A

Project On

DEMAND ANALYSIS OF HONEYWELL PRODUCT AND PERFORM SERVICE ANALYSIS WITH REFERS TO THANE AREA
Submitted in the partial fulfillment for the requirement of the award of degree of Masters of Management Studies (MMS II) of Mumbai University

Submitted by Mr. Sawant Kiran Sanjay Roll No: 00 MMS II Academic Year: 2013-14 Under the guidance of Prof. Dhiraj Kute Changu Kana Thakur Institute of Management Studies and Research Plot 1 & 4, Sector 11, Khanda Colony, New Panvel (w) 410206

CERTIFICATE

This is to certify that the project title Demand analysis of Honeywell product and perform service analysis with refers to Thane area is successfully done by Mr. Sawant Kiran Sanjay, Roll No.00 during the partial fulfillment of the course Masters in Management Studies (MMS II) under University of Mumbai through Changu Kana Thakur Institute of Management Studies and Research, New Panvel, Navi Mumbai.

(Prof. Dhiraj Kute) Project guide

(Dr. S. T. Gadade) (Director)

Declaration

I, Mr. Kohale Vishal Dhananjay, Student of Changu Kana Thakur Institute of Management Studies and Research, MMS II, has completed this project on title Demand analysis of Honeywell product and perform service analysis with refers to Thane area in the academic year 20132014. The information submitted in this project is true and original to the best of my knowledge.

Mr. Sawant Kiran Sanjay, Roll No. 00

Acknowledgement
I was fortunate enough to have guide like Dronacharya for guiding me in my learning and who helped me to reach the pinnacle of success like Arjuna did. Furthering the age-old guru shishya tradition. So in the same sequence at very first I would like to confer the flower of acknowledgement to faculty members who taught me that how to do project through appropriate tools and techniques. I am grateful to DR.S.T. Gadade (Director) and the coordinator Prof. Mr. Nilesh. Manore. I would like to express my sincere gratitude to Prof. Dhiraj Kute for being my mentor throughout the project. I would also like to thank each and every professor and other literary staff and computer lab staff who contributed in their own special way to guide and help me. No words of thanks will judge the support rendered by my friends, Specially Rohit jagtap and Pranit mhatre . With that, I thank my family member for undying support Thank you Vira Printers, kalamboli for giving the project such a beautiful look Finally, it is only when one writes a book that one realizes the power of MSWord, form grammar checks to replace-alls. It is simple without this software, this book would not be written. Thank you Microsoft Crop!

I am thankful to these people for giving their kind support, cooperation and for being informative and tolerant. I would not have completed my project on the given time without the sincere efforts and guidance of the above mentioned people, whose presence was the blessing in disguise for me. I hope the same amount of cooperation in future also for developing my career prospects

CONTENTS
Chapters Particulars Executive Summary 6 Aim of the Project. 1. Objective of the study. Hypothesis Research Methodology Scope & limitations of the study Literature review Industry overview 3. 4. 5. 6. 7. Company profile Data Analysis & findings Result Conclusion Suggestions Bibliography 18 30 42 42 43 44 7 Page No

2.

Executive Summary :In each and every management training scheme there is a provision for real job experience within the academics time period call it summer training or corporate training or corporate interaction. The main aim of this is to introduce the corporate arena. This training to utilize and implement the theoretical knowledge of the classroom into real corporate world . it is well said nothing is much practical than a good theory. But on the very same we can not deny practical in the better than theory :. These phrases are opposing each other but also are complementary to each other .experiencing both in a good dedicated manner really plays a lot in ones profession carrier. In the field of marketing the scenario is no expectation. Field experience is very much necessary for the student of marketing too in this stream of business the application of theory is very frequent from the consumer behavior to consumer satisfaction all the theory can be explained in a day spend in the filed of marketing . Marketing is now so much diversified that now it can be internet ,but experiencing the real marketing tactics is the filed . there force I am really thankful to my college and COSMOS campany for providing me this opportunity. This project on Demand analysis and perform service analysis with market is basically done by two different surveys: 1. Dealer Survey 2. Consumer Survey Honeywell has had a presence in India for many decades and currently has businesses headquartered across four locations in India Bangalore, Chennai, Gurgaon, and Pune, employing over 7000 people. Honeywells business presence in India is roughly about USD 400 million and growing at an impressive rate. The

