to communicate efficiency.

(g) Leadership: A leader can attract better prospects. Leadership positioning, either in terms
of market share or innovations, creates a solid position for the organization in the market. Thus
theme can be undertaken only by leaders either at the corporate level or at the local level.

(h) Relationship: Service organizations are taking up special programmes for building,
maintaining, and enhancing relationships. The theme focuses not only on customer retention
but also on turning each customer into a brand ambassador and an indirect sales personnel of
the organization.

(i) Image building: A company cannot buy its image overnight. It has to build it over a period
of time through service excellence. Image building programmes are essential for service
organizations because the image influences customer’s perceived quality.

(j) Price v/s Quality: The price v/s quality communication programme focuses on attracting
different market segments. It also motivates consumers to compare the pricequality offerings
of the company with the competitive offerings. The campaign helps customers to choose a
service that suits their economic conditions and develop expectations accordingly.

DIFFERCENCE BETWEEN INTERNAL & EXTERNAL MARKETING:

EXTERNAL MARKETING INTERNAL MARKETING

1. There is interaction between the organization 1. There is interaction between the organization and
and customers. its employees.
2. Customers influence the operations of the 2. Management plays a crucial role in finalizing
organization. tasks and directing employees.
3. Organization makes promises to customers. 3. Internal marketing enables the employees to fulfil
the promises made during external marketing.
4. customers makes promises to customers 4. Employees derive benefits from compensation
plan adopted by the company.
5. External Marketing aims at achieving 5. Internal marketing increases job satisfaction
customer satisfaction. among employees.
6. Market research is conducted on customer 6. Feedback is obtained from employees. Training
trends, competitors strategy etc, in then market and appraisal of employees are suitably adopted.
 UNIT – IV - Delivering Quality Service:
Causes of Service – Quality Gaps. The Customer Expectations Versus Perceived Service Gap.
Factors and Techniques to Resolve This Gap Customer Relationship Management.
Gaps in Services – Quality Standards, Factors and Solutions – The Service Performance Gap
– Key Factors and Strategies for Closing the Gap. External Communication to the Customers
– The Promise versus Delivery Gap – Developing Appropriate and Effective Communication
about Service Quality.

DEFINING SERVICE QUALITY:

Being an intangible concept, defining service quality poses a lot of problems. It is very
difficult to quantify the abstract elements of service quality, which are highly idiosyncratic and
customer-specific. Several attempts have been made to define the same. However, the most
commonly accepted definition of service quality is:

Service quality is the delivery of excellent or superior service relative to customer

expectations. - Zeithaml and Bitner

This is the simplest way to understand service quality, although this definition is far
from being adequate. In general terms, quality is defined as ‘conformance to standards.
Therefore, when service measures up to some predefined parameters of performance, it is said
to be of higher quality. The real issue is in identifying these parameters of performance and
then measuring the service in relation to these parameters. For example, for some person,
waiting for 15 minutes at a bank counter is ‘OK’, while it may be ‘too much’ for another. If a
teller disposes off the customer in 10 minutes, the first customer would be very delighted, but
the second customer will be protesting for the delay. The problem for the banker would lie in
establishing the ‘normal’ time, which a customer should wait at the counter. Despite these
short-comings, a lot of research has been done to understand service quality and now it is quite
possible to quantify the same.

The following are some important ways of judging quality of service:

a. Fitness for purpose

b. The totality of features of service that meet the customer needs.
c. The difference between customer expectations and performance delivery.
d. Meeting or exceeding the customer expectations.
DIMENSIONS OF SERVICE QUALITY:

Research done by Zeithaml and Berry has identified five basic key areas of service
quality, which seem to fit in for most of the services. These key areas of service quality and
their respective components are

Key area of Service Quality Components of Key Areas

Reliability Ability to perform the service dependably and accurately
Responsiveness Willingness to help customers and provide prompt service.
Assurance Employees knowledge and courtesy and their ability to
inspire trust and confidence.
Empathy Caring, individualised attention given to customers
Tangibles Appearance of physical facilities, equipment, personnel,
and written materials.

These dimensions represent how consumers organize information about service quality in their
minds. On the basis of exploratory and quantitative research, re-searchers have found these five
dimensions relevant for many services, including banking, insurance, appliance
repair and maintenance, securities brokerage, long-distance telephone service, automobile
repair service. The dimensions are also applicable to retail and business services. These
dimensions are discussed in detail in the following discussion.

Reliability:
Out of the five dimensions of service quality, reliability has been consistently found to
be the most important determinant of perceptions of service quality. It is defined as the ability
to perform the promised service dependably and accurately. It is an indicator of how a company
delivers its promises about delivery, service provision, problem resolution, and pricing.
Customers want to do business with companies that keep their promises, particularly their
promises about the core service attributes. For example, in railway time table Shatabdi Express
leaves a station at say 1430 hours. Reliability will be the measure of whether Indian Railways
will be able to adhere to its promised departure time or not.

All firms need to be aware of customer expectations of reliability. Firms that do not
provide the core service, that customers think they are buying, fail in the eyes of their customers
in the most direct way. The importance of reliability is further dramatized by the finding that
customers’ expectations for service are likely to go up when the service is not performed as
promised. When service failures occur, customers’ tolerance zones are likely to Shrink and
their adequate and desired service levels are likely to rise. For example, the expected core
service of railways is transportation. Hence Shatabadi has to leave the station at promised 1430
hours. If it is late by, say more than say 30 minutes every day, customers are likely to lose faith
in the service and may resort to airlines or use their own car.

Responsiveness

Responsiveness is the willingness of the service providers to help customers and to

provide prompt service. This dimension emphasizes attentiveness and prompt-ness in dealing
with customer requests, questions, complaints, and problems. There are strong similarities
between the employee behaviors noted in those critical service encounters and the
responsiveness dimension of service quality. Responsiveness is communicated to customers by
the length of time they have to wait for assistance, answers to questions, or attention to
problems. Responsiveness also captures the notion of flexibility and ability to customize the
service to customer needs. For example, if a customer wants to know the exact departure time
of Shatabadi, the rail fare, facilities available, Indian Railways has to provide for the same. If
a customer rings up inquiry office and nobody picks up the phone, the service is likely to be
viewed negatively by the customer. The customer will feel neglected.

To excel on the dimension of responsiveness, a company must be able to view the

process of service delivery and the handle the requests queries or complaints of from the
customers. It must be able to understand customers’ point of view rather than impose its own
point of view. Standards for speed and promptness that reflect the company’s view of internal
process requirements may be very different from the customer’s requirements for speed and
promptness.

Assurance

Assurance is defined as employees’ knowledge and courtesy and the ability of the firm
and its employees to inspire trust and confidence. This dimension is likely to be particularly
important for services that the customer perceives as involving high risk and/or about which
they feel uncertain about their ability to evaluate outcomes, for example, banking, insurance,
brokerage, medical, and legal service.

Trust and confidence may be embodied in the person who links the customer to the
company, for example securities brokers, insurance agents, lawyers, counselors. In such service
contexts the company seeks to build trust and loyalty between key contact people and
individual customers. The “personal banker” concept captures this idea-customers are assigned
to a banker who will get to know them individually and who will coordinate all of their banking
services.

In the early stages of a relationship, the customer may use tangible evidence to assess
the assurance dimension. Visible evidence of degrees, honors, and awards and special
certifications may give a new customer confidence in a professional service provider. Even in
the public sector banks, the concept of personal banking and customizing the services is gaining
popularity. Despite heavy marketing of private sector banks, people feel assumed of the
security only with the public sector banks. This is the ‘assurance’ dimension, encompassing
trust and confidence.
Empathy

Empathy is defined as the caring, individualized attention the firm provides to its
customers. The essence of empathy is conveying, through personalized or customized service,
that customers are unique and special. Customers want to feel understood by and important to
firms that provide service to them. Personnel at small service outlets often know customers by
name and build relationships that reflect their personal knowledge of customer requirements
and preferences. When such a small firm competes with larger firms, the ability to be
empathetic may give the small firm a clear advantage.

