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GNDU QUESTION PAPERS 2022
BBA 6
th
SEMESTER
Paper-BBA-611 (Group-A) : SERVICES MARKETING
Time Allowed: 3 Hours Maximum Marks: 50
Note: Aempt Five quesons in all, selecng at least One queson from each secon. The
Fih queson may be aempted from any secon. All quesons carry equal marks.
SECTION-A
1. How and why did services markeng evolve as a discipline ? What role does it play for
an economy?
2. What are the components of the services markeng mix ? Explain.
SECTION-B
3. In today's dynamic mes, what pricing strategies can be adopted to respond to change
in demand and reshape the demand for eecve pricing?
4. What is the product service mix? Discuss the transion from product markeng to
service markeng.
SECTION-C
5. How do personal selling, adversing and sales promoon contribute to promoon of
services? Exemplify.
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6. What do you mean by distribuon of services? How should a service be distributed?
SECTION-D
7. How is the concept of customer service crical in service markeng?
8. Write note on:
(a) PZB Gap Model
(b) Services as process or system.
GNDU Answer PAPERS 2022
BBA 6
th
SEMESTER
Paper-BBA-611 (Group-A) : SERVICES MARKETING
Time Allowed: 3 Hours Maximum Marks: 50
Note: Aempt Five quesons in all, selecng at least One queson from each secon. The
Fih queson may be aempted from any secon. All quesons carry equal marks.
SECTION-A
1. How and why did services markeng evolve as a discipline ? What role does it play for
an economy?
Ans: How did Services Marketing evolve?
Imagine a time when most businesses only sold physical products—like clothes, food, or
machines. In the early days of marketing (around the early 20th century), all focus was on
goods. Companies mainly asked:
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How do we produce better products?
How do we sell more units?
But slowly, the world started changing.
Shift from Goods to Services
As economies developed, especially after industrialization, people’s needs also changed.
They didn’t just want products—they wanted experiences and services, such as:
• Banking
• Education
• Healthcare
• Tourism
• Transport
For example, going to a hospital is not about buying a product—it’s about receiving care and
service. Similarly, in education, students are not buying books only—they are paying for
knowledge and teaching.
This shift led to a big realization:
Services are different from goods.
Why was a new discipline needed?
Traditional marketing (for goods) didn’t fully work for services. Why?
Because services have some unique characteristics:
1. Intangibility (You can’t touch them)
You can’t see or touch a service before buying it.
Example: You can’t “see” a haircut before getting it.
2. Inseparability (Produced & consumed together)
Services are produced and consumed at the same time.
Example: A teacher teaches while students learn—both happen together.
3. Variability (Quality may differ)
Service quality depends on the person providing it.
Example: Two doctors may give different experiences.
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4. Perishability (Cannot be stored)
Unused services cannot be stored.
Example: An empty seat in a train today cannot be sold tomorrow.
Because of these differences, businesses faced problems like:
• How to build trust when customers can’t see the service?
• How to ensure consistent quality?
• How to manage customer expectations?
This led to the birth of Services Marketing as a separate field, especially from the 1970s
onwards.
Experts started developing new concepts like:
• 7Ps of Marketing (instead of 4Ps)
→ Product, Price, Place, Promotion
→ + People, Process, Physical Evidence
These additions helped businesses manage service delivery better.
What is Services Marketing?
In simple words:
Services Marketing is the process of promoting, delivering, and managing services to
satisfy customer needs.
It focuses not just on selling—but on customer experience and relationship building.
Role of Services Marketing in an Economy
Now let’s understand why it is so important for an economy.
1. Growth of the Service Sector
Today, the service sector contributes a major part of GDP in most countries.
For example:
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• Banking, IT, tourism, education, healthcare—all are services.
• In countries like India, services contribute more than 50% of GDP.
Services marketing helps these sectors grow by attracting and retaining customers.
2. Employment Generation
Services create a large number of jobs:
• Teachers
• Doctors
• Bank employees
• Call center workers
• Tourism professionals
Good marketing increases demand → More services needed → More jobs created.
3. Global Competitiveness
Countries compete globally through services like:
• IT services (India is a global leader)
• Tourism
• Financial services
Effective services marketing helps countries attract international customers and earn
foreign exchange.
4. Customer Satisfaction & Quality of Life
Services directly affect people’s daily lives:
• Better hospitals → Better health
• Better education → Better future
• Better transport → Easier life
Services marketing ensures these services are customer-focused and high quality.
