Chapter – 1 Introduction

to Services and Bank

Services

McGraw-Hill © 2022 The McGraw-Hill Companies

Objectives for Chapter 1: Introduction to
Services
Explain what services are and identify service trends.
Explain the need for special services marketing concepts
and practices.
Outline the basic differences between goods and services
and the resulting challenges for service businesses.
Introduce the service marketing triangle.
Introduce the expanded services marketing mix.
Introduce the gaps model of service quality.
What are Services?
• In The Simplest Term Services Are Deeds, Processes And
Performances
• Services Are A Form Of Product That Consist Of Activities,
Benefits, Or Satisfactions Offered For Sale That Are Essentially
Intangible And Do Not Result In The Ownership Of Anything.
What are Services?
• More elaborately services can be defined as, “ Service include all
economic activities whose output is not a physical product or
construction, is generally consumed at the time it is produced,
and provides added value in forms (such as convenience,
amusement, timeliness, comfort, or health) that are essentially
intangible concerns of its first purchaser.
Bank Services
Bank services refer to the range of
products and financial transactions
offered by banks to their customers.
These services typically include
deposit accounts, loans, credit cards,
debit cards, wire transfers, online
banking, mobile banking, ATM
services, foreign currency exchange,
investment services, insurance
services, and other financial services.
Bank Services
Deposit accounts are the most basic bank service, where
customers can deposit their money and earn interest on it.
Loans are another common bank service where customers
can borrow money for various purposes, such as buying a
home or starting a business. Credit cards and debit cards
allow customers to make purchases and withdraw cash
from ATMs. Wire transfers allow customers to send money
to other people or businesses, either domestically or
internationally. Online banking and mobile banking enable
customers to access their bank accounts and conduct
transactions from their computers or mobile devices.
Marketing

Ref.: https://murraydare.co.uk/marketing/what-is-marketing
Challenges for Services
Defining and improving quality
Communicating and testing new services
Communicating and maintaining a consistent image
Motivating and sustaining employee commitment
Coordinating marketing, operations and human resource efforts
Setting prices
Standardization versus personalization
 Examples of Service Industries

Health Care
◦ hospital, medical practice, dentistry, eye care

Professional Services
◦ accounting, legal, architectural

Financial Services
◦ banking, investment advising, insurance

Hospitality
◦ restaurant, hotel/motel, bed & breakfast,
◦ ski resort, rafting

Travel
◦ airlines, travel agencies, theme park

Others:
◦ hair styling, pest control, plumbing, lawn maintenance, counseling services, health club
Service Sector’s Contribution to GDP in
BD
Theme Park
Tangibility Spectrum
Salt
 Soft Drinks
 Detergents
 Automobiles
 Cosmetics
Fast-food
 Outlets
 Intangible
Dominant

Tangible 
Dominant Fast-food
Outlets 
Advertising
Agencies 
Airlines 
Investment
Management 
Consulting 
Teaching
Differences Between Goods and Services

Intangibility Heterogeneity

Simultaneous
Production Perishability
and
Consumption
Implications of Intangibility

 Services cannot be inventoried

 Services cannot be patented
 Services cannot be readily displayed or
communicated
 Pricing is difficult
Implications of Heterogeneity

Service delivery and customer satisfaction depend on

employee actions
Service quality depends on many uncontrollable factors
There is no sure knowledge that the service delivered
matches what was planned and promoted
Implications of Simultaneous Production and
Consumption
Customers participate in and affect the
transaction
Customers affect each other
Employees affect the service outcome
Decentralization may be essential
Mass production is difficult
Implications of Perishability

 It is difficult to synchronize supply and demand

with services
 Services cannot be returned or resold
Table 1-2
Services are Different
Goods Services Resulting Implications
Tangible Intangible Services cannot be inventoried.
Services cannot be patented.
Services cannot be readily displayed or communicated.
Pricing is difficult.
Standardized Heterogeneous Service delivery and customer satisfaction depend on
employee actions.
Service quality depends on many uncontrollable factors.
There is no sure knowledge that the service delivered
matches what was planned and promoted.
Production Simultaneous Customers participate in and affect the transaction.
separate from production and Customers affect each other.
consumption consumption Employees affect the service outcome.
Decentralization may be essential.
Mass production is difficult.
Nonperishable Perishable It is difficult to synchronize supply and demand with
services.
Services cannot be returned or resold.

