BA 9253 – SERVICES MARKETING UNIT – I – INTRODUCTION

SERVICES DEFINITION. An act or performance offered by one party to another (performance are intangible, but may involve use of physical products) An economic activity that does not result in ownership A process that creates benefits by facilitating a desired change in customers themselves, physical possessions, or intangible assets

Many have attempted to define service in such a manner as to bring out all its characteristics. The common theme of all definitions has invariably been that while service is intangible, it goes on to produce tangible results or output. In other words, it acts like a facilitator.

Some definitions are serious, academic, and long on detail while others are light-hearted. But they all drive home the unique features that differentiate service from goods. They are:

A service is any activity or benefit that one party can offer to another which is essentially intangible and does not result in the ownership of anything. Its production may or may not be tied to a physical product. – Kotler, Armstrong, Saunders and Wong (1999)

……. Services…… anything that cannot be dropped on your foot. - The Economist Services are economist/economic activities that create value and provide benefits for customers at specific times and places as a result of bringing about a desired change I - or an behalf of – the recipient of the service. - Christopher Lovelock

Let us define service in a manner appropriate to our study and in order to explain services are the scope of this text. Services are the production of essentially intangible benefits and experience, either alone or as part of a tangible product, through some form of exchange, with the intention of satisfying the needs, wants and desires of the consumers.

Characteristics of service The characteristics of services-intangibility, inseparability, heterogeneity and perish ability – mean that there are new considerations facing services marketers. These differences led to the development of the expanded marketing mix to focus on issues perceived by customers to be important in services marketing.

CLASSIFICATION OF SEVICES As has already been suggested, there are a number of ways of classifying service activity, and there is inevitably some degree of overlap between the methods available. This section outlines some of the methods of classification commonly used.

TYPES OF SERVICES Services are divided between and consumer services, business-to-business services and industrial services. These fall between the public and private sectors.

END-USER Services can be classified into the following categories: Consumer : leisure, hairdressing, personal finance, package holidays. Business to Business : advertising agencies, printing, accountancy, consultancy. Industrial : Plant maintenance and repair, project management.

SERVICE TANGIBILITY The degree of tangibility of a service can be used to classify services: Highly tangible : Car rental, vending machines, telecommunications. Service linked to tangible goods: domestic appliance repair, car service. Highly intangible: Psychotherapy, consultancy, legal services.

PEOPLE-BASED SERVICES Services can be broken down into labor intensive (people –based) and equipment-based services. This can also be represented by the degree of contact: People-based-services-high contact: education, dental care, Restaurants, medical services Equipment-based-low contact: automatic car wash, Launderette, vending machine, cinema.

EXPERTISE The expertise and skills of the service provider can be broken down into the following categories: Professional : medicine services, legal services, accountancy, tutoring. Non-professional : infant caretaking, casual labor.

PROFIT ORIENTATION The overall business orientation is a recognized means of classification: Not-for-profit : The scouts association, charities, public sector leisure facilities. Commercial : banks, airlines, tour operators, hotel and catering services.

Example -services Travel services are generally offered to all sectors of the market, although specific market segments are evident, such as the tourism market and business travelers. Contract cleaners may service both industrial premises such as factories and other service businesses in offices and retail service outlets.

A motor service garage may repair company- owned and commercial vehicles as well as providing a service for the private motorist. Banks traditionally provide corporate and consumer financial services.