CHARACTERISTICS & CLASSIFICATION OF SERVICES

SERVICE DEFINITION

“ A service is an act of performance that oneparty can offer to another that is essentiallyintangible and does not result in the ownershipof anything. Its production may or may not betied to a physical product.”

- Philip Kotler

CHARACTERISTICS OF SERVICE MARKETING

1. INTANGIBILITY

2. PERISHABILITY

3. INSEPARABILITY

4. HETEROGENEITY

5. OWNERSHIP

6. SIMULTANEITY

7. QUALITY MEASUREMENT

8. NATURE OF DEMAND

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.

INTANGIBILITY EXAMPLE

Mobile network providers like Vodafone , Airtel , Reliance , etc.

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.

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.

INSEPARABILITY EXAMPLE

Taxi operator drives taxi, and the passenger uses it.

The presence of taxi driver is essential to provide the service.

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.

HETEROGENEITY EXAMPLE

Live concerts like singing , dancing and comedy shows , movies , etc.

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.

OWNERSHIP EXAMPLE

Membership of a gym

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.

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.

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.

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.

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.

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.

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.

Classification of services

• 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

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

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

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

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

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

Tangible goods linked to services

• Service provider offer tangible goods for use along with the services.

• Eg. Theaters offer 3d glasses along with movie

Classification on the business orientation

• Non profit organisation: govt schools a social service.

• Commercial organization.

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

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

SERVICE SECTOR MANAGEMENT

TYBMS A (2014-2015)

o Harsh Shah 538

o Mohit Malde 523

o Jigar Gala 514

o Sanchit Gangar 515