In business-to-business services, customers want supplier firms to understand their

industries and issues. Many small computer consulting firms successfully compete with large
vendors by positioning themselves as specialists in particular industries. Even though larger
firms have superior resources, the small firms are perceived as more knowledgeable about
customer’s issues and needs and able to offer more customized services.

Tangibles

Tangibles are defined as the appearance of physical facilities, equipment, personnel,

and communication materials. All of these provide physical representations or images of the
service that customers, particularly new customers, will use to evaluate quality. Every service
has an element of tangibility, although its significance may vary. For example, in medical
services, hospital, equipment, medicines are the tangible dimensions. Despite being of very
high value, the service is incomplete in absence of a skilled doctor. Alternatively, despite
having a skilled doctor, a hospital is likely to be rejected if it is dirty and unhygienic. Service
industries that emphasize tangibles in their strategies include hospitality services where the
customer visits the establishment to receive the service, such as restaurants and hotels, retail
stores, and entertainment companies.

Tangibles are often used by service companies to enhance their image, provide
continuity, and signal quality to customers.

GAPS IN SERVICE QUALITY

Quality can be viewed from two perspectives - internal and external. Internal quality is
based on conformance to specifications. External quality is based on relative customer
perceived quality. The important point is that quality must be seen from the customer’s
view point, not the company’s. It is essential that quality be measured from the customer’s
perspective, not from what managers within a company think their customers’ views are:

Several reasons have been identified as to why it is unsafe to rely on managerial

opinions of customer perceptions. These include the following:

1. Management may not know what specific purchase criteria users consider important.
For example, customers frequently identify key purchase criteria not identified by
management. Even when the criteria are correctly identified, management may misjudge the
relative importance of individual criteria.

2. Management may misjudge how users perceive the performance of competitive

products on specific performance criteria. These differences in perception of performance may
exist for the most basic of criteria.

3. Management may fail to recognize that user needs have evolved in response to
competitive product developments, technological advances, or other market or environmental
influences.

GAP MODEL:

A model has been developed by Parasuraman and his colleagues which helps identify
the gaps between the perceived service quality that customers receive and what they expect.
The model identifies five gaps:

Gap No. Dimension of Gap

Gap 1 – The Knowledge Gap Consumer expectation and management perception
Gap 2 – The Policy Gap Management perception and service quality expectation.
Gap 3 – The Delivery Gap Service quality specification and service deliver
Gap 4 – The Communication Gap Service delivery and external communications to consumers
Gap 5 – The Customer Gap Expected service and perceived service
GAPS MODEL OF SERVICE QUALITY:

Gap - I: Consumer expectation and management perception:

The first gap is the difference between consumer expectations and management
perceptions of consumer expectations. Research shows that financial service organizations
often treat issues of privacy and confidentiality as relatively unimportant, whilst consumers
considered them very important.

In India, very little research is done by the companies to know the customers’
expectations. Often, management believes that their estimate of what customers want is final.
They make as error of judgment at this stage. The customers themselves are also to be blamed
because they do not protest or complaint, when they do not get the desired service. This keeps
the management in dark and they continue to live by their belief that what they think is correct.

For example, advert the coming of private telephone companies, the PSUs never bothered to
listen to their customers. This kept the customers dissatisfied and the private players were able
to make a rapid entry into the market by taking the ad-vantage of this gap of the PSU telecom
service provider.

Gap – II: Management perception and service quality expectation:

The second gap is the difference between the management perceptions of consumer
expectations and service quality specifications. Managers will set specifications for service
quality based on what they believe the consumer requires. How-ever, this is not necessarily
accurate. Hence, many service companies put much emphasis on technical quality, when in fact
the quality issues associated with service delivery are perceived by clients as more important.

For example, some foreign banks believe that the customers will maintain high
minimum balance (to the tune of Rs. 10000/-) in their accounts. This is too heavy an amount
for any bank, which aspires to become a “mass” bank and not remain a “class” bank. Probably,
these banks extrapolate the minimum balance maintained by the customers in foreign countries.
In India, same specifications cannot work.

Gap - III: Service quality specification and service deliver:

The third gap is the difference between service quality specification and the service
actually delivered. This is of great importance to services where the delivery system relies
heavily on people. It is extremely hard to ensure that quality specifications are met when a
service involves immediate performance and delivery in the presence of the client. This is the
case in many service industries: for example, a medical practice is dependent on all the
administrative, clerical and medical staff performing their tasks according to certain standards.
The practice may set a goal of a maximum fifteen-minute patient waiting time, however, a
doctor who keeps a poor schedule will upset the system for all of the staff.

For example, it happens in most government offices in India that one or more dealing
clerks are on leave or do not process the files, leading to delay in the decisions. This upsets the
whole working of the office.
Gap – IV: Service delivery and external communications to consumers:

The fourth gap is the difference between service delivery intention and what is
communicated about the service to customers. This establishes an expectation within the
customer which may not be met. Often this is result of inadequate communication by the
service provider.

Indian Railways is a good example to show this gap. Late arrival of trains is more of a
routine than being an exception. Even the clerk at the reception is unable to tell the exact time
of delay. No officer of the railways takes any responsibility for the delay.

Gap – V: Expected service and perceived service:

The fifth gap represents the difference between the actual performance and the
customers’ perception of the service. Subjective judgement of service quality will be affected
by many factors, all of which may change the perception of the service, which has been
delivered. Thus a guest in a hotel may receive excellent service throughout his stay, apart from
poor checking out facilities. But this last experience may damage his entire perception of the
service, changing his overall estimation of the quality of the total service provided from good
to poor.

ADVANTAGES OF GAP MODEL:

The gap model has following advantages:

• It provides a framework for understanding the factors of service quality.

• It helps in identifying shortfalls in service quality.

• It suggests the means to fill the gaps.

LIMITATION OF GAP MODEL:

The problem of the gap model lies in defining and quantifying various specifications
to identify these gaps.

IMPROVING SERVICE QUALITY:

Improving service quality is an important activity, which needs to be followed. Some

of the commonly used techniques for improving service quality are:
  Benchmarking
 Service Blueprinting

Benchmarking

In order to evaluate service quality it is important to establish a firm’s performance

relative to its competitors. Benchmarking involves looking for the best ways to achieve
competitive advantage. It stems from the Japanese practice of ‘dantotsu’ which means striving
to be ‘best of the best’. The company’s products, service and practices are continually
compared with the standards of the best competitors and identified industry leaders in other
sectors. By observing and measuring the best within and outside the industry it is possible to
improve the performance of the company.

An early firm to adopt benchmarking was Xerox Corporation who use it as a major tool
in gaining competitive advantage. Xerox first started benchmarking in their manufacturing
activities and focused on product quality and feature improvements. Xerox is now seen as a
world role model for quality improvement with some 240 different functional areas of the
company routinely involved in benchmarking against comparable areas. Service companies
can identify improvement opportunities from a wide range of different industries, not just
services. The value chain concept developed by Michael Porter can be especially useful in
benchmarking competitors. By systematically comparing processes within each element of the
firm’s value chain with those of competitors, areas for improvement can be identified. Such
systematic comparisons can make transparent areas where competitive advantage can be
secured. Benchmarking can be used to improve service quality or reduce cost. For example, it
may show where competitors are subcontracting activities out to third parties at prices lower
than it would cost them to perform the activities themselves.

