Marketing in 2020- 81 Hours

Welcome to this course on Services Marketing, I am the Zillur Rahman, professor in the

Department of Management Studies at IIT, Roorkee. Across this course, we will give a

special emphasis on Integrating People, Technology and Strategy. Let me explain you why

this is important? As you know that competition is changing every day it is becoming more

intense and your competitors are coming with newer technologies.

Now, companies they have to skill their employees in this new technologies. The employees

have to unlearn the older skills and learn new skills. Companies at the same time have to

educate the customers in using those technology and to educate and make them aware of how

these new technologies are going to benefit them.

Now, with all these changes, changes happening in the environment, companies also have to

then, take these changes into consideration and incorporate them in their strategy. So, that

they remain relevant to the customers as well as employees. So, this is the uniqueness of this

course that also this course we will be talking about how to go about integrating technologies

people and a strategy.

This course is divided into five sections and it has 40 modules. These are those 40 modules

the five sections are. In the first section that is ended understanding service products,

consumers and market is spread across 8 modules. The second section that is on applying the

4 Ps of marketing to services, it spread from module 9 to 19. The third section is on managing

the customer interface that will that will cover module 20 to 29.

The fourth module has will, will be talking about developing customer relationship that

spreads from the module 30 to 35 and in the last we will be talking about, in the fifth section

is striving for service excellence, this covers module 36 to 40. Now, let us start with the first

section that is understanding service products, consumers and market. In the first three

module, that is Module 1, 2 and through 3, we will be talking about new perspective on

marketing in the service economy.

Let us start with module 1. So, we are not talking on New Perspectives on Marketing in the

service economy. So, we will be talking about understanding how services contribute to a

country’s economy and the principal industries in the service sector. We will then identify the

powerful forces that are transforming service markets.

This is the overview of this course, we will talk about why should why we should study

services marketing? And then we will talk about the various definitions of services, we will

then move on to the service sector, what are the industries in the service sector?

The categories of service by the types of processing then we will move on to the key trends

and then, we will also talk about services for what are the distinct challenges that services for

opposes for marketing? And then we will talk about the functions and the service profit chain

and how we should put services strategy into action? So, this is this is what we are we will be

talking about through these modules.

Now, why we should study services? So, the first important point is that services dominate

the global economy. There is an increasing size of service sector across the globe, across the

globe across all the countries the size of service sector is increasing and the relative share of

employment between agriculture and industry and services is changing dramatically.

The, this proportion of employment that comes from agriculture or manufacturing or services

it is changing and even in emerging economies, the service output is growing rapidly and

often represents at least half of the gross domestic product. So, it is about 50 percent of the

GDP that comes from services and the rest 50 percent comes from agriculture and industry.

So, that is why it is important that we should study services.

Now look at this, this slide it shows the evolution of service dominated economy. On the x

axis we have time and per capita income. So, it moves from left to right and from lower to

higher and then on the y axis we have share of employment again it moves from, bottom to

the top as we go up. So, now you see that, these services, the contribution of services in the

GDP and per capita income has increased tremendously.

This slide shows the contribution of service industries to the GDP globally. So globally,

services account for 63 percent of the global GDP, 31 percent comes from manufacturing,

and 6 percent comes from agriculture. So, it is more than 50 percent of the GDP across of the

globe that services contribute to.

This slide shows the size of service sector in various economies. So, you see that on the top

we have countries like Bermuda and Hong Kong and Bahamas and at the bottom, we have

countries like Indonesia, Laos, and Saudi Arabia.

So, this shows the service as percentage of GDP. So in Bermuda is 94 percent of the GDP

while in Saudi Arabia it is 36 percent of the GDP and there are lots of, in India the World

Factbook, 2015 shows that it is 57 percent and now it has increased to more than 60 percent.(Refer Slide Time: 06:13)

The second important point that makes studying of services in important is that most new

jobs are generated by services. So, it is not only about the contribution of services in the

GDP, but also the more amount of job that it generates. So, in most countries around the

world, new job creation comes mainly from services. There are knowledge based industries

such as professional and business services, education and health care. They generate high

paid jobs. In fact, this shift in employment to the service sector has been seen as one of the

longest and the most stable of the economic trends.

Many manufacturing firm too have moved from just bundling supplementary services with

their physical products to marketing certain elements as standalone services. For example,

IBM that was primarily known as a manufacturer has now transformed into a service provider

and has become the world’s largest business and technology service provider offering

management consulting, systems integration and application management services as part of

IBM Global Services. So, you see that the manufacturing pure manufacturing firms they are

moving towards services as and several of them including IBM have now become a pure

service company.

Now, this slide shows the share of service sector in GDP and employment. So, in India, it is

the gross value added by services is 53.2 percent and the employment it generates is 28.6

percent, while in U.S they are about the same. The gross value added is 79.3 percent while

the employment is 80 percent.

(Refer Slide Time: 08:03)

The third important point for us to study services marketing is that understanding of services

will offer personal competitive advantage. So, the distinct characteristics of services and how

they affect both customer behavior and marketing strategy will give important insights and

perhaps create a competitive advantage for us as not only a customer but also as an employee.

This is the distribution of principal industries of the service sector. So, agriculture, so, this is

agriculture, forestry, fishing and mining that contributes to 77, 7.7 percent then there are

government services that contributes to the highest and that is 30, 13.2 percent.

(Refer Slide Time: 08:56)

Now, let us look at some of the powerful forces that are transforming services markets,

government policies, business trends, advances in IT etcetera, are among the powerful forces

transforming today’s service markets. Collectively these forces they reshape demand, supply,

competitive landscape and even the way customer buy and use services.

Of these forces the dramatic development of IT and communications is perhaps the most

important at the moment. So these powerful forces, they are transforming service markets and

the service markets are no longer what they used to be. Because they are reshaping the

demand and supply and the competition and therefore, they have all they have also brought

about a change in how we as customers buy and use services.

Then innovation in big data, the user generated content, mobile communications and network

technology, Artificial Intelligence and app based self service technologies bring their own

service revolution. These technologies they enable firms to deepen the relationship with their

customers, offer multiple ways information flow, and more personalized services. They

improve analytics and improve productivity and therefore improves profitability.