Definining Services

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Definining Services A service is any act or performance that one

party offers to another, that is essentially

intangible, does not result in the ownership of anything. Its production may or may not betied to any physical product. Philip Kotler.



Goods Service Continuum



CHARACTERISTICS OF

SERVICES:

INTANGIBILITY

INSEP ARABILITY

HETEROGENITY

PERISHABILITY



Marketing problems

caused by intangibility Services are subjectively evaluated

Services are difficult to sample before

purchase

Services cannot be stored

Patent problems are there

Difficulty in pricing services Difficulty in displaying or communicating

services.



Possible solutions to

Intangibility problems:

Use of Tangible clues.

Use of personal sources of information

Creation of strong organizationalimage.



Marketing problems

caused by inseparability Service provider is physically connected to the service being

provided Involvement of customers and other customers in the service

production process: To start and stop For processing Mental involvement Heterogeneity and Quality issues Uncertainity in scheduling

Catering to individual customer demand is difficult Arrivals are not under control Mass production is diff.




inseparability problems:

Employee selection, training, andmotivation.

Consumer management

seggregating customers

home delivery

Prohibit customer entry in certainareas

Use of multisite location



Marketing problems

caused by Heterogeneity:

Service standardization and QualityControl are difficult.

Many errors in service operations areone time events.




Heterogeneity problems:

Customization

takes extra time

adds to cost

uncertanity associated with customisedservices

Standardization Use of machines

Training



SOME COMPANIES

STANDARDISE THE CORE

PRODUCT

ALLOW CUSTOMERS TO SEMICUSTOMISE THE FINAL OUTCOME



Marketing problems

caused by Perishability:

Inventoring problem

Problem of Demand SupplyManagement

Higher demand than supply

lower demand than supply




Perishability problems: Creative Pricing attract customers in off peak hours

attract another segment separate diverse target markets Reservation Systems Development of Complementary Services

Capacity Sharing Part Time Employee Utilization Increase in Customer Participation



CLASSIFICATION OF

SERVICES

On the basis of degree of Tangibility

On the basis of Labor Intensiveness On the basis of Degree of Customer

Contact

On the basis of skill level of the ServiceProvider

On the basis of Goal of Service Provider



Service Process Matrix Given By Roger Schmenner

Low Degree Of Interaction and customisation and

Low degree of Labor Intensity:S

ervic

eFac

tory

Airlines,Hotels

Low Degree Of Interaction & Cus and High degree of Labor Intensity: Mass Service, Schools, Retailing

High Degree Of Interaction & Cus and Low degree of

Labor Intensity: Service Shops, Hospitals High Degree Of Interaction & Cus and High degree of

Labor Intensity: Professional Service, Physicians, Lawyers



Nature of the service act and

the recipient of the service

Services where tangible actions are directed at peoples bodies: Health care, beauty saloons

Services where tangible actions are directed at Physical goods: laundry, repair &maintenance

Services where intangible actions are directed at peoples bodies: education, information

Services where intangible actions are directed at

Physical goods: banking legal services



Nature of Service delivery and type of relationship between Service Organization

and its Customers

Continuous delivery of service andmembership relationship: electric utility

Discrete transactions and membershiprelationship:Transit pass, buying club

Continuous delivery of service and Noformal relationship:Radio station, Police

protection Discrete transactions service and No formal

relationship: movie theater, Restaurant



Customization & Judgment In

service Delivery High Extent of judgement and High

customization : Surgery,Taxi.

High Extent of judgement and Lowcustomization :Education, Preventive HealthProgramme

Low Extent of judgement and Low

customization :Public Transport. Low Extent of judgement and High

customization: Retail Banking



Nature of Demand &Supply Wide Demand Fluctuations but peak demand can be

met without delay: electricity , telephone

Wide Demand Fluctuations and peak demand cannot be met without delay: Tax preparations, hotels.

Narrow Demand Fluctuations and peak demand canbe met without delay: Insurance ,banking

Narrow Demand Fluctuations but peak demand

cannot be met without delay: Fast food, Movietheater



On the basis of Nature of Interactionbetween Customer & Service Organisation

and Availability of service outlets

Single site location where customer travels to servicefirm: Theater, Barber shop

Single site location where service provider travels to

customer :Taxi Single site location where transaction is at arms

length: Local TV Station Multiple site location where customer travels to

service firm: Bus service

Multiple site location where service provider travels tocustomer: Mail Delivery

Multiple site location where transaction is at armslength: Telephone company

Definining Services

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