Service blueprinting/process analysis

Service companies who wish to achieve high levels of service quality and customer
satisfaction need to understand all the factors which may influence customer perception.
‘Blueprinting’ or service process analysis is a concept which breaks down the basic systems
and structures of an organization in order to develop a greater understanding of the service
process. The approach requires the identification of all of the points of contact between the
customer and the service provider. Possible breakdowns in the service encounter can then be
identified. These can then be acted upon and improved, thereby improving service quality.
Several approaches to carrying out a blueprinting exercise have been suggested:

a) Blueprinting/cycle of service analysis:

The concept suggests that each contact with the customer is a ‘moment of truth’,
each being an opportunity to either increase or decrease customer satisfaction. The
customer’s perception is a continuous stream of experiences which together
determine the service quality. The company will very often not perceive the service
in this way as their employees are constrained in their view by the particular part of
the overall service with which they are involved. The blueprinting/cycle of service
approach enables a service company to shift its employees’ perception so that they
have a better understanding of the customer’s experience.

b) Value chain analysis:

This important analytical tool involves breaking down each of the activities of
a firm into its various activities, and showing where value is added for its customers.
Each activity can be analyzed to determine its contribution to customer satisfaction
and service quality.

c) Storyboarding:
This concept was developed by the Walt Disney organization in designing its
theme parks in order to engineer the customer experience and ensure the greatest
customer satisfaction. When a film is made, each scene is outlined in advance, using
a series of sketches arranged in a sequence known as a storyboard. Similarly,
sketches of each contact a customer has with the service provider can be used to
identify points for improvement in customer service. Scenes can be rearranged to
improve the quality of the customer experience.
 UNIT – V - Marketing of Service with Special Reference:

Financial Services – Health Service -Hospitality Services including travel, hotels and tourism
- Professional Service - Public Utility Services - Educational Services.

HOSPITABILITY:

In any business, a solid marketing strategy is critical to building a brand, attracting new
customers and maintaining loyalty. The hospitality industry is no different. Because customer
loyalty is key, marketing managers and executives devote a lot of time and resources to building
brand awareness and creating ongoing, interconnected campaigns. These marketing efforts
usually include both print and digital collateral that target former guests while also attracting
new clientele. However, this particular industry has a unique set of challenges that must be
overcome. Understanding the importance of marketing in the hospitality industry can help you
get ahead and stand out in the competitive job market.

Hospitality sales are different from consumer goods sales because marketers must sell
tangible as well as intangible products. In many cases this means that they are marketing
services rather than goods, and success hinges on creating the right feeling in the consumer.
For example, a resort will want to cultivate a relaxing, fun atmosphere that is recognizable to
customers and inspires those same feelings in the consumer. Because the hospitality industry
is mostly made up of tourism and other experiential services, a consistent brand identity is also
very important. Marketers want to ensure that brand recognition exists so that customers will
use their services again and again. Repeat customers bring in a sizeable portion of revenue, so
marketing strategy must be split between maintaining relationships with past customers while
seeking out new ones.

Strategies for success

Companies in the hospitality industry use various methods to develop and maintain an
effective marketing plan. The following are some of the general strategies that marketers use
for brand success.

Research: Customers choose hotels and other hospitality services for a variety of reasons.
From location to facilities and perks, companies have to be sure that they’re providing what
buyers are looking for. The role of marketers is to identify what factors make customers choose
a particular hospitality service, and this requires extensive research. By speaking
to current and former guests, monitoring customer reviews on websites, reviewing industry
data and more, marketing professionals learn what makes a hospitality service stand out, as
well as how it can be improved

Awareness: If potential customers don’t know about a service, they can’t purchase it. That’s
where brand awareness comes in. Marketers make sure information on hotels, resorts and
restaurants is easy to find and up-to-date. They can do this by buying ad space on relevant
travel sites, creating an engaging website and collaborating with other, noncompeting
hospitality services in the same market.

Promotion: Another smart strategy for attracting customers is to run promotions during certain
times of the year, usually when business is slower. Introducing incentives and offering
incentives are just some of the ways that marketing professionals achieve this. Have you
purchased a Group on for a spa weekend? That’s promotion at work.

Relationships: To ensure high levels of repeat business, good customer relationships are vital.
Not only do repeat customers usually promote a service through word-of- mouth and social
media, but they also create a stable revenue base. One way to build relationships is through
customer loyalty programs, which reward customers who regularly use a particular hospitality
service.

TRAVEL AND TOURISM:

Like consumer products, tourism has also assumed huge proportions, resulting in a
multiplicity of products and sales intermediaries trying to get maximum share in the market.
Today, tourism is the fastest growing industry in the world and also one of the most competitive
sector. This competition is constantly growing as more and more destinations seek to attract
tourists and more companies and organizations become involved in highly skilled business of
destination planning, transportation, accommodation and catering for the tourists. Travel and
tourism needs to be marketed more vigorously than other products as it is an industry in which
the customer has immense variety of choice and also varied motivations for travel. As long as
the inherent sense of curiosity and adventure dwells in the hearts of human beings, the desire
to travel, in order to see new sights and experience new things and to live under different
environments, will always grow. Hence marketing in the tourism industry is greatly simplified,
as part of the process has already been completed by the desire for travel in people.
Tourism is a very complex industry because of its multi-faceted activities which together
produce the ‘tourist product’. It is also complex because of various subsectors that are in
themselves complex industries, if considered independently. Its complexity lies in the
tourism promotion in its various forms directed at large number of people in various lands
of different socio-economic structures, having different needs, expectations and behaviour
patterns. Tourism marketing can be defined as the systematic and coordinated efforts
exerted by the National Tourist Organizations and the tourist enterprises at international,
national and local levels to optimize the satisfaction of tourists, groups and individuals, in
view of the sustained tourism growth.

Marketing in tourism is concerned with the needs of identifiable consumer groups.

Marketing involves much more, including product/service development, place (location
and distribution), and pricing. It requires information about people, especially those
interested in what you have to offer (your "market"), such as what they like, where they
buy and how much: they spend. Its role is to match the right product or service with the
right market or audience. Modern marketing is heavily based on the "marketing concept"
which holds that businesses and organizations should

(1) design their products/services to meet customer needs and wants;

(2) focus on those people most likely to buy their product rather than the entire
mass market; and

(3) Develop marketing efforts that fit into their overall business objectives.

MARKETING MIX FOR TRAVEL SERVICES

The marketing mix for travel services involves adapting traditional marketing
principles to the unique characteristics of the travel and tourism industry. Here's how the
traditional 4Ps (Product, Price, Place, and Promotion) apply to trav

The "product" in travel services encompasses el services:

1. Product:

Various offerings, including transportation (flights, trains, buses, rental cars),

accommodation (hotels, resorts, vacation rentals), tour packages, cruises, activities
(sightseeing tours, adventure activities), and travel insurance. Travel service providers
 need to offer diverse and appealing options that cater to different preferences, budgets,
and travel styles.

2. Price:

 Pricing strategies in travel services vary depending on the type of service and
market dynamics. Providers may offer dynamic pricing models, seasonal
discounts, package deals, loyalty programs, and promotional offers to attract
customers. Transparency in pricing and value for money are essential
considerations to ensure customer satisfaction.

3. Place:

 "Place" in travel services refers to the distribution channels and accessibility of

travel products. This includes online booking platforms, travel agencies, tour
operators, airline offices, hotel websites, and mobile apps. Travel service
providers need to ensure that their products are easily accessible to customers
through multiple channels, offering seamless booking experiences and
convenient payment options.