5. Innovation and Economic Development
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Services marketing encourages innovation:
• Online banking
• E-learning
• Telemedicine
• Food delivery apps
These innovations make life easier and improve economic efficiency.
6. Relationship Building & Loyalty
Unlike products, services often require long-term relationships.
Example:
• A bank customer stays for years
• A student studies in one institution for long time
Services marketing focuses on trust, loyalty, and customer retention, which strengthens
the economy.
Final Understanding (Easy Summary)
• Initially, marketing focused only on physical goods.
• As economies developed, services became more important.
• Services are different (intangible, variable, etc.), so a new marketing approach was
needed.
• This led to the evolution of Services Marketing.
Today, it plays a huge role by:
• Driving economic growth
• Creating jobs
• Improving quality of life
• Supporting innovation
Conclusion
In simple terms, services marketing evolved because the world changed—from a product-
based economy to a service-based economy. It helps businesses not just sell services, but
also build trust, deliver quality experiences, and maintain long-term relationships.
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2. What are the components of the services markeng mix ? Explain.
Ans: Introduction
When we talk about marketing, most people immediately think of products—cars, clothes,
gadgets. But services are different. They are intangible, cannot be stored, and often involve
direct interaction between the provider and the customer. Because of this unique nature,
the traditional 4Ps of marketing (Product, Price, Place, Promotion) were expanded into 7Ps
to better suit services. This extended framework is known as the Services Marketing Mix.
Think of it as a recipe: each “P” is an ingredient, and together they create the right flavor for
delivering and marketing services effectively.
Components of the Services Marketing Mix
1. Product (Service Itself)
• In services, the “product” is intangible. It could be a haircut, a bank loan, a hotel
stay, or medical treatment.
• The challenge is to design the service in a way that meets customer expectations.
• Service quality, reliability, and customization are key. Example: A hospital’s
“product” is healthcare, but it must ensure skilled doctors, modern equipment, and
patient care.
2. Price
• Price in services is tricky because customers often judge quality based on price.
• Pricing strategies may include hourly rates (lawyers), subscription fees (Netflix), or
package deals (tourism).
• Discounts, seasonal offers, and dynamic pricing are common in services.
Example: Airlines use dynamic pricing—ticket prices change based on demand and
timing.
3. Place (Distribution)
• Place refers to how the service is delivered to customers.
• Services can be delivered physically (restaurants, hospitals) or digitally (online
banking, streaming platforms).
• Accessibility and convenience are crucial. Example: Banks now offer mobile apps
so customers can access services anytime, anywhere.
4. Promotion
• Since services are intangible, promotion plays a big role in creating awareness and
trust.
• Tools include advertising, personal selling, public relations, and digital marketing.
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• Word-of-mouth and customer reviews are especially powerful in services.
Example: Hotels rely heavily on online reviews and ratings to attract new customers.
5. People
• Services are delivered by people—employees, staff, or service providers.
• Their behavior, attitude, and skills directly affect customer satisfaction.
• Training, motivation, and customer orientation are essential. Example: In
airlines, cabin crew friendliness and professionalism shape the passenger’s
experience.
6. Process
• Process refers to the way the service is created and delivered.
• Efficient processes ensure consistency, speed, and quality.
• Technology often plays a role in streamlining processes. Example: Fast-food
chains like McDonald’s have standardized processes to ensure uniform taste
worldwide.
7. Physical Evidence
• Since services are intangible, physical evidence helps customers evaluate them.
• This includes the environment, brochures, websites, uniforms, and even the
ambiance.
• Tangible cues reassure customers about the quality of service. Example: A luxury
hotel uses elegant décor, branded stationery, and professional uniforms to signal
high quality.
Diagram for Better Understanding
Services Marketing Mix (7Ps)
|
-----------------------------------
| | | | |
Product Price Place Promotion People
| | | | |
Process ---------------- Physical Evidence
Why the 7Ps Matter
• Services are intangible, inseparable, variable, and perishable.
• The 7Ps framework ensures that companies address these challenges.
• It helps in designing services that are customer-friendly, competitive, and
sustainable.
Evaluation
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• Strengths: Provides a holistic view of service marketing, focusing on both tangible
and intangible aspects.
• Limitations: Needs constant updating in the digital age, where technology and
customer expectations evolve rapidly.
