DEFINITION,
CHARACTERISTICS &
CLASSIFICATION OF
SERVICES
KRIZIA ANN M. SARIBONG, LPT, MMPA
Instructor
“ A Service is an act of performance
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.”
- Philip Kotler
SERVICE DEFINITION
Service Encounter
A Service Encounter is a period of time
during which customer interact
directly with a service. It is also called
as "Moment of Truth”
CHARACTERISTICS OF
SERVICE MARKETING
1. INTANGIBILITY
2. PERISHABILITY
3. INSEPARABILITY
4. HETEROGENEITY
5. OWNERSHIP
6. SIMULTANEITY
7. QUALITY MEASUREMENT
8. NATURE OF DEMAND
1. INTANGIBILITY
Services are intangible we cannot touch them as
they are not physical objects.
A consumer feels that he has the right and
opportunity to see, touch, hear, smell or taste
the goods before they buy them but his is not
applicable to services.
The services are not known to the customer
before they take them.
INTANGIBILITY EXAMPLE
Mobile network providers
like Vodafone , Airtel ,
Reliance , etc.
2. PERISHABILITY
Value of service exists at the point when it is
required.
Services perish as soon as they are used.
Services last for a specific time and cannot be
stored like a product for later use.
3. INSEPARABILITY
Services cannot be separated from the service
provider.
Thus, the service provider would become a part
of a service.
Production and consumption of services go hand
in hand.
INSEPARABILITY EXAMPLE
Taxi operator drives taxi, and the passenger
uses it.
The presence of taxi driver is essential to
provide the service.
4. HETEROGENEITY
The quality of services cannot be standardized.
Systems and procedures are put into place to
make sure the service provided is consistent.
The service firms should make an effort to
deliver high and consistent quality by selecting
good and qualified personnel for rendering the
service.
HETEROGENEITY EXAMPLE
Live concerts like singing ,
dancing and comedy
shows , movies , etc.
5. OWNERSHIP
In the sale of goods, after the completion of
process, the goods are transferred in the name
of the buyer and he becomes the owner of the
goods.
But in the case of services, the users have only
an access to services.
They cannot own the service.
OWNERSHIP EXAMPLE
Membership of a gym
6. SIMULTANEITY
Services cannot move through channels of
distribution and cannot be delivered to the
potential customers and user.
Either users are brought to the services or
providers go to the user.
It is right to say that services have limited
geographical area.
COST & SIMULTANEITY
EXAMPLE
When the producers approach the buyer to
deliver services the cost of those services is
increased. On the other hand it cost time and
money for the buyers to come to producers
directly.
A doctor’s visit to home.
Electronics service, repair & maintenance
centers.
7. QUALITY MEASUREMENT
A service sector requires another tool for
measurement.
We can measure it in terms of SERVICE
LEVEL AGREEMENT (SLA).
It is very difficult to rate or quantify
services.
QUALITY MEASUREMENT
EXAMPLE
We can quantify the food served in a hotel but
the way waiter serves the customer or the
behaviour of the staff, timely delivery , hygiene
etc. cannot be ignored while rating the total
process.
Thus the firm sells good atmosphere,
convenience of customers, consistent quality of
services, etc.
8. NATURE OF DEMAND
The services are fluctuating in nature.
The demand of services can be abnormal,
sudden seasonal, situational & dependent.
Therefore, while identifying the salient
features of services one cannot ignore the
nature of demand.
NATURE OF DEMAND
EXAMPLE
• Service quality level deteriorates during peak
hours in hotels, transportation etc.
• E-Retailers offering huge discounts on festive
occasions
• A marketer should effectively utilize the capacity
without deteriorating the quality to meet the
demand.
FEW ADDITIONAL
CHARECTERISTICS
I. Services are sold exclusively on the
basis of benefits they offer.
II. Services cannot be made available in
advance.
III. Time utility is critical.
IV. Services cannot be transferred.
V. A service once consumed cannot be
returned.
Classification of
Services
A. Classification on the Basis
of Involvement of Customer
1. People Processing
2. Possession Processing
3. Mental Stimulus
Processing
4. Information Processing
1. People Processing
• Level of involvement can vary.
• Managers must think about processes /
outputs in terms of what happens to
customers or what benefits are created.
• Identify non-financial costs, time, mental and
physical effort, fear, and pain etc.
• Example : healthcare, beauty salon, dentist,
spa, tourism, transportation, restaurant,
lodging
2. Possession Processing
• Working to tight deadlines to restore
customer’s possessions to good working order.
• People are less physically involved and
usually, no real need for them to enter the
service; often limited to requesting the
service; explaining the problem or paying the
bill only.
• Eg : post office /courier, laundry, ATM,
warehousing, landscaping, gardening, office
cleaning, repair and maintenance, freight
transportation
3. Mental Stimulus
Processing
• Services that interact with people’s mind.
• Anything touching people’s mind has power to
shape attitudes and influence behaviour.
• Information based content can be converted to
digital bits, recorded or transformed into
manufactured products viz. CD’s, Video’s, which
can be packed and sold like any physical product.
• Eg education , news , entertainment , Advertising/
PR , video games, music concerts, broadcasting
4. Information Processing
• Most intangible form of service output.
• Customer involvement determined more by
tradition or personal desire to meet face to face
and not by the needs of the operational
process.
• Customer / Supplier learn each other’s needs,
capabilities and personalities by personal
meetings, however this relationship can also be
build / sustained on trust or telephonic contact.
• financial services, accounting , banking,
Insurance, legal services, , MR, software
consulting
B. Classification Based on
Service Tangibility
1. Services Linked to Tangible
Goods
2. Tangible Goods Linked to
Services
1. Services Linked to
Tangible Goods
• In order to experience the service
customers should first purchase the
product.
• Ex: alterations, warranties
2. Tangible Goods Linked
to Services
• Service provider offer tangible goods for
use along with the services.
• Ex: Theaters offer 3D glasses along with
movie
C. Classification on the
Business Orientation
• Non-Profit Organization- entity that is
created and operated for charitable or socially
beneficial purposes rather than to make a profit
Ex: Government schools a social service.
• Commercial Organization- organization,
institution, corporation, or other legal entity,
including, but not limited to, partnerships, sole
proprietorships, and limited liability companies,
that is organized or operated for the profit or
benefit of its shareholders or other owners
D. Classification on the Basis of
requirement of Skill and Expertise
1. Professional Services
• Requires a set of qualificaion skills
adequate training etc.eg lawyer,pilot
2. Non Professional Services
• Do not require any set of skills
training.
• Ex: house keeping, babysitting etc
E. Classification on the
Basis of End User
1. Consumer Services- beauty case, hair
case
2. Business to Business Services-
market research and consultancy
3. Industrial Services- machine
installations
Consumer Services
• Pure Services : Activities performed that do not
include a tangible product. Ex: Massage
• Non-Good Services - Personal/Professional
service for a fee. Ex: Tax Preparation.
• Owned-Good Services - Activities that alter,
improve, or repair products already owned. Ex:
dry cleaning, appliance repair service.
• Rented Good Services - Provide a product to use
for a brief period for a fee. Ex: carpet cleaners,
movie rental.
END OF PRESENTATION.
THANK YOU!!!
