CHARACTERISTICS &

CLASSIFICATION OF SERVICES
 SERVICE DEFINITIO
“ A service is an act of performance that on
party can offer to another that is essential
intangible and does not result in the ownership
anything. Its production may or may not be t
to a physical product.”
- Ph
Kotler
CHARACTERISTICS OF SERVICE MARKETING

1. INTANGIBILITY
2. PERISHABILITY
3. INSEPARABILITY
4. HETEROGENEITY
5. OWNERSHIP
6. SIMULTANEITY
7. QUALITY MEASUREMENT
8. NATURE OF DEMAND
 Characteristics of Services

 A service is an act or performance offered by one

party to another.
 They are economic activities that create value
and provide benefits for customers at specific
times and places as a result of bringing desired
change.
 The term service is not limited to personal
services like medical services, beauty parlours,
legal services, etc. According to the marketing
experts and management thinkers the concept of
services is believed to be a wider one.
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.
While selling or promoting a service one has to
concentrate on the satisfaction and benefit a
consumer can derive having spent on these
services.
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.

Examples are an unoccupied building, under-utilised

skills of a person, credit unutilized, etc. are economic
waste
EXAMPLES OF PERISHABILITY
 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.
Donald Cowell states ‘Goods are produced,
sold and then consumed whereas the
services are sold and then produced and
consumed’.
INSEPARABILITY EXAMPLE
 Taxi operator drives taxi, and the passenger uses
it.
 The presence of taxi driver is essential to
provide the service.
4. HETEROGENEITY
This character of services makes it difficult to set a
standard for any service

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.

e.g. a consumer can use personal care services or

medical services or can use a hotel room, gym etc.,
however the ownership remains with the
providers.
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.

 It is very difficult to rate or quantify

services.

 E.g. we can quantify the food served in a

hotel but the way waiter serves the customer
or the behaviour of the staff cannot be
ignored while rating the total process.
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.

E.g. tourists go to hill stations during summer

season wherein public and private transport
utilities are used substantially.
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
 Consumer services
• Pure services : Activities performed that do not
include a tangible product.
• Non-good services - Personal/professional service for a
fee.
• Example: tax preparation.
• Owned-good services - Activities that alter,
improve, or repair products already owned.
• Example: dry cleaning, appliance repair service.
• Rented good services - Provide a product to use for a
brief period for a fee. Example: carpet cleaners,
movie rental.
Classification on the basis of
involvement of customer

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 saloon, dentist,

spa, tourism, transportation, restaurant, lodging
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 /currier, laundry, ATM, warehousing,

landscaping, gardening, office cleaning, repair and
maintenance, freight transportation
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
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
Classification based on
service tangibility
• Services linked to tangible goods.
• In order to experience the service customers
should first purchase the product.
• Eg alterations, warranties
Tangible goods linked to
services
• Service provider offer tangible goods for use
along with the services.
• Eg. Theaters offer 3d glasses along with
movie
Classification on the
business orientation
• Non profit organisation: govt schools a social
service.

• Commercial organization.
Classification on the basis of
requirement of skill and expertise

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

• Non professional services

• Do not require any set of skills
training.
• Eg house keeping, babysitting etc
Classification on the basis of
end user

• Consumer services: beauty case hair case

• Business to business services: market research
and consultancy
• Industrial services: maachine installations
 Classification Of Services –
A Different Approach
Service can be classified in several ways. Various
authors have tried to classify services on the basis of
different features /aspects such as the market
segments, tangibility factor, skill type, etc.
They are enlisted below.
Market segment
Degree of tangibility
Skills of the service provider
Goals of the service provider
Degree of regulation
Degree of labour intensiveness
Degree of customer contact
 In India service sector contributes 60% of the
GDP and 35 % of employment. Around 80 %
of India’s total exports are dominated by high
skilled services , such as software business
services and communication services.
 Market Segment
Service can be classified on the basis of market
segment they are catering to.

Thus we can have service catering to end consumers

such as the hair salon and beauty services , coaching
classes and car wash services and services catering to
organizational customers such as management
consulting, repair and maintenance services for
machines and legal services
 Degree Of Tangibility

Service can be classified into tangible offerings

• Rental Goods ( Hotel Room, Car etc.)
• Owned Goods (T.V Repair etc.)
• Non –Good (College education )
 Skills of the Service Provider

Service can be provided by highly skilled labour and

unskilled labour. Thus service can be classified as
• Professional ( Legal, Medical , management etc. )
• Non professional ( Taxi, security , shoe shining
, laundry , cleaning services etc.)
 Goals Of The Service Provider

Service are differentiated on the basis of the

goals they pursue-whether they are profit
making or non profit making.
• Profit ( Airlines, Hotels , Insurance etc)
• Non-profit ( Indian Postal Service , NGO,
Public libraries , Religious Places etc.)
 Degree Of Regulation

Service are also classified according to the extent

of government regulation on them.
High Regulation ( Airlines, Railways , and
Roadways etc.)
Limited Regulation ( Hospitality sector ) Absent
Regulation ( Barber and Beauty Service, Personal
services, etc.)
 Degree Of Labor Intensiveness

Services can be equipment based or people

based.
Equipment based services –
• completed automated services (ATMs , Coffee
Vending Machines etc.)
• Unskilled Operators (Movie theatre , Dry
cleaning etc)
• Skilled operator (Airlines , Crane machines,
Railways etc.)
 People based Services

• Unskilled (Security Guards, Cleaning services

etc.)
• Skilled labor (Printing, catering etc.)
• Professionals (Lawyer ,Doctor ,Management
consultant , HR Consultant etc.)
Degree Of Customer
Contact
Service is categorized on the basis of customer contact:

High Contact- Where customer spends time , days,

week , month , year like education and hospitality
services

Low Contact –Low contact service is one which the

contact with service system ranges from few minutes to
some hours like appliance repair service, postal services
etc.
JOE