Introduction to Services Marketing

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Chapter 1

Introduction to Services Marketing

In general, goodscan be defined as objects, devices, or things, whereas products refer to

both goods and services. A serviceis any act or performance that one party can offer to another

that is essentially intangible and does not result in the ownership of anything. Its production may

or may not be tied to a physical product. The distinction between goods and services is not

perfectly clear. Serviceis the sum of all encounters between a customer and a service provider,

while buying/using service, feelings about such encounters immediately after the event and

sometimes, the recollections about the event after a period of time. For example, many things

happen when a customer undertakes a bus journey. The reservation process, timely

departure/arrival, luggage arrangement, leg space, comfort in the bus, audio/video entertainment,

functioning of AC etc. make up the total experience of a journey for the customer. Hence, it is

appropriate to think of a service as an experience comprising many tangible, intangible, process

and encounters.

Services Economy

All developed economies now have large service sector contribution to their country’s

GDP; it was about 76.9% in USA, 75.4% in Japan about 70% in the European Community.

Service industry is employed nearly 79% in USA and majority of industries in the U.S. economy

do not produce, they perform.

When we look at the contributions of each sector to the GDP in India, the share of

agriculture has declined from 52.60% in 1950-51 to about 14.70% in the 2009-10. The industry

grew from 14.50% in 1950-51 to 28.00% in 2009-10. The most notable feature is the steady

growth of the tertiary or service sector from 32.90% in 1950-51 to about 57.20% in 2009-10. The

service industry has outpaced manufacturing and agriculture to co ntribute more than half the

gross domestic product of the country. It is growing at a much faster rate and it is projected to be

more than 70 percent by 2020.

The

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