Super brands Council of India has recognized Honeywell as a Business Super brand. Honeywell Automation India Ltd is a leading provider of integrated automation and software solutions that improve productivity, enhance comfort and ensure safety and security of your homes and business premises. With over 2500 employees and an annual turnover of about Rs. 868 crores, HAIL is headquartered in Pune with 8 offices all over India. HAIL is a listed company on the Indian Stock Exchange and is part of Honeywell Inc. the technology leader with 120000 employees across 100 countries world wide Since November 2004, when the parent Honeywell acquired the remaining 40% stake from the Tatas, HAIL has come a long way, stepping out from the shadows and emerging as the market leader in most of the business areas it operates in, a fact that is underlined by the presence of Rashtrapathi Bhavan in its clientele list. With its five strategic businesses, namely, the Global Services, Honeywell Building Solutions, Honeywell Process Solutions, Control Products and the Honeywell Security Group, HAIL drives the nation's growth by playing a major role in the smooth running of the "core" business sectors of the Indian Economy, be it Infrastructure, Petrochemicals, Refining, Chemicals, Mining & Metals or Automobiles and Hospitality. The objective of this research is to determine company products demand in markets as well as proving services to client. . It involves the study the distributor channel and distributor relationship with customer regarding product and services in the market Collected the information from customer and dealer through questionnaire survey Later I went through the process of filling the questionnaires from 30 retailers as well as customer & 20 dealers selling and consuming both client taken into account to making valuable research more effectively . Secondary data from various sources like magazines, a journal etc has also been taken.

Ultimately, it can be said that the most important task of marketing research is to identified demand of the product. Although this study is conducted at small level (only some part of Thane) yet the findings and suggestions of it will help the management of the organization The study will also help the organization in making decision regarding promotional

schemes and also identified the hidden opportunity in the certain other area as well as company what types of services give to clients after selling the products It also includes the visits of the places where others competitors similar products were installed to get their performance feedback and identified the hidden opportunities for Honeywell company After done the research to find out which assumption should be right in selected market area and presenting the Researched report for the company .This report were will used full for company

Chapter: - 1

Demand
The amount of a particular economic good or service that a consumer or group of consumers will want to purchase at a given price. The demand curve is usually downward sloping, since consumers will want to buy more as price decreases. Demand for a good or service is determined by many different factors other than price, such as the price of substitute goods and complementary goods. In extreme cases, demand may be completely unrelated to price, or nearly infinite at a given price. Along with supply, demand is one of the two key determinants of the market. The concept of demand takes on a very particular, and somewhat different, meaning in economics. Economically speaking, to demand something means to be willing, able and ready to purchase a good or service. Let's examine each of these requirements in turn:

Willing to purchase: Being willing to purchase simply means that one likes an item enough to want to buy it, and this is usually what people think of when they encounter the concept of demand. However, it's important to remember that, while it's good to want things, desire to purchase is not the only requirement for economic demand.

Able to purchase: Wanting to purchase an item doesn't mean a whole lot if one doesn't have the means to make the transaction happen. Therefore, ability to purchase is another important factor of demand. Economists don't specify how an individual must be able to pay for an item- she can pay with cash, check, credit card, money borrowed from friends or taken from the piggy bank, etc.

Ready to purchase: Demand is, by its nature, a current quantity, so an individual is only said to demand something if she is willing and able to purchase it now as opposed to some point in the future. Putting these three requirements together, it is reasonable to think of demand as answering the question "If a seller were to show up right now with a whole truckload of the item in question, how much would an individual purchase?" Demand is a pretty straightforward concept, but there are a few other things to keep in mind: Individual vs. Market Demand Not surprisingly, demand for any given item varies from person to person. Nonetheless, market demand can be constructed by adding together the individual demands of all of the buyers in a market.

Implicit Time Units It doesnt really make sense to describe demand without time units. For example, if someone asked how many ice cream cones do you demand? you would need more information in order to answer the question. Does demand mean demand today? This week ? This year ? All of these time units are going to result in different quantities demanded, so its important to specify which one you are talking about. Unfortunately, economists are often somewhat lax about mentioning the time units explicitly, but you should remember that they are always there.

