1

Chapter-1

Introduction

SERVICE MARKETING

Gone are the days when the perception of services remained confined to work with only service

motto. In the 21st century, the business environmental conditions are likely to be more volatile the multi-

dimensional developments in the information technology, activated and energized by the developed

countries, have made ways for sophistication in almost all the areas. It is against this background that

leading service organizations of the world have been found believing in making things happen. It is

against this background that we talk about the marketing services.

Services refer to social efforts which include even government to fight for giant evils like want,

disease, ignorance, squalor and illness in the society. In common parlance the term service can’t be only

personal services it also includes B to B services and services rendered to govt and so on. Thus the

present day service can be defined as an action of organization that maintains the well being of people,

govt and other organizations.

In the above perspective marketing of services possess the salient features like intangibility,

perish ability, inseparability, heterogeneity, simultaneity etc.,

We term marketing a function by which a marketer plans promotes and delivers goods and

services to the customers or clients. Where as the perception of service marketing focuses on selling the

services in the best interest of users or customers. It is concerned with a scientific and planned

management of services which makes possible a fair sync of the interests of service providers as well as

users.

Marketing is also defined as a managerial process by which the products are matched with market

and through with the consumer is enabled to use or enjoy the product. In the present definition the product

is an all inclusive term which includes services as well as physical goods. Thus marketing a service meant

marketing something intangible. By the above statements about marketing a service we cannot deny a

statement that service marketing is marketing a promise.

In view of the above we observe the following key points regarding the perception of service marketing

It is a managerial process of managing the services.

It is an organized effort for providing a soul foundation for the development of an organization.

It is a social process helping an organization to understand the emerging social problems and to

take part in the social transformation to justify its existence in the society.

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marketing segments

geographic demographic pyschographic behavioral

Chapter-2

Market segmentation of service industry

Marketing segmentation is subdividing a market into distinct and homogeneous sub group of

customers where any group can be selected as a target market to be met with distinct marketing

mix.

-Philip Kotler

Market segmentation is the starting step in applying the marketing strategy once

segmentation takes place the marketer targets the identified consumer group with proper

marketing mix so as to position the product as perceived by the target segments.

Bases of marketing

segmentation:

Consumer markets can be segmented into various segments by using different basis this

basis is broadly classified into 4 categories.

Geographical segmentation:

This is generally he starting point of all marketing segmentation strategies the geographic

location of the customers does help the firm in planning its marketing offer. It refers to

segmenting markets by region of a country or the world, market size, market density or climate.

Market density means the no. of people within a unit of land. Climate is commonly used for

geographic segmentation because of its dramatic impact in residents’ needs and purchasing

behaviour.

Demographic segmentation:

In Demographic segmentation the market is divided into groups on the basis of variable

such as age, family, gender, income, occupation, education, religion, race, generation, nationality

and social class. Demographic variables are the most popular base for distinguishing customer

groups. These Demographic variables show a major impact on the buying behaviors of the

consumers for instance the social class makes an influence to buy products like cars, home

furnishing, leisure activities etc.

Psychographic segmentation:

Often it has been seen that two consumers with same demographic characteristics may

act in an entirely different manner. Even though the two may be of the same generation, same

occupation and same income. This is because of the following psychographic factors like life

style, personality, value, beliefs. Psychographic refers to information about consumers’ attitude,

values, motivations and life style as they relate to buying behaviors in a particular product

category. Numerous marketing research forms psychographic studies offer individual clients.

Behavioral segmentation:

In Behavioral segmentation buyers are divided into groups on the basis of the knowledge

and response to the product. Many marketers believe that Behavioral variables are like

occasions, benefits, user status, usage rate, loyalty status, buyers-readiness and attitude are the

best starting points for constructing marketing segments.

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Chapter-3

Marketing mix of service industry

Successful marketing depends upon addressing a number of key issues. These include:

what a company is going to produce, how much it is going to charge, how it is going to deliver

its products and how it is going to tell its customers about its products and services. The above

said things constitute a traditional marketing mix. But later 3 more things are added and made

seven. These are called 7P’s of marketing mix.

