The document summarizes key differences between services and goods. Services are intangible, heterogeneous, produced through customer interaction, and cannot be stored. Goods are tangible, homogeneous, produced in factories separately from distribution and consumption, and can be stored with ownership transferred. The document then discusses various ways services can be classified, including by industry, target effect, skill level, labor intensiveness, degree of customer contact, and goal of the service provider. Finally, it provides examples to illustrate classifications by target effect and skill level of service provider.

2. Services Vs Goods
Services Goods
Intangible Tangible
Heterogeneous Homogenous
Produced in Buyer Seller interaction Produced in factory
Production, distribution & consumption takes All three are separate & independent
place simultaneously
Consumers participate in production Consumers don’t generally participate
Cannot be stored Can be stored
Transfer of ownership cannot take place Transfer of ownership does take place

3. Characteristics of Services

4. Classification of Services
It is required to design & apply marketing techniques to
completely satisfy the customer & increase profits & identify
new emerging services.
Classifications can be done on following basis:
• Classification by Industry
• Classification by Target Effect
• Skill level of service provider (Professional/ Nonprofessional)
• Labor intensiveness (People-based/Equipment-based)
• Degree of customer contact (High / Low)
• Goal of the service provider (Profit /Nonprofit)

5. Classification By Industry
a. Entertainment industry
b. Education
c. Telecommunications
d. Finance & Insurance
e. Transportation
f. Public utilities
g. Government services
h. Health
i. Hospitability Industry
j. Business services
k. Telecommunications
l. Trading

6. Classification By Target
Effect
Based on Degree Of Customer Involvement: ( Lovelock)
1. People Processing: Services aimed at physical care e.g. Healthcare,
clinics, restaurant, hospitals, hair stylists, fitness centers
2. Mental Stimulus Processing: Services aimed at mind of customer e.g.
Education, information, entertainment, consulting, psychotherapy
3. Possession Processing: Services aimed at physical possession &
tangible assets e.g. repair & maintenance, laundry, repair services,
landscaping, house cleaning services
4. Information Processing : Services for intangible assets e.g. Banking,
legal consultation, brokerage, financial services.

7. Skill level of service
provider
•Teacher
•Doctor
•Engineer
•Accountant

8. Labor intensiveness
Mechanic
Electrician
Labor
Plumber
Artisan

9. Degree of customer contact
High Degree (Every day) – TV channels, mobile
etc.
Moderate Degree (Regular) – Teacher, Barber,
washer man etc.
Low Degree ( Occasional ) – Priest, Doctors etc.