Unit 4: Services in Indian and Global

economy, Ethics in services marketing

Chapter outline

A. Services in the Global Economy

B. Moving from Domestic to Transnational Marketing
C. Recent Trends in Services Marketing
D. Ethics in Services Marketing

A. Service Marketing in Global economy

The services sector plays an increasingly important role in the global economy and the growth and
development of countries.

Services are becoming crucial in a country's development, including for the achievement of the
Millennium Development Goals, such as poverty reduction and access to basic services, including
education, water and health services.

Facts:

• World Bank has pointed to the higher contribution of growth in the services sector to poverty
reduction than the contribution of growth in the agriculture or manufacturing sectors.
• Strengthening the domestic services sector by increasing its backward and forward linkages with
the primary and the secondary sectors, as well as its linkage with trade, can be an effective
component of a comprehensive development strategy.
• As of 2022, the services sector accounted for approximately 71% of global GDP, highlighting its
dominance over the agriculture and manufacturing sectors; also, global services exports were
valued at $7.1 trillion, representing 7.1% of world GDP and 23% of total world trade. (UNCTAD
Handbook) (OECD).
• Trade in services demonstrated relative resilience in during various financial and economic
crises in terms of lower magnitude of decline, less synchronicity across countries and earlier
recovery from the crises. Such resilience has led many countries to incorporate services trade into
their post-crisis national trade and growth strategies.
• For developing countries and least developed countries (LDCs), service trade is the new frontier
for enhancing their participation in international trade and, in turn, realizing development gains.

It is therefore imperative to increase public and private sector advocacy and awareness, to mobilize
policy attention and resources to boost the sector's contribution to growth and development in
developing countries and LDCs.
Given the multifaceted contribution of services to national economy and trade, it is critically important
to design and implement a services-driven development strategy within a coherent and comprehensive
policy framework, ensuring linkages with other policy areas and overall national development objectives.

B. Transnational Marketing
a. Moving from Domestic to Transnational Marketing

There are many market-entry strategy options. Deciding which method is most appropriate depends
heavily on the planning process. It is suggested to analyse the costs and benefits of each before making a
decision.

• Exporting: Exporting accounts for around 10 percent of global economic activity. Direct exporting
occurs when a company sells to a customer in another country, and is most common with
company's taking their first international step. Indirect exporting usually means that the company
sells to a buyer (importer or distributor) in the home company. Indirect and direct exporting can
be achieved by using The Internet or Direct Sales methods.
• Contractual Agreements: Licensing and Franchising: This method involves long-term' non-equity
associates between a company and another in a foreign market. Licensing agreements mean
establishing ' a presence in a foreign market without large capital investments. Instead, patent
rights, trademark rights, and rights to use technology and operational processes are given to
another company. Franchising is a form of licensing in which the franchiser supplies a standard
package of products, systems and management services and provides more support in the
business overall.
• Strategic International Alliances: A strategic international alliance (SIA) is a business relationship
established by two or more companies to cooperate out of a mutual need and to share risk in
achieving common goals. International Joint Ventures and Consortia are two types of SIA's.

International Joint Ventures are characterized as follows -

- JV's are established, separate, legal entities

- They acknowledge intent by the partners to share in the management of the JV
- They are partnerships between legally incorporated entities, such as companies, chartered
organizations, or governments and not between individuals
- Equity positions are held by each of the partners.

Consortias are similar to joint ventures but differ in two distinct characteristics -

- They typically involve a large number of participants

- They frequently operate in a country or market where no participant is currently active.

Basically, consortias are formed to pool financial and managerial resources and reduce risk. It is
common for consortias to form in construction projects where there a large number of major
contractors with different specialties. By establishing a separate company, negotiation and
production can occur more readily.
 • Foreign Direct Investment: Investment with a foreign nation is another way for a company to
develop and enter a market. Investing locally has many benefits, including: taking advantage of
low-cost labor, avoiding high import taxes, reducing high costs of transportation to a new market,
gaining access to raw materials and technology, or as a means of gaining market entry altogether.
The most common form of foreign direct investment is when companies establish manufacturing
operations throughout the world. This trend in FDI will continue to increase as barriers preventing
free trade are eliminated and companies can do business wherever it is most cost effective.