The formal definition is services are an economic activity offered by one party to another, most commonly employing time-based performances to bring about desired results in recipients themselves or in objects or other assets for which purchasers have responsibility. Time-based means something the firm does, which is within a certain time period. Desired results are outcomes desired by the customer. In exchange for their money, time and effort, service customers expect to obtain value from access to goods, labour, professional skills, facilities, networks and systems Organisations also use a wide array of business-to-business (B2B) services, varying to some degree according to the nature of their industry, but usually involving purchases of a much larger scale than those made by individuals or families. Nowadays, firms are outsourcing more and more tasks to external service providers in order to focus on their core business.

Service
Marketing has been considered to be an integral business aspect for long. Service marketing is the endorsement of economic activities offered by a company to its consumers, it is considered to be a special sub set of marketing because it focuses on how rendering of services can affect both the customer attitude and the marketing strategy. Service marketing includes building public relations, advancing customer loyalty, developing quality of service, handling relationships and complaint management. Service marketing involves 3 types of marketing: 1. EXTERNAL MARKETING

2. INTERNAL MARKETING 3. INTERACTIVE MARKETING External Marketing : "Setting the Promise" Marketing to END-USERS. Involves pricing strategy, promotional activities, and all communication with customers. Performed to capture the attention of the market, and arouse interest in the service. Internal Marketing : "Enabling the Promise" Marketing to EMPLOYEES. Involves training, motivational, and teamwork programs, and all communication with employees. Performed to enable employees to perform the service effectively, and keep up the promise made to the customer. Interactive Marketing : (Moment of Truth, Service Encounter) This refers to the decisive moment of interaction between the front-office employees and customers, i.e. delivery of service. This step is of utmost importance, because if the employee falters at this level, all prior efforts made towards establishing a relationship with the customer, would be wasted.

Chapter: - 2

Aim of the project:-

To analysis Demand of Honeywell product and perform service analysis with refers to Thane area

Objective of the Study: To determine and analyze the Market Potential of the Honeywell Company in Thane TO measuring demand and putting strategy in market To identify the factor which influence the purchase decision of customer with product and services . To study and determine the competitor position in the market. To Recommendations on how to increase the sales of the company product and how to cater the recruitment of the people via distributor and retailers To find out the opportunity and captures the market To analysis distributor relationship and distributor channel with product and services in the market

Hypothesis:Null Hypothesis:-

Honeywell has higher product demand in the market

Alternative Hypothesis:Honeywell has lower product demand in the market rather than competitor

Literature Review:-

1.

Supply chain management

Authors Name Rahul V. Altekar Chapter 2 demand management in supply chain Type of demand page no.12 Independent demand (items are generally finished goods ) Dependent demand (items are generally components ) forecasting As manufactures, retailer and distribution companies move toward integration their supply chains, they realize that an accurate representation of future demand is necessary to reduce cost and prevent customer dissatisfaction 2. Demand forecasting model 26 Supply chain strategy 34

Consumer behavior (4 edition)

Authors Name DAVID L. Loudon and Albert J ,Della Bittla Chapter 21 Organizational buying behavior The nature of organizational buying 658 organizational buying is in some ways similar to consumer buying it is not organizations making the buying decisions but people within those organizations. But there are significant differences that must be understood by marketers in order to succeed in the organizational market. 3. Organization buying decision 673 Type of decision situations 673 Sales Management (decision, Strategies and Cases) Fifth Edition

Authors Name Richard R.Still , Edward W.Cundiff norman A.P.Govani

Chapter 9 Distributive Netwirk Relation Developing Management Efficiency in Distributive Organizations 230

4. Marketing management, Introduction to Sales Management. 13 Editions

Authors Name: philip kotler, kevin L. keller, Abraham koshy, mithileshwar jha. Chapter 4 Conducting research and forecasting demand 86 Chapter 7 Analyzing business Markets 172 Chapter 13 Designing and Managing Services 336 web sites: www.pearsoned.co.in/marketingmanagementindia. page number: 124 Product and service quality Product and service quality, customer satisfaction and company profitability are intimately connected. higher levels of quality result in higher levels of customer satisfaction, which support higher prices and lower costs. Studies have shown a high correlation between relative product quality and company profitability." Quality is clearly the key to value creation and customer satisfaction". From a management point of view, marketing is an organizational function and set of processes for creating, communicating, and delivering value to customers and for managing customer relationship in ways that benefit the organization and its stakeholders. Marketing management is the art & science of choosing target market and getting, keeping, and growing customers through creating, developing, and communicating superior customer value.

