Introduction to Marketing of Services

Introduction to Marketing of Services


What is a Service?

Kotler and bloom (1984) defined service as:

“Any activity on benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything”


Therefore, a service can be:

  • An act or performance offered by one party to another
  • An economic activity that does not result in the ownership of anything
  • A process that creates benefits by facilitating a desired change in – intangible assets, physical possessions or the customer themselves.


From a consumer`s point of view, services can be viewed as activities (activities which a customer cannot perform himself or he chooses not to) offered for sale which provide valuable benefits and satisfaction to a customer.

GATS identified 155 activities as service and classified them into 11 categories. They are:


  1. Business service
  2. Communication
  3. Construction and engineering
  4. Distribution
  5. Education
  6. Environment
  7. Finance
  8. Tourism
  9. Health
  10. Recreation
  11. Transportation



  • Services are activities rather than things
  • Services are intangible- i.e. we can’t see, touch or feel a service.
  • Thay are inseparable i.e. they are produced , distributed and consumed simultaneously
  • They are heterogeneous i.e. all services vary in time taken for delivery and consumption and the quality and extent of service
  • They are perishable i.e. it cannot be stored
  • Customers do not obtain ownership of a service they avail once
  • They are variable i.e. It refers to variations in service quality due to presence of human element
  • In case of services there is greater involvement of customer in production process
  • Services are difficult to visualize and understand, therefore they are also difficult to evaluate
  • A service is essentially a process and not a product 




Production and distribution are separate from consumptionProduction and distribution and consumption are simultaneously processed
A thingAn activity or process
Transfer of ownershipNo transfer of ownership
Core value produced in factoryCore value produced in buyer -seller interaction
Customers do not participate in production processThey participate in the production process





The Service industry accounts for 51% of India`s total gross domestic product .The reasons for such growth are as follows-


Changes in government policies –



Socio-cultural changes-



Business trends –



Advances in IT –


  • Growth of internet
  • Greater Bandwidth
  • Compact mobile equipment
  • Wireless networking
  • Faster, powerful software
  • Digitalization of text, audio, graphics, video


Globalization –


  • More companies operating on translational basis
  • Increased international travel
  • International mergers and alliance
  • Off shoring of customer services
  • Foreign competitors invading domestic market

Leave a Reply

Notify of