b. Factors Favoring Transnational Strategy

A transnational strategy is a complex approach that balances the need for global integration and local
responsiveness. It is characterized by a centralized structure that manages overarching strategies while
allowing for local adaptations. Here are the key factors favoring the adoption of a transnational strategy:

1. Global Efficiency and Cost Reduction

• Economies of Scale: By centralizing operations, transnational companies can achieve significant

cost savings through bulk purchasing and streamlined production processes. This efficiency allows
for competitive pricing across different markets
• Standardized Operations: Core products and services are standardized, which helps in
maintaining quality and consistency across different regions. This also reduces the complexity and
costs associated with varied product lines

2. Local Responsiveness and Customization

• Adaptation to Local Markets: Transnational firms adapt their products and marketing strategies
to meet the specific preferences and cultural nuances of local markets. For example, McDonald's
offers different menu items in different countries to cater to local tastes, such as offering wine in
France and vegetarian options in India.
• Customer-Centric Approach: By being attuned to local market demands, companies can increase
customer satisfaction and brand loyalty. This local focus is crucial for penetrating markets with
unique cultural or consumer behavior.

3. Competitive Advantage

• Balancing Global and Local Needs: The ability to integrate global efficiencies with local
adaptability gives transnational companies a competitive edge. They can leverage global brand
recognition while tailoring their offerings to local tastes, thus enhancing market penetration and
customer retention.
• Risk Diversification: Operating in multiple countries helps in spreading business risks. This
diversification means that a company is less vulnerable to market-specific downturns.

4. Innovation and Learning

 • Cross-Cultural Exchange: Transnational strategies foster the sharing of knowledge and
innovations across borders. This cross-cultural exchange can lead to new product ideas and
improvements that are beneficial globally.
• Adaptive Organizational Structures: Companies often develop flexible structures that allow local
units to implement changes quickly in response to market shifts, while still aligning with global
strategic objectives.

In conclusion, a transnational strategy is suitable for companies aiming to leverage global efficiencies
while also catering to the specific needs of local markets. It requires a delicate balance between
standardization and customization, offering the best of both worlds in terms of cost savings and local
market responsiveness. This approach is particularly beneficial for large multinational corporations with
diverse product lines and a presence in culturally diverse markets

c. Elements of Transnational Strategy

A transnational strategy is a complex approach that multinational corporations (MNCs) adopt to balance
the benefits of global integration and local responsiveness.

It aims to achieve both efficiency and flexibility in diverse markets. Here are the key elements:

1. Global Integration: This involves standardizing products, processes, and operations across
countries to achieve economies of scale and cost efficiencies. It helps MNCs leverage their global
resources and expertise.
2. Local Responsiveness: This entails adapting products, services, and marketing strategies to meet
the specific needs and preferences of local markets. It helps MNCs gain a competitive edge by
addressing cultural nuances and consumer demands.
3. Knowledge Transfer: This involves sharing knowledge and best practices across different
subsidiaries and functions within the MNC. It fosters innovation and learning from diverse
markets.
4. Global Learning: This refers to the ability of the MNC to learn from its experiences in different
countries and apply those lessons globally. It helps the MNC adapt and evolve in a dynamic global
environment.
5. Network Coordination: This involves coordinating the activities of different subsidiaries and
functions across the MNC. It ensures that the MNC operates as a cohesive unit and leverages its
global network effectively.
6. Differentiated Contributions: This refers to the unique contributions that each subsidiary makes
to the MNC's overall success. It recognizes the diversity of markets and the need for each
subsidiary to contribute based on its strengths.
7. Flexible Coordination: This involves adapting coordination mechanisms to the specific needs of
each situation. It allows the MNC to respond quickly to changes in the global environment.

Examples

McDonald's: While maintaining a consistent global brand identity (golden arches, Ronald McDonald),
McDonald's tailors its menu to local tastes and preferences. In India, they offer vegetarian options like the
McAloo Tikki burger, while in Japan, you can find the Teriyaki McBurger. This demonstrates a balance
between global standardization and local responsiveness.
Nestlé: This Swiss multinational food and beverage company adapts its products to various markets. For
example, Nescafé coffee comes in different blends and flavors depending on regional preferences.
Additionally, Nestlé owns numerous local brands like Maggi (India), KitKat (Japan), and Perrier (France),
demonstrating a multi-domestic approach within a global structure.