5. Marketing Management Authors Name Dr.K. Karunakaram Web sites www.himpub.com

Chapter 3 understanding market environment 35 Chapter 5 marketing Research 107 Chapter 6 Demand measurement and sales forecasting 129 Chapter10 Service marketing 202 o Importance of Service Marketing o Marketing Mix in Services Marketing o Service Quality Distribution Management & Sales Promotion 197-221. The operational success of a company depends not only on well it performs in terms of production and sales but also on how well its entire channels of distribution compete with competitors channels. A company may produce the best products but still not do well if its dealers perform poorly in sales and services against the competitors dealers. A channel of distribution is a set of interdependent organizations involved in the process of making a product or service available for use or consumption by the consumer or business user. 6. Industrial marketing 2 Edition Authors Name: Krishna K Havaldar Chapter 3 the nature of industrial buying and buying behavior 34 Chapter 4 Buying-seller relationship 52 Type of relationship Customer relationship management Chapter 8 Industrial Distribution channels and marketing logistics 154 Chapter 13 Business-to-Business (Industrial) Marketing though Commerce 285

Chapter: -3

Importance of the Study

Scope
Honeywell International is a Fortune 100 diversified technology and manufacturing leader, serving customers worldwide with aerospace products and services; control technologies for buildings, homes and industry; automotive products; turbochargers; and specialty materials. Honeywell Process Solutions is part of Honeywell's Automation and Control Solutions group, a global leader in providing product and service solutions that improve efficiency and profitability, support regulatory compliance, and maintain safe, comfortable environments in homes, buildings and industry. For more information about Process Solutions. Safety & Security Zone at India Warehousing & Logistics Show is your ultimate opportunity to scale up your business. Within its huge scope and space, a warehouse is prone to subdued but potential hazards like breach of access & security, fire and power shedding, which has adverse effects on its seamless operations. To get over this challenge, there is an increased focus on safety and security while establishing a warehouse, thanks to specific mandates from warehousing regulatory authorities and government bodies. India Warehousing Show offers you the opportunity to exhibit your safety solutions to the warehouse owners, companies from all sectors including pharma, retail, food & beverage, infrastructure, airlines, banks & financial institutions, courier and many more.

We encourage solution providers dealing with Access & Security Systems, Smoke & Fire Alarm, Fire Protection, CCTV cameras and Power Backup Systems to exhibit at the show to create business opportunities among the right users segment The security systems services industry in the US includes about 5,000 companies with combined annual revenue of about $15 billion, adding several competitive components to the home automation integrator industry. Although perhaps the most proactive amongst major players is Honeywell, consumers have a plethora of options to choose from. One major competitive issue exists: the industry is concentrated. The 50 largest companies generate about 60 percent of industry revenue as a whole, although Honeywell generally stands above the rest. The study is conducted to evaluate the performance and market positioning of HONEYWELL in order to better scope to the investors, shareholders and the management about the rating of HONEYWELL and its performance in the current market situation. Hence Organizational study was conducted to analyze through the entire organization, its departments, their responsibilities, financial factors of HONEYWELL and to indirectly help the investors, Government, employees, creditors and other stakeholders in financial forecasting and Planning also in decision making. There is a Scope of future and detailed Study of the more retail outlets of other territories to study buying and consumption pattern of particular segment in that region and also the impact of communication in that region. Also there is a wide scope to study the marketing activity of other small and big companies in the other parts of country which would reveal how and why the particular brands are successful in particular regions only. So this study helps to Security System Services industry to know the market position of different companies. There is lot of scope to expand the market. Optimized Communication Since all information stored within the customer database is accessible centrally, Various departments within an organization can access such information seamlessly Hence, segments pertaining to customer management, sales effectiveness as well as marketing management all are included within the scope of customer relationship management systems. Information searches happen within sub-seconds and there is no wastage of time in getting access customized, vital information. With such small business crm systems, organizations can have access to holistic management as well as capabilities pertaining to users as well as application.

