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Evolution and growth of Service Sector : for Service Marketing

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Service Marketing 571073


Unit I Introduction:

Introduction :

The turn of the century has seen profound changes in the global economy. Services had played a crucial part in these changes, because the services are become the way organizations met with their market. Already organizations discovered that their survival no longer exclusively depends on their products they offer, but also on the additional offerings they make to their customers that differentiate from their competitors innovative organizations, offering new services as well as unique customer services, are now succeeding in markets where
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established organizations have failed (Lovelock and Patterson, 1998:4).

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established organizations have failed (Lovelock and Patterson, 1998:4). Services marketing is not a self-enclosed task but is integral to service organizations as a whole and the object of the activity is people, who are reactive, not passive as compared with a product (Irons, 1997:18). Services marketing concepts, frameworks and strategies were developed as the result of interlinked the forces of many industries, organizations, and individuals who have realized the increasingly important role services are playing in the current world economy. Initially the development of services marketing focused on service industries. However, manufacturing and technology industries recognized services as a prerequisite to compliment their products, in order to compete successfully in the market place. Therefore it can be argued that, in most industries, providing a service is no longer an option but a necessity.

Service definition

Kotler (1996) defines service as an activity that one party offers another that is essential intangible and does not result in the ownership of anything. Its production may or may not be tied to a physical product. Grnroos (1990) identifies a service as an activity or series of activities of a more or less intangible nature that normally, but not necessarily, takes
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place in interaction between the customer and service employees and/or physical resources or goods and/or systems of the service provider, which are provided as solutions to customer problems. The term services covers a heterogeneous range of intangible products and activities that are difficult to encapsulate within a simple definition. Services are also often difficult to separate from goods with which they may be associated in varying degrees.
"Marketing is not an event, but a process... It has a beginning, a middle, but never an end, for it is a process. You improve it, perfect it, change it, even pause it. But you never stop it completely." - Jay Conrad Levinson.

Difference between Goods and Services:

1. 2. 3. 4. 5.

Higher Intangibility Lack of Ability to store them for future Sale Greater Interaction between the customer and the service Factory Greater Variability in Service Delivery Greater Variability among service customers Expectations

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Service economy can refer to one or both of two recent economic

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developments. One is the increased importance of the service in industrialized economies. Services account for a higher percentage of US GDP than 20 years ago. The current list of Fortune 500 companies contains more service companies and fewer manufacturers than in previous decades.

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The term is also used to refer to the relative importance of service in a product

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The term is also used to refer to the relative importance of service in a product offering. The service economy in developing countries is mostly concentrated in financial services, health, and education. Products today have a higher service component than in previous decades. In the management literature this is referred to as the sterilization of products. Virtually every product today has a service component to it. The old dichotomy between product and service has been replaced by a service-product continuum. Many products are being transformed into services. For example, IBM treats its business as a service business. Although it still manufactures Search This Document computers, it sees the physical goods as a small part of the

Evolution and growth of Service Sector : for Service Marketing

Search "business solutions" industry. They have found that the price elasticity of demand for "business solutions" is much less than for hardware. There has been Search History: Searching... a corresponding shift to a subscription pricing model. Rather than receiving a Result 00single of 00 payment for a piece of manufactured equipment, many manufacturers 00 results for result for
are now receiving a steady stream of revenue for ongoing contracts. James

p.

Murrdock once said "When GDP are low...the service based economy must be also."
Evolution and growth of Service Sector : THE FIRST ERA:

SERVICES MARKETING Fisk,

Brown and Bitner (1993) employed the

metaphor of biological evolution to describe the history of the services marketing field. Biological evolution describes how species emerge and develop, so Fisk, Brown and Bitners portrayal of the emergence and

development of the evolutionary stages:

services marketing

field

involved

three

1) Crawling Out (Pre 1980) when early services defended the services marketing field;
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scholars created and


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2)

Scurrying

About (1980 to

1985)

when a rapidly growing and

enthusiastic

community of scholars quickly built the basic structure of

services marketing;

3) Walking Erect (1986 to 1992) when the services marketing field achieved a measure of respect and legitimacy within the marketing discipline and beyond.

Before

examining ponder

recent stages of why marketing

service evolution, it was the first area

is of

worthwhile to

business and academe to discover and research services. We believe it is because the marketing field is by necessity many service failures customer-centered. Hence, marketing managers and marketing academics were the first to observe the and inefficiencies experienced by customers

as the service economy expanded. Further, it is noteworthy that marketing managers and academics in North America and Europe were observing these problems nearly simultaneously. This customer-centric

orientation positions marketing well to address the future needs of service customers.

THE SECOND ERA:

THE EMERGENCE OF A MULTIDISCIPLINARY FIELD


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Remarkable change has occurred in the services marketing field since the publication of Fisk, Brown and Bitner (1993). To portray these changes in the services field, we continue with a metaphorical approach, but we shift the nature of the evolutionary biological evolution to social evolution. metaphor from

Recent Stages of Service Evolution Making Tools

A tremendous technology infusion, especially of information technology made it possible for most service industries to rapidly increase the technological sophistication of the service they provide customers.

Prominent among these technology changes is the emergence of the Internet and the many web-based services that are possible via the Internet. Included in these technology changes are numerous self-

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Sections
Unit I Introduction: Introduction : Service definition Difference between Goods and Services: Evolution and growth of Service Sector : THE FIRST ERA: THE SECOND ERA: THE EMERGENCE OF A MULTIDISCIPLINARY FIELD Recent Stages of Service Evolution Making Tools Creating Language BUILDING COMMUNITY: THE FUTURE OF THE SERVICE FIELD CONCLUSION
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Services in India Nature and scope of Services: Learning Objectives: 1. Lack of ownership 2. Intangibility 3. Inseparability 5. Heterogeneity Challenges and Issues in Services Marketing: Ethics in Services Marketing Unit II Service Marketing Opportunities Assessing Service Marketing Potential: Benefits of Market Potential Analysis Expanded Marketing Mix Service offerings (Product) Price Distribution (Place) Promotions People Processes Physical evidence Environment and trends : Service Market Segmentation: Attributes of Effective Segmentation : Reasons for marketing Segmentation: Bases of Segmentation Advantage Evaluation of market Segmentation: Target Marketing: Process of Choosing the Target Market Positioning Approaches of Positioning Unit III Service Design and Development Service Life Cycle New Service Development A hierarchy of New Services Categories Stages in New Service Development Process Blue Printing Blue Printing Components Service Blue Print Blueprint Components Blueprint: Overnight Hotel Stay Measuring Service Quality Unit IV Service Delivery and Promotion Positioning of Service Design Service Channels Service Pricing Pricing Your Services Factors to consider in pricing
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Calculating your costs Determining a fair profit margin Different Pricing Models Monitoring and Changing Your Price An Integrated Service Design Process Building Relationships Through Integrated Marketing Communications Is Crucial Unit III Service Strategies Service Marketing Strategies for Health Resurrecting a Relic The Real Deal

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