Service sector management , Service industry

1. CHARACTERISTICS &
CLASSIFICATION OF SERVICES

2. SERVICE DEFINITION
“ A service is an act of performance that one
party can offer to another that is essentially
intangible and does not result in the ownership
of anything. Its production may or may not be
tied to a physical product.”
- Philip Kotler

3. CHARACTERISTICS OF SERVICE
MARKETING
1. INTANGIBILITY
2. PERISHABILITY
3. INSEPARABILITY
4. HETEROGENEITY
5. OWNERSHIP
6. SIMULTANEITY
7. QUALITY MEASUREMENT
8. NATURE OF DEMAND

4. 1. INTANGIBILITY
Services are intangible we cannot touch them as they
are not physical objects.
A consumer feels that he has the right and
opportunity to see, touch, hear, smell or taste the
goods before they buy them but his is not applicable
to services.
The services are not known to the customer before
they take them.

5. INTANGIBILITY EXAMPLE
Mobile network providers
like Vodafone , Airtel ,
Reliance , etc.

6. 2. PERISHABILITY
Value of service exists at the point when it is required.
Services perish as soon as they are used.
Services last for a specific time and cannot be stored
like a product for later use.

8. 3. INSEPARABILITY
Services cannot be separated from the service
provider.
Thus, the service provider would become a part of a
service.
Production and consumption of services go hand in
hand.

9. INSEPARABILITY EXAMPLE
Taxi operator drives taxi, and the passenger uses it.
The presence of taxi driver is essential to provide
the service.

10. 4. HETEROGENEITY
The quality of services cannot be standardized.
Systems and procedures are put into place to make
sure the service provided is consistent.
The service firms should make an effort to deliver high
and consistent quality by selecting good and qualified
personnel for rendering the service.

11. HETEROGENEITY EXAMPLE
Live concerts like singing ,
dancing and comedy shows ,
movies , etc.

12. 5. OWNERSHIP
In the sale of goods, after the completion of process,
the goods are transferred in the name of the buyer
and he becomes the owner of the goods.
But in the case of services, the users have only an
access to services.
They cannot own the service.

13. OWNERSHIP EXAMPLE
Membership of a gym

14. 6. SIMULTANEITY
Services cannot move through channels of distribution
and cannot be delivered to the potential customers
and user.
Either users are brought to the services or providers
go to the user.
It is right to say that services have limited
geographical area.

15. COST & SIMULTANEITY EXAMPLE
When the producers approach the buyer to deliver
services the cost of those services is increased. On
the other hand it cost time and money for the
buyers to come to producers directly.
A doctor’s visit to home.
Electronics service, repair & maintenance centers.

16. 7. QUALITY MEASUREMENT
A service sector requires another tool for
measurement.
We can measure it in terms of service level.
It is very difficult to rate or quantify services.

17. QUALITY MEASUREMENT EXAMPLE
We can quantify the food served in a hotel but the
way waiter serves the customer or the behaviour of
the staff, timely delivery , hygiene etc. cannot be
ignored while rating the total process.
Thus the firm sells good atmosphere, convenience of
customers, consistent quality of services, etc.

18. 8. NATURE OF DEMAND
The services are fluctuating in nature.
The demand of services can be abnormal, sudden
seasonal, situational & dependent.
Therefore, while identifying the salient features of
services one cannot ignore the nature of demand.

19. NATURE OF DEMAND EXAMPLE
• Service quality level deteriorates during peak hours in
hotels, transportation etc.
• E-Retailers offering huge discounts on festive
occasions
• A marketer should effectively utilize the capacity
without deteriorating the quality to meet the
demand.

20. FEW ADDITIONAL
CHARECTERISTICS
I. Services are sold exclusively on the basis of
benefits they offer.
II. Services cannot be made available in advance.
III. Time utility is critical.
IV. Services cannot be transferred.
V. A service once consumed cannot be returned.

21. Classification of
services

22. • Pure services : Activities performed that do not
include a tangible product.
• Non-good services - Personal/professional service for a
fee.
• Example: tax preparation.
• Owned-good services - Activities that alter, improve,
or repair products already owned.
• Example: dry cleaning, appliance repair service.
• Rented good services - Provide a product to use for a
brief period for a fee. Example: carpet cleaners,
movie rental.
Consumer services

23. Classification on the basis of
involvement of customer
• People processing
• Level of involvement can vary.
• Managers must think about processes / outputs in
terms of what happens to customers or what
benefits are created.
• Identify non-financial costs, time, mental and
physical effort, fear, and pain etc.
• Example : healthcare, beauty saloon, dentist,
spa, tourism, transportation, restaurant, lodging

25. Possession processing
• Working to tight deadlines to restore customer’s
possessions to good working order.
• People are less physically involved and usually, no
real need for them to enter the service; often
limited to requesting the service; explaining the
problem or paying the bill only.
• Eg : post office /currier, laundry, ATM, warehousing,
landscaping, gardening, office cleaning, repair and
maintenance, freight transportation

27. Mental stimulus processing
• Services that interact with people’s mind.
• Anything touching people’s mind has power to
shape attitudes and influence behaviour.
• Information based content can be converted to
digital bits, recorded or transformed into
manufactured products viz. CD’s, Video’s, which
can be packed and sold like any physical product.
• Eg education , news , entertainment , Advertising/
PR , video games, music concerts, broadcasting

29. Information processing
• Most intangible form of service output.
• Customer involvement determined more by tradition
or personal desire to meet face to face and not by
the needs of the operational process.
• Customer / Supplier learn each other’s needs,
capabilities and personalities by personal meetings,
however this relationship can also be build /
sustained on trust or telephonic contact.
• financial services, accounting , banking, Insurance,
legal services, , MR, software consulting

31. Classification based on service
tangibility
• Services linked to tangible goods.
• In order to experience the service customers
should first purchase the product.
• Eg alterations, warranties

32. Tangible goods linked to
services
• Service provider offer tangible goods for use
along with the services.
• Eg. Theaters offer 3d glasses along with movie

33. Classification on the business
orientation
• Non profit organisation: govt schools a social
service.
• Commercial organization.

34. Classification on the basis of
requirement of skill and expertise
• Professional services
• Requires a set of qualificaion skills
adequate training etc.eg lawyer,pilot
• Non professional services
• Do not require any set of skills training.
• Eg house keeping, babysitting etc

35. Classification on the basis of
end user
• Consumer services: beauty case hair case
• Business to business services: market research
and consultancy
• Industrial services: maachine installations

36. SERVICE SECTOR MANAGEMENT
TYBMS A (2014-2015)
o Harsh Shah 538
o Mohit Malde 523
o Jigar Gala 514
o Sanchit Gangar 515