DEFINITION,

CHARACTERISTICS &
CLASSIFICATION OF
SERVICES
KRIZIA ANN M. SARIBONG, LPT, MMPA
Instructor
 “ A Service is an act of performance
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

SERVICE DEFINITION
Service Encounter

A Service Encounter is a period of time

during which customer interact
directly with a service. It is also called
as "Moment of Truth”
CHARACTERISTICS OF
SERVICE MARKETING
1. INTANGIBILITY
2. PERISHABILITY
3. INSEPARABILITY
4. HETEROGENEITY
5. OWNERSHIP
6. SIMULTANEITY
7. QUALITY MEASUREMENT
8. NATURE OF DEMAND
1. INTANGIBILITY

Services are intangible we cannot touch them as

they are not physical objects.

A consumer feels that he has the right and

opportunity to see, touch, hear, smell or taste
the goods before they buy them but his is not
applicable to services.

The services are not known to the customer

before they take them.
INTANGIBILITY EXAMPLE

Mobile network providers

like Vodafone , Airtel ,
Reliance , etc.
2. PERISHABILITY

Value of service exists at the point when it is

required.

Services perish as soon as they are used.

Services last for a specific time and cannot be

stored like a product for later use.
3. INSEPARABILITY

Services cannot be separated from the service

provider.

Thus, the service provider would become a part

of a service.

Production and consumption of services go hand

in hand.
INSEPARABILITY EXAMPLE

Taxi operator drives taxi, and the passenger

uses it.
The presence of taxi driver is essential to
provide the service.
4. HETEROGENEITY

The quality of services cannot be standardized.

Systems and procedures are put into place to

make sure the service provided is consistent.

The service firms should make an effort to

deliver high and consistent quality by selecting
good and qualified personnel for rendering the
service.
HETEROGENEITY EXAMPLE

Live concerts like singing ,

dancing and comedy
shows , movies , etc.
5. OWNERSHIP

In the sale of goods, after the completion of

process, the goods are transferred in the name
of the buyer and he becomes the owner of the
goods.

But in the case of services, the users have only

an access to services.

They cannot own the service.

OWNERSHIP EXAMPLE

Membership of a gym
6. SIMULTANEITY

Services cannot move through channels of

distribution and cannot be delivered to the
potential customers and user.

Either users are brought to the services or

providers go to the user.

It is right to say that services have limited

geographical area.
COST & SIMULTANEITY
EXAMPLE
When the producers approach the buyer to
deliver services the cost of those services is
increased. On the other hand it cost time and
money for the buyers to come to producers
directly.

A doctor’s visit to home.

Electronics service, repair & maintenance

centers.
7. QUALITY MEASUREMENT

A service sector requires another tool for

measurement.

We can measure it in terms of SERVICE

LEVEL AGREEMENT (SLA).

It is very difficult to rate or quantify

services.
QUALITY MEASUREMENT
EXAMPLE
We can quantify the food served in a hotel but
the way waiter serves the customer or the
behaviour of the staff, timely delivery , hygiene
etc. cannot be ignored while rating the total
process.

Thus the firm sells good atmosphere,

convenience of customers, consistent quality of
services, etc.
8. NATURE OF DEMAND

The services are fluctuating in nature.

The demand of services can be abnormal,

sudden seasonal, situational & dependent.

Therefore, while identifying the salient

features of services one cannot ignore the
nature of demand.
NATURE OF DEMAND
EXAMPLE
• Service quality level deteriorates during peak
hours in hotels, transportation etc.

• E-Retailers offering huge discounts on festive

occasions

• A marketer should effectively utilize the capacity

without deteriorating the quality to meet the
demand.
 FEW ADDITIONAL
CHARECTERISTICS
I. Services are sold exclusively on the
basis of benefits they offer.

II. Services cannot be made available in

advance.

III. Time utility is critical.

IV. Services cannot be transferred.

V. A service once consumed cannot be

returned.
Classification of
Services
A. Classification on the Basis
of Involvement of Customer

1. People Processing
2. Possession Processing
3. Mental Stimulus
Processing
4. Information Processing
1. People Processing
• Level of involvement can vary.

• Managers must think about processes /

outputs in terms of what happens to
customers or what benefits are created.

• Identify non-financial costs, time, mental and

physical effort, fear, and pain etc.
• Example : healthcare, beauty salon, dentist,
spa, tourism, transportation, restaurant,
lodging
2. Possession Processing
• Working to tight deadlines to restore
customer’s possessions to good working order.

• People are less physically involved and

usually, no real need for them to enter the
service; often limited to requesting the
service; explaining the problem or paying the
bill only.

• Eg : post office /courier, laundry, ATM,

warehousing, landscaping, gardening, office
cleaning, repair and maintenance, freight
transportation
3. Mental Stimulus
Processing
• Services that interact with people’s mind.
• Anything touching people’s mind has power to
shape attitudes and influence behaviour.
• Information based content can be converted to
digital bits, recorded or transformed into
manufactured products viz. CD’s, Video’s, which
can be packed and sold like any physical product.
• Eg education , news , entertainment , Advertising/
PR , video games, music concerts, broadcasting
4. Information Processing

• Most intangible form of service output.

• Customer involvement determined more by
tradition or personal desire to meet face to face
and not by the needs of the operational
process.
• Customer / Supplier learn each other’s needs,
capabilities and personalities by personal
meetings, however this relationship can also be
build / sustained on trust or telephonic contact.
• financial services, accounting , banking,
Insurance, legal services, , MR, software
consulting
B. Classification Based on
Service Tangibility

1. Services Linked to Tangible

Goods
2. Tangible Goods Linked to
Services
1. Services Linked to
Tangible Goods

• In order to experience the service

customers should first purchase the
product.
• Ex: alterations, warranties
2. Tangible Goods Linked
to Services

• Service provider offer tangible goods for

use along with the services.
• Ex: Theaters offer 3D glasses along with
movie
 C. Classification on the
Business Orientation

• Non-Profit Organization- entity that is

created and operated for charitable or socially
beneficial purposes rather than to make a profit
Ex: Government schools a social service.

• Commercial Organization- organization,

institution, corporation, or other legal entity,
including, but not limited to, partnerships, sole
proprietorships, and limited liability companies,
that is organized or operated for the profit or
benefit of its shareholders or other owners
D. Classification on the Basis of
requirement of Skill and Expertise

1. Professional Services
• Requires a set of qualificaion skills
adequate training etc.eg lawyer,pilot

2. Non Professional Services

• Do not require any set of skills
training.
• Ex: house keeping, babysitting etc
 E. Classification on the
Basis of End User

1. Consumer Services- beauty case, hair

case
2. Business to Business Services-
market research and consultancy
3. Industrial Services- machine
installations
 Consumer Services
• Pure Services : Activities performed that do not
include a tangible product. Ex: Massage
• Non-Good Services - Personal/Professional
service for a fee. Ex: Tax Preparation.
• Owned-Good Services - Activities that alter,
improve, or repair products already owned. Ex:
dry cleaning, appliance repair service.
• Rented Good Services - Provide a product to use
for a brief period for a fee. Ex: carpet cleaners,
movie rental.
END OF PRESENTATION.

THANK YOU!!!