TYBMS SEM 5 : Marketing: Services Marketing (Q.P. April 2025 with Solution)

                                      Paper/Subject Code: 46004/Marketing: Services Marketing

TYBMS SEM 5 : 

Marketing:

Services Marketing

(Q.P. April 2025 with Solution)

Q.1.A. Choose the appropriate alternative and fill in the blanks (Any 8)            (08)

1. Service marketing become difficult because of _________

a. Intangibility

b. No demand

c. More complex market

d. Difficult to enter market

2. Service are characterized by all of the following characteristics except for ________

a. Intangibility

b. Homogeneity

c. Perishability

d. Inseparability

3. Green marketing is a part of _________

a. Social marketing

b. Service marketing

c. Relationship marketing

d. Rural marketing

4. Customer satisfaction can be defined by comparing ________

a. Predicted service and perceived service

b. Predicted service and desired service

c. Desired service and perceived service

d. Adequate service and perceived service

5. Which of the following is not a service?

a. Insurance

b. Mail delivery

c. Medical checkup

d. None of these

6. A buyer's perception of value is considered a trade-off between _______

a. Product value and psychic cost

b. Total customer value and total customer cost

c. Image value & monetary cost

d. Service value and monetary cost

7. Solutions used to minimize the marketing problems attributed to heterogeneity include _______

a. Standardizing the service

b. Using multi-site location

c. Stressing tangible clues

d. None of these

8. Which of the following is not an objectives of service marketing?

a. Promoting customer satisfaction

b. Building trust

c. Establish uniform price

d. None of these

9. Which of the following is not included in seven Ps of the marketing mix given by Booms and Bitner?

a. Process

b. People

c. Politics

d. Physical evidence

10. The following is not ways in which intangibility can be overcome

a. Visualization

b. Association

c. Documentation

d. Situation

Q.1.B. State True or False (Any 7)                (7)

1. Intangibility is the primary characteristics that distinguishes services from goods

Ans: True

2. Service encounter is a part of day to day work for the services providers.

Ans: True

3. Customers should be treated royally as they are termed as king in marketing.

Ans: True

4. Empathy is the key quality parameter in service.

Ans: True

5. Service providers often rely more on personal selling than product marketers.

Ans: True

6. Services can be returned or exchanged like physical products.

Ans: False

7. The concept of perishability in service marketing means that services cannot be stored for later use.

Ans: True

8. Customer experience plays a crucial role in service marketing strategies.

Ans: True

9. Technology plays no significant role in service delivery and marketing strategies.

Ans: False

10. Intangibility is a unique characteristic of services that affects how they are marketed.

Ans: True

Q2

a) Explain the features of services                (08)

The unique features of services, often described through key characteristics that differentiate services from physical goods. These features help businesses understand how to design, deliver, and market services effectively.

Unique Features of Services

1. Intangibility

Services are intangible, meaning they cannot be touched, seen, tasted, smelled, or stored in the same way physical products can.

Unlike goods, services do not have a physical presence. This makes it difficult for customers to evaluate a service before purchasing it. For example, when you buy a mobile phone, you can see, touch, and test it. But when you book a vacation package or attend a coaching session, you rely on trust, reviews, or previous experiences.

• Customers perceive value based on reputation, branding, and communication.

• Service providers must use tangible cues (e.g., uniforms, certificates, ambiance) to build trust and reduce uncertainty.

Example:
Consulting, insurance, or education—where the outcome is experienced rather than possessed.

2. Inseparability

Services are produced and consumed simultaneously, and cannot be separated from the service provider.

Unlike products, which are manufactured in one place and consumed in another, services require real-time interaction between the provider and customer. The quality of service often depends on both the provider’s performance and the customer’s participation.

• Service delivery is often personalized and varies from customer to customer.

• The presence and behavior of the service provider are critical to customer satisfaction.

• Managing the interaction process becomes essential.

Example:
Haircuts, hotel stays, or medical consultations, where the customer must be physically present to receive the service.

3. Variability (Heterogeneity)

Services are highly variable, and their quality may differ depending on who provides them, when, where, and how.

Because human involvement is high, there can be significant differences in how a service is delivered. Even the same employee may not perform exactly the same way every time due to mood, workload, or customer behavior.