Product:

There is no point in developing a product or service that no one wants to buy, so the

successful companies will find out what customers need or want and then develop the right

product with the right level of quality to meet those needs now and in the future. The key

features of a product should be it provide value to customers, it may not be tangible(service),it

should be maintained with supportive systems and it should not go far beyond customers’ needs.

Price:

A product is only worth what customers are prepared to pay for it. The price also needs to

be competitive, but this doesn’t necessarily mean the cheapest; the small business may be able to

complete with larger rivals. The price should also provide profit. Price is the only element of the

marketing mix that generates revenue. The price positions a company in the market. Existing

customers are generally less sensitive to price than new customers.

marketing mix

product

price

place

promotion

people

process

physical Evidence

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Place:

The place where customer byes a product and the means of distributing the product to

that place. Must be appropriate and convenient to the customer. The product must be in the right

place at the right time and in the right quality. Customers surveys have shown that delivery

performance is one of the most important criteria for choosing a product. Place also means ways

of displaying your product to customer groups. This could be a shop window or internet.

Promotion:

Promotion is the way a company communicates what it does and what it can offer to

customers. It includes activities such as branding, advertising, corporate identify etc., it must

gain attention and be appealing. Promotion should communicate the benefits that a customer

obtains from the product. A good promotional activity will be easy to understand and enables the

customer to identify the reasons why they should buy the product.

People:

Anyone who comes into contact with customers will make an impression and that can

have a profound effect either it may be positive or negative on a customer. The reputation of the

brand rests in the people’s hands. It is essential to ensure that the employees who have contact

with the customers should be properly trained. The level of after sale support and advise

provided is a way of adding value. There should be a good reaction by the business men to the

people whether they may be customers or general public.

Process:

The process of a giving service and the behavior of those who deliver the service are

crucial to customer satisfaction. Customers are not interested in the derail of how a business

runs, what matters to them is that the systems works. Process is one of the P that is frequently

overlooked. If the process what costs to a customer fails there is no value in making rest of the

company run perfectly. As a consequence, this P could be a greatest source of advantage if used

wisely.

Physical evidence:

A service can’t be experienced before it is delivered. This means that choosing to use a

service can be perceived as a risky business because you are buying something intangible. This

uncertainty can be reduced by helping the customers to see what they are buying. Case studies

and testimonials can provide evidence that an organization keeps its promises. Facilities such as

a clean and well decorated reception area can reassure. Although a customer cannot experience

the service before purchase, he or she can talk to other people with experiences of the service

Each of the ingredients of marketing mix is a key to success. No one element can be

considered in isolation. For instance, developing a product without considering a price or

without any promotion.

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Chaper-4

Industry profile

The railway industry encompasses not only the operating railway companies and transit

authorities, but also the various government regulatory agencies, railway associations,

professional organizations, manufacturers and suppliers of locomotives, railcars, maintenance

work equipment and track materials, consultants, contractors, educational institutes and, most

important of all, the shipping customers.

The information in this chapter is of a general nature and may be considered as typical of

the industry. However, each railway company is unique and as such it must be understood what

is included in this chapter may not be correct for a particular company.

Government owned freight railways are nowadays limited to some regional lines where

transportation service must be protected for the economic well being of the communities.

Passenger railways, on the other hand, are generally owned by governments. Transcontinental

services, such as the Amtrak or VIA Rail in Canada, are corporations solely owned by the

respective Federal Governments. These passenger railway companies normally do not own the

trackage infrastructures. Except for certain connecting routes and dedicated high-speed corridors,

they merely operate the passenger equipment on existing tracks owned by freight railways. Local

rapid transit systems are usually operated as public utilities by the individual municipalities or

transit authorities on their own trackage. Commuter services may be operated by government

agencies or private sector on either their own or other railway owned trackage.

