Chap 2 uptil 2.33 first lecture

Unit no 2.1 to 2.33Unit no 2.1 to 2.33 11

What are What are Services?Services?

Chapter # 2 Chapter # 2



Service/ProductService/Product BundleBundle

ElementElement Core GoodsCore GoodsExampleExample

Core ServiceCore ServiceExampleExample

BusinessBusiness Custom Custom clothierclothier

Business hotelBusiness hotel

CoreCore Business suitsBusiness suits Stay in Room Stay in Room for the nightfor the night

PeripheralPeripheralGoodsGoods

Garment bagGarment bag ??

PeripheralPeripheralServiceService

Deferred Deferred payment planspayment plans

In house In house restaurantrestaurant

VariantVariant Coffee loungeCoffee lounge Airport shuttleAirport shuttle


What is meant by What is meant by SERVICES?SERVICES?

General Approach:General Approach:““Services are the activities Services are the activities

that could contribute to that could contribute to the economic growth in the economic growth in terms of commercially terms of commercially based or obeying Non based or obeying Non

profit oriented criteria”.profit oriented criteria”.


What is meant by What is meant by SERVICES?SERVICES?

Economist’s Approach:Economist’s Approach:““Services have been Services have been institution based or institution based or

activity based.”activity based.”


Two Main areas of providing Two Main areas of providing services to the economyservices to the economy

Govt Sector

Pvt /Public sector

Commercial Services

Non Profitable Services

Sector Services


Historical Historical developmentdevelopment for for achieving accurate achieving accurate

definition of services:definition of services: By French PhilosophersBy French Philosophers::““Services include all activities Services include all activities

other than agricultural other than agricultural production.”production.”


Contd…Historical Contd…Historical developmentdevelopment

By Adam Smith:By Adam Smith: He CRITICISED on physiocrats &narrated:He CRITICISED on physiocrats &narrated:““Services are barren & unproductiveServices are barren & unproductivebecause they perish in the very instant because they perish in the very instant

ofoftheir performance and do not showtheir performance and do not showconsistency in any tangible commodity”consistency in any tangible commodity”



By Jean Batiste: By Jean Batiste: He Focused on non He Focused on non manufacturing activities & argued Smith’s manufacturing activities & argued Smith’s definition:definition:

““The activities which have utility and giveThe activities which have utility and givesatisfaction to the consumer, like the doctorsatisfaction to the consumer, like the doctor

who cures are productive, and that agriculture,who cures are productive, and that agriculture,manufacturing and commerce should be treatedmanufacturing and commerce should be treated

on equal basis.” on equal basis.” He described immaterial wealth in terms of services He described immaterial wealth in terms of services



By Marshall:By Marshall: He further took over the J.B concept:He further took over the J.B concept:““In the world of new ideas men cannot create In the world of new ideas men cannot create

material things unless or until he will not material things unless or until he will not put his mental and moral values including put his mental and moral values including

his sacrifices and efforts to change the his sacrifices and efforts to change the form or arrangement of matter for his form or arrangement of matter for his

satisfaction that hesatisfaction that he wants.” wants.”


So……So……Western Countries say: Western Countries say:

““Services do not lead Services do not lead to a change in the to a change in the form of a good”.form of a good”.


• By Foote & Hatte:By Foote & Hatte:

They classify services on the They classify services on the basis of service industry:basis of service industry:

Tertiary Industry:Tertiary Industry:Quaternary Industry:Quaternary Industry:Quinary Industry:Quinary Industry:


Contd….Contd….1. Tertiary Industry:1. Tertiary Industry:

RestaurantsRestaurants Barber & SaloonsBarber & Saloons Laundry & dry cleaningLaundry & dry cleaning Home repair & maintenanceHome repair & maintenance Handicraft Handicraft other domestic servicesother domestic services


Contd….Contd….2. Quaternary Industry:2. Quaternary Industry:

TransportationTransportation CommerceCommerce CommunicationCommunication FinanceFinance AdministrationAdministration


Contd….Contd….

3. Quinary Industry:3. Quinary Industry: Health careHealth care EducationEducation RecreationRecreation


PPurpose of this Classification is…urpose of this Classification is…

to define services by to define services by changing and changing and improving the improving the

recipient through recipient through effective division of effective division of

labor.labor.


Some other views :Some other views :

Fuchs excludedFuchs excluded : : transportation, communications & transportation, communications & public utilities and place them in public utilities and place them in

industrial sector-------------- industrial sector-------------- because ofbecause of

their dependence on heavy capital their dependence on heavy capital equipment & complex technology.equipment & complex technology.


