Question Bank with Answers – Service Marketing (Unit 1)
1.1 Meaning and Definition of Services
2 Marks
Q1. Define services.
Answer:
Services are intangible activities, benefits, or satisfactions offered to customers that cannot be physically possessed. They involve deeds, performances, or processes such as banking, education, healthcare, and hospitality.
5 Marks
Q2. Explain the meaning of services with examples.
Answer:
Services refer to economic activities that create value without resulting in the ownership of tangible products. They fulfill customer needs by delivering intangible benefits. For example, a bank provides financial services, a doctor offers healthcare, and a teacher delivers educational services. Unlike goods, services focus on creating customer experiences, problem-solving, and convenience rather than producing physical items.
10 Marks
Q3. Discuss the meaning and various definitions of services given by scholars.
Answer:
The term "service" originates from the Latin word servitium, meaning "to serve." Services can be understood as activities or benefits that one party can offer to another, which are essentially intangible and do not result in ownership. According to Kotler, services are “any activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything.” Lovelock defines services as “an act or performance offered by one party to another, which is intangible in nature and does not result in ownership.” Services are therefore process-driven, customer-centric, and experiential in nature. They have become increasingly important in modern economies where sectors like education, IT, transport, and hospitality dominate GDP growth.
1.2 Characteristics of Services (4 I’s)
2 Marks
Q1. List the 4 I’s of services.
Answer:
The 4 I’s of services are: Intangibility, Inseparability, Inventory (Perishability), and Inconsistency (Variability).
5 Marks
Q2. Explain intangibility and inseparability in services.
Answer:
Intangibility means services cannot be seen, touched, or stored like physical goods. For instance, the quality of a lecture cannot be displayed in advance—it is only experienced. Inseparability means services are produced and consumed at the same time. For example, a haircut requires the presence of both the barber and the customer; production and consumption occur simultaneously.
10 Marks
Q3. Describe the 4 I’s of services with suitable examples.
Answer:
Services have four unique characteristics:
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Intangibility: Services lack physical form and cannot be owned. For example, insurance provides security but not a tangible product.
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Inseparability: Production and consumption happen together. A doctor treats a patient in real-time; the service cannot be separated from the provider.
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Inventory (Perishability): Services cannot be stored. An empty hotel room tonight cannot be sold tomorrow—it represents lost revenue.
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Inconsistency (Variability): Service quality varies depending on who provides it, when, and how. For example, two waiters at the same restaurant may provide different experiences.
These characteristics make services challenging to manage and highlight the importance of standardization and customer relationship management.
1.3 Difference between Goods and Services
2 Marks
Q1. Give any two differences between goods and services.
Answer:
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Goods are tangible; services are intangible.
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Goods can be stored; services are perishable.
5 Marks
Q2. Explain the key differences between goods and services.
Answer:
Goods are physical items that can be produced, stored, and owned, such as cars, furniture, and clothes. Services are intangible experiences like healthcare, banking, or tourism. Goods are homogeneous and standardized, while services vary depending on provider and situation. Ownership is transferred in goods but not in services.
10 Marks
Q3. Differentiate between goods and services in detail with examples.
Answer:
Goods and services differ in several aspects:
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Tangibility: Goods are tangible and can be touched or seen (e.g., mobile phone), while services are intangible (e.g., mobile network services).
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Storage: Goods can be stored in inventory; services cannot. For instance, a car can be stored, but an airline seat cannot be reserved after departure.
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Production & Consumption: Goods are produced first and then consumed. Services are produced and consumed simultaneously, like a haircut.
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Ownership: Goods involve transfer of ownership; services provide only temporary access. Buying a book means ownership, whereas renting an e-book is a service.
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Standardization: Goods can be standardized; services vary widely.
Thus, managing goods focuses on production efficiency, while managing services emphasizes quality, experience, and customer satisfaction.
1.4 Classification of Services
2 Marks
Q1. Name any two types of services.
Answer:
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Consumer services (e.g., tourism, healthcare)
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Business services (e.g., banking, logistics)
5 Marks
Q2. Explain consumer and business services.
Answer:
Consumer services are those directly provided to individuals, such as education, entertainment, and healthcare. Business services are activities that support business operations, such as consultancy, IT services, and financial services. Both are critical for economic growth and customer satisfaction.
10 Marks
Q3. Discuss the classification of services with examples.
Answer:
Services can be classified as:
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Consumer Services: Provided directly to individuals. Examples: hospitality, tourism, healthcare, education.
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Business Services: Support business operations. Examples: banking, consultancy, BPO.
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Social Services: Provided for community welfare. Examples: public health, education, NGOs.
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Public Services: Offered by government for societal benefit. Examples: police, defense, public transport.
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Professional Services: Offered by skilled experts. Examples: legal, medical, accounting.
This classification highlights the diversity of services and their role in both economic development and individual welfare.
1.5 Growth and Scope of Service Sector in India
2 Marks
Q1. State one reason for growth of the service sector in India.
Answer:
Rapid urbanization and rising disposable incomes have significantly contributed to the growth of services in India.
5 Marks
Q2. Explain the scope of the service sector in India.
Answer:
The service sector in India covers industries like IT, telecom, healthcare, retail, banking, and hospitality. It contributes over 50% to India’s GDP and provides employment opportunities to millions. Its scope continues to expand with digitalization, globalization, and foreign investments.
10 Marks
Q3. Discuss the growth and scope of the Indian service sector in detail.
Answer:
The Indian service sector has emerged as the backbone of the economy, contributing more than half of the GDP. Its growth is driven by globalization, foreign direct investment, outsourcing, technological advancement, and rising consumer demand.
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IT & ITES: India is a global hub for software and outsourcing services.
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Banking & Financial Services: Digital banking, UPI, and mobile wallets have revolutionized finance.
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Healthcare & Education: Growing demand for quality services has expanded hospitals and institutions.
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Retail & Hospitality: Changing lifestyles and income growth drive modern retail and tourism.
The scope of services lies in employment generation, exports (IT and BPO), improving living standards, and attracting FDI. With government support (Digital India, Make in India), the sector will continue to lead economic development.
1.6 Key Drivers of Service Sector Growth
2 Marks
Q1. Mention any one driver of service sector growth.
Answer:
Technological advancement is a key driver of service sector growth in India.
5 Marks
Q2. Explain the role of FDI in driving service sector growth.
Answer:
FDI has boosted service industries such as telecom, banking, and retail by bringing capital, advanced technology, and global practices. This has created jobs, improved infrastructure, and enhanced service quality, making India a competitive service hub.
10 Marks
Q3. Describe the key drivers of growth in the Indian service sector.
Answer:
The major drivers include:
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Technological Advancements: Digital platforms, AI, cloud computing, and fintech revolutionized service delivery.
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Globalization: Outsourcing and integration with global supply chains expanded Indian IT, BPO, and consultancy services.
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Rising Middle Class: Growing incomes increased demand for healthcare, retail, education, and tourism.
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Urbanization: More urban population requires housing, transport, and financial services.
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FDI & Government Support: Policies like Digital India, Startup India, and liberalized FDI norms encouraged growth.
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Export Potential: IT and software services contribute significantly to India’s exports.
Thus, the combination of technology, policy, demand, and globalization continues to drive India’s service sector.
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