Freight railways in North America, including those owned by government, are usually

incorporated as separate legal entities from their owning shareholders. The major railroads are

usually owned by public companies with shares traded through the various stock exchanges. Due

to their age, most of these companies were incorporated under special charters or acts of

Congress. Private companies, the shares of which are not openly traded, may own the smaller

regional or short line railroads.

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Chapter-5

Company profile

Indian Railways (reporting mark IR / भा. रे) is an

Indian state-owned enterprise, owned and operated by

the Government of India through the Ministry of Railways. It is

one of the world's largest railway networks comprising

115,000 km of track over a route of 65,436 km and 7,172

stations. Indian Railways carried 8,425 million passengers

annually or more than 23 million passengers daily and 1050.18

million tons of freight in the year.

In 2013–2014 Indian Railways had revenues of

1441.67 billion which consists of 940.0 billion from freight

and 375.0 billion from passengers’ tickets.

Railways were first introduced to India in the year 1853 from Bombay to Thane. In 1951

the systems were nationalized as one unit, the Indian Railways, becoming one of the largest

networks in the world. IR operates both long distance and suburban rail systems on a multi-

gauge network of broad, meter and narrow gauges.It also owns locomotive and coach production

facilities at several places in India and are assigned codes identifying their gauge, kind of power

and type of operation. Its operations cover twenty nine states and seven union territories and also

provides limited international services to Nepal, Bangladesh and Pakistan.

Indian Railways is the world's seventh largest commercial or utility employer, by number

of employees, with over 1.307 million employees. As for rolling stock, IR holds over

239,281 Freight Wagons, 62,924 Passenger Coaches and 9,013 Locomotives (43 steam, 5,345

diesel and 4,568 electric locomotives). The trains have a 5 digit numbering system and runs

12,617 passenger trains and 7421 freight trains daily. As of 31 March 2013, 20,884 km of the

total 65,436 km route length was electrified. Since 1960, almost all electrified sections on IR

use25,000 Volt AC traction through overhead centenary delivery.

Services delivered:

Passenger railways

Freight services

Parcel carrier

Catering and tourism services

Parking lot operations

Other related services

Life Line Of The Nation

7

Railway zones:

Sl.

No

Name of zone Abbr

.

Headquarters Divisions

1. Central CR Mumbai Mumbai, Bhusawal, Pune, Solapur, Nagpur

2. East Central ECR Hajipur Danapur, Dhanbad, Mughalsarai, Samastipur,Sonpur

3. East Coast ECo

R

Bhubaneswar Khurda Road, Sambalpur, Waltair[10]

4. Eastern ER Kolkata Howrah, Sealdah, Asansol, Malda

5. North Central NCR Allahabad Allahabad, Agra, Jhansi

6. North Eastern NER Gorakhpur Izzatnagar, Lucknow, Varanasi

7. North Western NW

R

Jaipur Jaipur, Ajmer, Bikaner, Jodhpur

8. Northeast Frontier NFR Guwahati Alipurduar, Katihar, Rangia, Lumding, Tinsukia

9. Northern NR Delhi Delhi, Ambala, Firozpur, Lucknow, Moradabad

10. South Central SCR Secunderabad Secunderabad, Vijayawada, Hyderabad, Guntakal, Guntur,

Nanded

11. South East Central SEC

R

Bilaspur Bilaspur, Raipur, Nagpur

12. South Eastern SER Kolkata Adra, Chakradharpur, Kharagpur, Ranchi

13. South Western SWR Hubli Hubli, Bangalore, Mysore

14. Southern SR Chennai Chennai, Tiruchirappalli, Madurai, Palakkad, Salem,

Thiruvananthapuram

15. West Central WCR Jabalpur Jabalpur, Bhopal, Kota

16. Western WR Mumbai MumbaiCentral, Ratlam, Ahmedabad, Rajkot, Bhavnagar,

Vadodara

17. Kolkata Metro MR Kolkata

Overview:

Type Public sector undertaking

Founded 16th April 1853

Head quarters New Delhi

Area served India (also limited services to Pakistan Nepal & Bangladesh)

Revenue 1441.6 billon(2013-2014)

Profit 157.8 billon (2013-2014)

Owners Government of India (100%)

Employees 1.55 millon(2013)

Divisions 17 Railway Zones

Website www.indian railways.gov.in

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Chapter-6

Indian railways market segmentation

The marketing segmentation of Indian railways should be classified in to two major

categories which are passenger market segmentation and freight market segmentation.

