Session 1- Services

8/7/2019 Session 1- Services

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Service Sector in India

03-Jan-2011 MMS-SEM-IV


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In this session. Service Sector

Indian Service Sectorpost liberalization

Major Sub-Sector of service industry

Future trends in Service Industry

Definition of Service

Nature of service

Classification of Services


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3MITES - Shrikant Kulkarni


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Service Sector

Service sector is the lifeline for the social economicgrowth of a country.

It is today the largest and fastest growing sectorglobally contributing more to the global output andemploying more people than any other sector.

The real reason for the growth of the service sector isdue to the increase in urbanization, privatization andmore demand for intermediate and final consumerservices.


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Service Sector Availability of quality services is vital for the well

being of the economy.

In advanced economies the growth in the primary

and secondary sectors are directly dependent on the

growth of services like banking, insurance, trade,

commerce, entertainment etc.


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Indian Service Sector Indian service sector has witnessed a major boom and is one of

the major contributors to both employment and national incomein recent times.

The activities under the purview of the service sector are quitediverse. Trading, transportation and communication,financial, real estate and business services, community,social and personal services come within the gambit of theservice industry.

One of the key service industry in India would be health andeducation. They are vital for the countrys economic stability.A robust healthcare system helps to create a strong and diligenthuman capital, who in turn can contribute productively to thenations growth.


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Post Liberalization The Indian economy has moved from agriculture based

economy to a knowledge based economy.

Today the IT industry and ITE'S industry are the dominantindustry in the service sector.

Media and entertainment have also seen tremendous growth

in the past few years.


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Sub Sectors for Service Industry Information Technology Industry

ITES sector

Retailing Financial Services-Banking And Insurance


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Information Technology Industry

The Information Technology industry has achieved phenomenalgrowth after liberalization.

The industry has performed exceedingly well amidst toughglobal competition.

Being knowledge based industry; India has been able to

leverage the global markets, because of the huge pool ofengineering talent available and the proficiency in Englishlanguage among the middle class.


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ITES sectorThe ITES sector has also leveraged the global changes positively

to emerge as one of the prominent industries.

Some of the services covered by the ITES industry would be:

Customer interaction services -Non voice and Voice.

Back office, revenue accounting, data entry, data conversion,HR services.

Medical Transcription. Content development and animation.

Remote education, market research and GIS


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Retailing Prior to liberalization, India had one of the most underdeveloped

retail sectors in the world.

After liberalization the scenario changed dramatically. Organizedretailing with prominence on self service and chain stores has

changed the dynamics of retailing.

In most of the tier I and tier II cities supermarket chainsmushroomed, catering to the needs of vibrant middle class. This

indirectly contributed to the growth of the packaged food

industry and other consumer goods.


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Banking SectorThe major changes in the banking sector after liberalization are:

Nationalized banks including SBI were allowed to sell stakesto private sector and private investors were allowed to enterthe banking domain.

Foreign banks were given greater access to the domesticmarket, both as subsidiaries and branches, provided theforeign banks maintained a minimum assigned capital and

would be governed by the same rules and regulationsgoverning domestic banks.


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Banking Sector contd. Banks were given greater freedom to leverage

the capital markets and determine their asset

portfolios. The banks were allowed to provide advances

against equity provided as collateral and

provide bank guarantees to the brokingcommunity.


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Insurance Sector The Insurance Regulatory and Development Authority Act

1999 (IRDA Act) allowed the participation of privateinsurance companies in the insurance sector.

The primary role of IRDA was to safeguard the interest ofinsurance policy holders, to regulate, promote and ensureorderly growth of the insurance industry.

The insurance sector could invest in the capital markets andother than traditional insurance products, various market linkinsurance products were available to the end customer tochoose from.


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Future Trends in Services Industry Globally outsourcing industry would continue to grow.

Following the success of US and UK, more countries in the

European Union would outsource their business.

Technological power shift from the West to the East as India

and China emerge as major players.

Political backlash over outsourcing would come down ascompanies reap the benefit of outsourcing.


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Definition of Service Activities, benefits or satisfaction, which are

offered for sale, or provided in connection

with the sale of goods.---- AMA


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Growing Importance of Services in

Marketing Economic well being of population

Changing lifestyle

Complexity of product Focus on core work

Government Policies

Technology as a key driver for serviceinnovation

Internationalization


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Nature of Services Intangibility

Heterogeneity

Inseparability

Perishability


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Intangibility Service cannot be measured

Service is not consistent

Quality of services cannot be measured

SO WHAT MEASURES ARE TO BE

TAKEN TO STANDARDIZE SERVICES

BY ORGANIZATIONS???


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Heterogeneity Services are not identical

It depends on

person

time

place

WHAT IS BENEFIT OF SERVICES BEING

HETEROGENIOUS IN NATURE??


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Inseparability Services cannot be stored

So there has to be greater interaction between

customers and service provider

Production and consumption occurs

simultaneously

WHAT SHOULD COMPANY DO??


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Perishability Services cannot be stored

WHAT SHOULD BE SERVICE PROVIDER

STRATEGY ???


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Classification of services

Degree of Involvement of the customer

Service Tangibility Skills and expertise Required

Business Orientation of Service Provider

Type of End-user


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Classification on Basis of the Degree if

Involvement of the customer

People Processing

Possession Processing

Mental stimulus Processing

Information Processing


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Examples


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Classification on the basis of the Service

Tangibility

Highly tangible

Service linked to tangible goods

Tangible goods linked to services

Highly Intangible


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Examples


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Classification on basis of skills and expertise

Required

Professional services

Non-Professional services


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Classification on the basis of the business

Orientation of Service Provider

Not- for profit Organization

Commercial organization


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Examples


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Classification on basis of the Type of End-user

Consumer services

Business- to- business services

Industrial Services


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Examples


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Thats all for today !!!

Session 1- Services

Documents

Transcript of Session 1- Services