1.

UNDERSTANDING SERVICES
A. Service Product Difference/ Service
Peculiarities (i) 4 Is of Services
a) b) c) d) Intangibility Inconsistency Inseparability Inventory - intangibility spectrum - heterogeneity - simultaneous production& consumption - perish ability

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Characteristics of Services Compared to Goods

Intangibility Heterogeneity

Simultaneous Production and Consumption

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Perishability

Examples of Service Industries

Health Care hospital, medical practice, dentistry, eye care Professional Services accounting, legal, architectural Financial Services banking, investment advising, insurance Hospitality restaurant, hotel/motel, bed & breakfast ski resort, rafting Travel airline, travel agency, theme park Others hair styling, pest control, plumbing, lawn maintenance, counseling services, health club, interior design
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1. UNDERSTANDING SERVICES
Service industries & companies- whose core product is a service
e.g. lodging Taj Hotels, transportation- Indian Airlines

Service as products wide range of intangible product offerings

e.g. IBM software consultancy, Accenture

Customer Service- in support of the cos core product

call centers

Derived Service service provided by the goods

e.g. car provides transport service

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Implications of Intangibility
Services cannot be inventoried Services cannot be readily displayed or communicated Services cannot be easily patented Pricing is difficult
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Implications of Simultaneous Production and Consumption

Customers participate in and affect the transaction Customers affect each other Employees affect the service outcome Decentralization may be essential Mass production is difficult
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Implications of Heterogeneity
Service delivery and customer satisfaction depend on employee and customer actions Service quality depends on many uncontrollable factors There is no sure knowledge that the service delivered matches what was planned and promoted
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Implications of Perish ability

It is difficult to synchronize supply and demand with services Services cannot be returned or resold

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1.UNDERSTANDING SERVICES (Contd.)

B. Services Marketing Triangle
a. Company
b. Provider c. Customer Between a & b - Internal Marketing Between b & c - Interactive Marketing Between a & c - External Marketing

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SERVICES CLASSIFICATION
(1) People Processing Services
These services require the customers presence while the service is being provided. Typically such services are directed or applied to people and so their presence is mandatory. To use, enjoy and buy these services customers must be prepared to spend time co-operating with the service operation. Typical examples are medical services, passenger transport, hotels, fitness centres and beauticians. It is the marketing of these services that is very different to marketing physical products.
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SERVICES CLASSIFICATION
(2) Possession Processing Such services are aimed at peoples possessions, e.g. goods transportation, laundry and repair services. Clearly these services do not require customer involvement in the process and so from a marketing perspective are less complex than people processing services.
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SERVICES CLASSIFICATION
(3) Mental Stimulus / Information Based Services Under this heading are a developing range of services aimed at peoples minds and assets, e.g. entertainment, education. The internet has created huge global opportunities for mental stimulus and information processing services. e.g. consulting, education, entertainment, finance, travel facilitation, data processing and communication which can now be delivered electronically to global markets

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Tangibility Spectrum
Salt

Soft Drinks Detergents Automobiles Cosmetics Fast-food Outlets

Fast-food Outlets

Intangible Dominant

Tangible Dominant

Advertising Agencies Airlines Investment Management Consulting

Teaching

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Consumer Evaluation Processes for Services

Search Qualities
attributes a consumer can determine prior to purchase of a product

Experience Qualities
attributes a consumer can determine after purchase (or during consumption) of a product

Credence Qualities
characteristics that may be impossible to evaluate even after purchase and consumption

1.UNDERSTANDING SERVICES (Contd.)

C. Search, Experience & Credence Attributes of Services
Manufactured Goods High on Search Attributes Services High on Experience & Credence Attributes

Continuum of Evaluation for Different Types of Products

Most Goods
Easy to evaluate

Most Services
Difficult to evaluate

High in search High in experience High in credence qualities qualities qualities

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Goods versus Services

Source: A. Parasuraman, V.A. Zeithaml, and L. L. Berry, A Conceptual Model of Service Quality and Its Implications for Future Research, Journal of Marketing 49 (Fall 1985), pp. 4150.

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