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By :- Sachin

MBA 3rd sem.

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Definition of Servicey Dictionary definition :- the action of serving,

helping, or benefiting, conduct tending to welfare oradvantage of another.

yAcc. To Bessom :- for the consumer, services areactivities offered for sale that provide valuable benefitsor satisfaction; activities that he can not perform

himself or that he choose not to perform by himself.

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Characteristics of a Service

Lack of ownership :-we can only experience it,

For example, an engineer may service your air-conditioning, but you do not own the service, the

engineer or his equipment.Intangibility:- service cannot have a real, physical

presence as does a product.

Inseparability:- Services cannot be separated from

the service providers. A product when produced can betaken away from the producer.

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Variability- since the human involvement of service

provision means that no two services will becompletely identical.

Perishibility:- Services last a specific time and cannotbe stored like a product for later use.

For example If travelling by train, coach or air theservice will only last the duration of the journey.

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How is it different from product?y Physical Goods

y Tangible

y Homogeneous

y A thing

y Core value produced infactory

y Can be kept in stock

y Transfer of ownershipy Production and

distribution are separatedfrom consumption

y Services

y Intangible

y Heterogeneous

y A activity process

y Core value produced inbuyer seller interaction

y Cannot be kept in store

y No transfer of ownershipy Production ,distribution

and consumption aresimultaneous process

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Role of service sector in Indian economy

y India has fifteenth rank in services output.

y Providing 23% employment of the total workforce in

the country.yVarious services under this sector are:_

Constructions Trade Hospitality

Transport Food and beverage services,

communication, Social and personal services,insurance , financing etc.

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Service sector contribution to indian

economyy Service sector contribute to indian GDP around 56% in

2009.

y Service sector contribution is increasing rapidly asinformation and communication technology enabledservice(ITES) from india won the confidence of manyglobal corporations, wanting to lower their operationalcosts through process outsourcing.

reason being india has large pool of highly-skilled andeducated workers available at relatively lower cost.

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Conty Indian GDP Trend Of Growth Rate

1960-1980 : 3.5%1980-1990 : 5.4%

1990-2000 : 4.4%2000-2009 : 6.4%

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Contribution of Various Sectors in GDP

y In the Indian GDP for 1990-1991 are as follows:

Agriculture: - 32%Industry: - 27%Service Sector: - 41%

y In the Indian GDP for 2005-2006 are as follows:

Agriculture: - 20%Industry: - 26%Service Sector: - 54%

y

In the Indian GDP for 2007-2008 are as follows:Agriculture: - 17%Industry: - 29%Service Sector: - 54%

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Classification of services

yClassifications can be done on following basis:

Classification by Industry

Classification byTarget Effect

Skill level of service provider (Professional/Nonprofessional)

Labor intensiveness (People-based/Equipment-

based) Degree of customer contact (High / Low)

Goal of the service provider (Profit /Nonprofit)

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Classification By Industry

Entertainment industry Education Telecommunications Finance & Insurance Transportation Public utilities Government services Health

Hospitability Industry Business services Telecommunications Trading

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Classification By Target Effect

y Based on Degree Of Customer Involvement:

1. People Processing: Services aimed at physical care e.g.Healthcare, clinics, restaurant, hospitals, hair stylists, fitnesscenters

2. Mental Stimulus Processing: Services aimed at mind of customer e.g. Education, information, entertainment,consulting, psychotherapy

3. Possession Processing: Services aimed at physical

possession & tangible assets e.g. repair & maintenance,laundry, repair services, landscaping, house cleaning services

4. Information Processing : Services for intangible assets e.g.Banking, legal consultation, brokerage, financial services.

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Skill level of service provider

Teacher

Doctor

Engineer

Accountant

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labor intensiveness

yMechanic

y Electrician

y Labor

y Plumber

y Artisan

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Degree of customer contact

yHigh Degree (Every day) TV channels,

mobile etc.

yModerate Degree (Regular) Teacher,

Barber, washer man etc.

y Low Degree ( Occasional ) Priest,Doctors etc.

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Thank you