Passenger market segmentation:

The passenger market segmentation is broadly classified in to two which have

subsections in them. They are shown in the below table.

Passenger Market Segmentation

Geographic segmentation Demographic segmentation

Zonal segmentation Age

Climatic Gender

Income

Occupation

Special quotas

Geographic segmentation:

Indian railways have segmented their market geographically on the basis of zones and

climate. On the basis of zones the Indian railways have been divided into 17 zones like south

central railway, southern railway, northern railway, western railway etc. these 17 zones have

their separate head offices and divisions which work continuously 24*7. All these 17 divisions

come under the head office located in new delhi. These zonal segments makes their tracks track

plans according to the requirements of the people in their zone and co-ordinate with each other.

On the basis of climate IR have segmented their market like in the heavy cold areas of

India they provide air conditioned coaches not cool but hot. As we use room heaters in our home

in the same way those coaches provide comfort to passengers by giving warmth. As the hot or

normal geographical areas are considered railways provide air conditioned coaches of cool

breeze for passengers.

Demographic segmentation:

Indian railways demographic market segment is based on various like

Age: IR has divided people in to three age groups under 2 years with no fare, 2-5 years

with 50% fare, 5-60 years with full fare and finally above sixty i.e. senior citizens with

75% of fare.

Gender: IR has divided public on basis of gender as male and female though there is no

concession regarding the ticket fare but they can reserve their seats for future journey

with the 33% reservation provided by Govt.

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Income: IR has divided the people in to 3 income groups high, medium and low. These

segments are provided with different classes of travel like HAC, 2AC, 3AC, Sleeper and

general coaches for travel.

Occupation: people have been divided into employees of railways, employees of railway

subsidiaries, employees of railway schools and hospitals etc.

Special quotas: In the above bases of Demographic segmentation though there are given

many concessions to different categories of people IR also provides some special quotas

to different categories of people these are small in number. The different kinds of

passenger come under this category are sports persons, Govt. servants, people’s

representatives, physically disabled persons, group concessions in pro-booking, monthly

passes for travelers who travel to same destination frequently etc.

Freight market segmentation

Indian railways have segmented the freight services market into the same as above

passenger market segmentation when considered broadly that is about geographic and

demographic.

Geographic:

The geographic segmentations is of same as passenger market segmentation with 17

zones with head quarters and divisions of each working under the main headquarters in New

Delhi.

Demographic:

When it comes to demographic segmentation considering freight services there is a

bigger classification in which some of the most familiar ones are

Public & private: some of the companies have their own wagons and tracks into the

manufacturing units and are connected to main track for transport these are called private

and all other freight services comes under public.

Distance: long, short and medium.

Weight: very heavy, heavy, medium, low

Chemical state of product: solid, liquid, gas, flammable, not flammable, perishable etc.

Size: big, small, very small, when there are very big freight a separate wagon is put for

smaller ones all the things are put in one wagon.

Thus these are some of the segments of the freight services of the Indian railways.

Remaining all the services provided by IR are related to passengers so these follow the

passenger segmentation.

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Chapter-7

Marketing mix of Indian railways

The successful marketing strategies of the Indian railways are based on its marketing mix i.e.

7’Ps. The IR has a good formulated marketing consisting of product, promotion, price, place,

people, process, physical evidence. The IR with its great experience of more than 150 years has

known the pulse of the market and it keeps on changing according to the market and external

situations. Thus he marketing mix of the railway industry is

Product:

As a service industry product here refers to service. The various services offered by IR

are passenger services freight services, parcel courier services, catering and tourism services,

parking lot services and remaining all other services like cloakroom, restroom, railway kooli etc.