There are two places that scope is defined on project. High-level scope is defined in project charter. Low-level scope is defined in business requirements document. High-level scope consists of two main components. 1. Deliverables. If you cant remember anything else about scope, list your deliverables. Defining deliverables goes a long way toward defining the overall scope of the project. 2. Boundaries. The try to define the boundaries of project. Boundary statements help to separate the things that are applicable to project from those areas that are out of scope. There are two broad categories of research: applied and basic.

Applied means you have a problem and you are trying to solve it. Basic means you are trying to understand the universe and have no immediate use for the information. Companies who want to make money generally do applied reseach; basic reseach is done universities, government agencies and not-for-profit think tanks. The scope of a research project outlines the extent of the project and the requirements necessary to achieve the goals and objectives The work that needs to be accomplished to deliver a product, service, or result with the specified features and functions During the project, this documentation helps the project team remain focused and on task. The scope statement also provides the project team with guidelines for making decisions about change requests during the project Terms of reference or statement of work, explains the boundaries of the project, establishes responsibilities for each team member and sets up procedures for how completed work will be verified and approved

Limitation

Low connectivity Less sampling The limitation faced while doing a research was that the people were not ready to give the information. Sometimes the required persons were not available in there office or place The respondents use to refuse to give the important information best known to them The sources of data collection and time are limited in this research.

Marketing Research (MR) is not an exact science though it uses the techniques of science. Thus, the results and conclusions drawn upon by using MR are not very accurate. MR is not a complete solution to any marketing issue as there are many dominant variables between research conclusions and market response.

MR is not free from bias. The research conclusions cannot be verified. The reproduction of the same project on the same class of respondents give different research results. Some respondent in corporate offices hesitate to give complete information. Some respondent has not given proper information. Unavailability of visiting cards from some respondent. Some of the retailers were busy and could not give appropriate information. And also very few retailers did not want to share any information

As study was done in Thane , it did not covered broader area to understand prescribing behavior of customer

Inappropriate training to researchers can lead to misapprehension of questions to be asked for data collection.

The Data collected from the Dealer might not be very accurate to obtain the desired information.

Difficulty in gathering the reasonable data. The period of the project was not sufficient to study all the factors in deep. Visiting various places for the study consumed a lot of time.

We cannot say that what the consumer have revealed will be right for each and every situation because their perception is influenced by many factors.

Many consumer and dealers/retailers showed less interest in providing information and havent cooperated.

Some of confidential information viz. credit period, schemes, policies and sales figure were not disclosed by the competitors.

Demand

The amount of a particular economic good or service that a consumer or group of consumers will want to purchase at a given price. The demand curve is usually downward sloping, since consumers will want to buy more as price decreases. Demand for a good or service is determined by many different factors other than price, such as the price of substitute goods and complementary goods. In extreme cases, demand may be completely unrelated to price, or nearly infinite at a given price. Along with supply, demand is one of the two key determinants of the market price.

Aggregate Demand - The combined demand of all buyers in a market. Budget Constraint - The outermost boundary of possible purchase combinations that a person can make, given how much money they have and the price of the goods in consideration. Buyer - Someone who purchases goods and services from a seller for money. Competition - In a market economy, competition occurs between large numbers of buyers and sellers who vie for the opportunity to buy or sell goods and services. The competition among buyers means that prices will never fall very low, and the competition among sellers means that prices will never rise very high. This is only true if there are so many buyers and sellers that no one individual has a significant impact on the market's equilibrium. Complementary Good - A good is called a complementary good if the demand for the good increases with demand for another good. Demand - Demand refers to the amount of goods and services that buyers are willing to purchase. Typically, demand decreases with increases in price, this trend can be graphically

