indian service sector explained

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The Indian ServiceSector

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India is one of the fastest growingeconomy in the world growing at the

prosperous rate of 6.1%.

Its current participation in export

(service) accounts for 2.45% in the

world trade activities.

Contribution of service sector in

country¶s GDP is 54.6%.

Indian Economy

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The Service Sector - includes

Businesses, government agencies, nonprofit

organizations.

Organized and unorganized sector.

Companies of any size--from huge globalcorporations to local small businesses

Limited companies to individual run

organizations/set up.

High technology content to very low technologyinter- phase organizations.

Jobs range from high-paid professionals and

technicians to minimum daily wage earners.

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Factors Stimulating growth of Service

Economy

Government Policies (e.g., regulations, trade agreements) Social Changes (e.g., affluent, time poor, seek experiences)

Business Trends

 ± Manufacturers offer service

 ± Growth of retail chains and franchising

 ± Pressures to improve productivity and quality

 ± More strategic alliances

 ± Marketing emphasis by even nonprofit organizations

 ± Innovative hiring practices

Advances in technology especially IT (e.g., speed, digitization,wireless, Internet)

Internationalization (travel, transnational companies)

Impact of other sectors.

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India 2007-08 GDP contribution.

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Agriculture # Manufacturing = Services*

1950-51 59.19 13.29 27.52

1960-61 54.74 16.61 28.65

1970-71 48.12 19.91 31.97

1980-81 41.82 21.59 36.59

1990-91 34.92 24.49 40.59

1991-92 34.08 23.93 41.99

1992-93 34.17 23.74 42.09

1993-94 33.54 23.69 42.77

1994-95 32.94 24.35 42.71

1995-96 30.58 25.47 43.95

1996-97 30.86 25.45 43.69

1997-98 29.03 25.20 45.77

1998-99 29.03 24.51 46.46

1999-2000 27.49 24.63 47.88

2007-2008 18.50 26.60 54.90

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Changing Structure of Employment

with Economic Development

Time, per Capita Income

Industry

Services

Agriculture

Source: IMF 

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Contribution of Service Sector in GDP For

Various Countries

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Services - GDP contribution ± 54.60 %

Sub sectors GDP contribution

1. Trade and hotels, tourism services 14.3 %

2.Transpot, storage and communication. 16.0%

3. Banking, insurance and other financial services 9.0%

4. Public administration & defense 7.3%

5. IT , ITES and other services 8%

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Industries in Service Sector

o Tourism and Travels

o Hospitality( Hotels, Motels , Resorts).

o Catering And Restaurant Industry.

o Consultancy Services.

o

Insurance .o Health care and Hospital management.

o Housing and Construction Industry.

o Burial permission and dispose off agencies.

o Communication.

o Entertainment.

o Banking Services.

o Transportation and Logistics.

o Theme parks.

o Leisure activities industry.

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Continued«««

o Legal Agencies.

o Maintenance Services.

o Information Technology Services.

o Research and Development.o Investment Advisers.

o  Accounting and Tax Services.

o Electricity, Gas and Sanitary Services.

o

Real Estates.o Personnel Services.

o Social Organizations.

o Other Service Providers.

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High growth service industries

Financial services ±banks, insurance .

Telecommunications

Health services

Tourism

Travel & transport

Information technology

Retailing

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What is a Service?

An act or performance offered by one party

to another. (Performances are intangible, but

may involve use of physical products.)

An economic activity that does not result in

ownership

A process that creates benefits by facilitating

a desired change in customers themselves,

physical possessions or intangible assets

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Interdependence of Marketing,

Operations and Human Resources

Customers

Operations

Management

Marketing

Management

HumanResources Management

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The ³8Ps´ of Service Management

Product elements

Place, cyberspace, and time

Process

Productivity and quality

Technology and Equipments

People

Promotion and education

Physical evidence/ Ambience

Price and other user costs

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PRODUCT

PROCESS

TECHNOLOGY&

EQUIPEMENTSAMBIENCE

PEOPLE

PRICE

DIST

PROMO

CUSTOMER

SERVICE

STANDARDS

RELIABILITY

RESPONSIVEN

ESS.

ASSURANCE

EMPATHY

TANGIBILITY

CUSTOMER 

SATISFACTION/

DISSATISFACTION CRM

Service

guarantee

Complaintmanagement.

CUSTOMER

EVALUATION

SERVICES MARKETING FRAMEWORK

Queuing

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(1) Product Elements All   Aspect s of Service Performance

that Create Val ue

Core product features

Bundle of supplementary service elements

Performance levels relative to competition

Benefits delivered to customers

Guarantees

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(2) Place, Cyberspace, and Time

Del ivery Deci sions re: P l ace, Time,Method s, Channels

Geographic locations served

Physical channels

Electronic channels

Customer control and convenience

Service schedules

Channel partners/intermediaries

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(3

) ProcessMethod and Sequence in Service Creation and 

Del ivery 

Design of activity flows Number and sequence of actions for 

customers

Providers of value chain components

Nature of customer involvement

Role of contact personnel

Role of technology, degree of automation

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(4) Productivity and Quality

Synergy in Val ue Creation for Customer s and the Firm

Achieve productive transformation of inputs to

outputs

 ± efficiency (cost control, avoidance of waste)

 ± effectiveness (value added, including quality and

timeliness)

Attain customer-defined quality standards

 ± reliability

 ± responsiveness

 ± competence/trust

 ± human dimensions

 ± tangibles

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(5) People

The Human Side of the Enter  pri se

The right employees performing tasks well

 ± job design

 ± recruiting/selection

 ± training

 ± motivation

 ± evaluation/rewards

 ± empowerment

 ± teamwork

The right customers for the firm¶s mission

 ± fit well with product/processes/corporate goals ± appreciate benefits and value offered

 ± possess (or can be educated to have) necessary skills

 ± firm is able to manage customer behavior for productivity, satisfaction of other customers, employeeprotection

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(6) Promotion and Education

Informing/Educating, Per suading, and Reminding Customer s

Marketing communication tools

 ± media elements (print, broadcast, outdoor,retail, Internet, etc.)

 ± personal selling, customer service ± sales promotion

 ± publicity/PR

Imagery and recognition

 ± branding

 ± corporate design

Content

 ± information, advice

 ± persuasive messages

 ± customer education/training

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(7) Physical Evidence

Providing tangibl e evidence of service  performances

Create and maintaining physical appearances

 ± buildings/landscaping

 ± interior design/furnishings

 ± vehicles/equipment

 ± staff grooming/clothing

 ± other tangibles

Select tangible metaphors for use in marketing

communications

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(8) Price and Other User Costs

Managing Customer Out l ay s Rel ative to Cor  porate Revenues

Quoted price level and trade margins

Discount terms

 ± time sensitive

 ± volume sensitive

 ± user sensitive

Price-setting mechanism

 ± determined by seller 

 ± negotiation/barter 

 ± auction/reverse auction Credit terms

Strategies to minimize other user costs

 ± out-of-pocket financial expenses (e.g., travel, phone)

 ± time investments and mental/physical effort

 ± negative sensory experiences

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9. Technology and Equipments

Awareness to new and appropriate technology

and equipments.

Understand ways in which new technology can

alter ways in which service firms do business -

l ook from consumer and  provider ang l e (benefit s)

Opportunity for creating data bases about

customer needs and behavior.

Compatibility with org. structure. Employee capability.

Competitor standards.