Conclusion
The Services Marketing Mix expands the traditional 4Ps into 7Ps to capture the unique
nature of services. It includes Product, Price, Place, Promotion, People, Process, and
Physical Evidence. Together, these components ensure that services are designed,
delivered, and promoted effectively.
SECTION-B
3. In today's dynamic mes, what pricing strategies can be adopted to respond to change
in demand and reshape the demand for eecve pricing?
Ans: Why Pricing Needs to Change Today
Imagine you run a small café. On weekdays, you have fewer customers, but on weekends,
your café is full. If you keep the same price every day, you might lose opportunities:
• Too high on weekdays → fewer customers
• Too low on weekends → lost profit
This is where dynamic pricing strategies come in. They help businesses adjust prices based
on demand, competition, time, and customer behavior.
Key Pricing Strategies in Dynamic Times
1. Dynamic Pricing (Flexible Pricing)
This is one of the most important modern strategies.
Prices change based on demand, time, or conditions.
Example:
• Flight tickets become expensive during holidays.
• Ride apps increase fares during peak hours.
Why it works:
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• Helps businesses earn more during high demand.
• Encourages customers to buy during low-demand periods.
2. Penetration Pricing
Start with a low price to attract customers and gain market share.
Example:
A new mobile app offers services at a very low cost initially.
Why it works:
• Quickly builds a customer base.
• Creates awareness and loyalty.
Later, prices can be increased once customers are used to the product.
3. Price Skimming
Start with a high price and gradually reduce it.
Example:
New smartphones are launched at high prices, then reduced after a few months.
Why it works:
• Targets customers willing to pay more early.
• Helps recover costs quickly.
4. Psychological Pricing
Pricing based on how customers feel about numbers.
Example:
₹999 instead of ₹1000 feels cheaper, even though the difference is just ₹1.
Why it works:
• Influences customer perception.
• Increases sales without changing actual value much.
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5. Discount and Promotional Pricing
Offering temporary price reductions to boost demand.
Example:
• Festive sales (Diwali, New Year)
• “Buy 1 Get 1 Free”
Why it works:
• Encourages quick purchases.
• Helps clear old stock.
6. Bundle Pricing
Selling multiple products together at a lower combined price.
Example:
A meal combo at a fast-food outlet.
Why it works:
• Increases total sales.
• Customers feel they are getting more value.
7. Value-Based Pricing
Price is based on the value perceived by the customer, not just cost.
Example:
Luxury brands charge high prices because of brand value.
Why it works:
• Focuses on customer satisfaction.
• Builds strong brand positioning.
8. Freemium Pricing
Basic product is free, but premium features are paid.
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Example:
Music or video streaming apps.
Why it works:
• Attracts a large number of users.
• Converts some users into paying customers.
9. Segmented Pricing
Different prices for different customer groups.
Example:
• Student discounts
• Senior citizen concessions
Why it works:
• Maximizes revenue from different segments.
• Makes products accessible to more people.
10. Surge Pricing
Prices increase suddenly during very high demand.
Example:
Cab fares increase during rain or peak hours.
Why it works:
• Balances supply and demand.
• Encourages more service providers to join.
How Pricing Can Reshape Demand
Pricing doesn’t just respond to demand—it can actually create or shift demand.
• Lower prices → attract new customers
• Higher prices → create premium perception
• Discounts → encourage quick buying
• Bundles → increase quantity purchased
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For example, if a gym reduces its membership fee in January (New Year resolution season),
it can attract more people and increase demand.
Conclusion
In today’s dynamic environment, pricing is a powerful tool—not just for earning profit, but
for influencing customer behavior and shaping demand.
Smart businesses:
• Adjust prices based on real-time conditions
• Understand customer psychology
• Use technology and data to make pricing decisions
In simple words, pricing is no longer static—it’s strategic, flexible, and customer-focused.
4. What is the product service mix? Discuss the transion from product markeng to
service markeng.
Ans: Introduction
In the world of marketing, businesses don’t just sell physical goods anymore. They often
combine products and services to create more value for customers. This combination is
called the product-service mix. Over time, marketing has shifted from being product-centric
(focused mainly on tangible goods) to service-centric (focused on intangible experiences and
customer satisfaction). Understanding this transition helps us see how modern businesses
operate in a competitive, customer-driven environment.
What is the Product-Service Mix?
The product-service mix refers to the blend of tangible products and intangible services
offered by a company to meet customer needs.
• Products are physical, tangible items like cars, phones, or clothes.
