The Evolution of Services Marketing: From Traditional to AI-Driven
The
fundamental task of marketing remains constant: to influence customer
behavior. However, the tools and mechanisms have evolved dramatically with
artificial intelligence reshaping how marketers understand, predict, and
respond to customer needs.
AI enables
marketers to gain greater insights into customer behavior through predictive
analytics, automate content creation and curation, and deliver personalized
experiences for customers at scale. In India specifically, 68% of Indian
businesses report using AI tools for marketing, which is actually higher than
the global average.
How AI
Influences Customer Behavior: The New Marketing Paradigm
1.
Predictive Analytics for Behavioral Understanding
AI tools
demonstrate an impressive 85% accuracy in predicting future consumer behaviors,
enabling businesses to proactively adapt their campaigns to meet evolving
demands. This transforms reactive marketing into proactive engagement.
Indian
Example - Tanishq (Jewelry Retailer):
Tanishq uses AI to predict demand for different product categories during
wedding seasons and festivals, resulting in 43% improved inventory optimization
and 36% increased promotional campaign effectiveness.(
2.
Hyper-Personalization at Scale
AI-driven
marketing techniques including personalization, smart search, and dynamic
pricing significantly influence consumer attitudes and purchase intentions in
the Q-grocery sector in India.
Campaign
Examples:
- Cadbury Celebrations (#CreatingMemoriesNeverClicked): For Raksha Bandhan, Cadbury launched a campaign enabling siblings to transform unphotographed moments into cherished keepsakes using AI technology that generates personalized images.
- Cadburycreating memories.com
- ITC Sunfeast Dark Fantasy: Ran an AI-driven Diwali
promotion where fans could upload a selfie and instantly star alongside
Shah Rukh Khan in a personalized ad. darkfantasyadwithsrk.in
- RedBus Primo Campaign: Utilized generative AI to
create personalized advertisement videos in eight Indian languages for
over 300 operators, featuring customized operator names, logos, and photos
enhanced with voice AI technology
3.
Real-Time Customer Engagement
80% of
Indian consumers rely on chatbots for key services, with 84% using AI for
shopping recommendations, 82% for food and dining suggestions, and 78% using AI
chatbots to check investment options.
The
AI-Enhanced Marketing Mix: 7Ps Framework for Services
PRODUCT
(Customer Solution)
Traditional
Approach: Design
products based on market research and assumptions
AI-Powered
Approach:
- Use machine learning to
analyze customer feedback, reviews, and usage patterns
- Develop products that solve
actual customer problems identified through AI insights
- AI recommendation systems play
a vital role in e-commerce by suggesting products through analyzing users'
preferences and behavior
Indian
Case Study - YÊU Cosmetics:
Introduced Grace AI, a virtual assistant for Technology-Enhanced Cosmetics that
supports consumers in their beauty journey, providing scientific explanations
of products and addressing skincare issues with emphasis on Indian skin tones
PRICE
(Customer Cost)
AI
Applications:
- Dynamic pricing based on
real-time demand, competitor analysis, and customer willingness to pay
- Predictive models for optimal
pricing strategies
- AI helps determine customer
lifetime value, enabling businesses to decide how much to spend acquiring
different types of customers
Impact
Metrics:
- AI-based approach results in
high conversion rates as demonstrated by Amazon's use of AI to improve
product recommendations and predict customer buying patterns
PLACE
(Convenience)
AI
Optimization:
- Supply chain optimization and
inventory management
- Seasonal trend prediction
through AI helps businesses prepare for demand fluctuations, with
companies using AI for seasonal planning reporting 34% better inventory
management
Distribution
Channel Intelligence:
- AI analyzes which channels
customers prefer
- Chatbots seamlessly integrate
with various communication channels such as websites, mobile apps, social
media platforms, and messaging services, ensuring consistent experience
across all touchpoints
PROMOTION
(Communication)
Content
Creation & Optimization:
- Over 60% of marketers have
embraced AI content tools for generating blog posts, social media updates,
