Professor Vipin 2014
Unit 5
Service Sector Marketing
Tourism Services (Concept)
Tourism is travel for recreational, leisure, or business purposes. The World Tourism Organization
defines tourists as people "travelling to and staying in places outside their usual environment for not
more than one consecutive year for leisure, business and other purposes"
Smith (1989) classifies tourism into following categories:
a)
b)
c)
d)
e)
f)
Tourism as a human experience
Tourism as a social experience
Tourism as an industry
Tourism as a geographic phenomenon
Tourism as an economic resource
Tourism as a business.
Nature of Tourism
Tourism activities require inputs of an economic, social, cultural and environmental nature. In the
sense it is described as multi-faceted. Tourism is hard to be classified as an industry because it does
not have the normal production function. It does not have measurable outputs like how the
manufacturing industry does.
The UN classified tourism into 3 categories:
1. Domestic tourism: it involves the residents of the given country travelling within their own
country.
2. Inbound tourism: non residents travelling within the country.
3. Outbound tourism: residents travel outside the country.
Recently, tourism has shifted from promotion of inbound tourism to promotion to intra-bound
tourism because many countries are experiencing tough competition for the inbound tourists. Policy
makers have shifted their priority of promotion of intra-bound tourism to promote local economy.
Even the core components of tourism such as accommodation and transport vary between
countries. Tourists in UK prefer bed and breakfast accommodation in private houses, the same
facilities are not there in Thailand. Since car ownership is high and road infrastructure quality is good
in USA, tourists prefer to travel using cars or buses. In India, people prefer travelling either by buses
or by trains.
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Significance of Tourism
Man, by nature, has never been satisfied by sitting at one place and never been contended by
confining his whole life to his place of birth. So travelling is a natural instinct of man since times
immemorial. Travel and Tourism is the world’s largest industry in terms of employment and second
to oil industry in terms of turnover.
Tourism holds immense potential for the Indian economy. It can provide impetus to other industries
through backward and forward linkages and can contribute significantly to GDP. With the increasing
globalization and opening of our economy to the world, travel and tourism in India is getting a great
impetus. It is of the major upcoming industries, which has a great potential for growth along with
earning a huge amount of foreign exchange for the country.
Why India is Popular for Tourism
a) India is a vast country with diverse cultures and traditions.
b) Our country offers a great attraction for those who crave to know about the splendor and
magnificence of one of the oldest civilizations of the world and for its scenic beauty, right
from Himalayas to Kanyakumari and from Gujarat to Arunachal Pradesh.
c) We also have a stable political government which a pre-requisite to promote tourism. We
are famous for our hospitality.
Apart from this, government has taken several other measures for the promotion of tourism. A
multi-pronged approach has been adopted, which includes new mechanism for speedy
implementation of tourism projects, development of integrated tourism circuits and rural
destinations, special capacity building in the unorganized hospitality sector and new marketing
strategy.
All of which makes the travelling experiences of the tourist far more memorable.
This industry provides large number of jobs in diverse areas through its various related fields. The
scope of travel and tourism is truly immense: in the last six years, it has created 11 million jobs and
has the potential to create another 37 million jobs (estimated by the NSSO, Ministry of Tourism) of
the 120 million projected requirement by 2020.
The future of tourism in India is certainly bright with above fact and effort by government of India.
Marketing of Tourism
Being a service product tourism has to adopt service marketing principles. Services are intangible
products, which make it more difficult to market than tangible products such as industrial goods. The
intangible nature of services makes quality control complicated but vital. Potential customers find it
hard to evaluate the services because of the intangibility factors involved in it. In tourism, instead of
providing the service at customer’s doorstep, the customer them-selves must travel to seek the
services. Travel involves spending major portion of time and money and gaining tourism
experiences. These factors enable people to make decisions on whether or not to plan for a business
or leisure trip. Tourism industry relies on many other industries also. So marketing of the tourism
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services should be creative and provide assurance for the intended customers about the quality time
he/she can spend.
Here, marketing mix is a package of contributions planned to attract the customer or visitor. Tourism
sector develop both external and internal marketing mixes for different target markets. The external
marketing mix includes service, price, place and promotion:
•
•
•
•
Service: the tourism sector must offer services to the customer or visitor. The quality of the
service should be maintained and restored. Making an effort to make the brand image
should be done to attract more number of visitors. For example, attracting customers by
providing services like massages, steam rooms, and so on.
