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A service business is one in which the

perceived value of the offering to the
buyer is determined largely by the
services provided to him than the
products offered. This includes the
business of all intangible services
delivered to the customer.

Some of the tangible services where both

the goods and services are provided to the
customer, like restaurants and
supermarkets, also come under the
purview of the services marketing.

The spectrum of services range between

the degree of intangibility and tangibility
of the offerings delivered to the user.
Some offerings are clearly services like
enjoyment of movie, art exhibition or an
athletic event.

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Some of the service offerings also have the

product component like the buying of
contact lenses also requires proper eye
examination and evaluation of the vision
parameters are the offerings of the service
in the process.

Learn about:- 1. Meaning and Definitions

of Service 2. Concept of Service 3.
Characteristics 4. Importance 5.
Classification 6. Nature and Role of
Service Marketing 7. Marketing Mix for
Services

8. Factors Affecting the Channel of

Distribution of Services 9. Differences
between Goods and Services 10.The
Customer Service Gap Model 11. Growth of
Service Marketing 12. Problems in
Marketing of Services 13. Scenario.

Service: Definitions,
Concept, Characteristics,
Importance,
Classification and the
Customer Service Gap
Model
Service – Meaning and
Definitions
Marketing, on the whole, can be divided
into goods marketing and services
marketing. Although according to Philip
Kotler, besides goods and services, a
marketer also markets eight other entities
like Events, Experiences, Persons, Places,
Properties, Organizations, Information
and Ideas; yet it is generally clubbed
together and is widely known as goods and
services. In marketing, services marketing
essentially deals with the products, which
are intangible in nature. Services are
created through a direct interaction
between the service provider and the
customers.

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Goods are physical, tangible articles, while

Services are nonphysical and intangible in
nature and can also satisfy a need like
goods. Financial services – Banking,
Telecom, DTH, Courier, Hotel, Airline,
Multiplex, Train, Doctors, Lawyers,
Healthcare and Management Consultancy
are all examples of services.

With the advancement in the economy, a

country moves from a goods producing
country to a service oriented country. For
example, USA, which is one of the most
developed countries in the world, is having
a 21% – 79% mix of goods and services.

Services can be defined as following:

‘A service is any activity or benefit that one

party can offer to another, which is
essentially intangible and does not result
in the ownership of anything. Its
production may or may not be tied to a
physical product.’ – Kotler, Armstrong,
Saunders and Wong

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‘Services are economic activities that

create value and provide benefits for
customers at specific times and places as a
result of bringing about a desired change
in – or on behalf of – the recipient of the
service.’ – Christopher Lovelock

A service business is one in which the

perceived value of the offering to the buyer
is determined largely by the services
provided to him than the products offered.
This includes the business of all intangible
services delivered to the customer. Some
of the tangible services where both the
goods and services are provided to the
customer, like restaurants and
supermarkets, also come under the
purview of the services marketing.

The spectrum of services range between

the degree of intangibility and tangibility
of the offerings delivered to the user. Some
offerings are clearly services like
enjoyment of movie, art exhibition or an
athletic event.

Some of the service offerings also have the

product component like the buying of
contact lenses also requires proper eye
examination and evaluation of the vision
parameters are the offerings of the service
in the process.

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Services are all or mostly tangible. In some

cases the physical evidence will be there of
transaction that took place but the work
done to execute the transaction will be
tangible. The example may be cited of the
service rendered by the Attorney in
preparing the will document of his client
as the tangibility may be seen as the
physical evidence in preparing the
document while the brain work done to
prepare the same may be intangible.

The inseparability of the buyer and service

provider may be seen on many occasions
while designing and delivery of the
services. This is called as simultaneity. The
services cannot be stored, warehoused or
otherwise kept on hand for sometime
when the demand is high. The services are
also time-sensitive as they cannot be back
ordered. The services are largely need-
based and called for immediate attention
or delivery to the customer.

The doctor’s services are required when

there are patients. Some of the services are
provided to cover the risk irrespective of
its immediate need. The example may be
cited of an insurance company who serves
the client till he or his life insurance is
alive without looking for instant or short-
run benefits. Since a large number of
services are highly intangible, it is difficult
to measure and control the quality and
they cannot be standardized like products.

This makes it difficult for the customer to

evaluate the quality and for employers to
measure and control the quality. The
quality of the services can be assessed
largely on the behavioral dimensions of the
customers and service providers. In view
of the difficulty of quality assessment of
the services it is always risky for the
customer to purchase the same.

The services are largely delivered as per

the customer’s prescription unlike
products which are often standardized.
The interior consultants, tailors,
restaurants and the like render the
customized services. However, there are
some services that have standardized
deliveries like ATM services of banks.
Many services are process rather than
discrete transactions and the talents and
attitudes of the person or team providing
the service can dramatically alter the
outcome and the level of customer delight.