• Services are intangible activities or benefits like maintenance, customer support, or
delivery.
When combined, they create a holistic offering. For example:
• A smartphone (product) + warranty and customer support (service).
• A car (product) + free servicing for two years (service).
This mix ensures that customers not only get the product but also the experience,
convenience, and assurance that come with it.
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Components of the Product-Service Mix
1. Core Product
o The basic need-satisfying item.
o Example: A washing machine.
2. Supplementary Services
o Added services that enhance customer satisfaction.
o Example: Free installation, maintenance, and helpline support.
3. Augmented Offering
o The total package of product + services that differentiates a brand.
o Example: Apple iPhone + AppleCare + Genius Bar support.
Transition from Product Marketing to Service Marketing
Marketing has evolved significantly over the decades. Let’s trace the journey:
1. Traditional Product Marketing
• Focused mainly on tangible goods.
• Strategies revolved around the 4Ps: Product, Price, Place, Promotion.
• Success depended on manufacturing efficiency, distribution, and advertising.
Example: In the 1960s, companies like Ford emphasized mass production and selling
cars as physical products.
2. Emergence of Services
• As economies grew, services like banking, insurance, healthcare, and hospitality
became more important.
• Customers began valuing experiences and support as much as the product itself.
Example: Airlines realized that customer service and in-flight experience mattered as
much as the seat itself.
3. Extended Marketing Mix (7Ps)
• To address the unique nature of services, the marketing mix expanded to include:
o People (employees delivering the service)
o Process (how the service is delivered)
o Physical Evidence (tangible cues like ambiance, brochures, websites).
Example: Hotels market not just rooms but also staff friendliness, booking
processes, and décor.
4. Customer-Centric Approach
• Modern marketing emphasizes building relationships, trust, and loyalty.
• Services are seen as a way to differentiate products in competitive markets.
Example: Amazon doesn’t just sell products—it offers fast delivery, easy returns, and
24/7 customer support.
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5. Digital Transformation
• Technology has accelerated the shift.
• Online platforms, apps, and AI-driven support have made services integral to
product offerings. Example: Netflix is essentially a service, but it markets itself
like a product subscription.
Diagram for Better Understanding
Transition in Marketing Focus
---------------------------------
Product Marketing → Service Marketing
---------------------------------
Product Marketing: Tangible goods, 4Ps, efficiency
Service Marketing: Intangible experiences, 7Ps, customer-
centric
Why the Transition Matters
1. Changing Consumer Expectations
o Customers want convenience, personalization, and support.
2. Competitive Advantage
o Services differentiate brands when products are similar.
3. Economic Growth
o Services now contribute more to GDP than manufacturing in many countries.
4. Sustainability
o Service-based models (like subscriptions) reduce waste and promote long-
term relationships.
Evaluation
• Strengths of Product Marketing: Clear focus, tangible offerings, mass production.
• Strengths of Service Marketing: Customer loyalty, differentiation, adaptability.
• Challenges: Services are harder to standardize, measure, and deliver consistently.
Conclusion
The product-service mix is the blend of tangible goods and intangible services that
companies offer to maximize customer satisfaction. Over time, marketing has transitioned
from being product-focused to service-focused, reflecting changes in consumer expectations
and economic structures.
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SECTION-C
5. How do personal selling, adversing and sales promoon contribute to promoon of
services? Exemplify.
Ans: 1. Personal Selling (Human Touch Matters)
Imagine you walk into a bank to open an account. A bank employee talks to you politely,
explains different account options, clears your doubts, and suggests the best plan for you.
That is personal selling.
✔ What is Personal Selling?
It is a face-to-face interaction between a salesperson and a customer, where the service is
explained in detail.
✔ How it helps in promoting services:
• Builds trust: Services are intangible, so people rely on human interaction.
• Customized explanation: Different customers have different needs.
• Immediate feedback: Customers can ask questions instantly.
• Relationship building: Long-term customer loyalty is created.
✔ Example:
• An insurance agent explaining life insurance policies
• A gym trainer convincing you to take a fitness membership
• A travel agent helping you choose a holiday package
In services, people often buy the person before they buy the service.
2. Advertising (Creating Awareness & Image)
Now imagine you see a TV ad of a hospital showing advanced technology and happy
patients. Even if you don’t need it now, you remember the name.
That is advertising.
✔ What is Advertising?