Thus the IR provides vide variety of products for travelling and comforts in travelling and to

send couriers from one place to other postal department uses its freight services to send their

freight.

Price:

The IR follows price discrimination policy. It offer different prices for different

customers traveling the same distance with some value added service like pre-booking, sleeper

class, AC class now latest introduction Tatkal for which they charge a premium price. Even there

are some special quotas for passengers who get a concession on the price like physically

challenged MLA’s MP’s sports persons, people from some trust etc.

It is somewhat same with the freight services based on weight, type, size and other bases

the price charged differs though it is of same distance. This way the IR has formulated a good

price policy which brings a great amount of profit to it.

Place:

The place refers to the availability of the firm. The 14,300 trains all over India covers a

distance of almost 3.5 times the distance of moon. The IR have 63,028 KM of track all over

India. IR has 7000 stations. All the above shows the availability of Indian railways to every nook

and corner of the country with 17 zones and its divisions. Thus IR has a great strategy in the

place i.e. is availability factor.

Promotion:

As it is a monopoly market for IR there is no need of promotion. Still it promotes its

brand through social responsibility factors like cleanliness, educational fares on train and

promotes the local monuments printed on trains running through those areas. Price

discrimination is the other promotion policy adopted by IR through various discrimination policy

it targets various types of customers.

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For IR there is no need to promote or advertise the changes in it the reason is that the

media any way telecast’s the news about the updates in IR. It also promotes itself through its

websites like www.indianrail.gov.in, www.irctc.co.in, www.trainenquiry.com, www.erail.in. It

also provides an app in android windows and ios for its users for all the information and booking.

People:

The people refer to employees, subsidiary employees, customers and general public. IR

has 1.55 million employees working for IR in various ways and these people help its passengers

in various ways from ticket booking to travel, safety etc. the subsidiary employees work for

betterment of railways. All these people have a good talk on IR as it is a cheap mode of transport

though there is a criticism that trains run late but on all above people play a good role in the mix

of the IR. IR is the only organization in India which includes almost all the citizens in to one of

the mixes people.

Process:

The processes of bringing the services to the customers by the IR are very user friendly as

the online system is introduced in ticket booking process the process of getting tickets are

minimized and we can get tickets 24*7. The freight process is also become very easy as IR

maintains a separate office for freight in every station. The manufacturing process and track

laying process have never given any trouble to public. The delivery process is also good as IR

has storage rooms and the person can go at his/her wish for the delivery of freight. All other

process which are directly related to customer are made simpler day by day.

Physical evidence:

People need not worry about the physical evidence about the services of the IR. Its more than

150 years of track record is the greatest evidence as the present generations great grand fathers

also experienced the services of IR. Largest establishment all over India with 700 stations 14,300

trains, 1.55 million employees are also the proof for the good service provided by IR. The tickets

issued for travel and the booking receipts given for freight services are the evidence which

assures customers about the travel. All the above things add to the physical evidence factor of the

marketing mix.

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Chapter-8

Findings

Railways impact area is limited and doesn’t reach all the corners and neglect areas of a

country

It is one of the world’s largest railway system that is providing employment for more

than 1 million people

It is solely owned by Govt. of India unlike all the other railway services in the world and

also provides multiple variety of services to its customers

Suggestions

It needs to improve its marketing strategies in order to reach each and every person

IR needs to also improve its customer service strategies

Hygiene factors should be concentrated and improved

Provision of services should be done with improved speed of delivery

Time punctuality is one of the factors that is neglected. Hence it must be maintained and

improved.

Conclusion

Over all IR is a complete government owned service, which is not managed effectively

Yet Resources are utilized to their optimal level and wastage is kept minimal

IR is one of the services that reach the people who are below the poverty line and is

affordable by all the sectors.

It provides not only transport services but also intellectual and educational information to

people of all ages.