Some other views :Some other views :

Whitemann :Whitemann : studied services as: studied services as: transportation,communicationtransportation,communication

s, Distributive s, Distributive trades, trades, Insurance, professional and Insurance, professional and scientific services, recreation, scientific services, recreation, public admin & defensepublic admin & defense..


Marketing Marketing Approaches to Approaches to

Services:Services:Definition Of ServicesDefinition Of ServicesCharacteristics Of ServicesCharacteristics Of ServicesClassification Of ServicesClassification Of ServicesFunctional DifferencesFunctional DifferencesConceptual FrameworksConceptual Frameworks


Definition of Definition of Services:Services:

According to American According to American Marketing Association: (1960)Marketing Association: (1960)

““Services can be defined as: Services can be defined as: Activities, benefits or satisfactions Activities, benefits or satisfactions

which are offered for sale, or are which are offered for sale, or are provided in connection with the provided in connection with the sale of goods.”sale of goods.”


Services are those separately identifiable, essential

intangible activities which provide want satisfaction and

that are not necessarily required to the sale of product

or another service. To use service it is not necessary to transfer the ownership to the

tangible goods.

Contd…..


For Example:

Hiring a room does not mean that u take the ownership of the room this is the concept that temporary possession cant make you the real owner by giving an amount of using that service or product.


Gronroos Added:Gronroos Added:““The service is the object of marketing that is The service is the object of marketing that is

the company is selling the service as the the company is selling the service as the core of its market offer.”core of its market offer.”

Kotler described: “A service is any activity or benefit 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 physical

product.”


It is now evaluated that

critics and favors developed

relationship between service

product and marketing due to

its nature of being intangible.


Intangibility (“u can’t touch this”)

Inseparability Heterogeneity Perishability Ownership

ChCharacteristics of aracteristics of Services:Services:


Have LOOK on the details of service characteristics!!


ITS

QUIZ TIME!!!!


Test your knowledgeTest your knowledge In India weddings are timed to occur when In India weddings are timed to occur when

Venus is in the ascendant and Jupiter is strong. Venus is in the ascendant and Jupiter is strong. This day is deemed lucky. In 2005, almost 15, This day is deemed lucky. In 2005, almost 15, 000 couples in New Delhi had their wedding on 000 couples in New Delhi had their wedding on December 25, the day astrologers announced December 25, the day astrologers announced would be the best day for a wedding. The would be the best day for a wedding. The service provided by the astrologers is an service provided by the astrologers is an excellent illustration of the _____ of services. excellent illustration of the _____ of services.

A)A) intangibility intangibility B)B) comparability comparability C)C) divisibility divisibility D)D) perishability perishability E)E) compatibility compatibility


Test your knowledgeTest your knowledge The first time Terry brought his car to Auto Lube to The first time Terry brought his car to Auto Lube to

have the oil changed he was very satisfied with the have the oil changed he was very satisfied with the service. The service manager consulted him several service. The service manager consulted him several times while his car was being serviced, asked him if times while his car was being serviced, asked him if there were any problems with the car, recommended there were any problems with the car, recommended when additional services should be performed, and when additional services should be performed, and answered questions directly and politely. However, answered questions directly and politely. However, when Terry went back to Auto Lube after three when Terry went back to Auto Lube after three months to have his oil changed again, he was not months to have his oil changed again, he was not satisfied with the service. The manager spoke to him satisfied with the service. The manager spoke to him only when he arrived and when he paid his bill. In only when he arrived and when he paid his bill. In addition, the manager was impatient and unfriendly addition, the manager was impatient and unfriendly during the interaction. Terry's experience at Auto during the interaction. Terry's experience at Auto Lube illustrates the _____ of services. Lube illustrates the _____ of services.

A)A) intangibility intangibility B)B) heterogeneity heterogeneity C)C) simultaneous production and consumption simultaneous production and consumption D)D) perishability perishability E)E) divisibility divisibility


Test your knowledgeTest your knowledge The Offshore Sailing School in Jersey City, New The Offshore Sailing School in Jersey City, New

Jersey offers a basic sailing course, which takes place in Jersey offers a basic sailing course, which takes place in three days over two weekends, for $495. Students three days over two weekends, for $495. Students enrolled in the course attend classroom sessions that enrolled in the course attend classroom sessions that cover the theory and technology of sailing and receive cover the theory and technology of sailing and receive hands-on sailing instructions in the water that hands-on sailing instructions in the water that introduces them to all fundamental sailing skills. introduces them to all fundamental sailing skills. Student participation in the Offshore Sailing School's Student participation in the Offshore Sailing School's classroom sessions and hands-on sailing instructions classroom sessions and hands-on sailing instructions illustrates the_____ characteristic of services. illustrates the_____ characteristic of services.