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The buyer-provider relationship in service

marketing as the knowledge, skill,
communication and customer-friendly
attitude of buyer and provider determine
the quality of service and the degree of
customer satisfaction.

Service – Concept of
Services
Services are the major component and
somehow influenced by the service
motives of any business. The service are
much needful to develop and make
safeguards of customers interest.
Moreover, services are complementary and
decisional part of marketing.

According to Philip Kotler:

“A service is any activity or benefit that are

being an offer to another that is essentially
intangible and does not result in the
ownership of anything.”

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The characteristics of services are

briefly stated here:

(i) It is a core area or an activity or a task

of business,

(ii) It is a major component and denotes a

parallel size of business,

(iii) Services may be collateral activity and

have a supplementary service to support
the core area of business,

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(iv) A service is an act or performance

offered by one party to another,

(v) It is an ideology or concept or an

approach based on customers’ orientation,

(vi) A service is an economic activity that

creates values and provides benefits for
customers,

(vii) The service process may be tied to a

physical product and the performance is
transitory,

(viii) Services are based on the concepts of

rational behaviour and the norms of
ethical values,

(ix) Services may be treated as the

philosophical part in the form of art and a
systematical part in the form of ‘science’,

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(x) It is prominent task to serve at the

input as well as output stages in any value
creation process,

(xi) It serves as dynamic platform to

accommodate professional attitudes,

(xii) It is provided by a person who

processes a particular skills, quality,
competencies and learning aspects,

(xiii) Services having the continuous

process within their performance,

(xiv) Services may be characterised as

intangibleness, inseparability
perishability, heterogeneity in nature and
does not normally result in ownership of
any resource,

(xv) Service are based on different

environmental factors.

Service – 6 Distinctive
Characteristics
Service, marketing academics and
practitioners argued that services required
special treatment as a result of their
distinctive characteristic; intangibility,
inseparability, heterogeneity and
perishability. These characteristics were
outlined during the “crawling out” stage.

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i. Intangibility refers to the fact that a large

component of many service offers is
immaterial or intangible and cannot be
presented in a concrete manner to
consumers prior to purchase. For example,
a customer cannot touch the aerobics class
prior to attending the class neither can
assess the quality without attending the
class.

ii. Inseparability refers to the notion that,

in much service operation the production
and consumption cannot be separated,
that is, a service is to great extent
consumed at the same time as it is
produced. For example, a hairdresser may
prepare in advance to carry out the service,
but most of the hairdressing service is
produced simultaneously as the customer
consumes the service.

iii. Heterogeneity is closely related

inseparability as it is very difficult to apply
quality standards to services to ensure an
identical service output, when so much
depends on the cooperation and parti-
cipation of individual customers.

iv. Perishability refers to the fact that

unlike physical goods, services cannot be
stored. An appointment with the dentist,
in contrast, at a given time on a given day,
cannot be stored and offered again to the
customer.

A detailed insight of the distinctive

characteristics of services is
provided below:

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1. Intangibility

2. Inseparability

3. Variability

4. Perishability

5. Simultaneity

6. Heterogeneity

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7. Lack of ownership

Characteristic # 1.
Intangibility:
Services cannot generally be seen, tasted,
felt, smelt, heard before being bought. The
potential customer’s is unable to perceive
the service before the service delivery.
Service is totally intangible and cannot be
seen what is done.

Intangibility presents problems in the

sense that the customer may experience
difficulty in knowing and understanding
what is on offer before and even after in
receipt of the service. The challenge for a
service provider is to make the service
tangible which implies resort to make
some form of measurement and to
provide-tangible evidence, e.g.,
computerised representation of hairstyle
or a university prospectus.

Service cannot be inventoried and

therefore fluctuations in demand are often
difficult to manage, e.g., resort owners
have same number of rooms to sell year
around but demand varies during peak
and non- peak seasons. Services cannot be
easily patented and new service concepts
can therefore be easily copied by
customers, Services cannot be readily
displayed or easily communicated to
customers, so quality may be difficult for
consumers to assess.

Decisions about what to include in

advertising and other promotional
campaigns are challenging as is pricing.
The actual cost is difficult to be
determined and so price quality
relationship is complex. Levitt has
suggested that there are no so such things
as service industries, only industries where
the service components are relatively
greater than those in other industries.

Similarly, Shostack has argued that there

are few industries or activities that are
purely goods based or a purely service
based, and presents a continuum from
tangible dominant goods to intangible
dominant services. Kotler identifies four
distinct categories of offerings, ranging
from purely tangible goods, to tangible
goods with accompanying services, to a
major service with some accompanying
goods, to pure services.

Characteristic # 2.
Inseparability:
There is marked difference between
physical goods and services in terms of the
sequence of production and consumption.

Sequence of Production and

Consumption:

a. Physical Goods