SERVICE SECTOR MANAGEMENT

Yasmin S

What is services?

Service is any act or performance that one party can offer to another that is essentially intangible and does not result in any ownership of anything. Its production may or may not be tied to physical products..Philip Kotler

Services marketing is marketing based on relationship and value. It may be used to market a service or a product

There are no such thing as service industries. There are only industries whose service components are greater or less than those of other industries. Everybody is in service.” Theodore Levitt-

What is a service?

It is intangible. It does not result in ownership. It may or may not be attached with a

physical product

Difference between physical goods and servicesPhysical goods Services

tangible intangible

homogeneous heterogeneous

Production and distribution are separated from consumption

Production, distribution and consumption are simultaneous processes

A thing An activity or process

Core value processed in factory Core value produced in the buyer-seller interaction

Customers do not participate in the production process

Customers participate in production

Can be kept in stock Cannot be kept in stock

Transfer of ownership No transfer of ownership

Characteristics of Service Sector Intangibility Perish ability Inseparability Heterogeneity Ownership Quality measurement Nature of demand

Reasons behind the growth of the Service Industry Increasing affluence More leisure time Higher percentage of working women Complex products Complexity of life

Service Marketing Triangle

SSM An Indian Perspective C. Bhattacharjee

Moment of Truth (MOT)

Service encounter is known as MOT “any episode in which the customer

comes in contact with the organization and gets an impression of the quality of its services”

Eg. A rude employees behavior makes the customer conclude that he is dealing with a rude company.

Marketing Challenges of Services

Intangibility Services cannot be stored Trust building Brand management Competition Physical evidence Marketing and sales loose

momentum

Business Environment

Internal environmentExternal environment

Micro EnvironmentMacro Environment

Service Marketing Environment

Micro Environment

Corporate Resources Customers Suppliers Competitors Marketing intermediaries

Macro Environment

Economic environment1. Industrial policy2. Trade policy3. Foreign exchange policy4. Fiscal policy5. Monetary policy6. Foreign investment and technology policy

Macro Environment ctnd….

Political environment Legal/ regulatory environment Technological environment Socio-cultural environment

PEST Analysis

Porters Five Force Model