4. Promotion:

 Promotion in travel services involves marketing communications activities to

attract customers, drive bookings, and build brand awareness. This may include
advertising campaigns, digital marketing (SEO, SEM, social media), content
marketing (blogs, videos, travel guides), email marketing, partnerships with
influencers, participation in travel fairs, and promotional events. Providers need
to highlight the unique features, experiences, and value propositions of their
offerings to stand out in a competitive market.

In addition to the traditional 4Ps, travel services may also consider other elements such
as:

5. People:

 People in travel services include customer service representatives, travel

agents, tour guides, hotel staff, transportation personnel, and destination
experts. Positive interactions between service personnel and customers are
crucial for creating memorable travel experiences and building customer
loyalty. Providers need to invest in training to ensure that staff are
 knowledgeable, helpful, and capable of delivering exceptional service.

6. Process:

 Process refers to the procedures and systems involved in delivering travel

services, including booking processes, reservation management, customer
service inquiries, check-in procedures, and tour operations. Providers need to
streamline processes, leverage technology for efficiency, and implement best
practices to enhance the customer experience, minimize hassles, and ensure
smooth operations.

7. Physical Evidence:

 Physical evidence in travel services includes tangible elements that represent

the quality and credibility of the service provider, such as the appearance and
cleanliness of facilities, the condition of transportation vehicles, the quality of
accommodation, and the professionalism of staff. Providers need to ensure that
physical assets meet customer expectations and contribute to a positive overall
experience.

8. Performance:

 Performance in travel services relates to service reliability, customer

satisfaction, and reputation in the industry. Providers need to track key
performance indicators (KPIs) such as on-time performance, booking
conversion rates, customer feedback scores, and online reviews. Continuous
improvement efforts and proactive management of customer issues are
essential to maintain high service standards and enhance the brand reputation.

By effectively managing the marketing mix elements, travel service providers can attract
customers, increase bookings, drive revenue growth, and build long-term relationships
with travelers. It's essential to stay attuned to market trends, customer preferences, and
emerging technologies to remain competitive and deliver exceptional travel experiences.

MARKETING MIX FOR TOURISM SERVICES

The marketing mix for tourism services involves applying traditional marketing principles to
the unique characteristics of the tourism industry. Here's how the traditional 4Ps (Product,
Price, Place, and Promotion) apply to tourism services:
 1. Product:

 The "product" in tourism services encompasses various offerings, including

destinations, attractions, accommodations, transportation, tours, activities,
events, and experiences. Tourism service providers need to offer diverse and
appealing options that cater to different traveler preferences, interests, budgets,
and demographics. This may include promoting cultural experiences, adventure
tourism, ecotourism, culinary tourism, wellness tourism, and more.

2. Price:

 Pricing strategies in tourism services can vary depending on the type of service,
seasonality, market demand, and competition. Providers may offer different
pricing options, such as package deals, discounts for early bookings, seasonal
promotions, group rates, or special offers for loyalty program members.
Transparency in pricing and perceived value for money are crucial
considerations to attract and retain customers.

3. Place:

 "Place" in tourism services refers to the distribution channels and accessibility

of tourism products. This includes online booking platforms, travel agencies,
tour operators, visitor centers, tourism offices, and information websites.
Tourism service providers need to ensure that their products are easily
accessible to travelers through multiple channels, offering seamless booking
experiences and convenient payment options.

4. Promotion:

 Promotion in tourism services involves marketing communications activities to

attract tourists, drive bookings, and build destination awareness. This may
include advertising campaigns, digital marketing (SEO, SEM, social media),
content marketing (blogs, videos, destination guides), email marketing,
partnerships with influencers, participation in travel fairs, and promotional
events. Providers need to highlight the unique features, attractions, experiences,
and value propositions of their destinations to stand out in a competitive market.

In addition to the traditional 4Ps, tourism services may also consider other elements such as:

5. People:
  People in tourism services include customer service representatives, tour
guides, hotel staff, transportation personnel, destination experts, and local
community members. Positive interactions between service personnel and
tourists are crucial for creating memorable travel experiences and building
destination loyalty. Providers need to invest in training to ensure that staff are
knowledgeable, helpful, and capable of delivering exceptional service.

6. Process:

 Process refers to the procedures and systems involved in delivering tourism

services, including booking processes, reservation management, customer
service inquiries, check-in procedures, tour operations, and destination
management. Providers need to streamline processes, leverage technology for
efficiency, and implement best practices to enhance the tourist experience,
minimize hassles, and ensure smooth operations.

7. Physical Evidence:

 Physical evidence in tourism services includes tangible elements that represent

the quality and credibility of the destination and service provider. This may
include the appearance and cleanliness of facilities, the condition of
transportation vehicles, the quality of accommodation, the authenticity of
cultural experiences, and the professionalism of staff. Providers need to ensure
that physical assets meet tourist expectations and contribute to a positive overall
experience.

8. Performance:

 Performance in tourism services relates to destination reputation, tourist

satisfaction, visitor spending, and economic impact. Providers need to track key
performance indicators (KPIs) such as tourist arrivals, hotel occupancy rates,
visitor expenditure, customer feedback scores, and destination competitiveness
rankings. Continuous improvement efforts and proactive management of
tourist issues are essential to maintain high service standards and enhance
destination attractiveness.

By effectively managing the marketing mix elements, tourism service providers can attract
tourists, increase visitor spending, promote sustainable tourism development, and contribute
to the economic growth and well-being of destination communities. It's essential to understand
tourist motivations, preferences, and trends to design compelling tourism experiences and
deliver memorable vacations.

MARKETING MIX FOR HOTEL SERVICES

The marketing mix for hotel services involves adapting traditional marketing principles to
the unique characteristics of the hospitality industry. Here's how the traditional 4Ps (Product,
Price, Place, and Promotion) apply to hotel services:

1. Product:
The "product" in hotel services refers to the accommodations, amenities, and hospitality
experiences offered by the hotel. This includes room types (standard rooms, suites, etc.),
facilities (restaurants, bars, pools, gyms, spas), services (concierge, room service,
housekeeping), and special features (views, location, historical significance). Hotels need
to differentiate their offerings by emphasizing unique features, design, ambiance, and
guest experience.

2. Price:
Pricing strategies in hotel services involve determining room rates, packages, and
ancillary charges. Hotels may use dynamic pricing algorithms to adjust rates based on
demand, seasonality, and market conditions. Other pricing considerations include
competitor rates, local events, guest preferences, and promotional offers. Hotels need to
balance revenue optimization with offering competitive prices and perceived value for
money.

3. Place:
"Place" in hotel services refers to the distribution channels and accessibility of
accommodations. This includes direct booking channels (hotel website, phone
reservations), online travel agencies (OTA), global distribution systems (GDS), and
traditional travel agents. Hotels need to optimize distribution strategies to reach a wide
audience of potential guests, offering seamless booking experiences and attractive
packages through various channels.

4. Promotion:
  Promotion in hotel services involves marketing communications activities to attract
guests, drive bookings, and build brand awareness. This may include advertising
campaigns, digital marketing (SEO, SEM, social media), content marketing (blogs,
videos, destination guides), email marketing, loyalty programs, partnerships with travel
influencers, and participation in industry events. Hotels need to highlight their unique
features, amenities, and service offerings to differentiate themselves from competitors.

In addition to the traditional 4Ps, hotel services may also consider other elements such as:
5. People:
 People in hotel services include hotel staff, management, and guest-facing personnel.
Positive interactions between hotel staff and guests are crucial for creating memorable
experiences and building guest loyalty. Hotels need to invest in training to ensure that
staff are knowledgeable, courteous, and capable of delivering exceptional service, from
check-in to check-out and beyond.