• Service firms must train staff well and maintain quality control mechanisms.

• Standardization is more difficult but can be supported through procedures and technology.

Example:
The experience at a restaurant may differ on a busy weekend versus a weekday, or between two servers.

4. Perishability

Services cannot be stored, saved, or returned once they are delivered or expire.

Unlike physical goods, services are perishable. Once the service time has passed, it cannot be recovered. For example, an unsold airline seat or a missed doctor's appointment represents a lost opportunity and revenue.

• Demand forecasting and capacity management are crucial.

• Businesses may use price discounts, appointments, or reservations to balance demand and supply.

Example:
Event tickets, hotel rooms, and transportation services—any unsold capacity is lost forever.

5. Lack of Ownership

When a customer purchases a service, they gain access or use—but they do not own it.

Customers only experience the benefit of the service during a specific time. There is no permanent transfer of possession or ownership. This is different from buying a car or clothing, which becomes the buyer’s property.

• Service providers must focus on the value of experience.

• Must highlight benefits rather than physical features.

Example:
Subscribing to Netflix or using public transportation—you pay for access, not ownership.

6. Customer Participation

• Customers often participate in the delivery process (e.g., using a self-service kiosk, giving input in a consultation).

7. No Transfer of Title

• Since no goods are exchanged, there’s no ownership transferred, just utility provided over time.

b) Distinguish between goods marketing and service marketing            (07)

	Goods	Service
1. Tangibility	Goods are tangible, meaning they have a physical form. They can be seen, touched, stored, and inspected before purchase. Example: A mobile phone, car, or a bag.	Services are intangible, meaning they cannot be physically touched or stored. They are experienced rather than owned. Example: Getting a haircut, consulting a lawyer, or attending a yoga class.
2. Ownership	Goods involve a transfer of ownership from seller to buyer. Once purchased, the customer becomes the owner of the good. Example: When you buy a car, it legally becomes your property.	Services do not involve ownership. You only gain access to or use of the service for a limited time. Example: When you stay at a hotel, you don’t own the room — you're paying to use it temporarily.
3. Production and Consumption	Goods are usually produced, stored, and then sold. Production and consumption happen separately. Example: A bakery produces bread in the morning and sells it later in the day.	Services are produced and consumed simultaneously. The customer often must be present during delivery. Example: A massage or medical treatment is delivered and consumed in real-time.
4. Perishability	Goods are less perishable — they can be stored in inventory for later sale. Example: Packaged food or electronics can sit on a shelf for weeks.	Services are highly perishable — they expire the moment they are offered and not used. Example: An empty hotel room or missed doctor's appointment cannot be sold later.
5. Consistency and Quality Control	Goods are usually standardized — meaning quality can be controlled during production. Example: Every unit of a branded chocolate bar will taste the same.	Services are variable — quality may differ depending on who provides the service, when, and how. Example: Two taxi drivers may offer completely different experiences.
6. Customer Involvement	Goods typically require less customer involvement in the production process. Example: A customer simply chooses and buys a TV.	Services often require active customer involvement. Example: In a music class, the student's participation affects the outcome of the service.
7. Returnability	Goods can be returned or exchanged if defective or unwanted. Example: You can return a dress if it doesn’t fit.	Services cannot be returned once delivered. Example: You can’t return a haircut once it's done — although complaints may lead to compensation.

OR

c) How do services serve as the largest source of employment in the economy? Discuss the Factors contributing to this trend."                (15)

In modern economies, the service sector (also called the tertiary sector) has become the largest generator of employment. Services include trade, banking, insurance, transport, communication, education, healthcare, tourism, IT, and many others. Unlike the primary (agriculture) and secondary (manufacturing) sectors, services are more labor-intensive in certain areas and expand rapidly as economies grow.

According to global economic patterns, as countries develop, the share of services in GDP and employment rises significantly. In many developing nations too, services now employ more people than agriculture or industry.

Factors Contributing to Growth of Employment in Services

1. Economic Development and Structural Change

• As economies grow, demand shifts from basic goods (food, clothing) toward services such as education, healthcare, banking, transport, and leisure.

• This transition naturally expands the service workforce.

• Example: Developed countries like the USA and UK have over 70% of employment in services.