It is a paid, non-personal form of communication through media like TV, internet,
newspapers, and social media.
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✔ How it helps in promoting services:
• Creates awareness: People come to know about the service.
• Builds brand image: Important for services where trust matters.
• Reaches a large audience: One ad can reach millions.
• Makes service visible: Since services are invisible, ads make them “feel real”.
✔ Example:
• Coaching institutes advertising their results
• Airlines promoting comfort and safety
• Online platforms like apps advertising convenience
Advertising helps answer:
“Why should I trust this service?”
3. Sales Promotion (Quick Attraction)
Now suppose a gym offers “Join today and get 1 month free” or a bank offers cashback on
opening an account.
That is sales promotion.
✔ What is Sales Promotion?
It includes short-term incentives to encourage customers to try or buy a service.
✔ How it helps in promoting services:
• Attracts new customers quickly
• Encourages trial of service
• Boosts short-term sales
• Creates urgency (limited-time offers)
✔ Example:
• Free trial classes in coaching institutes
• Discount on first flight booking
• Cashback offers in digital payment apps
• Free health check-ups by hospitals
Sales promotion answers:
“Why should I try this service now?”
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How All Three Work Together (Integrated Approach)
These three are not separate—they work together as a team.
Example: Coaching Institute
• Advertising: Runs ads showing top results and success stories
• Personal Selling: Counsellor explains courses to students and parents
• Sales Promotion: Offers demo classes or early-bird discounts
Result:
• Awareness is created (Advertising)
• Trust is built (Personal Selling)
• Action is triggered (Sales Promotion)
Key Difference in Simple Words
Tool
Purpose
Nature
Personal Selling
Build trust & explain
Face-to-face
Advertising
Create awareness
Mass communication
Sales Promotion
Encourage quick action
Short-term offers
Why These Are Especially Important for Services
Services have special characteristics:
• Intangible (cannot be touched)
• Perishable (cannot be stored)
• Variable (quality may differ)
Because of this:
• Personal selling reduces doubt
• Advertising builds confidence
• Sales promotion motivates trial
6. What do you mean by distribuon of services? How should a service be distributed?
Ans: Introduction
When we think of distribution in marketing, we usually imagine trucks carrying goods,
warehouses storing products, and shops selling them. But services are different. They are
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intangible, cannot be stored, and often require direct interaction between the provider and
the customer. So, when we talk about distribution of services, we are really asking: How do
we make services available and accessible to customers in the right place, at the right time,
and in the right way?
Understanding service distribution is crucial because it directly affects customer satisfaction.
If a bank doesn’t have enough branches or ATMs, or if an online platform doesn’t work
smoothly, customers feel frustrated. That’s why service distribution is as much about
convenience and accessibility as it is about efficiency.
What Do We Mean by Distribution of Services?
Distribution of services refers to the process of delivering a service from the provider to the
customer. Since services cannot be physically transported, distribution focuses on:
• Location of service outlets (banks, hospitals, restaurants).
• Channels of delivery (online platforms, mobile apps, call centers).
• Accessibility and convenience (timing, availability, ease of use).
In short: It is about ensuring that customers can easily consume the service whenever
and wherever they need it.
Characteristics That Make Service Distribution Unique
1. Intangibility: Services cannot be touched or stored, so distribution relies on
accessibility rather than physical movement.
2. Inseparability: Services are often produced and consumed at the same time (e.g., a
haircut).
3. Variability: Quality may vary depending on who delivers the service and how.
4. Perishability: Services cannot be inventoried—an empty hotel room tonight cannot
be sold tomorrow.
Because of these characteristics, service distribution requires special strategies.
How Should a Service Be Distributed?
1. Direct Distribution
• Services are often delivered directly from provider to customer.
• Example: A doctor treating a patient, a teacher conducting a class.
• Advantage: Personal interaction builds trust and satisfaction.
2. Service Outlets and Branches
• Physical outlets make services accessible.
• Example: Banks with branches and ATMs, restaurants with multiple locations.
• Strategy: Place outlets where demand is high and customers can reach easily.
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3. Electronic Channels
• Technology has transformed service distribution.
• Online platforms, mobile apps, websites, and call centers allow services to reach
customers instantly.
• Example: Online banking, food delivery apps, streaming services.
• Advantage: Convenience, 24/7 availability, wider reach.
4. Franchising
• Service providers expand through franchises.
• Example: Fast-food chains like McDonald’s or Domino’s.
