A Ser. Markt.I

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1. UNDERSTANDING SERVICES

A. Service Product Difference/ ServicePeculiarities

(i) 4 I’s of Services a) Intangibility - intangibility spectrum

b) Inconsistency - heterogeneity

c) Inseparability - simultaneous production& consumption

d) Inventory - perish ability

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Characteristics of Services

Compared to Goods

Intangibility

Perishability

SimultaneousProduction

andConsumption

Heterogeneity

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Examples of Service Industries

• Health Care

– hospital, medical practice, dentistry, eye care

• Professional Services

– accounting, legal, architectural

•

Financial Services – banking, investment advising, insurance

• Hospitality

– restaurant, hotel/motel, bed & breakfast

– ski resort, rafting

• Travel

– airline, travel agency, theme park

• Others

– hair styling, pest control, plumbing, lawn maintenance, counseling

services, health club, interior designArvind Shukla



1. UNDERSTANDING SERVICES

Service industries & companies- whose core product isa service

e.g. lodging – Taj Hotels, transportation- Indian Airlines

Service as products – wide range of intangible productofferings

e.g. IBM software consultancy, Accenture

Customer Service- in support of the co’s core productcall centers

Derived Service – service provided by the goodse.g. car provides transport service

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Implications of Intangibility

• Services cannot be inventoried

• Services cannot be readily displayed or

communicated

• Services cannot be easily patented

• Pricing is difficult

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Implications of Simultaneous

Production and Consumption

• Customers participate in and affect thetransaction

•Customers affect each other

• Employees affect the service outcome

• Decentralization may be essential

• Mass production is difficult

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Implications of Heterogeneity

• Service delivery and customer satisfaction

depend on employee and customer actions

• Service quality depends on manyuncontrollable factors

•There is no sure knowledge that the servicedelivered matches what was planned and

promoted

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Implications of Perish ability

• It is difficult to synchronize supply and

demand with services

• Services cannot be returned or resold

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1.UNDERSTANDING SERVICES (Contd.)

B. Services Marketing Triangle

a. Company

b. Provider

c. Customer

Between a & b - Internal Marketing

Between b & c - Interactive Marketing

Between a & c - External Marketing

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SERVICES CLASSIFICATION

(1) People Processing Services

These services require the customer’s presence

while the service is being provided. Typically suchservices are directed or applied to people and sotheir presence is mandatory. To use, enjoy andbuy these services customers must be preparedto spend time co-operating with the serviceoperation. Typical examples are medical services,

passenger transport, hotels, fitness centres andbeauticians. It is the marketing of these servicesthat is very different to marketing physicalproducts.

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(2) Possession Processing

Such services are aimed at peoples’

possessions, e.g. goods transportation,

laundry and repair services. Clearly these

services do not require customer involvement

in the process and so from a marketing

perspective are less complex than peopleprocessing services.


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• (3) Mental Stimulus / Information Based Services

• Under this heading are a developing range of services aimed at people’s minds and assets, e.g.

entertainment, education. The internet has createdhuge global opportunities for mental stimulus andinformation processing services. e.g. consulting,education, entertainment, finance, travel facilitation,data processing and communication which can nowbe delivered electronically to global markets

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Tangibility Spectrum

Tangible

Dominant

Intangible

Dominant

Salt

Soft Drinks

DetergentsAutomobiles

Cosmetics

AdvertisingAgencies

AirlinesInvestment

ManagementConsulting

Teaching

Fast-foodOutlets

Fast-food

Outlets

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Consumer Evaluation

Processes for Services

• Search Qualities

– attributes a consumer can determine prior to

purchase of a product

• Experience Qualities

– attributes a consumer can determine after

purchase (or during consumption) of a product

• Credence Qualities

– characteristics that may be impossible to evaluate

even after purchase and consumption



1.UNDERSTANDING SERVICES (Contd.)

C. Search, Experience & Credence

Attributes of Services

Manufactured Goods – High on Search Attributes

Services – High on Experience & Credence

Attributes



Continuum of Evaluation for

Different Types of Products

Difficult to evaluateEasy to evaluate

High in search

qualitiesHigh in experience

qualities

High in credence

qualities

MostGoods

MostServices

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Goods versus Services

Source: A. Parasuraman, V.A. Zeithaml, and L. L. Berry, “A Conceptual Model of Service Quality and Its Implications for Future Research,” Journal of Marketing 49

(Fall 1985), pp. 41 –50.

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A Ser. Markt.I

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