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    Nature and Scope of Services: Dr. Manel Khadraoui

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    Sara Yahyaoui
    The document discusses the nature and scope of services. It notes that services dominate most economies worldwide, accounting for over 60% of global GDP. It outlines several categories of traditional service industries such as leisure, hospitality, education, and financial services. The document also explains that many goods producers now generate over half their revenues from services. It distinguishes between service products, customer service, and after-sales service. Finally, the document describes some key characteristics of services, including their intangibility, inseparability from production and consumption, perishability, and variability.

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    Nature and Scope of Services: Dr. Manel Khadraoui

    Uploaded by

    Sara Yahyaoui
    26 views21 pages
    The document discusses the nature and scope of services. It notes that services dominate most economies worldwide, accounting for over 60% of global GDP. It outlines several categories of traditional service industries such as leisure, hospitality, education, and financial services. The document also explains that many goods producers now generate over half their revenues from services. It distinguishes between service products, customer service, and after-sales service. Finally, the document describes some key characteristics of services, including their intangibility, inseparability from production and consumption, perishability, and variability.

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    The document discusses the nature and scope of services. It notes that services dominate most economies worldwide, accounting for over 60% of global GDP. It outlines several categories of traditional service industries such as leisure, hospitality, education, and financial services. The document also explains that many goods producers now generate over half their revenues from services. It distinguishes between service products, customer service, and after-sales service. Finally, the document describes some key characteristics of services, including their intangibility, inseparability from production and consumption, perishability, and variability.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    26 views21 pages

    Nature and Scope of Services: Dr. Manel Khadraoui

    Uploaded by

    Sara Yahyaoui
    The document discusses the nature and scope of services. It notes that services dominate most economies worldwide, accounting for over 60% of global GDP. It outlines several categories of traditional service industries such as leisure, hospitality, education, and financial services. The document also explains that many goods producers now generate over half their revenues from services. It distinguishes between service products, customer service, and after-sales service. Finally, the document describes some key characteristics of services, including their intangibility, inseparability from production and consumption, perishability, and variability.

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    of 21

    Nature and scope of services

    Dr. Manel Khadraoui


    Why Study Services?

    • Services dominate most economies and are growing


    rapidly:
    – Services account for more than 60% of GDP worldwide
    – Almost all economies have a substantial service sector
    – Most new employment is provided by services
    – Strongest growth area for marketing

    • Understanding services offers you a personal


    competitive advantage
    Services Dominate the Global
    Economy
    Contribution of Services to GDP globally

    Industry 25%

    Services 65%
    Agriculture 3%
    What are services categories?
    • Traditional service industries:
    – leisure
    – hospitality
    – education
    – health services
    – financial
    – insurance services
    – professional
    – business services
    General Electric generally thought
    of as major goods producer, who
    now generate more than half of
    their revenues from services.
    Siemens offers consultancy
    services to develop and sell
    their product solutions to
    their customers.

    IBM offers information technology


    consulting services to the
    marketplace, competing with firms
    such as Accenture, a traditional
    pure service firm.
    Services are everywhere
    • But also, traditional goods producers are now
    turning to the service aspects of their
    operations
    – to establish a differential advantage in the
    marketplace
    – to generate additional sources of revenue for
    their firms
    Service Products vs. Customer
    Service & After-Sales Service

    • A firm’s market offerings are divided into core product


    elements and supplementary service elements

    • Need to distinguish between:


    – Marketing of services – when service is the core product
    – Marketing through service – when good service increases the
    value of a core physical good

    • Manufacturing firms are reformulating and enhancing


    existing added-value services to market them as stand-
    alone core products
    Service – A Process Perspective

    • Differences exist amongst services depending on what


    is being processed

    • Classification of services into


    – People processing
    – Possession processing
    – Mental stimulus processing
    – Information processing
    Goods/services
    • The distinction between goods and services is
    not always perfectly clear.
    • Providing an example of a pure good or a pure
    service is very difficult.
    • A pure good would imply that the benefits
    received by the consumer contained no
    elements supplied by service.
    • Similarly, a pure service would contain no
    tangible elements
    • In this course the term product is used to refer
    to goods or services
    • goods can be defined as objects, devices, or
    things
    • services can be defined as deeds, efforts, or
    performances
     the primary difference between goods and
    services is the property of intangibility
    scale of market entities
    • The scale that displays a range of products
    along a continuum based on their tangibility
    ranging from tangible dominant to intangible
    dominant.
    The scale of market entities
    What Are Services?

    • The historical view


    – Smith (1776): Services are different from goods because they
    are perishable
    – Say (1803): As services are immaterial, consumption cannot be
    separated from production

    • A fresh perspective: Benefits without Ownership


    – Rental of goods:
    • (a) Payment made for using or accessing something – usually for a
    defined period of time – instead of buying it outright and
    • (b) Allows participation in network systems that individuals and
    organizations could not afford
    Definition of services
    • 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.
    • Services are economic activities that create value
    and provide benefits for customers at specific
    times and places, as a result of bringing about a
    desired change in—or on behalf of —the
    recipient of the service.
    Characteristics of services

    1 Intangibility
    • This is the most basic and often quoted
    difference between goods and services.
    • Unlike tangible goods, services cannot
    generally be seen, tasted, felt, heard or
    smelled before being consumed.
    • The potential customer is often unable to
    perceive the service before (and sometimes
    during and after) the service delivery.
    2. Inseparability (or simultaneous production
    and consumption)
    • There is a marked distinction between
    physical goods and services in terms of the
    sequence of production and consumption:
    Physical goods Services

    Production
    Storage
    Sold Sold
    Consumed Produced and consumed at
    the same time
    3. Perishability
    • services cannot be saved,
    • their unused capacity cannot be reserved,
    • they cannot be inventoried.
    4. Heterogeneity: the variability of service delivery
    • the variation in consistency from one service transaction to the next
    • Service encounters occur in real time, and consumers are often
    physically present in the service factory, so if something goes wrong
    during the service process, it is too late to institute quality control
    measures before the service reaches the customer.
    • Heterogeneity, almost by definition, makes it impossible for a
    service operation to achieve 100 percent perfect quality on an
    ongoing basis.
     isolate mistakes and correct them over time
    • not only does the consistency of service vary from firm to firm and
    among personnel within a single firm, but it also varies when
    interacting with the same service provider on a daily basis.

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