Nature, characteristics of services
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The document discusses the differences between services and goods. It notes that services are intangible, perishable, and produced and consumed simultaneously. Services also vary between customers and cannot be inventoried. The document outlines various classifications of services, including how customized they are and whether transactions are discrete or continuous. It discusses the different types of customer relationships with service organizations and the degree to which personnel must exercise judgment to meet customer needs.
Nature, characteristics of services
- 1. Nature, characteristics And Classification of services
- 2. Differentiating services from goods Goods Search goods Experienced goods Only after buying or Prior purchase/use after consumption Tangible Intangible
- 3. Differences between services and physical goods S.NO. Physical goods services 1 Tangible Intangible 2 Homogeneous Heterogeneous 3 A thing An activity and process 4 Core value produced in Core value produced in the buyer factory and seller interactions 5 Customer do not participate in Customer participate in the the production process production 6 Can be kept in stock Cannot be kept in stock 7 Transfer of ownership No transfer of ownership 8 Production and distribution Production ,distribution and are separated from consumption are simultaneous consumption process
- 4. Element Core Goods Core Service Example Example Business Custom clothier Business hotel Core Business suits Room for the night Peripheral Garment bag Bath robe Goods Peripheral Deferred In house Service payment plans restaurant Variant Coffee lounge Airport shuttle
- 5. Degree of Interaction and Customization Low High Service factory: Service shop: Degree of labor intensity * Airlines * Hospitals Low * Trucking * Auto repair * Hotels * Other repair services * Resorts and recreation Mass service: Professional service: * Retailing * Doctors High * Wholesaling * Lawyers * Schools * Accountants * Retail aspects of * Architects commercial banking
- 6. Supporting Facility: The physical resources that must be in place before a service can be sold. Examples are golf course, ski lift, hospital, airplane. Facilitating Goods: The material consumed by the buyer or items provided by the consumer. Examples are food items, legal documents, golf clubs, medical history. Information: Operations data or information that is provided by the customer to enable efficient and customized service. Examples are patient medical records, seats available on a flight, customer preferences, location of customer to dispatch a taxi.
- 7. Explicit Services: Benefits readily observable by the senses. The essential or intrinsic features. Examples are quality of meal, attitude of the waiter, on-time departure. Implicit Services: Psychological benefits or extrinsic features which the consumer may sense only vaguely. Examples are privacy of loan office, security of a well lighted parking lot.
- 8. Simultaneity Perishability Intangibility Variability Inseparability
- 9. Services are rendered and consumed during the same period of time. As soon as the service consumer has requested the service (delivery), the particular service must be generated from scratch without any delay and friction and the service consumer instantaneously consumes the rendered benefits for executing his upcoming activity or task.
- 10. The service relevant resources, processes and systems are assigned for service delivery during a definite period in time. If the designated or scheduled service consumer does not request. An empty seat on a plane never can be utilized and charged after departure. When the service has been completely rendered to the requesting service consumer, this particular service irreversibly vanishes as it has been consumed by the service consumer. Example: the passenger has been transported to the destination and cannot be transported again to this location at this point in time.
- 11. Services are intangible and insubstantial: they cannot be touched, gripped, handled, looked at, smelled, tasted or heard. Thus, there is neither potential nor need for transport, storage or stocking of services. Furthermore, a service cannot be (re)sold or owned by somebody, neither can it be turned over from the service provider to the service consumer nor returned from the service consumer to the service provider. Solely, the service delivery can be commissioned to a service provider who must generate and render the service at the distinct request of an authorized service consumer.
- 12. Each service is unique. It is one-time generated, rendered and consumed and can never be exactly repeated as the point in time, location, circumstances, conditions, curre nt configurations and/or assigned resources are different for the next delivery, even if the same service consumer requests the same service. Many services are regarded as heterogeneous or lacking homogeneity and are typically modified for each service consumer or each new situation (consumerised).
- 13. Example: The taxi service which transports the service consumer from his home to the opera is different from the taxi service which transports the same service consumer from the opera to his home – another point in time, the other direction, maybe another route, probably another taxi driver and cab.
- 14. The service provider is indispensable for service delivery as he must promptly generate and render the service to the requesting service consumer. In many cases the service delivery is executed automatically but the service provider must preparatory assign resources and systems and actively keep up appropriate service delivery readiness and capabilities.
- 15. Additionally, the service consumer is inseparable from service delivery because he is involved in it from requesting it up to consuming the rendered benefits. Examples: The service consumer must sit in the hair dresser's shop & chair or in the plane & seat; correspondingly, the hair dresser or the pilot must be in the same shop or plane, respectively, for delivering the service.
- 16. Direct Recipient of the Service Nature of the Service Act People Things People’s bodies: Physical possessions: Health care Freight transportation Passenger transportation Repair and maintenance Tangible actions Beauty salons Veterinary care Exercise clinics Janitorial services Restaurants Laundry and dry cleaning People’s minds: Intangible assets: Education Banking Intangible actions Broadcasting Legal services Information services Accounting Theaters Securities Museums Insurance
- 17. Type of Relationship between Service Organization and Its Customers Nature of Service Delivery “Membership” relationship No formal relationship Insurance Radio station Telephone subscription Police protection Continuous delivery Electric Utility Lighthouse of service Banking Public Highway Long-distance phone calls Restaurant Theater series tickets Pay phone Discrete transactions Transit pass Toll highway Sam’s Wholesale Club Movie theater Airline frequent flyer Public transportation
- 18. Extent to Which Service Characteristics Are Customized Extent to Which Personnel Exercise Judgment in Meeting Customer Needs High Low Surgery Preventive health programs High Taxi services Education (large classes) Gourmet restaurant Family restaurant Telephone service Public transportation Hotel services Spectator sports Low Retail banking Movie theater Cafeteria Institutional food service
- 19. Availability of Service Outlets Nature of Interaction between Customer and Service Organization Single site Multiple site Customer travels to Theater Bus service service organization Barbershop Fast-food chain Service provider Taxi Mail delivery travels to customer Pest control service AAA emergency repairs Taxi Transaction is at Credit card company Broadcast network arm’s length Local TV station Telephone company
Editor's Notes
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