2. Urbanization and Lifestyle Changes

• Rising urbanization increases the need for housing, retail, hospitality, transportation, and communication services.

• Changing lifestyles and higher disposable incomes create demand for entertainment, tourism, fitness, and personal care services.

• Example: Growth of shopping malls, multiplexes, and fitness centers in urban India.

3. Globalization and Outsourcing

• Services such as IT, BPO, and KPO have become global industries, employing millions of skilled workers.

• Developing countries with educated, low-cost labor (e.g., India, Philippines) have become hubs for outsourced services.

• Example: Indian IT sector employing millions in software and customer support services.

4. Technological Advancements

• Growth of digital platforms, fintech, e-commerce, online education, and telemedicine has created entirely new categories of service jobs.

• Technology also enables remote services, expanding employment opportunities globally.

• Example: Rise of app-based services like Swiggy, Uber, and Zomato generating employment for delivery and transport workers.

5. Labor-Intensive Nature of Services

• Many services (healthcare, education, hospitality, tourism, retail) require direct human interaction and cannot be easily automated.

• This creates large-scale employment opportunities across both skilled and unskilled labor categories.

• Example: Hotels and restaurants employing large numbers of waiters, chefs, managers, and cleaners.

6. Government Policies and Public Sector Services

• Expansion of public services like education, healthcare, banking, and transport generates significant employment.

• Governments in developing nations also promote service sectors like tourism and infrastructure to absorb labor from agriculture.

• Example: National health schemes increasing demand for doctors, nurses, and support staff.

7. Tourism and Hospitality Industry

• Tourism acts as a major employment generator by creating jobs in transport, food services, hotels, handicrafts, and entertainment.

• Example: Countries like Thailand and Maldives rely heavily on tourism-related services for employment.

Q3

a) Explain the factors influencing consumer's behavior with references to services.            (08)

Consumer behavior is the study of how individuals, groups, and organizations select, buy, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and wants. Understanding the factors that influence this behavior is paramount for businesses, especially in the service sector, where the intangible nature of offerings adds complexity to the consumer decision-making process. Unlike tangible products, services are often experienced rather than possessed, making consumer perceptions and evaluations particularly critical.

Psychological Factors

Psychological factors are internal influences that affect an individual's purchasing decisions. These include:

• Motivation: Motivation refers to the driving force within individuals that compels them to act. Maslow's hierarchy of needs (physiological, safety, social, esteem, and self-actualization) provides a framework for understanding consumer motivations. For example, a consumer might choose a luxury spa treatment (esteem need) over a basic massage (physiological need) if they are seeking self-indulgence and status. Service providers can appeal to different motivational levels by offering a range of services that cater to various needs.

• Perception: Perception is the process by which individuals select, organize, and interpret information to form a meaningful picture of the world. Consumers' perceptions of service quality, value, and risk significantly influence their choices. For instance, a customer's perception of a restaurant's cleanliness and ambiance can heavily impact their dining experience and likelihood of returning. Service providers must manage perceptions through consistent service delivery, effective communication, and positive branding.

• Learning: Learning refers to changes in an individual's behavior arising from experience. Consumers learn about services through direct experience, word-of-mouth, and marketing communications. Positive experiences reinforce repeat purchases, while negative experiences can lead to brand switching. Service providers should focus on creating positive customer experiences and actively managing feedback to facilitate learning and build brand loyalty.

• Beliefs and Attitudes: Beliefs are descriptive thoughts that a person holds about something, while attitudes are a person's consistently favorable or unfavorable evaluations, feelings, and tendencies toward an object or idea. These significantly impact consumer behavior. For example, if a consumer believes that a particular airline consistently provides excellent customer service (belief), they are more likely to have a positive attitude towards that airline and choose it for their travel needs. Service providers need to understand and shape consumer beliefs and attitudes through consistent service quality, transparent communication, and positive brand associations.

Personal Factors

Personal factors are individual characteristics that influence consumer behavior. These include:

• Age and Life-Cycle Stage: Consumers' needs and preferences change as they age and move through different life-cycle stages (e.g., single, married, family with children, retired). A young professional might prioritize convenience and speed when choosing a dry-cleaning service, while a retired individual might value personalized attention and affordability. Service providers should tailor their offerings and marketing messages to specific age groups and life-cycle stages.