Philips: The Dutch multinational conglomerate balances global efficiency with local adaptation in its
healthcare division. They develop globally standardized medical technologies but customize their
marketing and sales strategies based on local regulations and healthcare practices. For example, their
diagnostic imaging equipment might have different software configurations to meet specific country
requirements.

Transnational strategy is a challenging but rewarding approach for MNCs. By balancing global integration
and local responsiveness, MNCs can achieve both efficiency and flexibility, ultimately leading to
sustainable competitive advantage in the global marketplace.

d. Local vs Global Services

In the field of services marketing, the distinction between local and global services is crucial, as each
approach presents unique challenges and opportunities. Understanding these differences is essential for
businesses aiming to optimize their service strategies and meet diverse customer needs effectively.

Local Services: Local services cater to a specific geographic area, often focusing on the unique needs and
preferences of a local customer base. These services benefit from a deep understanding of local culture,
language, and market conditions. For example, a local restaurant or a regional healthcare provider can
tailor their offerings to suit local tastes, dietary restrictions, or health concerns. The advantages of local
services include:

1. Cultural Relevance: Local businesses can align their offerings with cultural nuances, increasing
customer satisfaction and loyalty.
2. Customer Relationships: Proximity allows for stronger, more personalized relationships with
customers, leading to better service and feedback loops.
3. Adaptability: Local services can quickly adapt to changes in local market conditions or customer
preferences.

However, local services also face limitations, such as a smaller customer base and potentially higher costs
per unit of service due to lack of economies of scale.

Global Services: Global services, on the other hand, operate across multiple countries and often have a
standardized offering. These services aim to reach a broader audience, leveraging economies of scale and
a uniform brand image. Examples include global financial institutions, multinational consulting firms, and
international airlines. The benefits of global services include:

1. Economies of Scale: By serving a larger market, global services can reduce costs per unit and
increase profitability.
2. Brand Recognition: A consistent brand image across markets can enhance brand equity and
customer trust.
 3. Diverse Revenue Streams: Operating in multiple markets reduces dependency on any single
market, spreading risk.

However, global services must navigate challenges like cultural differences, varying legal regulations, and
potential issues with local market acceptance. Standardization might not always resonate with local
consumers, leading to a need for some degree of localization.

Comparative Analysis: The choice between local and global service strategies depends on the nature of
the service, the target market, and the company's goals. While local services can offer a personalized
touch and adaptability, global services benefit from scale and brand consistency. A hybrid approach,
where global companies incorporate local elements into their offerings, is increasingly common. This
strategy, known as "glocalization," allows businesses to leverage the strengths of both local and global
service models.

C. Recent Trends in Marketing of Services

a. Tourism and Hospitality

The data for this is sourced from https://www.ibef.org/industry/tourism-hospitality-india , visit this site for more information and reports

Increased Employment Opportunities: The tourism sector in India accounted for 35 million jobs in FY23,
showing an 8.3% growth over the previous year. The Hotels' Association of India (HAI) anticipates
generating 50 million direct and indirect employment opportunities in the next 5-7 years.

1. Government Initiatives and Investments: The Indian government has identified 78 lighthouses
and five ports as hubs for promoting lighthouse and cruise tourism. Additionally, a new policy
rollout includes granting five lakh free visas to international tourists to ease travel.Significant
investments, such as the Rs. 85,000 crore in Ayodhya for developing infrastructure and promoting
spiritual tourism, are part of broader efforts to enhance the tourism sector.
2. Diverse Attractions and Cultural Tourism: India offers geographical diversity and niche tourism
products like cruises, adventure, medical, and eco-tourism. The government’s promotion through
initiatives like "Incredible India" has spurred growth in tourist arrivals and employment.
3. Luxury and Niche Tourism: The luxury travel market in India is expected to grow at a rate of 12.8%
during 2015-25. Segments like eco-tourism and heritage tourism are also gaining popularity,
providing unique experiences and contributing to local economies.
4. Technological Integration and Online Presence: Online travel portals and low-cost carrier airlines
have boosted domestic tourism. The emergence of platforms for booking and reviews has made
it easier for tourists to plan and customize their travel experiences.
5. Eco and Sustainable Tourism: There is a growing trend towards eco-tourism, projected to grow
at a rate of 15.7% from 2019 to 2027. This trend emphasizes responsible travel to natural areas,
conservation, and the well-being of local people.
6. Medical Tourism: India’s world-class healthcare amenities and traditional healing practices
attract 21% of international travelers. The demand for Indian medical tourism is expected to grow
significantly.
 7. Government Support and Policy Initiatives: The government has launched various schemes and
campaigns like the 'NamasteIndia' Campaign to encourage international tourists to visit India. The
focus on infrastructure development, such as new airports and better road connectivity, supports
this initiative.

