Service Marketing – Semester 4 – Solved Question Paper 2016 – Dibrugarh University

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4th Semester 



  1. State weather the following are true or false:                                       1*8=8
    1. Once goods and service are sold, the ownership goes to the buyer: False.
    2. There is no need of market segmentation in service marketing: False.
    3. ITDC stands for Indian Tourism Development corporation : True.
    4. According to gap model, the gap between service performance and premise is known as service gap: ………………
    5. SWOT stands for strengths, weaknesses opportunities and training: False.
    6. Consultancy services are examples of non profit organizations: False.
    7. Intangible products are known as physical products: True.
    8. Dining area of a hotel is an example of physical evidence: True.
  2. Write short notes on any four of the following                                  4*4=16
    1. Growth of service marketing.
    2. Customer expectation.
    3. Packaging of service.
    4. Positioning.
    5. Service marketing triangle.
    6. Understanding service customer.

Ans:1. Growth of service marketing:

Service marketing refers to the marketing of all those economic activities whose output is not a physical product or constructing, is consumed at the time it is produced, and provides added value in forms that are essentially intangible concern of its purchases. Phenomenal growth has been witnessed in the service marketing in the past one decade. Both the developed as well as the developing countries have been  making multidimensional efforts to market service in a right fashion. Some of the potential reasons that have encouraged the encouraged the profit of service sector are-

  1. Increased disposal income:-

Over the years as the Indian economy has grown the disposable income of masses has also shown an upward trend. Such a trend is also known as found in the developed as well as the developing countries.

  • Specialization:-

Specialization is the end result of the division of labour where individuals specialize in these respective fields.

  • Upcoming Fashion Trends:

New developments in the corporate culture and the emergence of a well established service sector has influenced and changed the lifestyles of messes.

  • Information Boom:

Recent inventions and innovations in the field of communications has bridged the gap in the global markets.

  • Market Sophistication :

Changes in the information sector is driving the sophisticated changes in the market where customer expectations are all time high.

  • Professionalism in Education:

Success of any organization more or less depends on the human assets which that organization has hence the concept of employee reliability and performance orientation is gaining ground.

2.  Customer expectations:

Customer satisfaction reflects the exputation and experiences that customer has with a product or service. Expectation reflects both past and current product evaluation and use experiences. Customers hold both explicit and implicit performance expectations for attributes, features and benefits of products or services.

Understanding the following swen customers expectation is critical before  it is set out to measure customer satisfaction.

  1. Explicit expectation:

Explicit expectation are mental targets for product performance, such as well identified performance standards.

  • Implicit expectation:

Implicit expectation reflect established norms of performance. They are established by business in general, other companies industries and even cultures.

  • Static performance expectation:

It address how performance and quality are defined for a specific application.

  • Dynamic performance expectations:

Dynamic performance expectations are about how the product on service is expected to evolve over time.

  • Technological expectations:

Technological expectations focus on the evolving state of the product category.

  • Interpersonal expectations:

It reflect the relationship between the customer and the product or service provider.

  • Situational expectations:

In building a customer satisfaction survey, it is also  helpful to evaluate while pre purchase expectations or post purchase satisfaction may or may not be fulfilled or even measurable.

  •  Packaging of services  :

The service package is defined as a bundle of goods and service that is provided  in some environment . service managers have difficulty identifying their product. This problem is partly a result of the intangible nature of service, but in the presence of the customer in the process that creates a concern for the total service experience. Example- for a sit down restaurant, atmosphere is just as important as the meal, because many dinners regard the occasion as a way to get together with friends. A customer’s opinion of a bank can be formed quickly on the basis of a teller’s cheerfulness or length of the raiting line.

  • Positioning:

Positing is the means by which a brand on company presents its feathers and benefits to prospective customers. It is a means of establishing identity, one that sets a business apart from competitors. It is also determined by variables that include price, target audience, and the area where a firm does business.

The concept of positioning involves establishing a distinction place in the minds of target customers relative to competing products. An effective positioning strategy considers the strengths and weakness of the organization, the need of the customer and the market and the positions of the competitors. The purpose of positioning strategy  is that it allows a company to spotlight specific areas where they can outshine and beat their competition.

  • Service marketing  triangle:

The models of service marketing triangle is an integrated approach which focuses upon making and keeping promises to customers. According to this model, three structural relationships can east that have to be managed to make marketing of services effective.