• Advantage: Standardized service across locations, rapid expansion.
5. Agents and Intermediaries
• Some services use agents to reach customers.
• Example: Travel agents selling airline tickets, insurance agents selling policies.
• Advantage: Wider distribution without heavy investment in outlets.
6. Partnerships and Alliances
• Companies collaborate to distribute services.
• Example: Banks partnering with retailers for payment services, telecom companies
partnering with OTT platforms.
7. Self-Service Options
• Customers are empowered to access services themselves.
• Example: ATMs, online booking systems, self-checkout counters.
• Advantage: Reduces cost and increases convenience.
Diagram for Better Understanding
Distribution of Services
|
-----------------------------------
| | | | |
Direct Outlets Electronic Franchising Agents
Delivery Channels
Factors to Consider in Service Distribution
1. Customer Convenience: Services must be easy to access.
2. Cost Efficiency: Distribution should minimize costs without reducing quality.
3. Technology Integration: Digital platforms enhance speed and reach.
4. Consistency: Service quality should remain uniform across channels.
5. Flexibility: Distribution must adapt to changing customer needs.
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Evaluation
• Strengths of Direct Distribution: Builds trust, personal interaction.
• Strengths of Electronic Channels: Convenience, scalability.
• Challenges: Maintaining consistent quality, managing customer expectations, and
balancing costs.
Conclusion
The distribution of services is the process of making services accessible to customers
through direct delivery, outlets, electronic channels, franchises, agents, and partnerships.
Unlike products, services cannot be stored or transported, so distribution focuses on
convenience, accessibility, and customer satisfaction.
SECTION-D
7. How is the concept of customer service crical in service markeng?
Ans: What is Customer Service in Simple Words?
Customer service means how a business treats, helps, and interacts with its customers
before, during, and after a service.
In service marketing, the “product” is often invisible (intangible)—like a haircut, a hotel
stay, online teaching, or banking. Since you cannot touch or test it before buying, your
experience becomes everything.
Why Customer Service is Critical in Service Marketing
Let’s understand this step by step in a very simple and relatable way.
1. Services Cannot Be Seen or Touched
When you buy a mobile phone, you can see its features. But when you go to a doctor or
take an online class, you don’t know exactly what you’ll get until you experience it.
So what do you depend on?
You depend on:
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• Behavior of staff
• Communication
• Trust
That is all part of customer service.
Conclusion: Customer service reduces uncertainty and builds confidence.
2. First Impression = Lasting Impact
In services, the first interaction matters a lot.
• A rude receptionist → bad impression
• A friendly welcome → positive experience
Since services are based on human interaction, customer service becomes the “face” of the
business.
Example:
A hotel may have average rooms, but excellent service can still make customers happy.
3. Customer Satisfaction Depends on Service Experience
In service marketing, satisfaction is not only about the result but also about the process.
For example:
• In a restaurant → taste + behavior of staff
• In a bank → solution + waiting experience
Even if the core service is good, poor behavior can ruin everything.
Conclusion: Customer service directly affects satisfaction.
4. Builds Customer Loyalty
Good service doesn’t just satisfy customers—it makes them come back again and again.
Think about:
• Your favorite shop
• Your regular barber
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• Your preferred café
Why do you go there?
Not just for the service—but for how they treat you.
Key Point:
Customer service creates emotional connection → which builds loyalty.
5. Word of Mouth Marketing
Happy customers don’t stay silent. They tell others:
• Friends
• Family
• Social media
Similarly, unhappy customers also spread negative feedback quickly.
In today’s world, one bad review can damage a brand.
Conclusion: Customer service is free advertising—good or bad.
6. Differentiation from Competitors
In many industries, services are almost similar.
For example:
• Many banks offer same facilities
• Many coaching centers teach same subjects
So what makes one better?
Customer service
A business with excellent service stands out even if its core service is similar.
7. Helps in Handling Problems and Complaints
Mistakes happen in every business.
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But what matters is:
How you handle the problem
• Ignoring complaints → lose customers
• Solving quickly and politely → win trust
Sometimes, a well-handled complaint can make a customer more loyal than before.
8. Increases Business Profit
Good customer service leads to:
• Repeat customers
• Positive reviews
• More referrals
All this increases:
Sales
Profit
Also, it is cheaper to keep existing customers than to find new ones.
9. Human Touch in Services
Unlike products, services involve direct interaction between people.