A)A) versatility versatility B)B) heterogeneity heterogeneity C)C) simultaneous production and consumption simultaneous production and consumption D)D) perishability perishability E)E) intangibility intangibility Answer: Answer:


Test your knowledgeTest your knowledge In India weddings are timed to occur when the In India weddings are timed to occur when the

stars and planets are in certain positions, which are stars and planets are in certain positions, which are deemed lucky. In 2005, almost 15, 000 couples in New deemed lucky. In 2005, almost 15, 000 couples in New Delhi had their wedding on December 25, the day Delhi had their wedding on December 25, the day astrologers announced would be the best day for a astrologers announced would be the best day for a wedding. Wedding planners had to prepare all year for wedding. Wedding planners had to prepare all year for this one date instead of planning lots of weddings this one date instead of planning lots of weddings throughout the year. The service provided by the throughout the year. The service provided by the Indian wedding planners illustrates the _____ Indian wedding planners illustrates the _____ characteristic of services. characteristic of services.

A)A) versatility versatility B)B) heterogeneity heterogeneity C)C) simultaneous production and consumption simultaneous production and consumption D)D) perishability perishability E)E) intangibilityintangibility


Test your knowledgeTest your knowledge When Alicia and Jordan dined at Formia Ristorante, a When Alicia and Jordan dined at Formia Ristorante, a

contemporary Italian restaurant in New Jersey, they contemporary Italian restaurant in New Jersey, they both enjoyed Formia's coy, smart, and embracing both enjoyed Formia's coy, smart, and embracing atmosphere. Formia creates this atmosphere with a atmosphere. Formia creates this atmosphere with a single large dining room that measures 20 by 60 feet single large dining room that measures 20 by 60 feet and contains 14 roomy tables. Ceiling fans slowly and contains 14 roomy tables. Ceiling fans slowly swirl as candlelight dances across the tables that are swirl as candlelight dances across the tables that are attentively cared for by servers. Vertical pink and attentively cared for by servers. Vertical pink and white florid patterns emerge from old wainscoting. white florid patterns emerge from old wainscoting. Finally, Formia's two-page menu offers guests a range Finally, Formia's two-page menu offers guests a range of pasta, chicken, veal, and seafood entrees, in of pasta, chicken, veal, and seafood entrees, in addition to nightly specials that are handwritten and addition to nightly specials that are handwritten and presented on large index cards. Alicia and Jordan presented on large index cards. Alicia and Jordan experienced the _____ element of Formia Ristorante's experienced the _____ element of Formia Ristorante's services marketing mix. services marketing mix.

A)A) product product B)B) production production C)C) process process D)D) place place E)E) physical evidencephysical evidence


Test your knowledgeTest your knowledge Extron Electronics makes coaxial cables for connecting computers to all Extron Electronics makes coaxial cables for connecting computers to all

types of peripheral devices like printers, modems, and fax machines. For types of peripheral devices like printers, modems, and fax machines. For the benefit of its customers, Extron provides a laminated card with the benefit of its customers, Extron provides a laminated card with pictures of all the possible cable connections that a customer could need. pictures of all the possible cable connections that a customer could need. With this card, a customer can order from one to any number of With this card, a customer can order from one to any number of connectors with as many feet of cable as is needed. Orders can be connectors with as many feet of cable as is needed. Orders can be placed using a toll-free number, a fax number, or an e-mail address. placed using a toll-free number, a fax number, or an e-mail address. Company reps are also available 24-hours a day in case the customer is Company reps are also available 24-hours a day in case the customer is not sure which drawing on the card matches his or her needs. Orders are not sure which drawing on the card matches his or her needs. Orders are shipped within 48-hours of receipt. If a customer is not completely shipped within 48-hours of receipt. If a customer is not completely satisfied with his or her order, Extron has a 100 percent satisfaction satisfied with his or her order, Extron has a 100 percent satisfaction guaranteed return policy. Which of the following trends that has guaranteed return policy. Which of the following trends that has influenced the development of services marketing concepts and influenced the development of services marketing concepts and strategies as illustrated by Extron's focus on customer service? strategies as illustrated by Extron's focus on customer service?

A)A) the increasing importance of service industries to the U.S. the increasing importance of service industries to the U.S. and world economies and world economies

B)B) the increase of government regulation of service industries the increase of government regulation of service industries C)C) the growth in information-based technology the growth in information-based technology D)D) increased competition in professional services increased competition in professional services E)E) manufacturing firms are placing increased emphasis on manufacturing firms are placing increased emphasis on

providing services providing services

Chap 2 uptil 2.33 first lecture

Documents

knowledgein

day astrologers

auto lube

deemed lucky

tertiary industry

quinary industry

oil changed

quaternary