Essentials of Services Marketing offers a focused understanding of how services
differ from goods and the unique challenges involved in marketing them. The book
covers key concepts like service quality, customer satisfaction, service delivery, and
service recovery. Designed to meet academic needs, it is ideal for students of Commerce
and Management.

Salient Features:

•Focuses exclusively on the marketing of services, highlighting their distinct
characteristics compared to goods.
• Comprehensive coverage of core service marketing concepts, including service
characteristics and consumer behavior.
• In-depth discussion on service quality, pricing, branding, and positioning strategies.
• Detailed chapters on service product design, distribution, and promotion techniques.
• Focus on customer relationship management and service recovery mechanisms.
• Review questions at the end of each chapter as per blooms taxonomy for
self-assessment and exam preparation

Chapter 1 Introduction to Services Marketing 1.1
1.1 Introduction 1.1
1.1.1 Definition – Services 1.3
1.2 Reasons for Growth of
the Service Sector in India 1.4
1.2.1 Technological Advancements 1.5
1.2.2 Rising Consumer Demand 1.5
1.2.3 Growing Middle-Class Population 1.6
1.2.4 Impact of Globalisation 1.6
1.2.5 Government Support and Policies 1.6
1.2.6 Structural Changes in the Economy 1.6
1.2.7 Availability of Skilled Professionals 1.6
1.3 Concept of Services 1.7
1.4 Characteristics of Services 1.8
1.5 Classification of Services 1.10
1.5.1 High-touch and High-tech Services 1.10
1.5.2 Continuously Rendered and
Discretely Rendered Services 1.11
1.5.3 Classification Based on
Service Process 1.12
1.5.4 Classification Based on Sector 1.14
1.5.5 Classification Based on
Service Delivery Location 1.15
1.5.6 Classification Based on
Customisation Level 1.16
1.6 Service Blueprinting 1.18
1.6.1 Components of a Service Blueprint 1.18
1.6.2 Steps in Crafting a
Service Blueprint 1.22
Contents

Preface xiii

vi  Essentials of Services Marketing

1.7 Service Blueprinting Using Technology 1.24
1.8 Developing Human Resources
for Service Excellence 1.25
1.9 Building Service Aspirations 1.26
1.10 Conclusion 1.28
Review Questions 1.31
Chapter 2 Marketing Mix in Services Marketing 2.1
2.1 Introduction 2.1
2.2 The Seven Ps of Service Marketing 2.2
2.3 Product Decisions in Services 2.3
2.3.1 Concept of a Service Product 2.4
2.3.2 Levels of Service Product 2.5
2.3.3 Lifecycle of a Service Product 2.7
2.3.4 Types of New Services 2.14
2.3.5 New Service Development
Process / Stages in Service
Innovation and Development 2.16
2.4 Pricing Strategies and Tactics for Services 2.21
2.4.1 Pricing Objectives for Services 2.22
2.4.2 Factors Influencing Pricing
of Services 2.24
2.4.3 Approaches to Pricing Services 2.27
2.4.4 Methods for Pricing Services 2.29
2.4.5 Steps in Setting Price for
a New Service 2.32
2.4.6 Challenges in Pricing Services 2.39
2.5 Promotion of Services / Integrated
Service Marketing Communication
of Services 2.41
2.5.1 Integrated Service Marketing
Communication Mix 2.41
2.5.2 Communications Originating
from Outside the Organization 2.47
2.5.3 Integrated Services Marketing
Communication Process 2.48

Contents  vii
2.6 Distribution Methods for Services 2.51
2.6.1 Information and Promotion Flow 2.51
2.6.2 Negotiation Flow 2.51
2.6.3 Product Flow 2.52
2.6.4 Primary Methods of
Service Delivery 2.52
2.6.5 Service Location and Accessibility 2.54
2.6.6 Role of Intermediaries in
Service Delivery 2.55
2.6.7 Managing Intermediary
Relationships 2.55
2.6.8 Tactical Considerations
for Site Selection 2.56
2.6.9 Types of Distribution Channels
for Services 2.57
2.7 Managing People in Services 2.60
2.7.1 The Role of Employees in
Service Delivery 2.61
2.7.2 Customer’s Role in
Service Delivery 2.64
2.7.3 Balancing Employee and
Customer Expectations in
Services Marketing 2.69
2.8 Role of Physical Evidence 2.71
2.8.1 Components of Physical Evidence 2.72
2.8.2 Importance of Managing
Physical Evidence 2.74
2.8.3 Significance of Tangibles in
Intangible Services 2.75
2.8.4 Managing Customer Expectations
through Physical Evidence 2.75
2.8.5 Branding and Image Building
with Physical Evidence 2.75
2.8.6 Effective Use of Physical
Evidence in Services 2.76
2.9 Conclusion 2.77
Review Questions 2.83

viii  Essentials of Services Marketing
Chapter 3 Effective Management of Services Marketing 3.1

3.1 Effective Management of
Service Marketing 3.1
3.2 Managing Demand and Supply
through Capacity Planning 3.2
3.2.1 Managing Demand and
Capacity in Services 3.3
3.2.2 Demand Management 3.3
3.2.3 Capacity Management 3.4
3.3 Market Segmentation for Services 3.6
3.3.1 The Market Segmentation Process 3.7
3.3.2 Bases for Market Segmentation 3.8
3.4 Internal Marketing of Services 3.19
3.4.1 Important Dimensions of
Internal Marketing in Services 3.19
3.4.2 The Interplay of the
Three Dimensions 3.21
3.4.3 Success Factors in
Internal Marketing 3.22
3.5 External Versus Internal Orientation
of Service Strategy 3.24
3.5.1 External Orientation 3.24
3.5.2 Internal Orientation 3.25
3.5.3 Balancing Internal and
External Orientations 3.26
3.6 Conclusion 3.27
Review Questions 3.32
Chapter 4 Managing Service Quality 4.1
4.1 Delivering Quality Service 4.1
4.2 Causes of Service Quality Gaps 4.2
4.2.1 The Knowledge Gap 4.2
4.2.2 The Policy and Design Gap 4.3
4.2.3 The Delivery Gap 4.3
4.2.4 The Communication Gap 4.3