• Occupation: A person's occupation influences their purchasing decisions. For example, a business traveler might prioritize services that offer convenience and efficiency, such as airport lounges and express check-in, while a student might seek affordable options like budget airlines and student discounts. Service providers should understand the specific needs and preferences of different occupational groups.

• Economic Situation: A consumer's economic situation (income, savings, wealth) significantly impacts their ability to purchase services. High-income individuals might opt for premium services like private banking and luxury travel, while low-income individuals might prioritize essential services like public transportation and affordable healthcare. Service providers should offer a range of services at different price points to cater to diverse economic situations.

• Lifestyle: Lifestyle refers to a person's pattern of living as expressed in their activities, interests, and opinions. Consumers with active lifestyles might prioritize fitness services and outdoor adventure activities, while those with more sedentary lifestyles might prefer entertainment services like streaming platforms and movie theaters. Service providers should align their offerings with the lifestyles of their target customers.

• Personality and Self-Concept: Personality refers to the unique psychological characteristics that distinguish a person, while self-concept is how a person views themselves. Consumers often choose services that align with their personality and self-concept. For example, an adventurous individual might choose extreme sports activities, while a sophisticated individual might prefer fine dining experiences. Service providers should create brand personalities that resonate with their target customers' self-concepts.

Social Factors

Social factors are external influences that stem from an individual's interactions with others. These include:

• Culture: Culture is the set of basic values, perceptions, wants, and behaviors learned by a member of society from family and other important institutions. Cultural values influence consumer preferences for services. For example, in some cultures, personal grooming services like hair salons and spas are highly valued, while in others, they may be considered less important. Service providers should adapt their offerings and marketing messages to align with the cultural values of their target markets.

• Social Class: Social class is a relatively permanent and ordered division in a society whose members share similar values, interests, and behaviors. Social class influences consumer preferences for services. For example, upper-class individuals might prefer exclusive private clubs and concierge services, while middle-class individuals might opt for family-friendly restaurants and recreational activities. Service providers should tailor their offerings and marketing messages to specific social classes.

• Reference Groups: Reference groups are groups that have a direct (face-to-face) or indirect influence on a person's attitudes or behavior. These include membership groups (groups to which a person belongs), aspirational groups (groups to which a person wants to belong), and dissociative groups (groups to which a person does not want to be associated). Consumers often seek recommendations and opinions from their reference groups when making service decisions. Service providers should leverage word-of-mouth marketing and social media to influence reference groups and build brand advocacy.

• Family: Family members can strongly influence an individual's purchasing decisions, especially for services consumed collectively, such as family vacations and entertainment. Service providers should consider the needs and preferences of all family members when designing and marketing their services.

Cultural Factors

Cultural factors exert the broadest and deepest influence on consumer behavior.

• Culture: As mentioned earlier, culture encompasses shared values, beliefs, and customs that shape consumer preferences. For example, the emphasis on individualism versus collectivism can influence the types of services consumers seek. Individualistic cultures may prioritize personalized services, while collectivist cultures may value community-based services.

• Subculture: Subcultures are groups of people with shared value systems based on common life experiences and situations. These can include nationalities, religions, racial groups, and geographic regions. Service providers should recognize and cater to the unique needs and preferences of different subcultures.

b) Analyze the STP (Segmentation, Targeting, and Positioning) process in service Marketing.    (07)

Segmentation in Service Marketing

Segmentation involves dividing a broad consumer or business market into sub-groups of consumers based on shared characteristics. The goal is to identify segments with similar needs and wants, allowing for more tailored and effective marketing efforts. In service marketing, segmentation is particularly crucial due to the inherent heterogeneity and intangibility of services.

Segmentation Variables for Services

While traditional segmentation variables like demographics, geography, and psychographics are applicable, service marketers often rely on variables that are more directly related to service consumption:

• Behavioral Segmentation: This is often the most relevant for services. It focuses on:

  • Usage Rate: Heavy users, medium users, light users, and non-users. For example, a gym might target heavy users with premium memberships and light users with introductory offers.

  • Usage Situation: Segmenting based on when and why the service is used. A hotel might target business travelers during the week and leisure travelers on weekends.