These three principal modes are:

  1. Internal Marketing:

The marketing activity that is carried out between the service provides and its employees. Internal marketing (IM) is an ongoing process that occurs strictly within a company on organization whereby   the functional process aligns, motivates and employers employees at all management levels to consistency deliver a satisfying customer experiences. The basic idea behind the internal experience. The basic ides behind the internal marketing is that the employees who are not convinced and satisfied themselves will never be in a position in convince and satisfy the needs of the customers with whom they are going to interact. In simple terms internal marketing may be defined as meeting the needs of the employees so that they can meet the needs of their customers.

  • Interactive marketing:  

The marketing activity that is between  the employees and the external customers. The process of conceptualization and implementation of a marketing policy based on dirty interactive contact with the actual or potential customer is called interactive marketing. The idea behind interactive marketing is that all  individual within the organization successfully complete all interaction that adds value to service encounter. The service delivery system are changing at a feat pace and consumer is now an active participant from the product development stage to disposition of the product and is co-producing with the service providers in the service delivery process.

  • External marketing :

The marketing activity that is between company and the external customers. External customers refers to the fact that now how does the service provider position himself in the market via a via Its competitors. In simple terms external marketing refers to the positioning of the organization the mindset of the customers. External marketing to a large extent depends o the market potential which may be defined as “ total amount of a product/ services that a customer will purchase/ avail within a specified period at a specific level of industry wide marketing activity simple, external marketing in how the target market defines a particular service organization in relation to its competitors. External marketing is only applicable once the organization has selected its target marketing it refers how organizations want their customers to see their product/ service.

  • Understanding service customers:

Understanding what customer needs and wants are is a crucial components of having a successful organizations. If customers are dissatisfied they would look for other alternatives to satisfy their needs. Greater customer satisfaction results in customer loyalty, which eventually increase growth. I service marketing, it is important to understand why customers behave the way they do.

 Understanding customers is the key to giving them good services. To give good customer care you must deliver what you promise. But great customer care involves getting to know your customer so well that you can anticipate their needs and exceed their expectation.

To understand your customers well, you need to be attentive to them whenever you are in contact with them. The potential rewards are great, you can increase customer loyalty and bring in new business through positive word-of-mouth recommendation.

There are three main ways to understand your customers better. One is put yourself in their shoes and try and look at your business from their point of view. The second way is to collect and analyses data in order to shed light on their buying behaviors. The third way is simply to ask them what they think.

3(a) Describe the different macro environmental and micro environmental factors of service marketing.                                                                                                           3+8=11

Ans: Macro environment :

Macro environment factors are the external environment which have considerable influence on the external environment which have considerable influence on the marketing system of any organization. It refers to all forces that are part of the larger society and affect the micro environment. This includes all factors that  can influence and organization but that are out of their direct control.

The factory of macro environment are:

  1. The demographic Environment:-

Demography refers to studying human population in term of size, density, location, age, gender, race, and occupation. This is very important factor to study for marketers and helps to divide the population into market segments ad target marketers.

  • The economic environment:-

Another  aspect of the macro environment is the economic environment. This refers to the purchasing power spend their money.

  • The Natural environment:-

The natural environment is another important factor of the macro environment. This includes the natural resources that a company uses as inputs and affects their marketing activities.

  • The technological environment:-

The technological environment is perhaps one of the fastest changing factor in the macro environment. This includes all developments from antibiotics and surgery to nuclear missiles and chemical weapons to automobiles and credit cards.

  • The political environment:-

The political environment includes all laws, government agencies and  groups that influence or limit other organization and individuals within a society. It is important for marketers to be aware of these restrictions as they can be complex.

  • The socio-cultural environment:

The final aspect of the macro environment is the culture environment, which consists of institutions and basic values and beliefs of a group of people.

Micro Environment:

The factor which are close to the organization’s business operation are called the macro environmental factors. This environment influences the organization directly. It includes the company itself, its suppliers, marketing,  intermediaiaries,  customer markets, competitors and publics. These can sometimes be controllable and cannot be controllable some other time.

The factors of micro environment are:-

  1. The Supplier:

The suppliers of a company are also an important aspects of the micro environment because even the slightest delay in receiving supplies can result in customer dissatisfaction. The suppliers are very important to the success of the enterprises because they supply those products which consumers want from marketing houses.

  • The marketing intermediaries:

Marketing intermediaries refers to resellers, physical distribution firms, marketing services agencies and financial intermediaries. These are the people that help the company promote, sell, and distribute its products to the final buyers.