6. Process:

 Process refers to the procedures and systems involved in delivering hotel services,
including booking processes, check-in/check-out procedures, room assignments,
housekeeping schedules, guest requests, and complaint resolution. Hotels need to
streamline processes, leverage technology for efficiency, and implement best practices
to enhance the guest experience, minimize wait times, and ensure smooth operations.

7. Physical Evidence:

 Physical evidence in hotel services includes tangible elements that represent the quality
and credibility of the hotel. This may include the appearance and cleanliness of
facilities, the condition of guest rooms and public areas, the quality of furnishings and
amenities, the comfort of beds and linens, and the professionalism of staff attire. Hotels
need to ensure that physical assets meet guest expectations and contribute to a positive
overall experience.

8. Performance:

 Performance in hotel services relates to guest satisfaction, occupancy rates, revenue per
available room (RevPAR), average daily rate (ADR), and online reputation scores.
Hotels need to track key performance indicators (KPIs) such as guest satisfaction
surveys, online reviews, and ratings on review sites. Continuous improvement efforts
 and proactive management of guest feedback are essential to maintain high service
standards and enhance the hotel's reputation.

By effectively managing the marketing mix elements, hotels can attract guests, increase occupancy
rates, drive revenue growth, and build long-term relationships with guests. It's essential to understand
guest preferences, market trends, and competitive dynamics to deliver exceptional hospitality
experiences and maintain a competitive edge in the industry.

Marketing for services: The important characteristics of marketing for services are:
Intangibility, Inseparability, Heterogeneity, Perishability, and Ownership.

FINANCIAL SERVICES

All financial organizations are focusing on long term relationships with a view to:

• Acquisition

• Satisfaction

• Retention
Relationship marketing within financial services has evolved as a means to achieve these objectives
and provided a vehicle for the transition from the conventional transaction-based marketing
approach to the more interactive activities facilitated by more sophisticated customer databases.
Most financial services organizations realize that markets do not contain an infinite number of new
customers. Retaining customers and maximizing their lifetime value through relationship marketing
is based on the supposition that it is more cost effective to cross-sell to an existing customer than to
acquire a new one. Remember the cost, not to mention the effort that it takes to induce satisfied
customers to switch away from their current suppliers. Therefore a customer should not be seen as
the purchaser of a series of discrete transactions but rather as someone with whom the organization
has an ongoing relationship. This means that the organization should be anticipating what each
customer is likely to need throughout their life and when they are likely to need it. This is dependent
on the organization being knowledgeable about the characteristics of its customers – most, if not all,
financial services organizations have developed customer-based computer systems which hold data
on the characteristics of each of their customers and their behaviours. A large amount of this
information is collected by front- line staff or contact center advisers during meetings or discussions
with customers. By combining this information with: – geographic data – transaction data – family
life cycle information – details of customer balances – details of other products held a financial
services organization can ensure that customers are only targeted with products and promotions that
are appropriate to their circumstances and needs. The organization’s success at doing this is
dependent on the accuracy of the data that is held and the frequency with which it is updated. The
organization maintaining customer loyalty – in order to increase loyalty, financial services
organizations employ a number of marketing tools such as: – newsletters to keep customers
informed:

– Cross-selling programmes

– Relationship pricing (special reduced prices for customers who consolidate a number of their
requirements from one organization)

– Free phone numbers to handle customer enquiries and complaints.

The emphasis of any relationship marketing activity should be on maintaining relationships

with profitable customers.
BANKING AND INSURANCE:

Marketing approach in banking sector had taken significance after 1950 in western
countries and then after 1980 in Turkey. New banking perceptiveness oriented toward market
had influenced banks to create new market. Banks had started to perform marketing and
planning techniques in banking in order to be able to offer their new services efficiently.
Marketing scope in banking sector should be considered under the service marketing
framework. Performed marketing strategy is the case which is determination of the place of
financial institutions on customers’ mind. Bank marketing does not only include service selling
of the bank but also is the function which gets personality and image for bank on its customers’
mind. On the other hand, financial marketing is the function which relates uncongenitalies,
differences and non similar applications between financial institutions and judgement standards
of their customers. The reasons for marketing scope to have importance in banking and for
banks to interest in marketing subject can be arranged as: Change in demographic structure:
Differentiation of population in the number and composition affect quality and attribute of
customer whom benefits from banking services. Intense competition in financial service sector:
The competition became intense due to the growing international banking perceptiveness and
recently being non limiting for new enterprises in the sector. Increase in liberalization of
interest rates has intensified the competition. Bank’s wish for increasing profit: Banks have to
increase their profits to create new markets, to protect and develop their market shares and to
survive on the basis of intense competition and demographic chance levels. The marketing
comprehension that are performed by banks since 1950 can be shown as in following five
stages:

1. Promotion oriented marketing comprehension

2. Marketing comprehension based on having close relations for customers

3. Reformist marketing comprehension

4. Marketing comprehension that focused on specializing in certain areas

5. Research, planning and control-oriented marketing comprehension.

Marketing activities of firms begin with determination of the market that they offer
their services or goods.
While marketing manager is arranging the variables under firm’s control, she/he should also
adopt the external variables. We could call the factors that affect banks’ market as technological
developments, legal arrangements and competition.

MARKETING MIX IN BANKING SECTOR SERVICE:

The marketing mix, often referred to as the 4Ps (Product, Price, Place, and Promotion),
is a fundamental concept in marketing strategy. However, in the banking sector, an extended
marketing mix is often used to better reflect the unique characteristics of banking services. This
extended mix includes People, Process, Physical Evidence, and Performance. Here's how each
element applies in the context of the banking sector:
Product:
Banking products encompass a wide range of offerings, including savings accounts,
checking accounts, loans, mortgages, credit cards, investment products, insurance, and more.
Banks need to continuously innovate and tailor their product offerings to meet the evolving
needs of customers.
Price:
Pricing strategies in the banking sector involve setting fees, interest rates, and charges
for various services. Banks must strike a balance between profitability and competitiveness
while ensuring their pricing is perceived as fair by customers.
Place:
In the banking sector, "place" refers to the distribution channels through which banking
services are delivered. This includes physical branches, ATMs, online banking platforms,
mobile apps, and call centers. Banks need to ensure accessibility and convenience across these
channels to cater to the diverse preferences of customers.
Promotion:
Promotion in the banking sector involves advertising, public relations, sales
promotions, and other marketing communications activities to attract and retain customers.
Banks need to communicate the features, benefits, and value propositions of their products and
services effectively while complying with regulatory requirements.
People:
People refer to the employees who interact with customers directly or indirectly. In the
banking sector, the expertise, professionalism, and customer service skills of bank staff play a
crucial role in shaping the overall customer experience and building trust and loyalty.
Process:
Process refers to the procedures and systems involved in delivering banking services.
This includes account opening processes, loan application procedures, transaction processing,
customer service protocols, and complaint resolution mechanisms. Banks need to streamline
processes to enhance efficiency and improve the customer experience.
Physical Evidence:
Physical evidence relates to the tangible elements that customers perceive when
interacting with a bank. This includes the appearance and layout of branches, the design of
websites and mobile apps, branded materials, and other physical or digital touchpoints.
Consistent and appealing physical evidence helps reinforce the bank's brand image and
credibility.
Performance:
Performance refers to the quality and reliability of banking services, as well as the
overall customer satisfaction and loyalty levels. Banks need to monitor key performance
indicators (KPIs) such as customer retention rates, Net Promoter Score (NPS), and customer
feedback to assess their performance and identify areas for improvement.
By incorporating these elements into their marketing strategies, banks can effectively address
the unique challenges and opportunities in the banking sector, differentiate themselves from
competitors, and create value for customers.

