SERVICES MANAGEMENT DEFINITIONS A service is an act or performance offered by one party to another.

. The performance is essentially intangible and does not result in ownership of any factors of production Services are economic activities that create value and provide benefits for customers at specific times and places bringing about a desired change in or on behalf of the recipient of the services

A service is a set of singular and perishable benefits delivered from the accountable service provider, mostly in close coactions with his service suppliers, generated by functions of technical systems and/or by distinct activities of individuals, respectively, commissioned according to the needs of his service consumers by the service customer from the accountable service provider, rendered individually to an authorized service consumer at his/her dedicated request, And, finally, consumed and utilized by the requesting service consumer for executing and/or supporting his/her day-to-day business tasks or private activities. A service is the non-material equivalent of a good. Service provision has been defined as an economic activity that does not result in ownership and is claimed to be a process that creates benefits by facilitating either a change in customers, a change in their physical possessions, or a change in their intangible assets. Meaning Service plays an important role in every nationals economy and country economy always depends on service infrastructure like transportation, communication, education and government services. In today's economy, you don't have to produce anything to get rich not have to employ anybody. Now days money rests on bigger markets and more ways to make money. Having a name, a status, an idea can be sufficient. E. g. entertainment and sports figures make money by bringing people happiness. A service is a financial activity that is basically intangible and does not result in the ownership of anything. Service can not be owned by anyone, The American economy is quickly becoming service leaning. According to the Monthly Labor Review Online, after Second World War factory jobs declined in figure, while servicebased employment increased. And it is increasing with rapid growth. Difference between services and manufacturing processes comprises the nature of outputs and the primary production processes, which are closely related. Service inputs include the facility where the service is provided, any products that are essential in providing the service. Even product-based organizations must give and manage a service package for their clientele. The bunch of services might include pre-sale services such as technical advice and dependable delivery, as well as post-sale services such as prompt repair and training. Not like most products, services are intangible, inseparable, variable and perishable.

Intangibility: Cannot be seen, felt, tasted, smelt or heard before being purchased Challenge: Making the intangible, tangible

Inseparability: reflects the interconnection between the service provider, customer receiving the service and customers sharing the service experience

Challenge: Increase productivity of providers who are inseparable from the product

Heterogeneity: Services delivered vary in quality, time consumed in delivery and the extent of service provided Challenge: Standardise quality in the face of variability

Perishability: The services cannot be stored Challenge: Influence demand movements and supply capacities better to overcome service perishability

Service Characteristics Intangibility of service: Service cannot be defined as physical attributes because it cannot be seen, tasted, felt, heard, touched or smelled before it is bought, so it is difficult for consumers to tell in advance what they will be getting. (Sheila Webber, 2001) The experience consumers obtain from the service has an impact on how they will perceive it. And perceived service is risky and difficult to evaluate, customer tend to rely more on personal references, reputation, facilities of the service provider as an indication of quality. Service marketers identify the feelings that they want the customer to experience as a result of the service. They stress the positive elements of tangibility in the service, make all communications with the customer very clear and focus constantly on service quality. For example when anybody buys a car, he/she takes it to test drive, if they like it than only pay and buy the car ,never pay for test drive. But if you buy a meal at a restaurant, you do not know what is going to serve. Now buyers only look at tangible evidence like cleanliness, decoration, staff movement, which provide the information of quality of intangible service. (Kotler et al. 1996, 61) Inseparability of service: Services cannot be separated from the service supplier. It is labour intensive. After it is sold, the customer can not be taken away from the

producer it is simultaneously produced and consumed. It is being produced at the same time that the customer is receiving. So customer is also part of the product. For example in a restaurant, you order your meal, during the time of waiting and delivery of the meal, the service provided by the service provider is all part of the service production process and is inseparable, the staff in a restaurant are as part of the process as well as the quality of food provided. Perishability of service: a characteristic of services unused capacity cannot be stored or saved for future sale or use, it perishes after a specific time. (Sheila Webber, 2001) For example a 200 room hotel that only sells about 160 rooms for particular night. It can not inventory the remaining 40 rooms and sell them next night; revenue lost from these 40 unsold rooms is gone forever, because of perishable character of service. same in a play ground or airlines, where if a match is held today and few seats are not sold lets take because of less popular team are playing these seats can not be sold in next match. And in airlines also for a destination all seats are not sold, revenue will be gone once journey over, so if these seats were sold even at low price some revenue could have earn. Thus service is perishable; it perishes if it is not used at particular time. Heterogeneity or variability of service: It is very difficult to make each service experience identical, since services are not produced by a single entity and then distributed to consumers, the quality of services may vary depending on who provides the service as well as when, where, and how they are provided. There is a strong possibility that the same question would be answered slightly differently by different people and even by the same person at different times. (Wolak. R, 1998) A guest can receive excellent service one day and not that good another day from the same person, because service person may have some personal problem or not have felt well. If travelling by plane the service quality may differ from the first time you travelled by that airline to the second, because the airhostess is more or less experienced. (Kotler et al. 1996, 61)

