Nature, characteristics of services

Nature, characteristicsAnd

Classification of services

Differentiating services from goods

Search goods

Experienced goods

Prior purchase/useOnly after buying or after consumption

Tangible Intangible

Goods

S.NO. Physical goods services

1 Tangible Intangible

2 Homogeneous Heterogeneous

3 A thing An activity and process

4 Core value produced in factory

Core value produced in the buyer and seller interactions

5 Customer do not participate in the production process

Customer participate in the production

6 Can be kept in stock Cannot be kept in stock

7 Transfer of ownership No transfer of ownership

8 Production and distribution are separated from consumption

Production ,distribution and consumption are simultaneous process

Differences between services and physical goods

Service/Product BundleElement Core Goods

ExampleCore Service

Example

Business Custom clothier Business hotel

Core Business suits Room for the night

PeripheralGoods

Garment bag Bath robe

PeripheralService

Deferred payment plans

In house restaurant

Variant Coffee lounge Airport shuttle

The Service Process Matrix

Degree of Interaction and Customization Low High

Service factory: Service shop:

* 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

Degre

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The Service Package

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.

The Service Package (cont.)

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.

Distinctive Characteristics of Services

Simultaneity

Perishability

Intangibility

Variability

Inseparability

Simultaneity

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.

Perishability

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.

Intangibility

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.

Variability

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, current 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).

Variability

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.

Inseparability

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.

Inseparability

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.

Strategic Service Classification (Nature of the Service Act)

Strategic Service Classification (Nature of the Service Act)

Direct Recipient of the ServiceNature 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

Strategic Service Classification (Relationship with Customers)Strategic Service Classification (Relationship with Customers)

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

Strategic Service Classification (Customization and Judgment)Strategic Service Classification (Customization and Judgment)

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

Strategic Service Classification (Method of Service Delivery)

Strategic Service Classification (Method of Service Delivery)

Availability of Service OutletsNature 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

Open Systems View of Services

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