the nature & classification of services

© Copyright 2013 Anupam Kumar 1

The Nature & Classification of

Services

-Presented By:

Anupam Kumar

Reader,

School of Management Sciences, Varanasi.

Email: [email protected]

1© Copyright 2013 Anupam Kumar

What are Services?

• Gronoos (1990)

– Service is an activity or a series of activities

– of more or less intangible nature that normally, but not necessarily,

– take place in interactions between the customer and service employees and /or

– physical resources or goods and/or systems of the service provider,

– which are provided as a solution to customer problems.


What are Services?

• Kotler (1991)

– Service is an act or performance

– that one party can offer to another

– that is essentially intangible and

– does not result in the ownership of anything.

– Its production may not be tied to a physical

product.


Nature of Services

• Researchers have proposed four basic traits of services.

– Intangibility

• Services are performances rather than objects, they cannot be seen, felt, tasted or touched like goods.

– Inseparability

• Services are created and consumed simultaneously; they cannot be stored like goods.

– Variability

• Quality and essence of service vary from producer to producer, customer to customer, and from day to day; it is largely the result of human interaction and all the vagaries that accompany it.

– Perishability

• Services once produced cannot be stored for future use.


Intangibility

• At times services are further classified into

– Physical intangibility

• that which cannot be touched.

– Mental intangibility

• that which is difficult for the consumer to grasp or measure even mentally.

• Services cannot be stored

• They cannot be patented legally, hence can easily be copied by competitors.

• They cannot be readily displayed or communicated leading to difficulty in assessing its quality.


Inseparability

This stands for the inseparability of production and consumption.

• Customer has to be present during the service production.

• Customers frequently interact with service providers, influence them and may even act as co-producers.

• Service producers themselves play an important role as part of the product itself, as well as an essential ingredient in the service experience for consumer.

• And thus,

– Centralized mass production is difficult if not impossible.

– Customer experiences depend upon the interactions

– Operations need to be decentralized so that services can be delivered directly to consumers at convenient locations.

– Involvement of customers in production process is important.



Variability

• Services face the difficulty

of achieving uniform

outputs, especially in

labour-intensive services.

– Performance and

behaviour vary among

service workers.

– It may even vary for the

same worker dealing with

different customers or on

different days of work.

• Thus, there is

– Difficulty in achieving

standardization

– Difficulty in setting quality

controls.

– Determination of quality is

possible only after

performance of service.

– Difficulty in communicating

to the clients what exactly

they would get.


Perish-ability

• Services cannot be stored and then sold at a

later date as they perish.

• And thus,

– Services have short lived value.

– Services cannot be inventoried.

– Time pressure for sale of service is extremely high.

– Capacity of services is finite.


Classification of Services

Services may be classified on several accounts:

• Tangibility component

• Skill type involved

• Goal of the business

• Regulatory dimensions

• Intensity of labour used

• Customer contact

• Place and timing

• Customization

• Relationship with customers

• Demand and supply

• Rental Goods

– Hotel room

– Car, etc.

• Owned Goods

– TV repair, etc.

• Non-Goods

– College education, etc.



Services classification on account of:








• Customization



• Professional

– Legal

– Medical, etc.

• Non-professional

– Taxi,

– Security, etc.











• Customization



• Profit

– Insurance,

– Security, etc.

• Non-profit

– Libraries,

– Social organizations, etc.











• Customization



• High regulations

– Hospitals, etc.

• Limited regulations

– Food joints, etc.

• Absent

– Carpentry service,

– Painting service, etc.












• Customization



• Equipment based– Automated

• Vending machines, etc.

– Unskilled operations• Movie theatre,

• Dry cleaning, etc.

– Skilled Operation• Airlines, etc.

• People based– Unskilled

– Skilled labour• Appliance repair, etc.

– Professionals• Lawyer, doctors, etc.











• Customization



• High customer contact

– Hotel,

– Restaurant, etc.

• Low customer contact

– Automated car wash,

– Petrol pump, etc.











• Customization



• Customer site

– Home delivery of food, etc.

• Services site

– Hair saloon,

– College, etc.

• Physical channel

– Through post or courier, etc.

• Electronic channel

– E-banking, etc.











• Customization



• Customized services

– Butler’s service,

– Charter services, etc.

• Standardized services

– Insurance policies,

– Bus route, etc.











• Customization



• Ongoing

– Barber,

– Restaurant, etc.

• Formal

– Bank, etc.

• Informal

– Watching TV programme, etc.

• Membership

– College enrollment, etc.











• Customization



• Steady

– Water works, etc.

• Fluctuating

– Hotels, etc.



For further details / comments ...

-Contact:

Anupam Kumar

Reader,

School of Management Sciences, Varanasi.

Email: [email protected]


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