b. Healthcare Sector

The data for this is sourced from https://www.ibef.org/industry/healthcare-india , visit this site for more information and reports

The healthcare industry has witnessed several significant trends in marketing strategies aimed at
enhancing service delivery and patient engagement. These trends include:

1. Shift from Communicable to Lifestyle Diseases: There is a growing focus on managing lifestyle-
related diseases such as diabetes, hypertension, and obesity, which have become more prevalent
than communicable diseases. This shift drives the need for specialized care and preventive
measures, influencing healthcare marketing to promote healthy lifestyles and chronic disease
management.
2. Expansion to Tier II and Tier III Cities: Healthcare providers are expanding their services to smaller
cities and towns. Government incentives, like tax relaxations, encourage private sector
involvement in these regions. Marketing strategies in these areas highlight the accessibility and
affordability of healthcare services, making advanced medical care more available to underserved
populations.
3. Emergence of Telemedicine: Telemedicine has seen significant growth, especially after the
COVID-19 pandemic. Services such as teleconsultations, telepathology, and e-pharmacies are
becoming increasingly popular. Marketing focuses on the convenience and safety of these
services, particularly for remote and underserved areas, emphasizing their role in maintaining
continuity of care.
4. Adoption of Artificial Intelligence (AI): AI technologies are increasingly integrated into healthcare
for diagnostics, patient management, and personalized medicine. Marketing emphasizes the
benefits of AI, including improved diagnostic accuracy, operational efficiency, and enhanced
patient outcomes.
5. Digital Vaccine Delivery Platforms: Digital platforms like CoWIN have revolutionized vaccine
distribution and tracking, playing a crucial role in public health initiatives. Marketing efforts
highlight the efficiency, transparency, and security of these platforms, which have been vital in
managing large-scale vaccination programs.
6. Increasing Penetration of Health Insurance: The expansion of health insurance coverage has
made healthcare services more accessible. Marketing strategies underscore the importance of
having health insurance, promoting comprehensive policies that cover a wide range of medical
needs and cater to diverse demographic groups.
7. Technological Innovations: The healthcare sector is increasingly utilizing technological
advancements like electronic medical records (EMRs), mobile health apps, and digital health
platforms. Marketing in this area focuses on the enhanced patient experience, data security, and
the seamless integration of healthcare services, all facilitated by technology.

These trends underscore the dynamic nature of the healthcare industry, highlighting the importance of
patient-centric approaches, technological integration, and comprehensive service offerings in
contemporary healthcare marketing.
c. Banking Sector

The data for this is sourced from https://www.ibef.org/industry/banking-india , visit this site for more information and reports

The banking sector is witnessing several key trends in the marketing of services, driven by technological
advancements and evolving customer expectations. Here are some of the notable trends:

1. Digital Transformation and Online Services: The increasing adoption of digital platforms has
revolutionized banking services. Digital payments have become a norm, with platforms like UPI
and mobile wallets leading the way. The use of digital channels for transactions has significantly
grown, accounting for 92% of overall transactions. The launch of digital banking units and
initiatives like the central bank digital currency (CBDC) pilot project further emphasize the sector's
digital shift.
2. Enhanced Rural Penetration: Efforts to increase banking access in rural areas have been a major
focus. Initiatives such as the opening of Digital Banking Units across various districts and the
digitization of KCC lending have improved the availability and efficiency of banking services in
these regions. The use of digital methods for new bank account openings has reached 100% in
rural areas, showcasing the sector's commitment to financial inclusion.
3. ATM and Micro-ATM Expansion: The expansion of ATMs and micro-ATMs has been a significant
trend, particularly through managed services and outsourcing models. The total number of micro-
ATMs in India has reached over 1.7 million, providing greater convenience for customers,
especially in underserved areas. This expansion supports the goal of last-mile financial inclusion,
allowing customers to access banking services closer to their homes and workplaces.
4. Growth in Digital Payments: Digital payments continue to grow, with platforms like PhonePe and
Google Pay dominating the UPI market. The volume of UPI transactions has seen substantial
growth, indicating a strong consumer shift towards digital payment methods. The increase in
digital payment modes highlights the sector's move away from traditional paper-based
instruments.
5. Technological Innovations: The banking sector is increasingly leveraging technological
innovations to improve efficiency and service quality. The introduction of UPI-ATM, the
digitalization of Agri-finance, and the launch of new digital payment methods are examples of
how technology is reshaping banking services. These innovations are not only enhancing customer
experience but also expanding the reach and accessibility of banking services.
6. Focus on Financial Inclusion: Financial inclusion remains a core focus, with ongoing efforts to
ensure that banking services are accessible to all segments of the population. The emergence of
fintech companies has played a crucial role in promoting financial inclusion by offering innovative
and accessible financial products and services. The National Strategy for Financial Inclusion
outlines key objectives to achieve comprehensive financial inclusion across the country.