  • Customers:

Another aspects of micro environment is the customer. There are different types of customer markets including consumer markets, business markets, government markets,

International markets, and reseller markets. The consumer markets is made up of individuals who buy goods and services for their own personal use on use their household.

  • Competitors:

Competitors are also a factor in the micro environment and include companies with similar offerings for goods and services. To remain competitive a company must consider who their biggest competitors are while considering its own size and position in the industry.

  • Public:

The final aspect of the macro environment is publics, which is any group that has an interest in on impact on the organization’s ability to meet its goal. For example- financial publics can hinder a company’s ability to obtain funds affecting the level of credit a company has.


b) What is service marketing? Distinguish between goods and service marketing.   3+8=11

Ans: Service marketing refers to the marketing of all those economic activities whose output is not a physical product or construction, is consumed value in forms that are essentially intangible concerns of its purchaser.

Service marketing is marketing based on relationship and value. It may be used to market a service or a product. With the increasing prominence of services in the global economy, services marketing has become a subject that needs to be studied separately.  Marketing services is different   from marketing goods  because of the unique characteristics of services namely intangibility, heterogeneity, perish ability and inseparability.

The difference between goods and services are_

         Basis                  Goods                       Services 
MeaningGoods are the material items that can be seen, feel and are ready for sale to the customer.Services are amenities, facilities, benefits  or help provided by other people. 
NatureIt is tangible in nature.It is intangible in nature. 
Transfer of ownershipThe ownership of the goods can be transferred.The ownership of the service is non transferable. 
EvaluationThe evaluation of goods are very simple and easy.The evaluation of service is difficult because every service provider has a different approach of carrying out services, so it is hard to judge whose service are better. 
ReturnGoods can be return after they are sold.Services cannot be returned back once they are provided. 
SeparableGoods can be separated from the seller.Services cannot be separated from the separated from the services provides. 
StorageGoods can be stored for use in future or multiple use.Service cannot be  stored. 
Production and consumptionThere is a time gap between production and consumption of goods.Production and consumption of goods occurs simultaneously. 

 4 (a) Define the term ‘perception’. Explain the process of perception in the content of service marketing.                                                                                                        3+8=11

Ans: Perception is a marketing concept that encompasses a customer’s impression, awareness and / or consciousness about a company or its offering. In simple term we can say that perception is a way in which the customers perceives services in term of overall quality and satisfaction level . Customer perception is the factor that determines the customer evaluation of services.

Customer perception is typically affected by advertising, revives, public relations, social media, personal experience and other channels. The  marketing management is related with the concept of consumer perception. Interpretation  of stimuli is perception. Perception leads to through and through leads to act . perception is the process whereby stimuli are   received and interpreted by the individuals and translated into a response.

The process of perception in the context of service marketing is-

  1. The sensation stage:

The first stage of perception is the sensation stage. Sensation describes what occurs when a person’s senses are initially exposed to the external stimulus of a product or brand marketing . The sensory receptors of a consumer are engaged by product or brand eves through sight, sound, smell taste and texture. For example- star bucks engages   all the senses in its sensory brand marketing. A customer who enters a star bucks coffee shop may hear the sound and smell the aroma of the grinding of fresh coffee in the store.

  • The Attention stage:

In consumer information processing attention occurs when a process lingers and give mental processing capacity to the external stimulus from a product or brand. Selective perception   is when a consumer pays attention to massage that are consistent with her attitudes, believes and needs. When a product is inconsistent with these factors, the consumer will withdrawn attention.

  • The interpretation stage:

Interpretation occurs when a person assigns a meaning to the sensory stimulus from a product or brand marketing. Comprehension is aided by expectations and familiarity. A consumer scans his memory to retrieve previous experiences with the brand or a similar brand store brand marketing frequently capitalizes on the interpretation stage when product packaging design contains loges. Colors and other elements that are generally more familiar with.

  • The Retention Stage: 

The last stage of perception is the retention stage. This is marked by the storage of product on brand information in short term and long term memory. The marketing goal is to provide positive stimuli in the proceeding stage that translates into consumers storing the information about the product or brand into long term memory.


(b) Define service market segmentation. Explain the factors that generally considered by marketers in service market segmentation                                                  3+8=11 

Ans: Service market segmentation is the process of identifying and targeting groups of individuals who are similar to one another. Market can be segmented in various ways by product or services needs, by sensitivity to price, by geographic area, by demographic segment or by  psychographics and lifestyles. Successful segmentation depends on understanding what consumers need, how  group of customer differ prom one another and how consumers decides among products.

