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Elements of customer services & identifying them

Presenter Name : Neha Rijhsinghani

Any activity or benefit that one party can offer to another that is essentially intangible & does not result in the ownership of anything. Its production may or may not be tied up to a physical product.


Services Vs Goods Goods

A physical object e.g. video cassette of movie. Tangible e.g. medicine Homogenous Different customers getting standardised demands fulfilled e.g. mobile phones. All three are separate & independent e.g. purchasing ice-cream from a store. Involvement at the time of delivery not possible e.g. manufacturing a vehicle. Can be kept in stock e.g., train journey ticket Transfer of ownership does take place

Nature: An activity or process e.g. watching a movie in a cinema hall Intangibility: Intangible e.g. doctor treatment Type: Heterogeneous Inconsistency: Different customers having different demands e.g., mobile services Inseparability: Production, distribution & consumption takes place simultaneously e.g. eating ice-cream in a restaurant Involvement : Participation of customers at the time of service delivery e.g. self-service in a fast food joint. Inventory: Cannot be kept in a stock. e.g., experience of a train journey. Ownership: Transfer of ownership cannot take place


Classification of Services
It is required to design & apply marketing techniques to completely satisfy the customer & increase profits & identify new emerging services.

Classifications can be done on following basis:

Classification by Industry Classification by Market segment Degree of tangilbility Skill level of service provider (Professional/ Nonprofessional) Labor intensiveness (People-based/Equipment-based) Degree of customer contact (High / Low) Goal of the service provider (Profit /Nonprofit)

Degree of regulation Place & time Customization Relationship with customers Demand supply Degree of discretion Product & process

Classification By Industry

Entertainment industry Education Finance & Insurance Transportation Public utilities Government services Health Hospitability Industry Business services Telecommunications Trading

Market Segment

On the basis of market segment they are catering to:

End consumers (Hair salon, beauty services, Coaching classes, Car wash etc.) Market segment

Organizational Consumers (Mgmt consulting, repair & maintenance, Legal)

Degree of Tangibility

Lovelock & Wright: Services:


Tangible offerings ( food services, dry cleaning) Intangible services (Teaching & Medical services)
Rental goods (Hotel room, car rental, etc.) Owned goods (TV repair,laundry etc.) Non-goods (college education,legal)

Skill level of service provider


Professional ( Health services,Mgmt,Accounting,Researh etc.) Non-professional (Shoe shining, laundry,cleaning etc.)

Goals of the service provider

Services are differentiated on the basis of goals they pursue:

Profit making (insurance, hotels,airlines, restaurants) Non-profit making (Indian postal service, public Liberaries)


Degree of regulation

According to the extent of government regulation on them:

High (Airlines, railways, roadways) Limited (Fast Food, hospitality sector) Absent (House painting, barber & beauty services, domestic help services, etc.)


Labor intensiveness

Service may vary according to the extent of the labor involved

Automated (Vending M/c, ATMs) Unskilled operators (Movie Theatre, Dry cleaning) Skilled operator ( Airlines,BPOs) Unskilled (Guards,cleaning ) Skilled labor (Appliance repair, Catering, printing.) Professionals (Medical, Engineering Mgmt consultant etc.)

Equipment based Labour intensive People based

Degree of customer contact

Chase (1978) classified organizations on the basis of the contact time between the customers & the service provider

Customer contact

High contact (Education, Hotel) Low contact (Automated car wash, Appliance Repair services, postal services.)

Place & Time

On the basis of the place & time of service delivery.

Customer site (Pizza delivery) Services site (Hair salon,Watching movie In theatre) service delivery Physical channel (Mail) Electronic channel (banking transaction)

Place & Time


On the basis of :


Customized (Taxi service, Hair cut) Standardized( Insurance policy, Bus route)

Customization: when the service process can be adapted to suit the needs of individual customers Standardised : where the service to be provided is predetermined & predesigned.

Relationship with customers

According to the nature of relationship with customers Relationship with customers Ongoing (Barber, Restaurant) Formal (Banks) Informal (Watching TV) Membership (College enrolment Air lines)

Relationships with customers Nature of service delivery Type of relationship between the service organization & its customers Membership relationship Insurance Telephone subscription newspaper/ magzine subscription Long-distance phone calls No formal relationship Police protection National highway Postal services

Continuous delivery of services

Discrete transactions (separate & distinct transactions)

Demand & supply

According to the demand for the service & the ability of the service organizations to match the demand

Demand supply

Steady (College) Fluctuating ( Hotels)

Product & process

Product focused (Restaurants & transport services Process focused( hotels)

Degree of discretion

High degree (Mgmt consultancy) Low degree (news agents, confectioners)

High : when front office personnel use judgement in altering the service package without referring to superiors Low: where changes to service provision can be made only with authorization from superiors.

Marketing challenges in services business

Clients cant see or touch services before they purchase them

Developing trust:

Extra competition:
Emphasizing service instead of features

Creating a need:
Services are often produced & consumed simultaneously:

Remedial measures

Services have salient features necessitate a new vision, distinct approach & world class excellence to market effectively & profitably.

Intangibility: Inseparability: variability: Perishability: