Services marketing is marketing based on relationship and value. It may be used to market a service or a product.

Marketing a service-base business is different from marketing a product-base business.

There are several major differences, including:

1. The buyer purchases are intangible
2. The service may be based on the reputation of a single person
3. It’s more difficult to compare the quality of similar services
4. The buyer cannot return the service

5. Service Marketing mix adds 3 more p’s, i.e. people, physical environment, process service and follow-through are keys to a successful venture.

When one markets a service business, one must keep in mind that reputation, value, delivery of “Managing the evidence” refers to the act of informing customers that the service encounter has been performed successfully. It is best done in subtle ways like providing examples or descriptions of good and poor service that can be used as a basis of comparison. The underlying rationale is that a customer might not appreciate the full worth of the service if they do not have a good benchmark for comparisons.

However, it is worth remembering that many of the concepts, as well as many of the specific techniques, will work equally well whether they are directed at products or services. In particular, developing a marketing strategy is much the same for products and services, in that it involves selecting target markets and formulating a marketing mix. Thus, Theodore Levitt suggested that “instead of talking of ‘goods’ and of ’services’, it is better to talk of ‘tangibles’ and ‘intangibles’”. Levitt also went on to suggest that marketing a physical product is often more concerned with intangible aspects (frequently the `product service’ elements of the total package) than with its physical properties. Charles Revson made a famous comment regarding the business of Revlon Inc.: `In the factory we make cosmetics. In the store we sell hope.’ Arguably, service industry marketing merely approaches the problems from the opposite end of the same spectrum.

An Overview

The Indian rural market with its vast size and demand base offers great opportunities to marketers. Two-thirds of countries consumers live in rural areas and almost half of the national income is generated here. It is only natural that rural markets form an important part of the total market of India. Our nation is classified in around 450 districts, and approximately 630000 villages, which can be sorted in different parameters such as literacy levels, accessibility, income levels, penetration, distances from nearest towns, etc.

Few Facts

70 % of India’s population lives in 627000 villages in rural areas. According to the NCAER study, there are almost twice as many ‘lower middle income’ households in rural areas as in the urban areas.

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At the highest income level there are 2.3 million urban households as against 1.6 million households in rural areas.
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Middle and high-income households in rural India is expected to grow from 80 million to 111 million by 2007.
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In urban India, the same is expected to grow from 46 million to 59 million. Thus, the absolute size of rural India is expected to be double that of urban India.
Opportunity
The above figures are a clear indication that the rural markets offer the great potential to help the India Inc which has reached the plateau of their business curve in urban India to bank upon the volume-driven growth.

The Indian rural market with its vast size and demand base offers a huge opportunity that MNCs cannot afford to ignore. With 128 million households, the rural population is nearly three times the urban.

As a result of the growing affluence, fuelled by good monsoons and the increase in agricultural output to 200 million tonnes from 176 million tonnes in 1991, rural India has a large consuming class with 41 per cent of India’s middle-class and 58 per cent of the total disposable income.

The importance of the rural market for some FMCG and durable marketers is underlined by the fact that the rural market accounts for close to 70 per cent of toilet-soap users and 38 per cent of all two-wheeler purchased.

The rural market accounts for half the total market for TV sets, fans, pressure cookers, bicycles, washing soap, blades, tea, salt and toothpowder, What is more, the rural market for FMCG products is growing much faster than the urban counterpart.

THE ROAD AHEAD

In the financial year 2001-2002, the combined turnover of all three units of Haldiram’s was estimated at Rs. 4 billion. The company targeted a growth of 15% for the financial year 2002-2003. Analysts felt that, given the competition in the industry, Haldiram’s needed to develop new initiatives achieve this growth.

The competition in the ready-to-eat snack foods market in India was intensifying. Frito Lay India Ltd. (Frito Lay), one of Haldiram’s major competitors, was expanding its market share. Instead of directly competing with the market leader Haldiram’s, the company launched innovative products in the market and backed them with heavy publicity. Frito Lay’s product range consisted of a mixture of traditional Indian and western flavors which appealed to younger and older generations. Its products included Leher Namkeens, Leher Kurkure (snack sticks), Lays (flavored Chips), Cheetos (snack balls), Uncle Chips and Nutyumz (nut snacks). Frito-Lay was the first company to launch small 35 gm packs namkeens priced at Rs. 5 and also the first company in the organized sector to launch Aloo Bhujia[6] .

Another competitor, SM Foods, introduced a range of innovative products. The company launched India’s first non-wafer chips in 1988. SM offered products under two main brands – Peppy and Piknik. Under Peppy, it had sub brands such as Cheese Balls, Ringos, Hi Protein Crispies, Potato Rackets, Hearts, Veggie Treat, Mixtures and Minerette. Under Piknik, it had Protein Pin, Junior and Corn Puffs.

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POSITIONING

The above initiatives helped Haldiram’s to uniquely position its brand. Haldiram’s also gained an edge over its competitors by minimizing promotion costs. Appreciating the company’s efforts at building brand, an analyst said, “Haldiram once was just another sweet maker but it has moved into trained brands first by improving the product quality and packaging.

Through its clever products and brilliant distribution it had moved into the star category of brands.”Haldiram’s earned recognition both in India and abroad. The Nagpur unit of Haldiram’s was conferred the International Food Award. By the Trofeo International Alimentacion of Barcelona, Spain for having maintained high standards in quality and hygiene, at its manufacturing unit.

The Delhi unit was awarded the Keshalkar Memorial Award by the All India Food Preservers Association in the mid 1980s in recognition of its efforts for popularizing ethnic Indian foods in India and abroad. In 1994, the unit was awarded the International Award for Food & Beverages by the Trade Leaders Club in Barcelona, Spain. The unit also received the Brand Equity Award in 1998. Manoharlal Agarwal, who played a key role in the success of the Delhi unit, was included in the eighth edition of Distinguished Leadership by the Board of Registrars of The American Biographical Institute . Haldiram’s was also admitted as the member of Snack Food Association, US .

PROMOTION

Haldiram’s product promotion had been low key until competition intensified in the snack foods market. The company tied with ‘Profile Advertising’ for promoting its products. Consequently, attractive posters, brochures and mailers were designed to enhance the visibility of the Haldiram’s brand. Different varieties of posters were designed to appeal to the masses.

The punch line for Haldiram’s products was, ‘Always in good taste.’ Advertisements depicting the entire range of Haldiram’s sweets and namkeens were published in the print media (magazines and newspapers). These advertisements had captions such as ‘millions of tongues can’t go wrong,’ ‘What are you waiting for, Diwali?’ and ‘Keeping your taste buds on their toes. read more »