Same as 4(b) 2018   

5(a) Explain in detail about the elements of expanded marketing mix in service marketing. 11

Ans : The service marketing mix is also known as expanded marketing mix and is an integral part of a service blue print design. The service marketing  mix consists of 7p’s as compared to the 4p’s of a product marketing mix. The expand marketing mix places three future P’s. Which include people, process and physical evidence. All of these factors are necessary for optimum service delivery. Following are the expand marketing mix in service marketing which are discussed as:-

  1. Product:    

The product in service marketing mix is intangible in nature. Like physical product such as soap or a detergent, service products cannot be measured. Tourism industry or the education industry can be the  example of product in service. At the same time, service product are heterogeneous, perishable and cannot be owned . The service product those has to be design with care.

  • Place:

Place in case of service determine where is the service product going to be located. The best place to open up a petrol is on the high way or in the city. A place where there is minimum traffic is a wrong location to start a petrol pump.

  • Promotion:

Promotion have become a critical factor in the service marketing mix. Service are easy to be duplicated and hence it is generally the brand which sets a service apart from its computer part.

  • Pricing:

Pricing in case of service is rather more different then in case of product. Generally service pricing involves taking into consideration labor material cost and overhead cost. By adding a profit markup you get your final service pricing.

  • People:

People is one of the element of service marketing mix. People defines a service. For example- if you have an IT company your software engineer defines you. In case of service marketing people can make or break an organization. Thus many companies now-a-days are involved into specially getting their staff trained in interpersonal skills and customer service with a focus towards customer satisfaction.

  • Process:

Service process is a way in which a service is delivered to the end customers. For example:- Mac Donald and FedEx both the companies thrive on their quick service and the reason they can does that is their confidence on the process. On top of it, the demand of their service is such that they have to delivered optimally without a loss in quality. Thus the process of servicing company is delivered its product is of utmost importance.

  • Physical evidence:

The last element in the service marketing mix is the physical evidence. As said before service are intangible in nature however to create a better customer experience tangible elements are also delivered with the service physical evidence includes the environment or place where the services provided and any tangible elements that facilitates the performance or communication of the service.


b) What do you mean by quality? Discuss the quality model in service marketing?

Ans: Quality is the only one that counts. The totality of features and characteristics of a product or service that bears on its ability to satisfy given heads. Quality is not achieved by doing different things. It is achieved by doing things differently.

The GAP model also known as the five gap model of service quality is an important customer satisfaction framework. It is a conceptual model of services quality and its implication for future research. The five gaps that organization should measure, manage and minimize are:-


It is the distance between what customers expect and what managers think they aspect. Clearly survey research is a key way to narrow this gap.


It is between management perception and the actual specification of the customer experience. Managers need to make sure the organization is defining the level of service they believed is needed.   


It is from the experience specification to the delivery of the experience manager need to audit the customer experience that the organization currently delivers in order to make sure it lives up to the expectation.


It is the gap between the delivery of the customer experience and what is communicated to customers. All two of an organization exaggerate what will be provided to customer or discus the best case rather than the likely case, raising customer expectations and harming customer perceptions.


It is the gap between a customer’s perception of the experience and the customers expectation of the service. Customer expectation have been shaped by word of mouth, there personal needs and their own past experiences.

6(a)Write in detail about the marketing of financial services.                                              12

Ans: Financial services are the economic services provide by the finance industry, which encompasses a broad rang of businesses that manage money including credit unions, banks, credit card companies, insurance companies, accountancy companies, consumer finance companies stock brokerage, investment funds and same government sponsored enterprises. The financial services sector in India has witnessed a phenomenon transformation since the country was liberalized. India, in the last few years, has emerged as the one of the most rapidly growing economies across the globe. The financial services market is growing rapidly and there is significant potential for further growth.

Every financial services company needs the right marketing strategy to generate high quality leads. Financial marketing act as a like between financial services provider and business organization that are in need of specific financial services. Financial services providers adopt digital marketing strategies or obtain the services of a marketing firm in order to obtain high quality leads.

The key drivers for the growth for the growth of the financial services are-

  • High saving rate-

India’s high saving rates offers significant opportunity to put resources into the financial markets. The country has a favorable demographic profit with a large segment of the population under 30 years. The census 2011 shows 56.9% of India’s total population comes in the age group 15-59 years. The country will witness a sharp decline in the dependency ratio over the neat thirty.

  • Untapped domestic market-   

The domestic market urban or rural is largely untapped so far the potential of the financial service is concerned. This gives an ample opportunity far the service players to tap this huge potential.