  • Benefits Sought: Grouping customers based on the specific benefits they seek from the service. For example, some restaurant customers prioritize speed and convenience, while others value ambiance and quality.

  • Loyalty Status: Identifying loyal customers who are more likely to repurchase and refer the service. Loyalty programs and personalized offers can be used to retain these valuable customers.

• Psychographic Segmentation: Understanding customers' lifestyles, values, and attitudes can be particularly useful for services that are closely tied to personal identity or self-expression. For example, a luxury spa might target customers who value wellness and self-care.

• Demographic Segmentation: While less directly relevant than behavioral or psychographic segmentation, demographics can still provide valuable insights. For example, age and income can influence the demand for certain financial services.

• Geographic Segmentation: Location can be a key factor for services that are delivered locally. For example, a dry cleaner might target customers within a specific radius of their store.

Targeting in Service Marketing

Targeting involves evaluating the attractiveness of each segment and selecting the segment(s) that the company will focus its marketing efforts on. The goal is to identify the segment(s) that offer the greatest potential for profitability and growth.

Targeting Strategies for Services

• Concentrated Marketing (Niche Marketing): Focusing on a single, well-defined segment. This can be effective for small businesses with limited resources or for services that cater to a highly specialized need.

• Differentiated Marketing: Targeting multiple segments with different marketing mixes. This allows the company to reach a wider audience and increase its overall market share.

• Undifferentiated Marketing (Mass Marketing): Offering the same service to all customers. This is less common in service marketing due to the heterogeneity of customer needs.

• Micromarketing: Tailoring services to the needs of individual customers. This is becoming increasingly feasible with the rise of technology and data analytics.

Positioning in Service Marketing

Positioning involves creating a clear and distinctive image of the service in the minds of target customers. The goal is to differentiate the service from competitors and communicate its unique value proposition.

Positioning Strategies for Services

• Price Positioning: Offering the service at a lower price than competitors.

• Quality Positioning: Emphasizing the superior quality of the service.

• Service Feature Positioning: Highlighting unique features or benefits of the service.

• Convenience Positioning: Emphasizing the ease of access and use of the service.

• Specialization Positioning: Focusing on a specific niche or area of expertise.

• Relationship Positioning: Building strong relationships with customers through personalized service and communication.

OR

c) "Explain the concepts of service failure and the recovery process, highlighting their impact on customer satisfaction and loyalty."                    (15)

Service recovery refers to the actions taken by an organization to rectify a service failure and restore customer satisfaction. A well-executed service recovery process can turn a potentially negative experience into a positive one, strengthening customer loyalty.

Elements of an Effective Service Recovery Process:

• Acknowledgement and Apology: The first step is to acknowledge the failure and sincerely apologize to the customer. This demonstrates empathy and shows that the organization takes responsibility for the mistake.

• Explanation: Providing a clear and honest explanation of why the failure occurred can help the customer understand the situation and reduce their frustration.

• Solution and Compensation: Offering a solution to the problem is crucial. This could involve fixing the issue, providing a refund, offering a discount on future services, or providing other forms of compensation. The solution should be fair and proportionate to the severity of the failure.

• Empowerment: Empowering employees to resolve customer issues on the spot is essential. This allows for faster and more effective resolution, as employees can make decisions without having to go through multiple layers of approval.

• Follow-Up: Following up with the customer after the issue has been resolved demonstrates a commitment to customer satisfaction and allows the organization to ensure that the customer is happy with the outcome.

• Learning from Mistakes: Analyzing service failures to identify root causes and implement preventative measures is crucial for continuous improvement. This involves tracking failure rates, gathering customer feedback, and making necessary changes to processes and systems.

Strategies for Service Recovery:

Several strategies can be employed to effectively recover from service failures:

• Fairness: Customers expect to be treated fairly during the recovery process. This includes distributive fairness (the outcome of the recovery), procedural fairness (the process used to resolve the issue), and interactional fairness (the way the customer is treated during the process).

• Speed: Resolving issues quickly is crucial. Customers appreciate prompt attention and a swift resolution to their problems.

• Convenience: Making the recovery process as easy and convenient as possible for the customer is important. This could involve offering multiple channels for reporting issues, providing clear instructions, and minimizing the effort required from the customer.

