1-3-Intro,Characterstics & Classification of Services

8/6/2019 1-3-Intro,Characterstics & Classification of Services

1/13

Services Marketing


2/13

The service sector

The services sector has been growing at a

rate of 8% per annum in recent years More than half of our GDP is accounted for

from the services sector

This sector dominates with the best jobs,best talent and best incomes


3/13

There are no such thing as

service industries.There are onlyindustries whose service

components are greater or less

than those of other industries.

Everybody is in service.

-Theodore Levitt-


4/13

What is services?

It is the part of the product or the fullproduct for which the customer is

willing to see value and pay for it.


5/13

What is a service?

It is intangible.

It does not result in ownership. It may or may not be attached with a

physical product


6/13

Difference between physical goods

and servicesPhysical goods Services

tangible intangible

homogeneous heterogeneous

Production and distribution are

separated from consumption

Production, distribution and

consumption are simultaneous

processes

A thing An activity or process

Core value processed in factory Core value produced in the buyer-sellerinteraction

Customers do not participate in the

production process

Customers participate in production

Can be kept in stock Cannot be kept in stock

Transfer of ownership No transfer of ownership


7/13

Most products have a service

component

They could be

Equipment based People based varying skill levels


8/13

Services could meet

Personal needs haircuts, tution, massage

parlours Business needs courier services, office

cleaning services, delivering fresh flowers


9/13

The Nature of Services

regardless of the product, there is a servicescomponent to the offerings of all firms

in some cases, a service is the principal purpose

of the transaction, as in the rental of a car, ahaircut, or legal services -- we refer to this asthe core servicecore service

in others, service is performed in support of the

sale of a tangible product -- these are referredto as supplementary servicessupplementary services

12 - 9


10/13

Goods and Services Continuum

There are two classes of services.

Services that are the main purpose of atransaction renting a truck to move.

Services that supplement the sale of a tangiblegood for example, an information hotline forcomputer software.

The focus here is primarily on identifiable,

intangible services that are the main object of atransaction designed to provide want-satisfaction tocustomers; supplementary services growing inimportance, however.

12 -

10


11/13

Importance of Services

y Three-fourths of the Canadian labour forceis employed in service industries.

y

Over 70% of the nations gross nationalproduct is produced by services.

y From 1986 to 2000, virtually all new jobswill be in the service industries.

y Huge growth inpersonal servicespersonal services as wellasbusiness services.business services.

12 -

11Copyright 1998 by The McGraw-Hill Companies, Inc.


12/13

Characteristics of Services

1)1) intangibilityintangibility: difficult to sample and to evaluate

2)2) inseparabilityinseparability:: difficult to separate servicesfrom the service provider; mainly direct sales;

staff are essential to the delivery of qualityservices

3)3) heterogeneityheterogeneity: virtually every service isdifferent; very difficult to standardize quality

4)4) perishabilityperishability:: those not sold can not be stored

5)5) fluctuatingfluctuating demanddemand:: demand for some servicesfluctuates by season, or even by time of day


13/13

The three additional Ps of Service

Marketing

People

Physical evidence Process

1-3-Intro,Characterstics & Classification of Services

Documents

Transcript of 1-3-Intro,Characterstics & Classification of Services