These trends reflect the banking sector's response to changing consumer behaviors and technological
advancements, aiming to provide more efficient, accessible, and customer-centric services.

c. Insurance Sector

The data for this is sourced from https://www.ibef.org/industry/insurance-sector-india , visit this site for more information and reports

The insurance sector in India has undergone significant transformation in recent years, driven by
advancements in technology, increased private sector participation, and supportive regulatory changes.
As the market continues to expand, there is a growing focus on providing diverse insurance products,
improving accessibility through digital platforms, and enhancing customer service with innovative
technologies.

1. Increasing Private Sector Contribution: Since the liberalization of the Indian insurance market,
private companies have significantly expanded their presence. The market share of private
insurers in the non-life insurance segment has risen dramatically from 15% in 2004 to 62% in FY23.
This growth is driven by private companies like HDFC, ICICI, and SBI, offering a diverse range of
life and non-life insurance products.
2. Focus on Crop, Health, and Motor Insurance: The demand for health and motor insurance policies
has been a significant driver of growth. In FY24, the premium income from non-life insurance grew
by 19.5% year-over-year, largely due to these segments. Government initiatives like the Pradhan
Mantri Fasal Bima Yojana (PMFBY) have also boosted crop insurance premiums, enhancing the
sector's overall growth.
3. Technological Advancements: The adoption of technologies such as Robotic Process Automation
(RPA) and Artificial Intelligence (AI) is revolutionizing the insurance industry. These technologies
streamline processes, improve data handling, and enhance customer service through automated
policy servicing and claims management. The use of bots is becoming mainstream, offering faster
and more personalized customer interactions.
4. Health Insurance Expansion: The COVID-19 pandemic has underscored the importance of health
insurance. This sector is expected to play a crucial role in strengthening India's healthcare
ecosystem. Government schemes like Ayushman Bharat (PMJAY) have also expanded coverage,
providing significant policy support.
5. Rising Insurance Penetration: The overall insurance penetration in India reached 4% of GDP in
FY23, with life insurance accounting for 3% and non-life insurance for 1%. This penetration is
expected to grow, supported by regulatory reforms and increased awareness among consumers
about the importance of insurance.
6. Increased Foreign Direct Investment (FDI): Policy changes have facilitated greater foreign
investment in the Indian insurance sector. The FDI cap was raised from 26% to 74%, attracting
significant foreign investments, such as Zurich Insurance Group acquiring a stake in Kotak General
Insurance.
7. Diverse Insurance Offerings: The market is expanding with diverse offerings, including specialized
insurance products. This diversity caters to a broad range of consumer needs, from basic life and
health insurance to more specialized policies like crop and motor insurance.

These trends indicate a robust growth trajectory for the Indian insurance sector, driven by technological
innovation, increased private sector participation, and supportive government policies. The sector is
poised for further expansion, potentially becoming one of the largest insurance markets globally within
the next decade.

d. Education and Training Sector

The data for this is sourced from https://www.ibef.org/industry/education-sector-india , visit this site for more information and reports