  • Presence of financial and capital market mechanisms.
  • A large and continuously growing intellectual capital.
  • Healthy rate of economic.

(b) what do you mean by ‘tourism’? Discuss the marking practices in tourism industry.   12

Ans: Tourism is the totality of the relationshipand stay of strangers, provided the stay does not imply the establishment of a permanent residence and is not connected with the remuneratedactivities. The importance of tourism is not only the foreign exchange it brings in but more importantly the employment it generates at several location and in several layers of society ranging from airline staff to hotel employees.

Tourism marketing activities are systematic and coordinated efforts extended by National Tourist Organization and/ or tourist enterprises at international, national and local level to optimize the satisfaction of tourist groups and individuals in view of sustained tourism growth. Tourism marketing is a process of creating a product or providing a service . Tourism marketing comprises fact finding, data gathering , analyzing, communication to inform and promote ensuring and facilitating sales, selection of marketing planning, coordination, control and salvation, developing professionally sound personal. It is an integral effort to satisfy tourists and more so, it is a device to transform the potential tourists into the actual tourists. Tourism marketing is a safest way to generate the market share. Tourism marketing is a managerial process to promote business.

7(a) Define the term ‘adverting. Explain the role of advertising is service marketing.      11

Ans: Advertising is defined as a non personal method of communicating messages regarding products or services to general public in order to inform and persuade them so that they develop favorable attitude towards the products . because of the low cost per messages, it is largely used to develop initial product awareness or acceptance. It can also be defined as the paid form of non personal presentation and promotion of ideas goods or services by an identified sponsor.

Advertising is the best way to communication to the customers. Advertising which has a prime motive of creating a message that communicates the benefits of the product service to the target audience is altogether different in the end result of certain dissimilarities found in the basic nature of a product and a service.

Advertising for services involves the interaction of a complex mix of factors that would create maximum impact in the minds to target segment. Advertising has become altogether different in this era: gone are days when customers were given the information from the limited number of sources using traditional ways of advertising i.e. print media, radio or TV the advertisers were in a position to create and leave an imprint on customers mind with case.

Today with coming of new and more sophisticated ways of advertising, the customer is being exposed rather bombarded with all kind of advertisements within a short span with the addition of more lethal and penetrating tools such as targeted magazines, dedicated websites, direct mail, mobile advertising, bloggers and host of sales promotion tools, advertising  has gone more complex, and highly targeted in its nature.


(b)  What is service gap? Explain the different causes of service gap in service marketing.    3+8=11   

Ans: Service gap is a gap method in service quality measurement, a tool that can be used be product manager across all industries. The aim of this model is to (1) identify the gaps between customer expectation and the actual services provided at different stage of service delivery. And (2) close the gap and improve the customers service. The gap model also known as the five gap model of services quality is an important customer satisfaction framework. It is a conceptual modes of services quality and its implications for future research.

The cause of service gap in service marketing are:-

  1. Variable with customer expectation:-

It is simply not known what the customers expect. The intangible nature of service makes it difficult to define customer expectations quantitative. Even the customer sometimes is not articulate enough to explain as to what are his/her specific expectations. As a result marketers have to depend upon their own judgment which sometimes is at a variance with the customer expectation.

  • Perception that service cannot be standardize:-

The customer expectation need to be translated into appropriate performance standards. Many a times a service firm has a good idea as to what customer except but fail to develop them into appropriate service specification.There are many reasons responsible for it. Inadequate commitment to quality, lack of inclination to specify quality standards and measure quality.  Perception of unfeasibility, perception that  that services cannot be standardized etc.

  • Service delivery:

This reflects variation of the actual performance from the standard performance i.e. failure to conform to established standards. It occurs when the employees are unable to or unwilling to perform at desired level. Role ambiguity role conflict, pore employee- job fit, lack of training, absence of proper motivation system etc. may be the reason for it.

  • Over promises:

A service company’s external  communication efforts i.e. advertising, publicity, personal   selling and public relations may overpromise and that logically  results into  this gap to occur the marketers find it very hard to resists the temptation of making big promises. Otherwise they know that if they don’t make tall promises their appeal to the customers won’t be that exciting and the entire promotion exercise may be reduced to any.  

  • Communication gap:-

The gap occurs when the customers’ perceptions of delivered service is at variance with the expected  service. The customers’ experience of the service is conflict upon many factors and sometimes the service may need customers’ expectation not yet perceived otherwise. 



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