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Nature and Categories of
Services
Activity 1
Create a list of 10 services
List at least 3 service provider’s names
– Time allotted: 5 minutes
What are Services?
“Services are deeds, processes, and performances”
- Zeithaml et al
A few Definitions…..
Activities, benefits, or satisfactions which are offered for sale, or provided in connection with the sale of goods
- Amercican Marketing Association
A service is an act or performance offered by one party to another. Although the process may be tied to a physical product, the performance is essentially intangible and does not normally result in ownership of any of the factors of production - Christopher Lovelock
A few Definitions….. Any activity or benefit that one party can
offer to another that 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 and Bloom
A service is an activity or series of activities of more or less intangible nature that normally, not necessarily, take place in interactions between the customer and service employees and/or physical resources or goods and/or system of the service provider, which are provided as solution to customer problems - Gronross
So, Services……..
Are deeds, performances or activities offered by one party to another
Are essentially intangible
Do not result in the ownership of anything
Take place in interactions between the customer and the service provider
Service as Theater
“ All the world’s a
stage and all the men and women merely players. They have their exits and their entrances and each man in his time plays many parts”
William Shakespeare
As You Like It
Characteristics of Services Intangibility
– The potential customer is unable to perceive the service before the service delivery
Heterogeneity– The quality of the service may vary depending on who
provides it
Inseparability– Simultaneous Production and Consumption
Perishability– Cannot be stored for later sales or use
Physical Goods Services
Homogeneous Heterogeneous
Production and distribution are separated from consumption
Production, distribution and consumption are simultaneous processes
A thing An activity or process
Core value produced in factory
Core value produced in buyer-seller interactions
Customers do not participate in production process
Customers participate in production
Can be kept in stock Cannot be kept in stock
Transfer of ownership No transfer of ownership
Characteristics of Services vs. Goods
Goods Services ImplicationsTangible Intangible Services cannot be inventoried
Services cannot be readily displayed or communicated
Standardized
Heterogeneous
Pricing is difficult Service delivery and customer satisfaction depend on employee & customer actions Service quality depends on uncontrollable factors There is no sure knowledge that the service delivered matches what was planned and promoted
Characteristics of Services vs. Goods
Goods Services ImplicationsProduction separate from consumption
Inseparable Customers participate in and affect the transaction Customers affect each otherEmployees affect the service outcome Mass production is difficult
Nonperishable Perishable Difficult to synchronize supply and demand with services Services cannot be returned or resold
Activity 2 Give examples of each of the
following type. Also list the names of at least two companies offering that good/service.
– A pure tangible good
– Tangible good with accompanying service
– A major service with accompanying minor goods or services
– A pure service Time allowed: 5 minutes
Categories of Goods - Services
A pure tangible good
Tangible good with accompanying service
A major service with accompanying minor goods or services
A pure service …….Kotler’s
Categorization
Activity 3
A list of simple goods/services is provided in the next slide
Place these services in an appropriate position in the following continuum:
Tangible ____________________ Intangible dominant dominant
List for Activity 3
Salt Soft drinks Detergents Automobiles Cosmetics Fast-food outlets Ad agencies Airlines Investment management Consulting Teaching
“Breaking free from product marketing”
Lynn Shostack, 1977
Tangibility Spectrum
TangibleDominant
IntangibleDominant
SaltSoft Drinks
DetergentsAutomobiles
Cosmetics
AdvertisingAgencies
AirlinesInvestment
ManagementConsulting
Teaching
Fast-foodOutlets
Fast-foodOutlets
Activity - 4 A list of services is provided next.
Place these in an appropriate quadrant in the matrix below:
People Processing Possession Processing
Mental Stimulus Processing
Information Processing
(directed at intangible assets)
TANGIBLE ACTS
DIRECTED AT PEOPLE
DIRECTED AT POSSESSIONS
TANGIBLE ACTS
List for Activity - 4
Health care Accounting Lodging Beauty salons Phisiotherapy Music Concerts Insurance Freight transportation Fitness center Restaurants Legal services
Advertising Passenger
transportation Broadcasting Repair and
Maintenance Landscaping Psychotherapy Banking Laundry and Dry
Cleaning Education
“Classifying services to gain strategic marketing insights”
Christopher Lovelock, 1983
Lovelock’s Classification
People Processing Possession Processing
Mental Stimulus Processing
Information Processing
e.g., passenger transportation, healthcare,
lodging, beauty salons, fitness center
e.g., freight transportation, repair and maintenance, laundry and dry cleaning, landscaping
e.g., broadcasting, Education, advertising, music
concert, psychotherapy
e.g., accounting, Insurance, legal services,
banking
TANGIBLE ACTS
INTANGIBLE
ACTS
DIRECTED AT PEOPLE
DIRECTED AT POSSESSIONS
What is the Nature of the Service Act?
Who or What is the Direct Recipient of the Service?
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