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Services Marketing
Notes Family Structures
There have been enormous changes in the traditional family structures, which has necessitated
role reversals, influenced service offerings and service consumptions. The different family
structures and their evolution include the joint family system, the nuclear families, single parents,
mess systems, etc. In each case, service has been affected and has adapted to the changes.
Banks and insurance companies are now targeting a family as a whole. They are coming up with
plans that cover all the members of the nuclear family.
2.1.2 Legal Factors
The legal factors are a percolation of the political and governmental factors. So, often, they do
merge in environmental analysis. But increasingly, political factors are getting moulded by the
legal norms especially with internationalisms like WTO and Environmental norms.
There are more laws and regulations for the service industry than for manufacturing. Over the
years banking, insurance and accountancy has grown in complexity. The legal ramifications
local, domestic, and international are greatly affecting the service industries. There is always
the question of sovereignty, especially with the services.
Example: A case in point is the oncoming legislation in the state of New Jersey, to
prevent companies from sourcing their back-office operations to off-shore BPOs (read Indian
BPOs), especially state work. A major BPO, eFunds have closed shop in India due to the pre-
legislative pressures. These legal initiatives, with political overtones, are due to the loss in BPO
jobs in their respective countries. There are angry rumbles from the unions in the UK due to the
seemingly irreversible job losses.
The public sector bankers were, in the eighties, prevented by regulation from using advertising
and other promotional tools. The logic was that since the shareholder was only one, the
government, there was no justification for advertising and promoting the services and the
offers, which anyway were designed by the RBI and the parliamentarians. Limited promotion
was permitted when new branches were opened, or for deposit mobilization initiatives/loan
melas.
No banks could open branches at will. Reserve Bank of India would give permission and Licence
to open branches in those areas they decreed, mostly rural.
There were strict guidelines in the areas a bank could put its money. A bank had to compulsorily
put more than fifty per cent as Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR)
while almost 35 per cent was reserved for priority sector lending - which had no hope of any
decent return. Banks had to invest the remaining 15 per cent in industries and business, pay its
establishment costs and declare dividends!
Banks were fined if they did not adhere to the norms. Foreign banks like Citibank paid the fines
for breach of the former and did not risk bad loans.
2.1.3 Economic Factors
The ability of all service firms to survive and prosper depends wholly on the Central
Governments economic policies.
The government economic policies have had tremendous impact on management especially
of service firms. An economy has a business cycle of half-a-decade, lasting from one peak (high
24 LOVELY PROFESSIONAL UNIVERSITY