represented with a demand curve. Demand can be affected by changes in income, changes in price, and changes in relative price. Demand Curve - A demand curve is the graphical representation of the relationship between quantities of goods and services that buyers are willing to purchase and the price of those goods and services. Example: Diminishing Returns - Concept that the marginal utility derived from acquiring successive identical goods decreases with increasing quantities of goods. Economics - Economics is the study of the production and distribution of scarce resources, and goods and services. Equilibrium Price - The price of a good or service at which quantity supplied is equal to quantity demanded. Also called the market-clearing price. Equilibrium Quantity - Amount of goods or services sold at the equilibrium price. Because supply is equal to demand at this point, there is no surplus or shortage. Expected Value (EV) - How much a buyer thinks that a good or investment will be worth after a time lapse, based on the probabilities of different possible outcomes. Usually refers to stocks and other uncertain investments. Giffen Good - Theoretical case in which an increase in the price of a good causes an increase in quantity demanded. Firm - Unit of sellers in microeconomics. Because it is seen as one selling unit in microeconomics, a firm will make coordinated efforts to maximize its profit through sales of its goods and services. The combined actions and preferences of all firms in a market will determine the appearance and behavior of the supply curve. Goods and Services - Products or work that are bought and sold. In a market economy, competition among buyers and sellers sets the market equilibrium, determining the price and the quantity sold. Horizontal addition - The process of adding together all quantities demanded at each price level to find aggregate demand

Household - Unit of buyers in micro economics. Because it is seen as one buying unit in microeconomics, a household will make coordinated efforts to maximize its utility through its choices of goods and services. The combined actions and preferences of all households in a market will determine the appearance and behavior of the demand curve. Income Effect - Income effect describes the effects of changes in prices on consumption. According to the income effect, an increase in price causes a buyer to feel poorer, lowering the quantity demanded, and vice versa. Although the buyer's actual income hasn't changed, the change in price makes the buyer feel as if it has. Indifference Curve - Graphical representation of different combinations of goods and services that give a consumer equal utility or happiness. Inferior Good - A good for which quantity demanded decreases with increases in income. Marginal Utility - Additional utility derived from each additional unit of goods acquired. Market - A large group of buyers and sellers who are buying and selling the same good or service. Market Economy - An economy in which the prices and distribution of goods and services are determined by the interaction of large numbers of buyers and sellers who have no significant individual impact on prices or quantities. Market-clearing Price - The price of a good or service at which quantity supplied is equal to quantity demanded. Also called the equilibrium price. Microeconomics - Subfield of economics which studies how households and firms behave and interact in the market. Normal Good - A normal good is a good for which an increase in income causes an increase in demand, and vice versa. Optimization - To maximize utility by making the most effective use of available resources, whether they be money, goods, or other factors. Resource - A supply of capital that can be used in an economy. Because resources are scarce, however, there is not enough to go around.

Risk - Refers to the amount of variation in possible payoffs. A very risky investment will have wide variation in possible payoffs, but might have a higher expected value; a less risky investment will have a more predictable payoff, but a lower expected value. Scarcity - Goods, services, or resources are scarce if there is not enough for everyone to have as much as they would like. Seller - Someone who sells goods and services to a buyer for money. Substitute Good - Refers to a good which is to some extent interchangeable with another good, meaning that when the price of one good increases, demand for the other good increases. Substitution Effect - Describes the effects of changes in relative prices on consumption. According to the substitution effect, an increase in price of one good causes a buyer to buy more of the other good, since the first good has become relatively expensive, and vice versa. The buyer substitutes consumption of the second good for consumption of the first. Supply - Supply refers to the amount of goods and services that sellers are willing to sell. Typically, supply increases with increases in price, this trend can be graphically represented with a supply curve. Utility - An approximate measure for levels of "happiness." Wage - Price per unit of time when the good being sold is some form of labor or work (as opposed to a physical product
The different types of demand

Direct and Derived Demands Domestic and Industrial Demands Autonomous and Induced Demand Perishable and Durable Goods Demands New and Replacement Demands Final and Intermediate Demands Individual and Market Demands Total Market and Segmented Market Demands Company and Industry Demands

Determinants of Demand
When price changes, quantity demanded will change. That is a movement along the same demand curve. When factors other than price changes, demand curve will shift. These are the determinants of the demand curve. Income: A rise in a persons income will lead to an increase in demand (shift demand curve to the right), a fall will lead to a decrease in demand for normal goods. Goods whose demand varies inversely with income are called inferior goods (e.g. Hamburger Helper). Consumer Preferences:

Favorable change leads to an increase in demand, unfavorable change lead to a decrease. Number of Buyers:

The more buyers lead to an increase in demand; fewer buyers lead to decrease. Price of related goods: a. Substitute goods (those that can be used to replace each other): price of substitute and demand for the other good are directly related. . b. Complement goods (those that can be used together): price of complement and demand for the other good are inversely related. Expectation of future: a. Future price: consumers current demand will increase if they expect higher future prices; their demand will decrease if they expect lower future prices. b. Future income: consumers current demand will increase if they expect higher future income; their demand will decrease if they expect lower future

Introduction on Service
The world economy nowadays is increasingly characterized as a service economy. This is primarily due to the increasing importance and share of the service sector in the economies of

most developed and developing countries. In fact, the growth of the service sector has long been considered as indicative of a countrys economic progress. Economic history tells us that all developing nations have invariably experienced a shift from agriculture to industry and then to the service sector as the main stay of the economy. This shift has also brought about a change in the definition of goods and services themselves. No longer are goods considered separate from services. Rather, services now increasingly represent an integral part of the product and this interconnectedness of goods and services is represented on a goods-services continuum. Definition and characteristics of Services The American Marketing Association defines services as - Activities, benefits and satisfactions which are offered for sale or are provided in connection with the sale of goods. Intangibility: Services are intangible and do not have a physical existence. Hence services cannot be touched, held, tasted or smelt. This is most defining feature of a service and that which primarily differentiates it from a product. Also, it poses a unique challenge to those engaged in marketing a service as they need to attach tangible attributes to an otherwise intangible offering. Heterogeneity/Variability: Given the very nature of services, each service offering is unique and cannot be exactly repeated even by the same service provider. While products can be mass produced and be homogenous the same is not true of services. Perishability: Services cannot be stored, saved, returned or resold once they have been used. Once rendered to a customer the service is completely consumed and cannot be delivered to another customer. .Inseparability/Simultaneity of production and consumption: This refers to the fact that services are generated and consumed within the same time frame.

Types of Services
Core Services: A service that is the primary purpose of the transaction Supplementary Services:

Services that are rendered as a corollary to the sale of a tangible product. Services marketing mix The first four elements in the services marketing mix are the same as those in the traditional marketing mix. However, given the unique nature of services, the implications of these are slightly different in case of services. Product: In case of services, the product is intangible, heterogeneous and perishable. Moreover, its production and consumption are inseparable. Hence, there is scope for customizing the offering as per customer requirements and the actual customer encounter therefore assumes particular significance. However, too much customization would compromise the standard delivery of the service and adversely affect its quality. Hence particular care has to be taken in designing the service offering. Pricing: Pricing of services is tougher than pricing of goods. While the latter can be priced easily by taking into account the raw material costs, in case of services attendant costs - such as labor and overhead costs - also need to be factored in. Thus a restaurant not only has to charge for the cost of the food served but also has to calculate a price for the ambience provided. The final price for the service is then arrived at by including a mark up for an adequate profit margin. Place: Since service delivery is concurrent with its production and cannot be stored or transported, the location of the service product assumes importance. Service providers have to give special thought to where the service would be provided. Thus, a fine dine restaurant is better located in a busy, upscale market as against on the outskirts of a city. Similarly, a holiday resort is better situated in the countryside away from the rush and noise of a city. Promotion: Since a service offering can be easily replicated promotion becomes crucial in differentiating a service offering in the mind of the consumer. Thus, service providers offering identical services such as airlines or banks and insurance companies invest heavily in advertising their services. This is crucial in attracting customers in a segment where the services providers have nearly identical offerings. We now look at the 3 new elements of the services marketing mix - people, process and physical evidence - which are unique to the marketing of services. People:

People are a defining factor in a service delivery process, since a service is inseparable from the person providing it. Thus, a restaurant is known as much for its food as for the service provided by its staff. The same is true of banks and department stores. Consequently, customer service training for staff has become a top priority for many organizations today. Process: The process of service delivery is crucial since it ensures that the same standard of service is repeatedly delivered to the customers. Therefore, most companies have a service blue print which provides the details of the service delivery process, often going down to even defining the service script and the greeting phrases to be used by the service staff. Physical Evidence: Since services are intangible in nature most service providers strive to incorporate certain tangible elements into their offering to enhance customer experience. Thus, there are hair salons that have well designed waiting areas often with magazines and plush sofas for patrons to read and relax while they await their turn. Similarly, restaurants invest heavily in their interior design and decorations to offer a tangible and unique experience to their guests