Place: It is the place where they offer services. It should be accessible, should have the
infrastructure to support the services the customer For example five star and seven star
hotel facilities, cottages, home stays, all these form the places.
Promotion: The services that you are providing should be promoted in innovative and
attractive manner so that it can attract more tourists visiting your place. For example
offering special offers for couples during vacations.
Price: services must be reasonably priced and fair enough. It should also stand as per the
standard of the market you are targeting. For example providing special discounted rates
during non-peak seasons and special offers for group bookings.
A good example is Kerala tourism which successfully marketed itself for the services like ayurvedic
massage and its backwaters. Similarly Goa tourism is marketed as the best destination for beaches
and other services provided at the beaches, like water sports and the multi cuisine restaurants. New
tourism trends like medical tourism is gaining popularity in India. Diversity of India is also one of the
most important features that have been marketed by the brand Incredible India. Places like
Himachal Pradesh are famous for their snowfall and hill stations. Rajasthan is famous for its desert
safari.
Healthcare Services (Concept)
Health care (or healthcare) is the diagnosis, treatment, and prevention of disease, illness, injury, and
other physical and mental impairments in humans. The delivery of modern health care depends on
groups of trained professionals and paraprofessionals coming together as interdisciplinary teams.
This includes professionals in medicine, nursing, dentistry and allied health, plus many others such as
public health practitioners, community health workers and assistive personnel, who systematically
provide personal and population-based preventive, curative and rehabilitative care services.
Nature of Healthcare Services
The healthcare industry is composed of multiple segments pertaining to different practices in
medicine that provide different services. These services deal with different procedures and methods
that address a variety of medical needs.
The service may come in the form of a diagnosis, treatment, rehabilitation and other service. The
services can be under the sector of pharmaceutical, dental, medical, nursing and many more. The
services being offered are abundant that is why the amount of health care workers that are needed
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is so high. Millions of health workers are needed throughout the world in different health
institutions like hospitals and clinics.
Health services are offered at any time because different people may need them due to various or
special reasons. Some health workers should always be available that is why they have people who
are on call in hospitals and doctors’ offices. Health workers provide services on different people in
different age brackets.
There are several innovations when it comes to procedures performed in surgery and in general
medicine. Examples are in sophisticated surgical procedures, infection control for various diseases,
gene therapy for cancer treatment, advances in reproductive technology and others. Gadgets in
getting the patient's data are also available now.
Examples are automatic blood pressure readings, automatic heartbeat counters and many more.
Hospitals now days are also determined to secure their data in a more reliable and accurate way.
This is through the use of a centralized database. The database will then serve to provide a patient's
records, bill and other medical data that may be needed by the doctor, accounting office or other
authorized personnel.
Significance of Healthcare Industry
The Indian healthcare sector is estimated to reach US$ 100 billion by 2015, growing 20 per cent yearon-year (y-o-y), as per rating agency Fitch. The industry is expected to touch US$ 280 billion by 2020,
on the back of increasing demand for specialised and quality healthcare facilities.
Driving growth factors are rising population, increasing disposable income, increasing lifestyle
related health issues, cheaper treatment costs, thrust in medical tourism, improving health
insurance penetration, government initiatives and focus on public private partnership (PPP) models.
Most Indian metros have hospitals with world-class infrastructure, processes and outcomes.
However, 70% of the healthcare infrastructure is confined to the top 20 cities of India. In order to
reach the remaining population, innovations both in healthcare products and delivery are required.
Healthcare systems predominantly differ in means, methods and approach, but all confront
mediocre health outcomes and a steeply escalating cost curve that is unsustainable in the long term.
Offering affordable healthcare without compromising access to care or quality requires innovative
new products and care options.
Healthcare in India today provides existing and new players with a unique opportunity to achieve
innovation, differentiation and profits. In the next decade, increasing consumer awareness and
demand for better facilities will redefine the country’s second largest service sector employer.
Marketing Healthcare Services
Marketing services used by healthcare sector can be summarised as:
•
•
Use of the print media and digital media for the advertisement.
Providing special discounts on the membership.
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•
•
Tying up with different healthcare insurance providers to provide cashless facilities. For
example the AIMS and Apollo hospitals have tied up with leading insurance providers like
ICICI health insurance, to provide cashless facilities.
Organising voluntary camps to promote the social cause.