The education and training sector in India has witnessed significant changes in its marketing strategies,
driven by technological advancements and evolving consumer demands. The document highlights several
key trends shaping the sector.
 1. Increasing Use of Technology: The integration of advanced technologies such as Artificial
Intelligence (AI), Machine Learning (ML), Internet of Things (IoT), and blockchain has
revolutionized the education sector. By 2024, approximately 47% of learning management tools
are expected to be powered by AI capabilities. This technological evolution, referred to as
Education 4.0, promotes inclusive learning and enhances employability. For instance, during the
COVID-19 pandemic, the PM eVIDYA initiative, recognized by UNESCO, effectively utilized
Information and Communication Technology (ICT) to ensure continuity in education.
2. Emergence of International School Segment: The collaboration between Indian private players
and international brands has led to the growth of the international school segment. The number
of authorized International Baccalaureate (IB) World Schools in India increased by 31% between
2019 and 2023. This trend reflects a rising demand for international standards of education
among Indian students and parents.
3. Shift Towards Online Learning: Higher education institutions are increasingly offering online
programs to meet the growing consumer demand. The online education market in India is
projected to grow by USD 2.28 billion between 2021 and 2025, with a Compound Annual Growth
Rate (CAGR) of almost 20%. This shift has been further accelerated by initiatives like the free AI
training course introduced by the Indian government under the India 2.0 program, and the launch
of an online MA program in Sustainability Science by the Indira Gandhi National Open University
(IGNOU) in November 2022.
4. Specialized Degrees Gaining Popularity: There is a notable increase in demand for industry-
focused qualifications, leading to a rise in specialized degree offerings. Universities are now
providing MBA and technical degrees tailored to specific sectors, aligning with the industry's need
for specialized skills and knowledge.
5. Franchise Models in Private Schools: To ensure economic viability, private schools are adopting
franchise models, combining franchise and owned schools. This model allows for the
establishment of new educational institutions with lower capital investment, making it easier for
private players to expand their presence.
6. Government Initiatives and Policy Support: Government initiatives such as the National
Education Policy (NEP) 2020 aim to drive comprehensive reforms in higher education, targeting a
Gross Enrolment Ratio (GER) of 50% by 2035. Additionally, partnerships like the "Education to
Entrepreneurship" initiative and the "New India Literacy Programme" align with these policy
goals, promoting skill development and literacy across various demographics.

The education and training sector in India is undergoing a transformative phase, marked by the adoption
of new technologies, the rise of international collaborations, the growth of online learning, and the
introduction of specialized degree programs. These trends reflect a dynamic market that is adapting to
the changing needs of students and the broader educational landscape.

e. IT Sector

The data for this is sourced from https://www.ibef.org/industry/information-technology-india , visit this site for more information and reports

The Information Technology (IT) sector in India has been a cornerstone of the nation's economic growth,
contributing significantly to GDP and employment. In recent years, the marketing of IT services has
evolved rapidly, driven by technological advancements and changing global dynamics. This evolution is
characterized by increased adoption of new technologies, strategic international expansions, and a focus
on digital transformation, all of which are reshaping the way IT services are marketed and delivered.
 1. Data Annotation and Labelling Hub: India is emerging as a key player in the data annotation and
labelling market, with a value of USD 250 million in FY20, largely driven by demand from the US.
This market is projected to grow to USD 7 billion by 2030 due to the increasing domestic demand
for AI.
2. Adoption of New Technologies: The IT sector is seeing a significant shift towards disruptive
technologies such as cloud computing, social media, and data analytics. These technologies are
creating new growth opportunities across various verticals. The SMAC (Social, Mobility, Analytics,
Cloud) market was valued at USD 225 billion in 2020.
3. Global Delivery Model: Indian IT companies are increasingly investing internationally to expand
their global footprint and enhance their global delivery capabilities. For example, Tata
Consultancy Services (TCS) announced plans to recruit 1,500 technology employees across the UK
to improve service delivery to UK customers.
4. Promotion of R&D: Companies in the IT sector are heavily investing in research and development
(R&D) and training employees to enhance productivity and quality. This investment in R&D is
crucial for driving innovation and maintaining competitiveness in a rapidly changing landscape.
5. Product and Pricing Differentiation: IT companies are focusing on differentiating their products
and services through branding and innovative offerings. For example, Infosys is branding itself
with the slogan "Building Tomorrow's Enterprise." Additionally, firms are adopting various pricing
strategies to remain competitive.
6. Focus on Digital Transformation: There is an accelerating demand for digital transformation
services, including cloud computing, big data analytics, artificial intelligence, and machine
learning. This shift is driving significant investments in hyper-scale data centers, with global
investments expected to exceed USD 200 billion annually by 2025.
7. Expanding Market Reach: The Indian IT sector continues to dominate the export market, with
over 81% of its revenue coming from exports. The US remains the largest importer of Indian IT
services, followed by the UK. However, there is growing demand from regions like APAC, Latin
America, and the Middle East.
8. Increasing Employment: The IT sector is a major employer, with direct employment reaching 5.4
million in FY23. The sector added 290,000 new jobs in FY23 alone. This growth in employment
highlights the sector's role as a significant contributor to the economy.
9. Strong Foreign Direct Investment (FDI): The computer software and hardware sector in India has
attracted significant FDI, with cumulative inflows worth USD 102.9 billion between April 2000 and
March 2024. This sector ranks second in FDI inflows, indicating strong investor confidence.
10. Strategic Partnerships and Collaborations: Indian IT companies are forming strategic
partnerships and collaborations to enhance their service offerings and expand their market
presence. For instance, ZStack International announced its entry into India and the SAARC region,
highlighting the attractiveness of the Indian market for global players.