Source: Adapted from Valarie A. Zeithaml, A. Parasuraman, and Leonard L. Berry, “Problems and Strategies in Services Marketing,”
Journal of Marketing 49 (Spring 1985): 33-46.
 Services Marketing

Services are growing even faster in the world economy,

making up a quarter of all international trade.
The service industry varies greatly, consisting of
governments, private nonprofit organizations, and business
organizations. One of the chief reasons for the growth of the
service industry is the demand generated by the time-pressed
consumer.
Why Services Marketing?
A Service-Based Economy
Service as a Business Imperative in Manufacturing and IT
Deregulated Industries and Professional Service Needs
Service Marketing Is Different
Service Equals Profits
Figure 1-5
The Services Marketing Triangle
Company
(Management)

Internal External
Marketing Marketing
“enabling the “setting the
promise” promise”

Employees Interactive Marketing Customers

“delivering the promise”
Source: Adapted from Mary Jo Bitner, Christian Gronroos, and Philip Kotler
Ways to Use the
Services Marketing Triangle

Overall Strategic Specific Service

Assessment Implementation
• How is the service • What is being promoted and
organization doing on all by whom?
three sides of the • How will it be delivered and
triangle? by whom?
• Where are the
weaknesses? • Are the supporting systems in
place to deliver the promised
• What are the strengths? service?
 Figure 1-6
The Services Triangle
and Technology
Company

Technology

Providers Customers
Source: Adapted from A. Parasuraman
Services Marketing Mix:
7 Ps for Services

Traditional Marketing Mix

Expanded Mix for Services: 7 Ps
Building Customer Relationships Through People,
Processes, and Physical Evidence
Ways to Use the 7 Ps
 Traditional Marketing Mix

All elements within the control of the firm that communicate

the firm’s capabilities and image to customers or that influence
customer satisfaction with the firm’s product and services:
 Product
 Price
 Place
 Promotion
Expanded Mix for Services --
the 7 Ps

Product
Price
Place
Promotion

People
Process
Physical Evidence
Table 1-3
Expanded Marketing Mix for Services
PRODUCT PLACE PROMOTION PRICE
Physical good Channel type Promotion Flexibility
features blend

Quality level Exposure Salespeople Price level

Accessories Intermediaries Advertising Terms
Packaging Outlet location Sales Differentiation
promotion
Warranties Transportation Publicity Allowances
Product lines Storage
Branding
Table 1-3 (Continued)
Expanded Marketing Mix for
Services
PEOPLE PHYSICAL PROCESS
EVIDENCE
Employees Facility design Flow of activities

Customers Equipment Number of steps

Communicating Signage Level of customer

culture and values involvement

Employee research Employee dress

Other tangibles
PEOPLE
All human actors who play a part in service delivery and thus influence the buyers
perceptions: namely the firm’s personnel, the customer, and other customers in the
service environment.

Factors to Consider Regarding People:

Employees
–Recruiting
–Training
–Motivation
–Rewards
–Teamwork
Customers
- Education
- Training
PHYSICAL EVIDENCE
The environment in which the service is delivered and where the firm and customer interact, and any tangible
components that facilitate performance or communication of the service.

Factors to Consider Regarding Physical Evidence :

Facility Design.
Equipment
Signage
Employee dress.
Other tangibles
Reports, Business cards, Statements.
Guarantees.
 PROCESS
The actual procedures, mechanisms and flow of activities by which the service is delivered- the service delivery
and operating systems.

Factors to Consider Regarding Process:

Flow of activities:
Standardized.
Customized.
Number of steps:
Simple.
Complex.
Customer Involvement
 Ways to Use the 7 Ps
Overall Strategic Assessment Specific Service Implementation
How effective is a firm’s Who is the customer?
services marketing mix?
What is the service?
Is the mix well-aligned with
overall vision and strategy? How effectively does the
services marketing mix for a
What are the strengths and service communicate its
weaknesses in terms of the 7 benefits and quality?
Ps?
What changes/improvements
are needed?
 Zeithaml, Valarie A., Mary Jo Bitner, and Dwayne D. Gremler (2006), Services
Marketing (Fourth ed.). Boston, MA: McGraw-Hill/Irwin.

Expected Service The Gaps

Service is not as good as expected
Model of
Perceived Service
Service
Not knowing Not matching Quality
what performance
customers to promises Company Communications to
expect Service Delivery Customers

Not meeting designs

and standards

Customer Service Standards

Selecting
wrong service
designs and
standards
Company Perceptions of
Consumer Expectations
 Zeithaml, Valarie A., Mary Jo Bitner, and Dwayne D. Gremler (2006), Services
Marketing (Fourth ed.). Boston, MA: McGraw-Hill/Irwin.

The Gaps
Word of mouth
communication
Personal
Needs
Past
Experiences Model of
Expected
Service
Quality
Service

Gap 5

Perceived
Service
CONSUMER
MARKETER
G External Communication
Service Gap 4
ap to
1 Delivery
Customers
Gap 3

Service Quality
Specifications
Gap 2

Management Perception
of
Customer Expectations
 Zeithaml, Valarie A., Mary Jo Bitner, and Dwayne D. Gremler (2006), Services
Marketing (Fourth ed.). Boston, MA: McGraw-Hill/Irwin.

There are five gaps shown in the model: The Gaps

 Gap 1– the gap between customer expectation and Model of

management perception
Gap 2– the gap between management perception
Service
and service quality specification Quality
 Gap 3– the gap between service quality
specification and service delivery
 Gap 4– the gap between service delivery and
external communication
 Gap 5– the gap between perceived service and
expected service.