• "Service Recovery Paradox": In some cases, a well-executed service recovery can actually lead to higher customer satisfaction and loyalty than if the failure had never occurred. This is known as the "service recovery paradox." However, this paradox only applies when the recovery is truly exceptional and exceeds customer expectations.

Q4

a) Describe the types of demand in services with an example.                    (08)

Types of Demand in Services

Service demand is more complex than demand for physical goods because services are intangible, inseparable, variable, and perishable. They cannot be produced and stored for later sale, which makes demand management a central issue in service marketing. Below are the major types of demand in services, explained in detail:

1. Full Demand

• Meaning: This occurs when the demand for a service exactly matches the available supply or capacity. The organization is able to serve all customers without any wastage or shortage.

• Significance: This is considered the ideal situation for service providers because resources are fully utilized, and customers are satisfied.

• Example: A hotel with 100 rooms fully booked during a business conference, where every customer is accommodated and no room is left idle.

2. Excess Demand (Overdemand)

• Meaning: This arises when the demand for a service exceeds the service provider’s capacity. As a result, some customers may be turned away, wait longer, or receive reduced service quality.

• Significance: If not managed properly, excess demand can lead to customer dissatisfaction, loss of business, and damage to reputation.

• Example: During major festivals or holidays, train and airline bookings exceed capacity, leading to long waiting lists or cancellations.

3. Negative Demand

• Meaning: This exists when customers dislike or avoid a service and would rather not use it even if it is available. They may even be willing to pay to avoid it.

• Significance: Marketers need to create awareness, educate customers, or repackage the service to reduce negative perceptions.

• Example: People avoiding dental procedures due to fear of pain, or patients reluctant to undergo surgeries despite medical necessity.

4. Latent Demand

• Meaning: Latent demand arises when there is a strong need for a service, but it is not currently available in the market. Customers are willing to use it if it is introduced.

• Significance: This represents opportunities for innovation and new service development.

• Example: Before the rise of food delivery apps, there was latent demand among busy professionals for convenient, reliable home-delivered meals.

5. Overfull Demand

• Meaning: This type of demand occurs when the demand is higher than the service provider can handle, often to the point of straining resources and harming customer experience.

• Significance: Service providers may need to discourage demand temporarily, adjust pricing, or increase capacity.

• Example: Tourist destinations such as hill stations or beaches becoming overcrowded during summer vacations, leading to congestion and poor service quality.

6. Irregular (Fluctuating) Demand

• Meaning: Demand that varies significantly by time, season, or day, creating idle capacity at some times and excess demand at others.

• Significance: This is one of the biggest challenges in service marketing because services cannot be stored. Techniques like differential pricing and promotional offers are used to balance demand.

• Example:

  • Restaurants and cafes see higher demand on weekends and very low demand on weekdays.

  • Electricity consumption peaks during hot summer afternoons due to air conditioner usage.

7. Unwholesome Demand

• Meaning: This refers to demand for services that are harmful to individuals or society. Although profitable, they may have negative social consequences.

• Significance: Governments often regulate such services, and marketers may face ethical challenges.

• Example: Gambling, illegal betting, and consumption of harmful addictive services (e.g., certain types of nightlife entertainment).

b) Discuss various promotion strategies used in service marketing and their effectiveness in engaging customers.            (07)

Promotion Strategies in Service Marketing

Promotion in service marketing involves all communication efforts used to inform, persuade, and remind customers about a service. Since services are intangible, promotion plays a crucial role in reducing uncertainty, building trust, and differentiating one provider from another.

The major promotion strategies include:

1. Advertising

• Definition: Paid communication through media such as television, radio, print, outdoor, and digital platforms.

• Effectiveness: Helps create awareness, demonstrate service benefits, and build a strong brand image. In services, testimonials, demonstrations, and storytelling in ads are effective in reducing intangibility.

• Example: Insurance companies advertising customer success stories to build credibility.

2. Personal Selling

• Definition: Direct interaction between sales representatives and customers to explain and persuade.

• Effectiveness: Highly effective in services that are complex, customized, or high-involvement (e.g., financial services, education, healthcare). Builds trust and long-term relationships.

• Example: Bank executives personally explaining investment or loan options.

3. Sales Promotion

• Definition: Short-term incentives designed to stimulate demand.