f. Media and Entertainment Sector

The data for this is sourced from https://www.ibef.org/industry/media-entertainment-india , visit this site for more information and reports

The media and entertainment sector has experienced significant transformation in recent years, driven
by technological advancements and changing consumer preferences. This sector is characterized by rapid
innovation, digital adoption, and evolving business models. Key trends in the marketing of services within
this industry reflect these changes, highlighting the importance of digital platforms, content
personalization, and the growing influence of new media.
 1. Digital Streaming Platforms The proliferation of digital streaming platforms such as Netflix,
Amazon Prime, and Disney+ has revolutionized content consumption. These platforms use
advanced algorithms to offer personalized content recommendations, enhancing user
engagement and satisfaction.
2. Growth of Regional Language Content There has been a marked increase in the production and
consumption of regional language content. Streaming services are investing heavily in local
content to cater to diverse linguistic audiences, thus broadening their market reach.
3. Emerging Stakeholders in Cloud Gaming The online gaming segment has seen substantial growth,
becoming one of the fastest-growing sectors within media and entertainment. Cloud gaming,
supported by advancements in AR/VR and blockchain technology, is gaining traction, attracting a
large number of gamers and fostering a vibrant gaming community.
4. Direct-to-Home (DTH) Services Expansion The DTH market is expanding, driven by increased
television penetration. DTH services are evolving to offer a wider array of channels and interactive
services, enhancing the viewing experience for consumers.
5. Rise of Music Streaming Services Music streaming platforms like Gaana, JioSaavn, and Spotify
have gained significant market share. These services are increasingly focusing on subscription
models and exclusive content to attract and retain users.
6. Adoption of New Technologies The sector is embracing disruptive technologies such as AI, big
data analytics, and machine learning. These technologies are being used to enhance content
creation, distribution, and marketing strategies, leading to more efficient operations and
improved customer experiences.
7. Increased Focus on Digital Advertising Digital advertising has become a primary revenue stream
for many media companies. Targeted advertising, powered by data analytics, allows for more
effective marketing campaigns, reaching the right audience at the right time.
8. Partnerships and Collaborations Strategic partnerships and collaborations are becoming
common in the industry. Companies are joining forces to co-create content, expand their digital
footprint, and leverage each other's strengths, thereby driving growth and innovation.

D. Ethics in Services Marketing

Meaning of Ethics in Services Marketing:

Ethics in services marketing refers to the moral principles and standards that guide the behavior and
decisions of businesses when promoting and delivering services. These principles encompass honesty,
fairness, transparency, respect, and responsibility. Ethical marketing practices ensure that businesses
provide truthful information, respect customer rights, and avoid deceptive or manipulative tactics.