That’s why:
• Attitude
• Behavior
• Communication
…play a huge role.
A simple smile or polite tone can change the whole experience.
Simple Summary (Easy to Remember)
Customer service in service marketing is important because:
• It builds trust
• It creates satisfaction
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• It ensures repeat customers
• It spreads positive word of mouth
• It helps businesses grow
In short:
“In service marketing, the way you serve is more important than what you serve.”
Final Thought
Think of customer service like the “soul” of service marketing.
Without it, even the best service feels empty.
With it, even an average service becomes memorable.
So, if a business wants long-term success, it should not just focus on selling services—it
should focus on serving people well.
8. Write note on:
(a) PZB Gap Model
(b) Services as process or system.
Ans: Introduction
In service marketing, two important ideas help us understand how services are delivered
and how customers perceive them:
1. The PZB Gap Model (Parasuraman, Zeithaml, and Berry’s model of service quality).
2. The concept of Services as a Process or System.
Both are crucial because services are intangible, inseparable, variable, and perishable.
Unlike products, you cannot touch or store a service—you experience it. So, businesses
need frameworks to ensure quality and consistency. Let’s explore these concepts step by
step in a clear, engaging way.
(a) PZB Gap Model
1. Meaning
The PZB Gap Model is a framework that explains why customers sometimes feel dissatisfied
with services. It identifies “gaps” between customer expectations and actual service
delivery. By closing these gaps, companies can improve service quality.
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2. The Five Gaps
• Gap 1: Knowledge Gap
o Difference between what customers expect and what management thinks
they expect.
o Example: A bank assumes customers want faster loans, but customers
actually want better customer support.
• Gap 2: Policy Gap
o Difference between management’s perception and the service quality
specifications.
o Example: Management knows customers want quick service but fails to set
clear standards for staff.
• Gap 3: Delivery Gap
o Difference between service quality specifications and actual delivery.
o Example: A restaurant promises food in 15 minutes but staff take 30 minutes.
• Gap 4: Communication Gap
o Difference between what is promised in advertising and what is actually
delivered.
o Example: An airline advertises “luxury seating” but provides cramped seats.
• Gap 5: Perception Gap
o Difference between customer expectations and their perception of the
service received.
o Example: Even if a hotel provides good service, a customer may perceive it as
poor if staff are unfriendly.
3. Importance of the Model
• Helps identify weak points in service delivery.
• Provides a roadmap for improving customer satisfaction.
• Encourages alignment between customer expectations and company performance.
(b) Services as Process or System
1. Meaning
Services are not just one-time transactions; they are processes or systems. This means they
involve a sequence of steps, interactions, and activities that together create the customer
experience.
Example: In healthcare, the service is not just the doctor’s consultation. It includes
appointment booking, waiting time, diagnosis, treatment, billing, and follow-up.
2. Service as a Process
• Services are delivered through a series of actions.
• Each step must be efficient and customer-friendly.
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• Example: Online shopping involves browsing, selecting, payment, delivery, and after-
sales support.
3. Service as a System
• Services are interconnected activities working together.
• Inputs (customer needs, staff, technology) → Processes (delivery, interaction) →
Outputs (customer satisfaction).
• Example: A university is a system where teaching, administration, exams, and
student support all work together.
4. Importance of Viewing Services as Processes/Systems
• Ensures consistency and reliability.
• Helps identify bottlenecks and improve efficiency.
• Enhances customer satisfaction by focusing on the entire journey, not just one step.
Diagram for Better Understanding
PZB Gap Model
---------------------------------
Gap 1: Customer vs Management Perception
Gap 2: Management vs Policy
Gap 3: Policy vs Delivery
Gap 4: Delivery vs Communication
Gap 5: Expectation vs Perception
Services as Process/System
---------------------------------
Inputs → Processes → Outputs
(Customer needs → Service delivery → Customer satisfaction)
Linking the Two Concepts
• The PZB Gap Model shows where service quality can fail.
• Viewing services as processes/systems ensures that each step is designed to
minimize gaps.
• Together, they provide a holistic approach to service management.
Conclusion
The PZB Gap Model explains why customers sometimes feel dissatisfied by identifying gaps
between expectations and delivery. Meanwhile, the idea of services as processes or
systems emphasizes that services are not isolated events but interconnected activities that
create the overall customer experience.
“This paper has been carefully prepared for educaonal purposes. If you noce any
mistakes or have suggesons, feel free to share your feedback.”