INSURANCE SECTOR

Insurance companies are in a unique position when it comes to marketing. They have
no tangible products to sell, but must instead rely on strong relationships with loyal customers
and word of mouth to help them compete. Still, despite the challenges, the marketing strategies
for insurance companies are really no different than for any other company, and require a strong
focus on the basics of effective marketing.

Know the Market: First and foremost, insurance companies must know their market. This
means having a strong understanding of their target audience, their competition and the most
effective ways to connect with that audience, according to Lin Grensing- Pophal, author of
"Marketing with the End in Mind." Competition is fierce, but service organizations like
insurance agencies that thoroughly understand the needs and concerns of their target audience
can effectively motivate that audience to connect with them.
Establish a Plan: Successful marketers don’t just go out and "do things." Based on their
knowledge of the market, and their overall goals and objectives, successful marketers identify
and prioritize the communication strategies most likely to generate the results they need. This
generally involves a combination of activities that include both traditional and new media,
direct and indirect sales.0

Measure Effectiveness: It is important for insurance companies to measure the effectiveness

of their marketing efforts based on the goals they have established. This may be as simple as
comparing the number of clients before and after a campaign. It may also involve using online
analytics to monitor website visits after launching a promotion.

Gather Feedback: For insurance marketers, word of mouth is key. In addition to measuring
the effectiveness of marketing efforts based on quantitative data, insurance marketers can seek
input from their existing and new clients about their communication efforts. What worked well?
What was unclear? How might they communicate more clearly in the future? In addition, clients
can be excellent advocates and part of the marketing process. Successful insurance marketers
will take advantage of the opportunity to leverage their clients as word-of-mouth marketing
advocates.

MARKETING MIX IN INSURANCE SECTOR:

The marketing mix in the insurance sector shares similarities with other service industries, but
it also has its own nuances due to the intangible nature of insurance products and the regulatory
environment. Here's how the traditional 4Ps (Product, Price, Place, and Promotion) apply in
the context of the insurance sector, along with additional elements that are relevant:

1. Product:

 Insurance products typically include life insurance, health insurance, property

insurance, auto insurance, and various types of liability insurance. Insurers need to
continually innovate and customize their product offerings to meet the diverse needs
and preferences of customers.

2. Price:

 Pricing strategies in the insurance sector involve setting premiums based on actuarial
calculations, risk assessment, and market competitiveness. Insurers must balance the
need to remain profitable with offering competitive prices that are perceived as fair
by customers.
3. Place:

 In the insurance sector, "place" refers to the distribution channels through which
insurance products are sold and serviced. This includes insurance agents, brokers,
online platforms, call centers, and physical branch locations. Insurers need to ensure
accessibility and convenience across these channels to reach a wide range of
customers.

4. Promotion:

 Promotion in the insurance sector involves advertising, public relations, sales

promotions, and other marketing communications activities to raise awareness,
generate leads, and drive sales. Insurers must effectively communicate the features,
benefits, and value propositions of their insurance products while adhering to
regulatory guidelines.

5. People:

 People in the insurance sector include insurance agents, brokers, customer service
representatives, underwriters, and claims adjusters. These individuals play a crucial
role in building relationships with customers, providing personalized advice, and
delivering excellent customer service.

6. Process:

 Process refers to the procedures and systems involved in selling and servicing
insurance policies. This includes the application process, policy issuance, premium
collection, claims processing, and customer support. Insurers need to streamline
processes to enhance efficiency and improve the overall customer experience.

7. Physical Evidence:

 Physical evidence in the insurance sector encompasses tangible elements that

reinforce the insurer's brand and credibility. This includes the design of marketing
materials, the appearance of physical branch locations (if applicable), and the quality
of digital touchpoints such as websites and mobile apps.

8. Performance:

 Performance in the insurance sector relates to the quality of service provided, as well
as customer satisfaction, retention rates, and claims settlement efficiency. Insurers
 must track key performance indicators (KPIs) to assess their performance and
identify areas for improvement.

By effectively managing the marketing mix elements, insurers can differentiate themselves
from competitors, build trust with customers, and drive growth in an increasingly competitive
marketplace.

HEALTH CARE:

As the healthcare organizations provide different kinds of services, they need to follow
the principles of marketing in order to market the healthcare services. By the mid - 1980s,
marketing departments had been established in most of the large healthcare organizations in
the West. By early 1990s, market orientation at the level of the firm has been achieved to a
substantial extent in the healthcare industry. But, infiltration of such customer orientation down
into the personnel involved in providing healthcare services has not been observed remarkably.
No doubt, healthcare organizations like health insurance, pharmaceuticals, and medical
supplies, which are more in retail business of healthcare products, had been found registered
themselves with practice of incorporating the marketing activities, but, so far as health services
providers are concerned, they still have not resisted for consumer - oriented services. It is found
to be more true with developing country like India as her culture found it hard for a long time
even to imagine an equivalent of the “customer is the king” philosophy especially in the
healthcare services. The initial marketing efforts of the healthcare industry were on few of the
marketing activities, such as, relationship development among the physician, community
services, and public relations. The philosophy of customer centralism is found to be observed
more from the mid - 1990s with an increased over-supply of healthcare facilities along with
other environmental compulsions. The healthcare practitioners had initiated providing more
convenient customer services and have moved far beyond providing the core healthcare
services of mere prevention of or cure from a disease by developing better marketing mix
offerings. Yet, in the initial period, there indeed was an unseen and lethargic approach towards
need for such development and after initiation, healthcare practitioners have begun to consider
customer relations executives and the hospitals as hospitality undertakings. The smart hospitals
follow a patient friendly approach to provide service alike hotels and have changed traditional
belief of hospitals where people would like to stay away so far as possible.

MARKETING OF HEALTHCARE SERVICES:

Marketing of services is confronted with many problems such a cannibalization,

customization, segmentation, and communication. Understanding how consumers actually
perceive all the different service elements is regarded as an important task as it will lead to
better synchronization of marketer’s perception and customer’s perception of the services and
result into the success of service business. Though, marketing mix is considered as a fair
combination of Product. Price, Place and Promotion, in marketing of services, but still the
traditional marketing mix can be considered as inadequate because of need for tangibilisation,
lack of standardization and need for different marketing models and concepts for service
marketing. The marketing of services extended marketing mix beyond four Ps. In addition to
product, price, place and promotion they added people, physical evidence and process. Service
quality is more difficult to evaluate than quality of physical purchases by the consumer as
services are inseparable; produced and consumed simultaneously; the judgment about quality
of service can be made during an interaction between the customer and service provider. The
satisfaction from service provided is a result of comparison of consumers’ expectations with
actual service performance and quality evaluations which involve evaluation of process of
services and are not solely on the service outcome. To overcome the difficulties inherent in
evaluating service quality, consumers use five determinants to evaluate service quality viz.,
tangibility; reliability; accuracy; assurance and empathy. Importance of each dimension may
vary depending on the type of services being evaluated.

