Service is defined as “any activity of 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 a physical product” Philip Kotler.
Factors influencing the growth of the service sector:
Demographic changes: the changes in demographic factors such as
age, gender, income, marital status, and mobility have influenced the growth of the service sector.
Social and lifestyle changes: the growing urban population has
influenced the growth of the services sector.
Economic changes: the growing per capita income and GDP growth of
developed and developing countries have influenced the rapid growth of the services
sector.
Technological changes: the digitalization and improved use of
technology increased the awareness and use of various services.
Political changes: the political initiations for globalization and
liberalization has influenced the growth of services beyond national
boundaries.
Policy changes: the policy changes related to FDP and international
cooperation have positively influenced the growth of the services sector.
Characteristics of Services:
Intangibility: A service can’t be touched, seen, smelt, heard, measured, tested and tested. But these are possible with goods.
Inseparability: The goods are manufactured and consumed separately. But the service is delivered and consumed simultaneously and can’t be separated.
Inconsistency: Goods are known for standardization as the machines produce the goods with standard features and qualities. But the services which are mostly offered by human beings can’t be delivered with uniformity and consistency.
Instorability: Goods can be stored after manufacturing and inventory is needed for storing the goods. But services can’t be stored, and they are perishable soon after the expected duration of service delivery.
Generic Differences between goods and services:
- The nature of goods and services is different. Goods are material things and services are non-material things.
- The customer has no involvement in the production of goods, but the customer has involvement in the production and delivery of services.
- Goods are needed distribution channels, but services don’t need distribution channels
- Goods need an inventory system, but services don’t need an inventory system
- Quality standards are easy to be managed for goods, but it is hard to ensure quality standards of services.
- The demand for goods can be forecasted and delivered accordingly, but the demand for the service can fluctuate and it is hard to meet the emergency requirements for service delivery.
Classification of services:
Classification based on the degree of involvement of the customer
- People processing: The kind of service that needs customers to be physically present in order to experience the service. Example: massaging services.
- Possession processing: The kind of service that needs the customer to submit his property only to the service provider. Example: dry cleaning services
- Mental stimulus processing: The kind of service that needs the attention of the customer to be directed towards the service. Example: professional counselling.
- Information processing: The kind of service that requires collecting information, interpreting and offering appropriate advice to customers. Example: legal services and data processing
Classification based on the service tangibility:
- Highly tangible: The services that are based on tangible goods, such as car rental services.
- Services linked to tangible goods, such as services for computers.
- Tangible goods linked to services, such as airline services offer foods and magazines.
- Highly intangible services, such as hair cutting, massage parlour.
No comments:
Post a Comment