and advertising copy, leading to average savings of 20 hours per week
- Companies using AI for content
marketing report 37% faster content production and 28% better engagement
rates
Email
Marketing Revolution:
- AI-powered email campaigns
show 29% higher open rates and 41% better click rates compared to
traditional email marketing, with 67% of marketers using AI to personalize
content based on user behavior
Indian
Campaign Examples:
- Coca-Cola's Diwali Campaign: The "Create Real
Magic" platform was praised for weaving together technology, art, and
culture, using generative AI to let people express their emotions during
festivities
- Mumbai Indians Cricket Team: Partnered with AI platform
Gan.ai to deliver personalized video messages from star players via
Instagram DMs, tying fan data to automated creative
- "Croissant →
Prashant" Viral Moment:
When a teen's video mispronouncing "croissant" as
"Prashant" went viral in 2025, Swiggy quickly adjusted its app
so anyone searching "Prashant" saw croissants suggested, while
Britannia changed its Instagram bio to "It's Prashant, not
croissant"
PEOPLE
(Caring)
AI-Enhanced
Human Touch:
- AI chatbots enable 24/7
support service availability, ensuring clients may get assistance at any
moment
- 52% of customer service agents
believe AI will enhance their role by freeing up time for problem-solving
and customer care
Training
& Development:
- AI analyzes employee-customer
interactions to identify training needs
- Sentiment analysis helps
understand customer emotions in real-time
Indian
Service Provider Example:
A fintech startup in Gurgaon implemented AI customer service and reduced
support ticket volume by 54% while improving customer satisfaction scores
PROCESS
(Coordination)
Workflow
Automation:
- AI chatbots provide immediate
assistance, answer queries, and guide customers through the buying
journey, minimizing dependency on human support staff
- AI chatbots can integrate with
CRM and other systems with ease for streamlined operations and
channel-wide consistency in assistance
Efficiency
Gains:
- Using chatbot services might
result in up to 30% reduction in customer service costs for businesses
PHYSICAL
EVIDENCE (Confirmation)
AI-Generated
Visual Content:
- Virtual try-ons using
augmented reality
- AI-generated images for
marketing materials
- TV9 Bangla's AI-driven
campaign celebrated Durga Puja by showcasing Kolkata's iconic pandals
through graphical storytelling with monochromatic visuals enhanced by AI
and VFX
Proof
of Service Quality:
- Real-time dashboards showing
service metrics
- AI-generated customer
satisfaction reports
- Automated review analysis and
response systems
The 7Cs
Customer-Facing Framework
1.
CUSTOMER (Understanding)
- AI tools track engagement,
suggest content, and schedule posts to perfection on social media
platforms
- Marketers use AI at every
stage including retailing, strategic decision-making, personal engagement
marketing, and analyzing customer satisfaction
2. COST
(Value Perception)
- AI helps communicate value
propositions effectively
- Dynamic pricing strategies
based on customer segments
- AI-powered personalization can
drive up to 15% increase in revenue
3.
CONVENIENCE (Accessibility)
- AI-powered chatbots can
communicate in multiple languages to appeal to a varied clientele, crucial
for India's diverse linguistic landscape
- 24/7 availability across all
digital touchpoints
4.
COMMUNICATION (Dialogue)
- Two-way personalized
conversations
- AI-optimized influencer
content generates 37% higher engagement rates compared to traditional
influencer marketing approaches in India
5.
CARING (Empathy)
- Chatbots are evolving to
exhibit increasingly human-like capabilities including improved natural
language processing, better understanding of tone and context, and the
ability to simulate human conversational patterns
- Sentiment analysis enables
empathetic responses
6.
COORDINATION (Integration)
- Customer Data Platforms (CDPs)
consolidate offline and online data enabling seamless personalization; The
Indian Express personalized its content feeds and push notifications,
boosting click-through rates by 95%
7.
CONFIRMATION (Trust Building)
- Transparent AI-driven reviews
and ratings
- Automated follow-ups and
feedback collection
- Proof of service delivery
through AI-generated reports
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