MARKETING MIX OF HEALTHCARE SERVICES:

The marketing mix for healthcare services involves applying traditional marketing
principles to the unique context of the healthcare industry. Here's how the traditional 4Ps
(Product, Price, Place, and Promotion) can be adapted for healthcare services, along with
additional elements that are relevant:
1. Product:
 In healthcare, the "product" includes medical services, treatments, procedures, and
healthcare facilities. This encompasses a wide range of offerings such as primary
care, specialty care, diagnostic services, surgeries, rehabilitation services, and
preventive care programs. Healthcare providers need to focus on quality, safety, and
patient outcomes when promoting their services.
2. Price:
 Pricing strategies in healthcare involve setting fees for medical services, treatments,
and procedures. This can be influenced by factors such as insurance coverage,
government regulations, and market competition. Healthcare providers need to be
transparent about pricing and offer affordable options for patients while ensuring
financial sustainability.
3. Place:
 "Place" in healthcare refers to the accessibility and distribution of healthcare
services. This includes hospitals, clinics, outpatient facilities, telemedicine
platforms, and community health centers. Healthcare providers need to ensure that
their services are conveniently located and accessible to patients, particularly in
underserved areas.
4. Promotion:
 Promotion in healthcare involves advertising, public relations, digital marketing, and
patient education initiatives. Healthcare providers must effectively communicate the
value and benefits of their services while adhering to ethical guidelines and
regulations. This includes promoting patient testimonials, health education seminars,
and wellness programs to engage with the community.
5. People:
 People in healthcare include physicians, nurses, allied health professionals,
administrative staff, and support personnel. The interactions between healthcare
providers and patients are crucial for building trust and satisfaction. Providers need
to prioritize patient-centered care, empathy, and effective communication to enhance
the patient experience.
6. Process:
 Process refers to the procedures and systems involved in delivering healthcare
services. This includes appointment scheduling, patient registration, medical
consultations, treatment planning, and follow-up care. Healthcare providers need to
 streamline processes, minimize wait times, and ensure coordination among
multidisciplinary teams to improve efficiency and patient outcomes.
7. Physical Evidence:
 Physical evidence in healthcare includes the tangible elements that patients
encounter during their healthcare journey. This includes the cleanliness and comfort
of healthcare facilities, the appearance of medical equipment, and the
professionalism of staff uniforms. Creating a welcoming and reassuring
environment can enhance patient satisfaction and trust.
8. Performance:
 Performance in healthcare relates to the quality, safety, and effectiveness of
healthcare services. Healthcare providers need to track key performance indicators
(KPIs) such as patient outcomes, infection rates, readmission rates, and patient
satisfaction scores. Continuous improvement initiatives and accreditation processes
can help ensure high standards of care.
By effectively managing the marketing mix elements, healthcare providers can attract patients,
retain their loyalty, and improve population health outcomes. It's essential to balance the business
aspects of healthcare with the ethical responsibility to prioritize patient well-being and access to
quality care.

EDUCATION

Marketing of education is gaining momentum with the entry of private institutions,

change in people’s attitude towards education and the changing scope for the different courses
being offered. The technological changes and shrinking global boundaries have increased the
significance of marketing for education services. The education services can be described as a
high consumer and people-based service. However, innovative methods like using multi-media
kits while providing the service are making interaction between and instructor and student less
significant. With the changes in customer education and the job market, the market for
unconventional courses is increasing. So, no marketer can afford to ignore these markets. As
the education service is intangible, inseparable and perishable, certain implications exist for
marketing. And service quality is not consistent for all customers, or even a single customer at
all times. So the marketers’ job becomes tough. They are required to ensure that these features
of the education service are better utilized to meet the varying needs of customers. The
marketing mix can be better utilized to overcome the problems associated with the service
specific features of education. By offering education with enhanced features like updated
syllabus and industry interaction, they can improve the quality of the product. With franchising
and better infrastructure facilities experienced instructors, marketers can meet customer
expectations. With the right mix of all the Ps, tailor-made customer focused courses can be
offered. Technology like computers, LCD projectors and multimedia, has helped service
providers offer better service to more customers. It has enabled instructors to deliver the service
in less time in an effective manner to even a large group in high contact regular education. It
has enabled them to concentrate more on knowledge management rather than than on
preparation of teaching notes.

MARKETING MIX OF EDUCATION SERVICES:

The marketing mix for education services involves applying marketing principles to promote
and deliver educational offerings effectively. Here's how the traditional 4Ps (Product, Price,
Place, and Promotion) can be adapted for educational services, along with additional elements
that are relevant:
1. Product:
 In education, the "product" refers to the educational programs, courses, and learning
experiences offered by educational institutions. This includes academic programs,
vocational training, professional development courses, workshops, and online
learning platforms. Educational institutions need to differentiate their programs by
focusing on quality, relevance, innovation, and outcomes.
2. Price:
 Pricing strategies in education involve setting tuition fees, course fees, and other
costs associated with education. This can be influenced by factors such as program
duration, level of instruction, facilities provided, and market demand. Educational
institutions need to balance affordability with the perceived value of education to
attract students and ensure financial sustainability.
3. Place:
 "Place" in education refers to the physical and virtual locations where educational
 services are delivered. This includes campuses, classrooms, laboratories, libraries,
online learning platforms, and satellite campuses. Educational institutions need to
provide accessible and convenient learning environments that cater to the diverse
needs of students, including those with disabilities or other limitations.
4. Promotion:
 Promotion in education involves marketing communications activities to raise
awareness, attract students, and engage stakeholders. This includes advertising,
public relations, social media marketing, content marketing, and recruitment events.
Educational institutions need to effectively communicate their unique value
proposition, academic strengths, facilities, faculty expertise, student success stories,
and career outcomes to prospective students and their families.
5. People:
 People in education include faculty members, administrators, staff, students, alumni,
parents, and community partners. Positive interactions between stakeholders are
crucial for building trust, fostering engagement, and creating a supportive learning
environment. Educational institutions need to prioritize student success, faculty
development, diversity, equity, and inclusion initiatives to enhance the educational
experience.
6. Process:
 Process refers to the procedures and systems involved in delivering educational
services. This includes admissions processes, course registration, curriculum
development, teaching methods, assessment practices, student support services, and
graduation requirements. Educational institutions need to streamline processes,
leverage technology, and adopt best practices to enhance efficiency and student
satisfaction.
7. Physical Evidence:
 Physical evidence in education includes the tangible elements that represent the
quality and credibility of educational institutions. This includes campus facilities,
classrooms, libraries, laboratories, dormitories, student centers, and recreational
amenities. Creating a conducive and inspiring learning environment can enhance the
overall student experience and contribute to academic success.
8. Performance:
 Performance in education relates to the quality of teaching, learning outcomes,
student satisfaction, and institutional reputation. Educational institutions need to
 track key performance indicators (KPIs) such as graduation rates, retention rates,
student engagement, employer satisfaction, and alumni success. Continuous
improvement efforts and accreditation processes can help ensure accountability and
excellence in education.
By effectively managing the marketing mix elements, educational institutions can attract
students, retain their enrollment, enhance academic quality, and contribute to the personal and
professional development of learners. It's essential to align marketing efforts with the mission,
values, and goals of the institution while adapting to the evolving needs of students and the
education landscape.

PROFESSIONAL SERVICES:

Not very many years ago, professionals could count on their reputations and country club
contacts to obtain a steady stream of clients or patients. Today, though, lawyers, accountants,
management consultants, architects, engineers, dentists, doctors, and other professionals must do
extensive marketing to maintain and build their practices.

Several developments during the last few years have accelerated this trend, among them the
following:

1. Legal sanctions. Several highly publicized court cases have opened the door to such
previously banned marketing tools as advertising.

2. Too many professionals. Law, architecture, dentistry, and other professions have become
overcrowded and their members must increasingly compete for customers.

3. A declining public image. In an era of consumerism and malpractice suits, professionals are
no longer on a pedestal. This condition has made it necessary—and, ironically, more
acceptable—for professionals to use marketing to enhance their public images and to improve
their clients’ and patients’ satisfaction.
 These developments are pushing numerous professional service firms into the marketing
arena.

Professionals of all types now aggressively use marketing tools. For example, many
newspapers, magazines, and Yellow Pages directories are filled with advertisements for lawyers,
dentists, optometrists, and accountants. At the same time, storefront legal, dental, and tax-
preparation clinics have become accepted as part of the suburban shopping center scene.
Furthermore, newsletters, press releases, and other public relations tools are widely used by
accounting, law, architectural, engineering, and management consulting firms. And, in a less
visible way, professional service firms of all types and sizes are employing marketing research
and strategic planning with increasing frequency.