Contents  ix
4.3 SERVQUAL and SERVPERF Models 4.4
4.3.1 The SERVQUAL Model 4.4
4.3.2 The Service Performance
Model (SERVPERF) 4.7
4.4 The Customer Expectations Versus
Perceived Service Gap 4.9
4.5 Factors and Techniques to Resolve
the Customer Expectations Versus
Perceived Service Gap 4.10
4.5.1 Factors Leading to the Customer
Expectations Versus
Perceived Service Gap 4.11
4.5.2 Techniques to Close the Customer
Expectations Versus
Perceived Service Gap 4.12
4.6 Relationship Marketing and CRM
in Services Marketing 4.13
4.6.1 Relationship Marketing in Services 4.14
4.6.2 Customer Relationship
Management in Services 4.15
4.7 Gaps in Service Quality Standards,
Factors and Solutions 4.17
4.7.1 Knowledge Gap 4.17
4.7.2 Standards Gap 4.19
4.7.3 Delivery Gap 4.20
4.7.4 Communication Gap 4.21
4.7.5 Perception Gap 4.22
4.8 The Service Performance Gap 4.23
4.9 Key Factors and Strategies for
Closing the Service
Performance Gap 4.23
4.9.1 Factors Leading to the
Service Performance Gap 4.23
4.9.2 Strategies for Closing the
Service Performance Gap 4.24
4.10 External Communication to the
Customers- The Promise
Versus Delivery Gap 4.25

x  Essentials of Services Marketing

4.10.1 Common Indicators of the Gap 4.26
4.10.2 Managerial Controls
for Consistency 4.26
4.11 Developing Appropriate and
Effective Communication about
Service Quality 4.27
4.11.1 Principles of External
Communication 4.27
4.11.2 Internal Communication
Mechanisms 4.27
4.11.3 Feedback Loops and
Continuous Improvement 4.28
4.11.4 Coordinating Communication
During Service Failures 4.28
4.11.5 Documenting and Archiving
Quality Messages 4.28
4.12 Conclusion 4.28
Review Questions 4.31
Chapter 5 Marketing of Services in Specific Sectors 5.1
5.1 Marketing Financial Services 5.1
5.1.1 Introduction 5.1
5.1.2 Overview of the Sector 5.2
5.1.3 Origin and Evolution of Sector 5.2
5.1.4 Indian Scenario 5.2
5.1.5 Service Marketing Mix (7 Ps) 5.2
5.1.6 Future Outlook and Trends 5.4
5.2 Marketing Health Services 5.4
5.2.1 Introduction 5.4
5.2.2 Overview of the Sector 5.4
5.2.3 Origin and Evolution of Sector 5.4
5.2.3 Indian Scenario 5.5
5.2.4 Service Marketing Mix (7 Ps) 5.5
5.2.5 Future Outlook and Trends 5.6
5.3 Marketing Hospitality Services:
Travel, Hotels and Tourism 5.6
5.3.1 Introduction 5.6

Contents  xi
5.3.2 Overview of the Sector 5.7
5.3.3 Origin and Evolution of Sector 5.7
5.3.4 Indian Scenario 5.7
5.3.5 Service Marketing Mix (7 Ps) 5.7
5.3.6 Future Outlook and Trends 5.8
5.4 Marketing Professional Services 5.9
5.4.1 Introduction 5.9
5.4.2 Overview of the Sector 5.9
5.4.3 Origin and Evolution of Sector 5.9
5.4.4 Indian Scenario 5.9
5.4.5 Service Marketing Mix (7 Ps) 5.10
5.4.6 Future Outlook and Trends 5.11
5.5 Marketing Public Utility Services 5.11
5.5.1 Introduction 5.11
5.5.2 Overview of the Sector 5.11
5.5.3 Origin and Evolution of Sector 5.11
5.5.4 Indian Scenario 5.11
5.5.5 Service Marketing Mix (7 Ps) 5.12
5.5.6 Future Outlook and Trends 5.13
5.6 Marketing Educational Services 5.13
5.6.1 Introduction 5.13
5.6.2 Overview of the Sector 5.13
5.6.3 Origin and Evolution of Sector 5.13
5.6.4 Indian Scenario 5.13
5.6.5 Service Marketing Mix (7 Ps) 5.14
5.6.6 Future Outlook and Trends 5.15
5.7 Marketing E‐Services 5.15
5.7.1 Introduction 5.15
5.7.2 Overview of the Sector 5.15
5.7.3 Origin and Evolution of Sector 5.15
5.7.4 Indian Scenario 5.16
5.7.5 Service Marketing Mix (7 Ps) 5.16
5.7.6 Future Outlook and Trends 5.17
5.8 Conclusion 5.17
Review Questions 5.22
Index IND.1

Dr. D. Ramkumar is an Associate Professor in the Department of Business Administration,
Sri Meenakshi Government Arts College for Women (A), Madurai. He is a
post-graduate in Business Administration and has completed Ph. D., in Relationship
Marketing area. He has 29 years of teaching experience.

Dr. S. Ramesh is an Assistant Professor in the Department of Management Studies
at Sourashtra College, Madurai. He is a marketing professional and academic with
over 10 years of corporate experience and two year of teaching experience. He is a
post-graduate in Business Administration and has completed Ph. D., in Emotional
Intelligence.