The distribution of Medicare services has become the important part of healthcare industry. For
example, the Tata memorial hospital which specialises in cancer treatment is located at the central
place, easily accessible from all other places. Lilavati hospital holds a smart building that assist the
people in intellectual development.
The Central Government Health Scheme (CGHS) in India also provides several healthcare facilities for
the employees of central government. The CGHS Dispensaries are also used to provide medical
facilities through Ayurvedic, Allopathic, Homeopathic and Indian system of medicines.
Educational Services (Concept)
Industries in the Educational Services subsector provide instruction and training in a wide variety of
subjects. The instruction and training is provided by specialized establishments, such as schools,
colleges, universities, and training centres.
The subsector is structured according to level and type of educational services. Elementary and
secondary schools, junior colleges and colleges, universities, and professional schools correspond to
a recognized series of formal levels of education designated by diplomas, associate degrees
(including equivalent certificates), and degrees. The remaining industry groups are based more on
the type of instruction or training offered and the levels are not always as formally defined.
Significance of Educational Services
Education is the base for economic growth as well as social transformation for any country. Among
all the key indicators of socio-economic development like economy's growth rate, literacy rate, birth
rate, death rate and infant mortality rate (IMR), the literacy rate of the country is one of the most
vital one as the rise and fall of others largely depend upon country's literacy rate. In India, high
literacy rate leads to low birth rate as well as low IMR and it also increases life expectancy rate. So,
the importance of education industry in India can be understood.
The education system in India is much more improved these days and is one of the leading ones in
the world. It is also one of the biggest contributors to the economic growth of the nation. Besides
various government initiatives, the role of the private institutions in the development of education
industry in India cannot be denied. India's private education market was worth $40 billion in 2008,
which is expected to reach $68 billion by the year 2012.
However, there are also some glooming statistics as well. Despite such rising investment in
education industry, 40% of country's population is still illiterate. Only 15% of the students can go to
next level to reach high school.
India has world's third largest higher secondary education system with a number of institutions.
More and more students are going for higher education these days. The result gets reflected on the
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number of students enrolling for higher education. The number of institutions is also increasing day
by day. India has got following numbers of educational institutions (as on December 31, 2007):
Institution
Qty (in no.)
Central University
25
State University
231
Institutions established through State Legislation
5
Deemed University
100
Institutes of National Importance
31
Degree-granting Engineering College
1,522
Polytechnic
1,244
Marketing of Educational Services
Education is the service that is geared primarily to the customer market and hence it can be called as
customer service. Education in its conventional form is a high contact service. Intangibility factors
dominate the educational services. In the present context it is knowledge that derives the nations
therefore; marketing orientation should be applied in the field of education. Education sector
includes the services for the primary education, secondary education and higher learning. It also
includes the training centers that provide the training for languages and specialised courses like
technology, arts, mathematics and sciences. It also include services provided by coaching centers for
exams like IITJEE, CAT, IAS, IPS and many more. India has a large formal education system for
keeping with its billion-plus population and high proportion of the younger population. Its target
group is children and young persons in the age group of 6-24 years
Education is a service that can be judged by its content like curricula, course material, student
workload, and constituent faculty. People select their schools or colleges based on the quality of
teaching, cost and opinion sought from others. At the end of service experience, the consumer gets
the credential of an evaluation denoting his level of proficiency in the given course.
Developing a marketing mix for the education service needs constantly changing its components.
One should be clear what benefit the consumer gets while giving education by an institution.
Therefore consumer benefit concept, the service concept, the service offer and the service delivery
system should be made clear. For the decision making process, it is very essential to recognise the
basic elements like the core services, the facilitating services and the supporting services.
Educational institutions exist because of their core services they offer. For example, an engineering
institution exists because it possesses the basic facility, equips people with the skills and abilities to
understand and teach subjects related to engineering. They also offer core services like providing
hostel facilities for students and faculties. There are certain schools and colleges that educate
students on extracurricular activities like music, sports, dance, and arts and crafts. The students are
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also exposed to various competitions that take place within the organisation or at a state or district
level. There are distant learning universities like IGNOU, which is the largest Open University in the
world with more than 3 million registered students in all over world. Education is also provided with
different mediums like e-learning, which is provided using computerised study materials, online
study services provided by some websites. Also, ISRO’s initiative in launching Edusat, a satellite
dedicated for distance learning has widely helped education sector.
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