• Effectiveness: Encourages trial, repeat purchases, and quick decision-making. Particularly effective in competitive service markets.

• Example: Restaurants offering “buy one get one free” deals, or telecom companies providing extra data packs.

4. Public Relations (PR) and Publicity

• Definition: Activities aimed at creating a favorable public image through media coverage, events, sponsorships, and community engagement.

• Effectiveness: Builds credibility because publicity is seen as unbiased. Especially useful for professional services and social institutions.

• Example: Hospitals organizing free health camps or universities hosting seminars.

5. Direct Marketing

• Definition: Direct communication with targeted customers via email, SMS, telemarketing, or mailers.

• Effectiveness: Personalized, measurable, and cost-effective. Enhances customer engagement by addressing individual needs.

• Example: Travel agencies sending personalized holiday packages to past customers.

6. Digital and Social Media Marketing

• Definition: Use of online platforms such as websites, social media, search engines, and mobile apps.

• Effectiveness: Allows real-time interaction, user-generated reviews, and wide reach at relatively low cost. Highly engaging due to two-way communication.

• Example: Airlines using social media for promotions, updates, and customer service.

7. Word-of-Mouth and Referral Programs

• Definition: Encouraging satisfied customers to share their experiences and recommend the service to others.

• Effectiveness: One of the most powerful strategies in services due to the trust factor. Referral discounts and loyalty programs enhance effectiveness.

• Example: Ride-sharing apps offering referral bonuses.

8. Experiential and Event Marketing

• Definition: Creating experiences where customers can interact with the service before purchase.

• Effectiveness: Reduces uncertainty by letting customers “experience” service quality. Creates strong emotional connections.

• Example: Educational institutions conducting demo classes or hotels offering complimentary trial stays.

OR

c) Analyze the role of pricing in service marketing and its significance in influencing Customer perception and demand.                    (15)

Role of Pricing in Service Marketing

In service marketing, pricing plays a critical role because services are intangible, perishable, and highly variable. Unlike products, services cannot be stored or owned, so price often becomes a key indicator of value, quality, and positioning in the minds of customers.

The major roles of pricing in service marketing are:

1. Indicator of Service Quality

   • Since customers cannot physically evaluate a service before purchase, they often use price as a cue to judge quality.

   • Example: A higher fee charged by a lawyer or doctor may create the perception of greater expertise.

2. Revenue and Profit Generation

   • Pricing directly determines the revenue a service provider earns and is crucial for covering costs, especially in labor-intensive services.

3. Market Segmentation and Positioning

   • Price helps differentiate services in the market. Premium pricing can position a service as exclusive, while penetration pricing may help attract a larger customer base.

4. Demand Management

   • Pricing can be used to balance demand and supply, particularly because services are perishable (e.g., an unsold hotel room or an empty airline seat cannot be stored).

   • Example: Airlines and hotels use dynamic pricing to manage demand during peak and off-peak seasons.

5. Customer Relationship Building

   • Transparent and fair pricing builds trust and long-term relationships. Hidden charges or unfair pricing can damage customer loyalty.

Significance in Influencing Customer Perception

• Perceived Value: Customers weigh the price against the benefits received. If benefits exceed the cost, the service is perceived as high value.

• Price–Quality Relationship: In many services, higher prices create an assumption of higher reliability and professionalism.

• Reference Pricing: Customers compare service prices with competitors or past experiences to judge fairness.

• Psychological Impact: Round numbers (₹1000) vs. odd pricing (₹999) can influence perception of affordability.

Significance in Influencing Demand

• Elastic and Inelastic Demand:

  • For essential services (like healthcare), demand is relatively inelastic—price changes do not greatly reduce demand.

  • For luxury or discretionary services (like tourism, entertainment), demand is highly elastic—price changes strongly affect demand.

• Promotional Pricing: Discounts, seasonal offers, and bundling encourage trial and repeat purchases.

• Dynamic and Differential Pricing: Charging different prices based on time, customer category, or usage helps maximize revenue and manage demand fluctuations.

Q5

a) Explain service gaps analysis in detail

Service Gaps Analysis

Service Gaps Analysis is a framework used in services marketing to identify the differences between customer expectations and perceptions of service. It helps organizations understand where service delivery fails to meet customer expectations and provides a guide to improve service quality. The most widely accepted model is the Gaps Model of Service Quality developed by Parasuraman, Zeithaml, and Berry.

