The nature & classification of services

What are Services?
• Gronoos (1990)
– Service is an activity or a series of activities
The Nature & Classification of – of more or less intangible nature that normally,
Services but not necessarily,
– take place in interactions between the customer
-Presented By: and service employees and /or
Anupam Kumar
Reader,
– physical resources or goods and/or systems of the
School of Management Sciences, Varanasi. service provider,
Email: anupamkr@gmail.com – which are provided as a solution to customer
problems.

© Copyright 2013 Anupam Kumar 1 © Copyright 2013 Anupam Kumar 2

What are Services? Nature of Services
• Kotler (1991) • Researchers have proposed four basic traits of services.
– Intangibility
– Service is an act or performance • Services are performances rather than objects, they cannot be
– that one party can offer to another seen, felt, tasted or touched like goods.
– Inseparability
– that is essentially intangible and • Services are created and consumed simultaneously; they cannot
– does not result in the ownership of anything. be stored like goods.
– Variability
– Its production may not be tied to a physical • Quality and essence of service vary from producer to producer,
product. customer to customer, and from day to day; it is largely the result
of human interaction and all the vagaries that accompany it.
– Perishability
• Services once produced cannot be stored for future use.


Intangibility Inseparability
• At times services are • Services cannot be This stands for the inseparability of production and consumption.
further classified into stored • Customer has to be present • And thus,
– Physical intangibility • They cannot be during the service production. – Centralized mass production is
• that which cannot be • Customers frequently interact difficult if not impossible.
patented legally, hence
touched. with service providers, – Customer experiences depend
can easily be copied by influence them and may even upon the interactions
– Mental intangibility
• that which is difficult for
competitors. act as co-producers. – Operations need to be
decentralized so that services
the consumer to grasp or • They cannot be readily • Service producers themselves can be delivered directly to
measure even mentally. play an important role as part
displayed or consumers at convenient
of the product itself, as well as locations.
communicated leading an essential ingredient in the – Involvement of customers in
to difficulty in assessing service experience for production process is
important.
its quality. consumer.


© Copyright 2013 Anupam Kumar 1

Variability Perish-ability
• Services face the difficulty • Thus, there is • Services cannot be stored and then sold at a
of achieving uniform – Difficulty in achieving
later date as they perish.
outputs, especially in standardization
labour-intensive services. – Difficulty in setting quality • And thus,
– Performance and controls.
– Services have short lived value.
behaviour vary among – Determination of quality is
service workers. possible only after – Services cannot be inventoried.
– It may even vary for the performance of service. – Time pressure for sale of service is extremely high.
same worker dealing with – Difficulty in communicating
different customers or on to the clients what exactly – Capacity of services is finite.
different days of work. they would get.


Classification of Services Classification of Services
Services may be classified on several accounts: Services classification on account of:
• Tangibility component • Rental Goods • Tangibility component • Professional
• Skill type involved – Hotel room • Skill type involved – Legal
• Goal of the business – Car, etc. • Goal of the business – Medical, etc.
• Regulatory dimensions • Owned Goods • Regulatory dimensions • Non-professional
• Intensity of labour used – TV repair, etc.
• Intensity of labour used – Taxi,
• Customer contact • Customer contact – Security, etc.
• Non-Goods
• Place and timing • Place and timing
– College education, etc.
• Customization • Customization
• Relationship with customers • Relationship with customers
• Demand and supply • Demand and supply


Services classification on account of: Services classification on account of:
• Tangibility component • Profit • Tangibility component • High regulations
• Skill type involved – Insurance, • Skill type involved – Hospitals, etc.
• Goal of the business – Security, etc. • Goal of the business • Limited regulations
• Regulatory dimensions • Non-profit • Regulatory dimensions – Food joints, etc.
• Intensity of labour used – Libraries,
• Intensity of labour used
• Absent
• Customer contact – Social organizations, etc.
• Customer contact
– Carpentry service,
– Painting service, etc.
• Relationship with customers • Relationship with customers
• Demand and supply • Demand and supply



• Tangibility component • Equipment based • Tangibility component • High customer contact
• Skill type involved – Automated • Skill type involved
• Vending machines, etc. – Hotel,
• Goal of the business – Unskilled operations • Goal of the business – Restaurant, etc.
• Regulatory dimensions • Movie theatre, • Regulatory dimensions • Low customer contact
• Dry cleaning, etc.
• Intensity of labour used • Intensity of labour used – Automated car wash,
– Skilled Operation
• Customer contact • Airlines, etc. • Customer contact – Petrol pump, etc.
• Place and timing • People based • Place and timing
• Customization – Unskilled • Customization
– Skilled labour
• Relationship with customers • Appliance repair, etc.
• Relationship with customers
• Demand and supply – Professionals • Demand and supply
• Lawyer, doctors, etc.


• Tangibility component • Customer site • Tangibility component • Customized services
• Skill type involved – Home delivery of food, etc. • Skill type involved – Butler’s service,
• Goal of the business • Services site • Goal of the business – Charter services, etc.
• Regulatory dimensions – Hair saloon,
• Regulatory dimensions • Standardized services
• Intensity of labour used – College, etc.
• Intensity of labour used – Insurance policies,
• Customer contact • Customer contact – Bus route, etc.
• Physical channel
– Through post or courier, etc.
• Relationship with customers • Electronic channel • Relationship with customers
• Demand and supply – E-banking, etc. • Demand and supply


• Tangibility component • Ongoing • Tangibility component • Steady
• Skill type involved – Barber, • Skill type involved – Water works, etc.
• Goal of the business – Restaurant, etc. • Goal of the business • Fluctuating
• Regulatory dimensions • Formal • Regulatory dimensions – Hotels, etc.
• Intensity of labour used – Bank, etc.
• Intensity of labour used
• Customer contact • Customer contact
• Informal
– Watching TV programme, etc.
• Relationship with customers • Membership • Relationship with customers
• Demand and supply – College enrollment, etc. • Demand and supply



Bibliography
• Buffa, E.S. and Sarin, R.K., “Modern Production/Operations Management,” Eighth Edition. Singapore: John
Wiley & Sons (Asia). 1994.
• Martinich, J.S., “Production and Operations Management: An Applied Approach”, Singapore: John Wiley &
Sons (Asia), 2003.
• Monks, J.G., “Theory and Problems of Operations Management”, Second Edition, New Delhi: Tata McGraw
Hill, 2004.
For further details / comments ... •
•
Chary, S.N., “Productions and Operations Management,” Third Edition, New Delhi: Tata McGraw Hill, 2004
Kumar, S.A., and Suresh, N., “Production and Operations Management”, Second Edition, New Delhi: New
Age, 2008.
• Goel, B.S., “Production Operations Management”, Twenty Second Edition, Meerut, U.P.: Pragati Prakashan,
2010.
-Contact: • Kachru, U. “Production and Operations Management: Text and Cases,” New Delhi: Excel Books, 2007.
Anupam Kumar • Rama Murthy, P., “Production and Operations Management,” New Delhi: New Age International, 2012.
• Chunawalla, S.A., and Patel, D.R., “Production and Operations Management,” Mumbai: Himalaya
Reader, Publishing House, 2006.
School of Management Sciences, Varanasi. • Jauhari, V. and Dutta, K., “Services: Marketing Operations and Management,” New Delhi: Oxford University
Press, 2010.
Email: anupamkr@gmail.com
• Verma, H.V., “Services Marketing: Text and Cases,” New Delhi: Dorling Kindersley, Pearson Education, 2009



The nature & classification of services

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