Simultaneity of service: Services are being produced and consumed at the similar time. You buy not just the service but also a section of how the service is created and delivered. Services companies cannot classify functions like sales, customer service, etc. like you can in manufacturing. Yes, they still possibly need a marketing department, but all workforce who deal with customers need to be well informed.

key characteristics. 1. 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. 2. Perish ability Services are perishable in two regards 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 and consume the service during this period, the service cannot be performed for him. From the perspective of the service provider, this is a lost business opportunity as he cannot charge any service delivery; potentially, he can assign the resources, processes and systems to another service consumer who requests a service. Examples: The hair dresser serves another client when the scheduled starting time or time slot is over. 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. 3. 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 preparatorily assign resources and systems and actively keep up appropriate service delivery readiness and capabilities. 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. 4. 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. 5. 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). 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. Each of these characteristics is retractable per se and their inevitable coincidence complicates the consistent service conception and makes service delivery a challenge in each and every case. Proper service marketing requires creative visualization to effectively evoke a concrete image in the service consumer's mind. From the service consumer's point of view, these characteristics make it difficult, or even impossible, to evaluate or compare services prior to experiencing the service delivery. Mass generation and delivery of services is very difficult. This can be seen as a problem of inconsistent service quality. Both inputs and outputs to the processes involved providing services are highly variable, as are the relationships between these processes, making it difficult to maintain consistent service quality. For many services there is labor intensity as services usually involve considerable human activity, rather than a precisely determined process; exceptions include utilities. Human resource management is important. The human factor is often the key success factor in service economies. It is difficult to achieve economies of scale or gain dominant market share. There are demand fluctuations and it can be difficult to forecast demand. Demand can vary by season, time of day, business cycle, etc. There is consumer involvement as most service provision requires a high degree of interaction between service consumer and service provider. There is a customer-based relationship based on creating long-term business relationships. Accountants, attorneys, and financial advisers maintain long-term relationships with their clients for decades. These repeat consumers refer friends and family, helping to create a client-based relationship.

INTANGIBILITY: Marketing challenges Lack of ability to be stored: Cannot be stored as buffers for periods of high demand. This translates into constant supply and demand problems (physicians, movie seats) Lack of protection by patents: Since the service is intangible , it cannot be patented. New or existing services can be copied, hence difficulty in maintaining a differential service advantage over competition Difficult to display or communicate services: How does one get the customer to notice the service? Due to intangibility the task of explaining the merits of the service to consumers is highly challenging Difficult to price the services: Products are priced based on cost-plus basis, while in services the cost can be only attributed to labour (doctor charges). INTANGIBILITY: Possible Marketing SOLUTIONS Use of tangible clues: Consumers look a tangible clues or physical evidence surrounding the service. (quality of furniture, appearance of employees, logos) Use of personal sources of information:

Sources like friends, family, opinion leaders are used by consumers to gather information, word-of-mouth advertising

Creation of strong organisational brand image: If the brand is well known and respected, it lowers the perceived risk in the eyes of the consumer and results in loyalty
INSEparability : Marketing challenges Physical connection of the service provider to the service: Service provider should be physically present to deliver the service (dentist). Faceto-face interactions with customers makes employee satisfaction crucial. Involvement of the customer in the production process: Requires the customer to be physically present to receive the service (surgery, haircut) or present at the start and end of service ( dry cleaning, auto repair), or to be mentally present (adult education). The customer has a direct impact on the type of service desired Involvement of other customers in the production process: Since production and consumption happen simultaneously, several customers share a service experience. This could be negative or positive (restaurants ve, theatre +ve) INSEparability: Possible Marketing SOLUTIONS Emphasis on selecting and training public contact personnel: Unhappy employees can affect both, customers in direct contact as also other employees. A bright, highly motivated employee creates a more pleasant experience for the customer. A well trained employee also gives the customer a sense of gratification, training in skills like reliability, empathy, assurance, etc Consumer Management: Can be minimised through effective consumer management. (separating smokers from non-smokers, restaurant reservations) Use of multisite locations: Multisite locations would reduce distance for travel to avail of service, offer the customer better service at each location heterogeneity : Marketing challenges Lack of ability to control service quality before it reaches the consumer Most errors are one-time events and cannot be foreseen nor corrected ahead of time Consistency of service varies from firm to firm, among employees of the firm and also while interacting with the same service provider on day-to-day basis Service standardisation and quality control are difficult to achieve and maintain since each employee is a different personality

heterogeneity : Possible Marketing SOLUTIONS

 Customisation: Producing or creating services customised exactly to the consumers specifications. Such services end up satisfying a customer, but take longer to produce. However, the service provider could end up charging a premium for such services
Standardisation: The service firm could look at standardisation of services through training employees and service providers A better option is to replace human capital with machines (ATMs, automated car wash) perishability : Marketing challenges Refers to the fact that services cannot be stored or inventoried Unused capacity is lost forever Some services can inventory a part of their services (mostly related to goods) Matching demand and supply is a major problem