In the context of services, ethics becomes particularly critical due to the intangible and experiential nature
of services. Customers often rely heavily on the integrity and honesty of service providers, as they cannot
assess the quality of a service until it has been delivered. Therefore, ethical considerations in services
marketing involve accurate representation of service offerings, fair pricing, protection of customer data,
and responsible communication.
Importance of Ethics in Services Marketing:

1. Building Trust and Credibility: Ethical practices help in building trust and credibility with
customers. Trust is a fundamental component in service industries, where customers often enter
into long-term relationships with providers. By adhering to ethical standards, businesses can
establish a strong reputation, encouraging customer loyalty and repeat business.
2. Legal Compliance and Risk Management: Ethical marketing practices help businesses comply
with legal and regulatory requirements. Violations of ethical standards, such as false advertising
or misrepresentation, can lead to legal penalties and damage to a company's reputation. Adhering
to ethical standards minimizes the risk of lawsuits and regulatory fines, protecting the company’s
assets and standing.
3. Customer Satisfaction and Retention: When businesses operate ethically, they are more likely to
meet customer expectations and deliver on their promises. This leads to higher levels of customer
satisfaction and retention. Ethical marketing practices, such as transparent pricing and honest
communication, ensure that customers have realistic expectations and feel valued and respected.
4. Positive Word-of-Mouth and Brand Advocacy: Customers who perceive a company as ethical are
more likely to recommend it to others. Positive word-of-mouth and brand advocacy are crucial in
service industries, where personal recommendations often influence purchasing decisions. An
ethical reputation can differentiate a business from competitors and attract new customers.
5. Employee Morale and Retention: Ethical practices also impact the internal environment of a
business. Companies that prioritize ethics often have higher employee morale and retention
rates. Employees are more likely to feel proud of their workplace and align with the company's
values, leading to better service delivery and customer interactions.
6. Long-Term Sustainability: Ethics in services marketing contributes to the long-term sustainability
of a business. Companies that prioritize ethical behavior build strong relationships with
stakeholders, including customers, employees, suppliers, and the community. These relationships
are essential for long-term success and resilience in the face of market challenges.

Ethics in services marketing is essential for building trust, ensuring legal compliance, enhancing customer
satisfaction, fostering positive word-of-mouth, maintaining employee morale, and achieving long-term
sustainability. Companies that prioritize ethical practices not only fulfill their moral obligations but also
create a competitive advantage in the market.

Unethical Practices in Service Sector

Unethical practices in the service sector refer to actions that are deceptive, unfair, or violate moral and
legal standards in the delivery and marketing of services. These practices can harm customers, erode trust,
and damage a company's reputation. Some common unethical practices in the service industry include:

1. Aggressive Promotions through Telemarketing or Personal Selling: Telemarketing and personal

selling can sometimes cross ethical boundaries, particularly when they involve aggressive tactics.
While mass media promotions can be ignored, telemarketers or salespeople may pressure
customers, making it difficult for them to opt out or say no. This can lead to customers feeling
harassed or manipulated, especially if they are not provided with clear and transparent
information about the service.
2. Invasion of Privacy (Rectified by Permission Marketing): The invasion of privacy is a significant
concern in the service sector, particularly when companies use personal data without consent.
For instance, unsolicited calls, emails, or direct mail can infringe on a customer's privacy. To
 address this, the concept of Permission Marketing has been introduced, where companies seek
explicit consent from customers before contacting them. This ethical approach respects customer
privacy and preferences, ensuring that communication is welcome and relevant.
3. Misleading Claims Backed by Poor Service Performance: Misleading claims are another unethical
practice where service providers make false or exaggerated promises about their offerings. This
can include misrepresenting the quality, benefits, or terms of a service. For example, some credit
card companies have been criticized for not allowing customers to return their cards or for
imposing hidden charges. Such practices can lead to financial loss for customers and erode trust
in the service provider.
4. Non-Transparent and Dubious Practices: Some service providers engage in non-transparent
practices, such as not disclosing full terms and conditions or hiding fees. For example, insurance
companies might fail to explain the exclusions and limitations of a policy clearly, leading to
customers being unaware of what is covered. Similarly, tour operators may advertise low prices
but fail to disclose additional costs, leaving customers feeling deceived.
5. Discriminatory Treatment or Fudging of Data: Discriminatory treatment based on race, gender,
or other characteristics is unethical and, in many cases, illegal. This can occur in the service sector
when customers receive different levels of service based on these attributes. Additionally, fudging
data, such as altering application information or providing false data to meet certain criteria, is
highly unethical. For example, insurance agents may manipulate information on applications to
secure sales or benefits for certain customers.

Unethical practices in the service sector undermine customer trust and loyalty, lead to legal and regulatory
repercussions, and damage a company's reputation. It is crucial for service providers to adhere to ethical
standards, ensure transparency, and respect customer rights to build a sustainable and trustworthy
business.