Classification of services

September 8, 2018 By Hitesh Bhasin Tagged With: Marketing management articles

In order to be able to make a clear and relevant classification of

services, we would first need to understand the concept of the word
itself. Services usually refer to processes and not physical products.
To understand more, read this article on difference between goods
and services. Some services may include people whereas other
services (like online services) may including objects which are
managed by people.

Examples of services which include people can be a hair salon,

education, theater, restaurants, public transportation. On the other
hand services that include objects include repairs and maintenance,
dry cleaning, banking, legal services, insurance, etc.

The service processes can be either manual or mechanized or both.

It is possible to carry out a classification of services based on two

general dimensions such as what is being processed, whether is it a
person or an object, and how is it being processed? In other
words, what is the nature of the process (tangible or intangible
actions).

In terms of the people processing activities, the level of involvement

of the people can vary significantly. Managers must think about
processes/outputs in terms of what happens to customers and what
is being created. For pricing this category of services, the non-
financial costs, time mental effort as well as fear and pain level must
be identified.

Having your computer broken and taking it to a repair facility is one

example of service included in this category. Customers’ are less
physically involved in this category of services and usually there is
no real need for them to enter the service once he requested the
service, explained the problem and pays the respective service.
Classification of services can be done on the basis of two points.
These two points or factors, are further sub divided into 2 further
variables. All in all, service classification considers four types of
people or objects.

1) Classification of service based on

tangible action
Wherever people or products are involved directly, the service
classification can be done based on tangibility.

a) Services for people – Like Health care, restaurants and saloons,

where the service is delivered by people to people.

b) Services for goods – Like transportation, repair and maintenance

and others. Where services are given by people for objects or goods.
2) Classification of services based on
intangibility
There are objects in this world which cannot be tangibly quantified.
For example – the number of algorithms it takes to execute your
banking order correctly, or the value of your life which is forecasted
by insurance agents. These services are classified on the basis of
intangibility.

a) Services directed at people’s mind – Services sold through

influencing the creativity of humans are classified on the basis of
intangibility.

b) Services directed at intangible assets – Banking, legal services,

and insurance services are some of the services most difficult to
price and quantify.

The most intangible form of service output is represented by

information processing. The customer’s involvement in this type is
service is not required. Generally, customers have a personal desire
to meet face to face but there is no actual need in terms of the
operational process. Consultancy services can be an example of this
type of services where the relationship can be built or sustained on
trust or telephone contact. However, it is more indicated to have a
face-to-face relationship in order to fully understand the needs of
the customer.

A more general classification of services based on the type of

function that is provided through them can be as follows:

1. Business services.
2. Communication services.
3. Construction and related engineering services.
4. Distribution services.
5. Educational services.
6. Environmental services.
7. Financial services.
8. Health-related and social services.
9. Tourism and travel-related services.
10. Recreational, cultural, and sporting services.
11. Transport services.
12. Other services not included elsewhere.