As competition intensifies, many professionals are discovering the limits of conventional

marketing wisdom. They are finding that marketing concepts and approaches employed by
organizations selling toothpaste, cereal, and other tangible products, or even other types of
services, aren’t readily transferred to professional services. Indeed, marketing such services
is different.

Professional services review seven marketing challenges that confront professional

providers more frequently and affect them more intensely than they do the marketers of goods
and nonprofessional services. These challenges, which I have isolated through extensive
interviews and discussions with a diverse group of professional service marketing practitioners,
are:

1. Strict ethical and legal constraints.

2. Buyer uncertainty.
3. Need to be perceived as having experience.
4. Limited differentiability.
5. Immeasurable benefits of advertising.
6. Converting “doers” into “sellers.”
7. Allocating time for marketing.
MARKETING MIX OF EDUCATION SERVICES:

Professional services encompass a wide range of industries, including legal, accounting, consulting,
engineering, healthcare, and more. The marketing mix for professional services is tailored to the
unique characteristics and needs of each industry, but it generally involves the following elements:
1. Product (Service):
 The "product" in professional services refers to the expertise, knowledge, and
solutions provided by the professionals. This includes legal advice, financial
consulting, engineering design, medical diagnosis, and other specialized services.
Professionals need to differentiate their services by highlighting their qualifications,
experience, specialization, and track record of success.
2. Price:
 Pricing strategies in professional services involve determining fees, rates, or billing
structures for the services rendered. This can vary based on factors such as the
complexity of the project, the level of expertise required, the time involved, and
market demand. Professionals need to communicate the value of their services and
ensure that pricing is competitive while reflecting the quality and expertise offered.
3. Place:
 "Place" in professional services refers to the channels through which services are
delivered and accessed. This includes physical offices, virtual platforms, client
meetings, conferences, and networking events. Professionals need to establish a
strong presence in relevant markets, whether local, regional, or global, and ensure
accessibility to clients through various channels.
4. Promotion:
 Promotion in professional services involves marketing communications activities to
raise awareness, attract clients, and build relationships. This includes branding,
advertising, content marketing, thought leadership, networking, public relations, and
digital marketing. Professionals need to position themselves as trusted advisors and
subject matter experts through targeted promotion efforts.
5. People:
 People are central to professional services and include the professionals themselves,
as well as support staff, partners, and client-facing personnel. Positive interactions
between professionals and clients are essential for building trust, credibility, and
long-term relationships. Professionals need to prioritize client satisfaction,
communication, responsiveness, and professionalism in all interactions.
 6. Process:
 Process refers to the procedures, methodologies, and systems involved in delivering
professional services. This includes client onboarding, project management, quality
assurance, communication protocols, and feedback mechanisms. Professionals need
to streamline processes, leverage technology, and adhere to best practices to deliver
services efficiently and effectively.
7. Physical Evidence:
 Physical evidence in professional services includes tangible elements that represent
the professionalism and credibility of the service provider. This can include office
facilities, branding materials, case studies, client testimonials, certifications, awards,
and industry affiliations. Establishing a strong physical presence and providing
evidence of past successes can instill confidence in prospective clients.
8. Performance:
 Performance in professional services relates to the quality of service delivery, client
satisfaction, and reputation in the industry. Professionals need to track key
performance indicators (KPIs) such as client retention rates, referral rates, project
success rates, and client feedback scores. Continuous improvement efforts and client
feedback mechanisms can help maintain high standards of service delivery.
By effectively managing the marketing mix elements, professionals can attract clients, differentiate
themselves from competitors, and build long-term relationships based on trust, expertise, and value
creation. It's essential to align marketing efforts with the unique needs and preferences of the target
market while maintaining professionalism and integrity in all interactions.
 PUBLIC UTILITY SERVICES:
..0..0
A public utility is a company that operates as a public-service corporation, and provides
essential services to the public such as electricity, telephone service, natural gas, water or postal
services. The public utility is typically regulated by the national, state or local government. The
term ‘public utility’ may also refer to the service or product itself – water, natural gas, sewage,
etc. – that these organizations supply to members of the public.

A public utility often forms part of a natural monopoly. A natural monopoly is a

monopoly that exists because a specific market’s economies of scale make it the most cost-
effective way to provide consumers with the best quality and price.

Electricity

Postal
Water
Delivery

Public Utility
Service
Waste
Public Disposal
Transport and sewage
Treatment

Telephone

MARKETING MIX OF PUBLIC UTILITY. SERVICES:

The marketing mix for public utility services, such as electricity, water, gas, sewage treatment, waste
management, telecommunications, and public transportation, involves adapting traditional
marketing principles to the unique characteristics and challenges of providing essential services to
the community. Here's how the traditional 4Ps (Product, Price, Place, and Promotion) apply to
public utility services:
00
The "product" in public utility services refers to the specific service provided, such as electricity,
water supply, natural gas, sewage treatment, waste collection, telecommunications networks, or
public transportation. Utility providers need to ensure the reliability, safety, and quality of the
service, meeting regulatory standards and addressing customer needs efficiently.
Price:
Pricing strategies in public utility services are often regulated by government agencies to ensure
affordability and fairness. However, utility providers may offer different pricing structures, such as
tiered pricing based on usage levels or time-of-use pricing for electricity. Providers must
communicate pricing structures clearly to customers and provide transparent billing practices.
Place:
"Place" in public utility services refers to the distribution channels and accessibility of the service.
This includes physical infrastructure such as power lines, water pipes, gas pipelines, sewage
systems, waste collection routes, telecommunications networks, and transportation routes. Utility
providers need to ensure that infrastructure is well-maintained, accessible, and capable of meeting
demand.
Promotion:
Promotion in public utility services involves communication efforts to raise awareness, educate
customers about available services, promote energy or water conservation, and inform customers
about service disruptions or maintenance schedules. This may include advertising campaigns,
educational materials, community outreach programs, and social media engagement.
In addition to the traditional 4Ps, public utility services may also consider other elements such as:
People:
People in public utility services include customer service representatives, field technicians,
engineers, and administrative staff. Positive interactions between utility personnel and customers
are crucial for building trust and satisfaction. Utility providers need to invest in training to ensure
staff are knowledgeable, courteous, and responsive to customer needs.
Process:
Process refers to the procedures and systems involved in delivering public utility services, including
service installation, meter reading, billing, customer service inquiries, and service maintenance.
Utility providers need to streamline processes, leverage technology for efficient service delivery,
and implement best practices to minimize service disruptions and maximize customer satisfaction.
Physical Evidence:
Physical evidence in public utility services includes the infrastructure, equipment, and facilities
associated with service delivery. This may include power plants, water treatment facilities,
substations, transmission lines, pipelines, waste treatment plants, telecommunications
infrastructure, and public transportation hubs. Utility providers need to ensure that physical assets
are well-maintained, meet regulatory standards, and are accessible to customers.
Performance:
Performance in public utility services relates to service reliability, safety, and customer satisfaction.
Utility providers need to track key performance indicators (KPIs) such as outage duration, water
quality, response times for service inquiries, and customer satisfaction scores. Continuous
improvement efforts and investment in infrastructure upgrades are essential to maintain high service
standards and meet evolving customer expectations.
By effectively managing the marketing mix elements, public utility service providers can enhance
customer satisfaction, improve service reliability, and contribute to the well-being and sustainability
of the communities they serve. It's essential to balance the need for profitability and operational
efficiency with the responsibility to provide essential services to all customers, regardless of
socioeconomic status or geographic location.