Service sector in global framework


Services perform several important functions to promote the development in all countries especially in a developing economy. This sector provides infrastructure, education, health, banking, finances, highly rated technical services, software programming and many other aspects. Thus, it creates meaningful linkages of services with almost all sectors of the economy.

Nationally, service’s contribution in a country’s GDP and employment generation is only a part of the role of services, in a country’s development. Services also impart a meaningful role in all aspects of cultural life of a country and thus, it adds to development process.

Importance and Extent of Marketing in Service Sector:
In comparison with manufacturing firms, Service firms appear to be:

* Generally less likely to have marketing mix.
* Less likely to perform analysis in the offering area.
* Less likely to have an overall plan for sale of services.
* Less likely to develop sales training programs.
* Less likely to use marketing consultants and marketing research firms.
* Less likely to spend much on marketing in terms of percentage on gross sales.
* More likely to have their advertising internally rather than going for external advertisement.

The reasons for the above are:

A. Many service firms are small and do not use the management techniques such as marketing, marketing research etc., which they think are expensive.
B. Many professional and service firms believe that it is unprofessional to apply the techniques of marketing in real life.
C. Other services such as colleges, travel agencies, and hospitals had so much of demand for years that they had no need for marketing till recently.

Because of increased competition and costs, productivity has stagnated and service quality has come down. And now many service organizations are taking interest in marketing their services for the first time. Of late Airlines, Banking, Insurance travel agencies for Bus travel and even Indian Railways and similar service agencies have moved from hostility to marketing and now towards aggressive marketing within a short period of time. Presently, one of the main needs in Service marketing is to find the ways to increase its productivity. As the service sector is labor intense, due to the rise in labor costs, firms are facing many problems.

In such circumstances, a few ways to improve the productivity are:

* To employ a better trained personnel; else to train the existing manpower.
* To provide the customers with capital intensive equipment; to increase its service delivery capabilities.
* To reduce or eliminate the need for the service by inventing a new product / solution. For example, reducing the burden on the doctor by having a skilled nurse wherever advisable.

India has mastered the service skills during last 5 to 8 years equaling Global standards. The developed countries are out sourcing services in sensitive and high technical areas of Aircraft maintenance, Aircraft overhauling, Software programming and also from pharmaceutical sector. The developed counties are now showing interest in out sourcing legal, public relations, sales promotion and advertisement etc., from India. In some of the service sectors India has out performed China, Korea and even Japan.