Classification of Services 2010

8/4/2019 Classification of Services 2010

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CLASSIFICATION OF

SERVICES



CLASSIFICATION OF SERVICES

• Classification of services enables a betterunderstanding of the particular service under

consideration.

• It highlights the similarities and differencesbetween the service being classified and

other services

• It can assist in the development of marketingstrategies and tactics as services in the same

category will face some similar challenges



Selected Ways of Classifying

Services

• Degree of tangibility/intangibility of service processes

• Who or what is direct recipient of service process

– customers

– possessions belonging to customers

• Place and time of service delivery

• Customization vs. standardization

• Nature of relationship with customers

• Extent to which demand and supply are in balance

• Facilities, equipment, people as part of the service



Classification on the basis of the Nature of the

Service Activity

• Based on differences in nature of service act(tangible/intangible) and who or what is direct

recipient of service (people/possessions), there

are four categories of services: – People processing

– Possession processing

– Mental stimulus processing – Information processing



Four Categories Of Services

Information

processing

(services directed at

intangible assets):

Accounting

Banking

Nature of the Service Act

People Possessions

Tangible ActionsPeople processing


people’s bodies):

Barbers

Health care

Who or What Is the Direct Recipient of the Service?

Possession processing


physical possessions):

Refueling

Disposal/recycling

Mental stimulus

processing (services directed at

people’s minds):

Education

Advertising/PR

Intangible Actions



People Processing

• Customers must:

– Physically enter the service

factory – Co-operate actively with the

service operation

• Managers should think about

process and output fromcustomer’s perspective

– To identify benefits createdand non-financial costs:

• Time, mental, physical effort

Four Categories Of Services



Possession ProcessingPossession Processing

Customers are less

physically involved

compared to peopleprocessing services

Involvement is limited

Production and

consumption areseparable



Mental Stimulus ProcessingMental Stimulus Processing

Ethical standards required

when customers who depend

on such services canpotentially be manipulated

by suppliers

Physical presence of

recipients not requiredCore content of services is

information-basedCan be “inventoried”



Information ProcessingInformation Processing

Information is the most

intangible form of service

outputBut may be transformed into

enduring forms of service

output

Line between informationprocessing and mental

stimulus processing may be

blurred.



Classification of services:

By nature of service

• Healthcare

• Passenger transportation

• Beauty saloons

• Exercise clinics

• Restaurants

• Hairdressers

• Freight transportantion

• Industrial equipment repair

• Laundry and dry cleaning• Lawn care

• Veterinary care T a n g i b l e

a c t i o n s

People Things

Service directed at

people’s bodies:

Service directed

at goods:



Classification of services:

By nature of service

• Education

• Broadcasting

• Information services

• Theaters

• Museums

• Banking

• Legal services

• Accounting

• Securities

• Insurance I n t a n g i b l e

a c t i o n

s

People Things

By C. Lovelock

Service directed at

people’s minds:

Service directed

at intangible assets:



Implications of Different Service Processes:

Design of the Service Factory

People-processing servicesrequire customers to visit the“service factory,” so:

– think of facility as a “stage” for

service performance

– design process around customer

– choose convenient location

– create pleasing appearance,avoid unwanted noises, smells

– consider customer needs--info,

parking, food, toilets, etc.



Implications of Different Service

Processes:Alternative Channels for Service

DeliveryFor possession-processing, mental-stimulus

processing, or information processing services,alternatives include:

1. Customers come to the service factory2. Customers come to a retail office

3. Service employees visit customer’s home or workplace

4. Business is conducted at arm’s length through

- physical channels (e.g., mail, courier service)- electronic channels (e.g., phone, fax, email, Web

site)



Implications of Different Service Processes:

Applying Technology to Service Processes

All services can benefit from IT,but mental-stimulus processingand information-processingservices have the most to gain:

• Remote delivery of information- based services “anywhere,anytime”

• New service features through

Web sites, email, and internet(e.g., information, reservations)

• More opportunities for self-service

• New services can be offered



Strategic Service Classification (Relationship with

Customers/ Nature of Service Delivery)

Type of Relationship between Service Organization & CustomersNature of

Service Delivery “Membership” relationship No formal relationship

Insurance Radio station

Telephone subscription Police protectionContinuous delivery Electric Utility Public Highway

of service Banking

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



Strategic Service Classification (Customization

and Judgment)

Extent to Which Service Characteristics AreCustomized

Extent to Which High Low

Personnel High Surgery Education

Exercise Judgment Taxi services (in large classes)

in Meeting Customer Gourmet restaurant Family restaurant

Needs

Telephone service Public transportation Hotel services Spectator sports

Low Retail banking Movie theater

Cafeteria Institutional food service

Classification of services: By method of service



Classification of services: By method of service

delivery

Customer goes to service

organization

Service organization comes to

customer

Customer and service organization

transact remotely (mail or electronic

communications)

Drama Theater

Barbershop

Bus service

Fast-food chain

Lawn Care

Mobile car

wash

Credit card company

Local TV station

Mail delivery

Broadcast network

Telephone company

Type of Interaction between Customer

and Service Organization

Single Site Multiple

Sites

Availability of Service Outlets

Classification of Services 2010

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