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Keep raising the service bar
Most offerings in the service sector have witnessed some milestones that have pushed that industry to another level. Here are a few of those occasions...
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 Anil Rajpal,
Vice President Technopak Advisors
The concept of service was never new for India. However, most of the concepts were built around products and essential services delivered mostly in an unorganised setting. The 1990s brought about a change in the way services were defined as well as delivered. Since then, the Indian GDP growth has been increasingly services led because of factors like deregulation, liberalisation of FDI and greater participation of private investment. As a result, the service sector’s share has grown from 44% of GDP in 1990-91 to over 55% of GDP currently. First, let’s share the key determinants that have been instrumental in driving consumer demand for services.
While economic growth has translated into greater disposable incomes for consumers to spend on products and services, the Indian urban population is also increasing steadily. Currently, it forms 30% of the total population. This has led to greater exposure, awareness and consumption of lifestyle products and services. Besides, a large young working population, increasing number of nuclear families, dropping dependency ratio along with increasing working women population has driven the demand and consumption for lifestyle products and services.
Increasing travel and penetration of Internet and media has made Indian consumers desire for similar services in terms of quality and offerings, exposure to more developed economies with increasing penetration of Internet media. Consumer spending has also changed from basic to discretionary categories with an increase in spends on lifestyle products and services such as health and beauty, travelling, dining, et al. The consumer of today is more experimental and aware and does not mind paying for convenience. Though the nature of offerings in the service sector is diverse, most of them have witnessed some milestones (beyond the regulatory), which have pushed that service industry to another evolutionary stage. Some of these ideas are borrowed from more developed economies, while others are totally unique to India. Few of these include:
Creation of new services & customer segments: The Indian consumer is witnessing a whole new world of services. In fact, a lot of these services are supply driven since consumers sometimes do not realise their latent needs. So now we have a ‘Billjunction’ to pay our bills, a ‘Makemytrip.com’ to plan our holidays, ‘Easycabs’ to provide safe taxi transport, et al.
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 Pragya Singh,
Senior Consultant, Technopak Advisors
Entry of Air Deccan in 2003 as the first low cost carrier in India changed the way air travel was perceived. By expanding its customer base and targeting people who travelled in AC class by trains, Air Deccan proved that the air-service was no longer for the elite class. Something similar was witnessed in the hotel industry, which until the 1990s, served two extreme classes – five star luxury hotels at one end and totally unclassified at the other. Sarovar hotels was the pioneer to foray into budget/ mid-segment hotels offering high quality facilities at ‘reasonable’ rates targeting the large segment of corporate travelers (other than the very top management) who were earlier forced to stay in unclassified hotels/ guest houses or with relatives/ friends.
Standardisation & customisation: Pizza Hut and McDonald’s pioneered the quality and delivery control very successfully in the Indian service industry with a high focus on standardisation of manufacturing process and delivery. They followed benchmarks and standards for everything. For example, standards for quality, service, cleanliness, values, restaurant and equipment layout, display signage, operations, inventory control, financial records, recipes and specifications for menu items. So stringent were the standards that McDonald’s was importing potato for fries to India till 2007 to ensure consistent high quality. High standardisation ensured that customer experience was same every time, every where and that the brand lived up to its image. Apart from the standardisation focus, both McDonalds and Pizza Hut have successfully adapted their offerings to suit Indian tastes. Aloo-tikki burger, paneer-tikka pizza, segregation of vegetarian and non-vegetarian food, no beef products , et al, have been calculative steps to customise product offerings.
Creation of a new experience: Kingfisher airlines, in 2005, took the flying experience to ‘wow’ levels of customer satisfaction. It positioned itself as a budget carrier and showcased the airlines
as ‘the new flying experience’ with its ‘Funliners,’ which conveyed a youthful, fun-filled and a world-class image. Café Coffee Day and Barista changed the way drinking coffee was perceived in India by creating an entirely new experience of leisure around a cup of coffee.
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