The Gaps in Service Quality

1. Gap 1: Knowledge Gap

   • Definition: The difference between what customers expect and what management perceives they expect.

   • Cause: Lack of market research, poor communication with customers, or incorrect assumptions about customer needs.

   • Example: A telecom company assuming customers only value low prices, while customers actually also expect reliable network coverage.

2. Gap 2: Design and Standards Gap

   • Definition: The gap between management’s perception of customer expectations and the service quality specifications set.

   • Cause: Inadequate service design, absence of clear service standards, or failure to translate expectations into service guidelines.

   • Example: A bank knowing customers want faster services but not setting clear standards for reducing waiting times.

3. Gap 3: Delivery Gap

   • Definition: The difference between service quality specifications and the actual service delivered.

   • Cause: Lack of employee training, poor teamwork, inadequate resources, or service inconsistency.

   • Example: A restaurant promises food delivery in 30 minutes, but due to untrained staff, delivery often takes 45 minutes.

4. Gap 4: Communication Gap

   • Definition: The gap between what is promised to customers through external communication and what is actually delivered.

   • Cause: Overpromising in advertisements, miscommunication between marketing and operations, or unrealistic promotional campaigns.

   • Example: An airline advertising “luxury seating” but providing standard economy-class chairs.

5. Gap 5: Service Quality Gap (Customer Gap)

   • Definition: The difference between the expected service and the perceived service received by the customer.

   • Cause: This is the result of all the other four gaps.

   • Example: A hotel guest expected a clean and quiet room (expectation) but found it noisy and untidy (perception).

Importance of Service Gaps Analysis

• Helps organizations systematically identify weaknesses in service delivery.

• Guides managers in aligning customer expectations with actual service performance.

• Improves customer satisfaction and loyalty by reducing service failures.

• Provides a framework to train employees, set realistic standards, and design better communication strategies.

b) Describe the recent trends in telecommunication industry                (08)

The telecommunication industry has undergone significant transformation in recent years, driven by technological innovation, changing consumer demands, and regulatory developments. The following trends are most notable:

1. 5G Deployment and Transition Towards 6G
   The global rollout of 5G networks continues, offering high data speeds, ultra-low latency, and enhanced connectivity. Many operators are also moving towards standalone 5G networks, while research and standardization work on 6G has already begun.

2. Integration of Artificial Intelligence and Automation
   Artificial intelligence (AI) and machine learning (ML) are being adopted for network optimization, predictive maintenance, traffic management, and customer support. Automated processes help improve efficiency, reduce downtime, and enhance user experience.

3. Expansion of Internet of Things (IoT) and Edge Computing
   Telecommunications is enabling large-scale IoT deployment across sectors such as healthcare, transportation, and smart cities. Edge computing, which processes data closer to the source, is reducing latency and supporting real-time applications.

4. Adoption of Satellite and Non-Terrestrial Networks
   Satellite-based internet services are emerging as complementary to terrestrial networks. These systems help provide connectivity in rural, remote, and underserved regions, bridging the digital divide.

5. Diversification of Revenue Streams
   Telecom operators are moving beyond traditional voice and data services. They are offering enterprise solutions such as private 5G, cloud services, cybersecurity, and digital platforms to generate new sources of revenue.

6. Sustainability and Green Initiatives
   The industry is focusing on reducing its environmental impact through the use of renewable energy, energy-efficient network infrastructure, and the gradual phasing out of legacy systems like copper and 3G networks.

7. Strengthened Security and Privacy Measures
   With the growth of connected devices and complex networks, cybersecurity has become a priority. Telecom companies are adopting stronger encryption, zero-trust frameworks, and enhanced data protection strategies.

8. Network Virtualization and Open RAN
   Operators are increasingly adopting virtualization technologies such as Network Functions Virtualization (NFV) and Software-Defined Networking (SDN). Open Radio Access Networks (Open RAN) are gaining popularity to allow interoperability and reduce dependency on single vendors.

OR

c) Write short notes (any 3)                    (15)

i. Front end staff

ii. Goods Service continuum

i. Service Encounter

iv. Tourism sector

v. Quality dimensions