The service sector in India has been growing rapidly and its contribution to Gross Domestic Product (GDP) reached 55% in 2006-07. The rapid growth can be credited to the better management of innovations that have enabled marketers to focus on services as the differentiator. This article explains how marketers have used innovative strategies like micro-segmentation, collaboration, personalization, exotic appeal, intensive distribution and innovative combinations for penetrating the markets.

The Indian growth story has been dented by a number of skeptical predictions, but the Centre for Monitoring Indian Economy (CMIE) has reiterated in a recent report that it expects India's GDP to grow at 9.5% in 2008-09. The report also predicts that the service sector is expected to grow at 10.6%, thereby spearheading growth and alleviating skepticism. Contribution of the service sector to India's GDP has increased substantially over the past few decades (Refer Exhibit 1).

The rapid growth of the service sector has been largely fuelled by the increasing importance of services in the economy and the innovations made by the marketers of services. The marketing of services has been typified by the focus on the 7Ps - Product, Price, Promotion, Place, People, Process and Physical evidence. Recent innovations have gone beyond the 7Ps and have redefined services marketing with increased focus on emerging aspects like customer experience, micro-segmentation, personalization, etc. The noteworthy innovations that have catapulted the growth of services and enabled the respective companies to gain significant competitive advantage have been delineated below:

During the recent past, even product-based companies have begun to use service as the differentiator and making it their Unique Selling Proposition (USP). Blue Star's advertisements do not promote the air-conditioners or highlight their features, but showcase the company as `the experts' in cooling solutions. The company particularly targets the weakness of other air-conditioner manufacturers who promote their products, and not the solution that meets the exact requirements of the customers. The Blue Star website (www.bluestarindia.com) mentions: "Blue Star understands the dynamics and intricacies of different industries and has the expertise to provide optimal solutions for industry-specific requirements", thereby pitching the company as a solution-provider and not a mere manufacturer of air-conditioners.

Innovations, Service Sector, Gross Domestic Product, GDP,Monitoring Indian Economy, CMIE, Unique Selling Proposition, USP, Innovative Strategies, Micro-Segmentation, Fast Moving Consumer Goods, FMCG, Association of Mutual Funds in India, AMFI, ICICI and HDFC , Direct to Home, DTH, Direct Selling Associates, Financial Investment Industry.