perishability : Possible Marketing SOLUTIONS

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DEMAND STRATEGY: Creative pricing: early bird specials, price offs, discount coupons Reservation system: guarantees minimum usage of services. Drawbacks could be customers no showing up in time for the consumption of service, as well as increasing customer expectations since the service would available at a specific time Development of complementary services (lounge in a restaurant) Development of non-peak time demand; use of non peak time to prepare for the pea time demand SUPPLY STRATEGY: Part time employee utilisation Capacity sharing (service cooperatives, doctors for expensive medical equipment) Utilisaion of third parties (travel agents

Characteristics : Some Characteristics of Transportation1# it is science of supply 2# Logistics are closely related with management of channel of distribution. 3# it is the management of flow or movement of goods.

4# it is managerial activity. 5# it function is linked between the centers of production and centers of Consumption. Factors Affecting Transportation System :Since Transportation is integral part of logistics. Transportation coordination is an essential in developing countries so as to achieve full utilization of scarce resources. These Elements are:1# Nature of Products:The mode of transportation depends on the product to be transported. The safety of the products is very important factors. The product should not only reach the destination in time, it should also intact. Another issue involved is the cost of transportation. If the product is high value and low volume (like diamonds and gold) the ideal mode of transportation would be by air. The high volume of product is easily absorb airfreight. However if the product is low value and high volume the ideal mode of transportation would be by sea. Each type of products requires different type of transportation arrangement, For example- a product like fertilizer or wheat would need a very different logistics system than fresh fruits or toothpastes or maruti cars. Bulky products like wheat and fertilizer could be shipped without much packing but perishable products need careful packing. 2# Location of Manufacturing Plants:Normally the manufacturing plants are located either close to the source of raw material or close to market. In such case, if the manufacturing plant is close to the port or airport, the movement of material would be easy. If the plant is far away then the availability of goods road become critical. Hence the location of the plant in relation to the port is an important element of logistics system now a days many countries which are close to seaport or international airport. 3# Availability of Infrastructure:Infrastructure is the backbone of industry in any country. If the infrastructure of the country is strong, its industry can prosper. This includes good road, railways, air transport and inland waterways system, efficient telecommunication system and modern port with capability to break bulk commodities etc. 4# Availability of Different Modes of Transportation:Now a days export cargo moves on various mode of transportation. If the air services are available to an exporter of flowers or vegetables his product can reach overseas markets in fresh condition and in time. However in absence of air services he has to depend upon refrigerated to carry his cargo to the nearest port or air port. This also causes delays in arrival of the cargo of the destinations. Efficiency of logistics system depends upon the availability of various modes of transportation. 5# Dealer/Distributor Networks:-

This important component of products-mix of any company. A company may have an excellent product which is attractively priced aggressively promoted but if it does not have an efficient system, its success in the market will be doubtful. A dealer /distributors is the vital link between a manufacturer and customers. A distributor who willing to keep adequate stocks of the products makes the logistics system more effective. 6# Government Policies:Logistics system needs to be designed by the rule, regulation and policies of exporting and importing countrys government. Government policies related to sales tax excise duty, octroi, MODVAT and motor vehicle act etc. in international business, where many developed countries under Generalized System of Preference (GSP), the exporter can avail the benefit of zero import duty. 7# Cost of Transportation:Transportation cost nearly accounts for 15 to 35% of total cost of products or imported. There is direct relation between cost, speed and flexibility with the choice of transport. The cost decrease as we go from air to road transport, to rail transport, to waterways. The freight charges depend upon type of material, size, bulk, fragility and packing. Fundamentally services differ from products in terms of how they are produced, consumed, and evaluated. Some of the key characteristics unique to service are: a. Intangibility: Services are basically intangible. The intangible nature of services also presents a problem for customers. When buying a product, the customer is able to see it, feel it, and test its performance before purchase. For a service, however, the customer must rely on the reputation of the service firm. b. Inseparability: Production and consumption of many services are inseparable e.g. delivering a lecture. Quality in services often occurs during service delivery whereas quality in products is usually engineered at the manufacturing plant and delivered intact to the customer. Unlike goods producers, service providers do not have the benefit of a factory serving as a buffer between production and consumption. Service customers are often in the service factory, observing and evaluation the production process as they experience the services e.g. in KFC outlet. e. Perishability A service is a perishable commodity. Consider an empty airline seat, an unoccupied hospital or hotel room, or an hour without patient in the day of a dentist. In each case, a

lost opportunity has occurred. Because service cannot be stored, it is lost forever when not used. Plus the consumer cannot retain the actual service after it is produced. However the effect of the service can be retained for long time.