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Intangible products that are not goods (tangible products), such

as accounting, banking, cleaning, consultancy, education, insurance, know how,
medical treatment, transportation. Sometimes services are difficult to identify
because they are closely associated with a good; such as the combination of
a diagnosis with the administration of a medicine.
No transfer of possession or ownership takes place when services are sold, and
they
(1) Cannot be stored or transported,
(2) are instantly perishable, and
(3) Come into existence at the time they are bought and consumed.
?

Q. 2 Difference between goods and services?

. Goods are tangible but services are intangible.
2. The ownership rights of goods are transferable, but there is no ownership
involved in services.
3. Once goods are produced, their quality remains uniform, but the quality of
service varies step to step (with the change in environmental conditions)
4. Goods may be perishable or non-perishable, but they can be stored for a long
time. Services can¶t be stored for a long time and they are only perishable.
 . Goods are produced using raw material, but services are not produced using raw
material. They are automatically formed with the change in environment.
6. Services have ultimate and strong impact on demand for goods. But services
have not ultimate effect on demand for goods, and if there is an impact, it will be
negligible.

7. When one buys a refrigerator it is defined as a good but then the service angle is
the part that starts after the sales of the good. Service is an important part of the
entire package that one buys. It is more entwined when one buys a laptop. The
laptop is a physical good but then the service in terms of soft ware¶s/installations
etc is a continuous processJ

Q.3 Expanded Marketing Mix?

The Expanded Marketing Mix: IKEA Introduction At any successful company,
marketing seeks to connect with customers, serve their needs, and accomplish the
stated mission of the organization. A successful marketing process creates value
through consumer satisfaction from brand building before the sale to post-sales
service and support. The marketing strategy process has four primary segments:
product, price placement, promotion and people Companies with a service element
to their business often highlight three additional areas: people, processes and
physical evidence.

1. Service Marketing Mix ± 7 P¶s

! Product Price Place Promotion
! People Process Physical evidence
2. Remaining 3 P¶s
! People - An essential ingredient to any service provision is the use of
appropriate staff and people. The company hires and train staffs that would
represent their company to the market.
! Process - Refers to the systems used to assist the organization in delivering the
service.
! Physical Evidence - Physical Evidence is the element of the service mix which
allows the consumer again to make judgments on the organization.
3. Illustration of 7 P¶s (Example): McDonalds - Philippines
! Product: Burgers, French Fries, Salads, Desserts, and Chicken.
! Price : Burgers (P 2 ± 100), Chicken (P 0 ± 70), Desserts (P 20 ± 30)
! Cost-based and competition-based pricing.
! Promotion : Advertising (TV commercials), Sales Promotion (coupons, Happy
meals), and Public Relations (Ronald McDonald Foundation)

! 4. Place ± Branches are evenly spread out all over the country. It offers
delivery services and drive-thru services. (Manufacturer ± Retailer ±
Consumers)
! People - The employees in McDonalds have a standard uniform and
McDonalds specially focuses on friendly and prompt service to its customers
from their employees.
! Process - The food manufacturing process at McDonalds is completely
transparent (the whole process is visible to the customers).
! Physical Evidence - McDonald¶s focuses on clean and hygienic interiors of is
outlets and at the same time the interiors are attractive and the fast food joint
maintains a proper etiquette at its joints.

Q.4 Marketing operations & HR have to be more closely linked in

service them in manufacturing & why‰
As show by the component elements of the 7ps model. Marketing
cannot operate successfully in isolation from other functions in a
service business. Three management functions play central and
interrelated roles in meeting customer needs, namely , marketing,
operations, and human resources .
Service firms must understand the implications of the seven
components of the service marketing mix in order to develop
effective strategies. Firms whose managers succeed in developing
integrated strategies will have a better chance of surviving and
prospering.
Q.5). what are the perceived risks in purchasing & using service?
U
 
±
unsatisfactory performance outcomes
U    ± monetary loss, unexpected extra costs
U p
  ± wasted time, delays lead to problems
U   ± personal injury, damage to possessions
U   ± fears and negative emotions
U ‘  ± how others may think and react
U ‘ ± unwanted impacts to any of five senses

Q.6). write the steps in service marketing for high contact services &
low contact services?

 
‘
U Customers visit service facility and remain throughout service
delivery
U Active contact between customers and service personnel
U Includes most people-processing services
U Ex- hotel
]
 
‘
U ]ittle or no physical contact with service personnel
U Contact usually at arm¶s length through electronic or physical
distribution channels
U New technologies (e.g. Web) help reduce contact levels
U Ex-credit card



Q.7) Explain marketing segmentation forms in service marketing?

Êeographical Segmentation

Cities or neighborhoods Geographical segmentation dividing a market into

different geographical units such as nations, states, regions, countries.

aemographic Segmentation

Demographic segmentation divides the market into groups based on variables such
as age, gender, family size, family life cycle, income, occupation, education,
religion, race and nationality. Demographic factors are the most popular bases for
segmenting customer groups, largely because consumer needs, wants, and usage
rates often vary closely with demographic variables. Also, demographic variables
are easier to measure than most other types of variables. Even when market
segments are first defined using other bases, such as personality or behavior, their
demographic characteristics must be known in order to assess the size of the target
market and to reach it efficiently.

Age and Life-Cycle Segmentation

Dividing a market into different age and life-cycle groups.

Êender Segmentation

Dividing a market into different groups based on sex . Income Segmentation

Dividing a market into different income groups.

sychographic Segmentation

Dividing a market into different groups based on social class, lifestyle, or

personality characteristics.

Behavioral Segmentation

Dividing a market into groups based on consumer knowledge, attitude, use, or

response to a product.

Occasion Segmentation

Dividing the market into groups according to occasions when buyers get the idea to
buy, actually make their purchase, or use the purchased item.

Q.8). Explain steps in service planning?

Must relate marketing opportunities to firm¶s resources (physical,
financial, technological, human)
U Identify, evaluate firm¶s marketing assets
6 Customer portfolio/lifetime value (
)
6 Market knowledge
6 Marketing implementation skill
6 Product line
6 Competitive positioning strategies
6 Brand reputation ( 
)
 U Identify, evaluate firm¶s operating assets
6 Physical facilities, equipment
6 Technology and systems (especially IT)
6 Human resources (numbers, skills, productivity)
6 ]everage through alliances and partnerships
6 Potential for customer self service
6 Cost structure

Q.9). What are the importance of supplementary services?

Supplementary services help to differentiate core

Products and create competitive advantage by:

6   use of the core service

6   the value and appeal of the core

?
Q.10) what are the Advertisement strategies for service
marketing?
1. Understand or define the brand as it is now and what you want it to be,
whether to same or something different.
2. How to create and characterize the brand.
3. Know how the company is positioned in the minds of customers, and where
you want it to be positioned.
4. Understand the psycho-dynamics of the market.
Q.11). what are the three Main approaches to price a service
1.
 ! 

Set prices relative to financial costs (problem: defining costs)
"

 ! 

Monitor competitors¶ pricing strategy (especially if service lacks
differentiation)
Who is the price leader‰ (one firm sets the pace)
#
$  ! 
Relate price to value perceived by customer

BIBLIOÊRAHY-
Service marketing book of lovelock
www.google.com
www.scibd.com