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Introduction to service sector mgt

  1. Introduction to Service sector Mgt What are services? Definition and meaning Services are the non-physical, intangible parts of our economy, as opposed to goods , which we can touch or handle. Services include all economic activities whose output is not a physical product or construction, is generally consumed at the time it is produced and provides added value in forms (such as convenience, timeliness, comfort or health).That is essentially intangible concerns of its first purchaser .
  2. Examples of Services Services include Banking, Education, Medical treatment Provision of Internet , electricity , Renting , and transportation make up the majority of the economies of the rich nations. They also represent most of the emerging nations’ economies.
  3. Definition of services Service businesses are those that provide an activity or the performance of a task with a commercial purpose. This task is directed to help a business or an individual in subjects such as consulting, accounting, transportation, cleaning, hospitality, traveling or maintenance, among others.
  4. Definition of Services A service is an act of performance that one party can offer to another that is essentially intangible and does not result in the ownership of anything. Its production may or may not be tied to a physical product.” - Philip Kotler
  5. Service as part of Economy The three-sector model in economics divides economies into three sectors of activity: 1-Extraction of raw materials (primary), 2-Manufacturing (secondary), 3-and service industries which exist to facilitate the transport, distribution and sale of goods produced in the secondary sector (tertiary).
  6. Characteristics of Services The main Characteristics of Services are : Intangibility Inseparability Heterogeneity Perishability
  7. Intangibility Services are intangible in nature .Due to this it is not possible to stock services and hence fluctuations in demand becomes difficult to manage. These cannot be readily displayed or easily communicated, and hence it will be difficult for the consumers to assess the quality .
  8. Inseparability  Services are also inseparable because Services  and their providers are associated closely and thus, not separable.  A service is produced when it is consumed.  The customers are present when the service is produced thus other customer play an important role in satisfaction.  Eg doctor and his service cannot be separated as teacher and his service cannot be separated . Masons , Mechanics , hotels , travel agencies , electric providers , internet providers , taxis and others are inseparable services .
  9. Heterogeneity As services are produced by humans, hence no two services can be identical. Further no two customers are precisely alike and hence their experiences of the same service are different. Even the same customer can be with different frame of mind at different times – which results in differing satisfactions from the same service at different times.
  10. Perishability Services are perishable since they are consumed at the time of production . Services cannot be stored, saved, resold or returned. A bad haircut cannot be returned or resold to another customer . Hence demand forecasting and creative planning to meet the demand is a problem. Further one has to be right the first time or if things go wrong one should have strong recovery strategies to retain the customer goodwill. Due to these characteristics of services the marketers face a major challenge in marketing of Services.
  11. Importance of Service sector The service sector makes an important contribution to GDP in most countries, providing jobs, inputs and public services for the economy. Trade in services can improve economic performance and provide a range of traditional and new export opportunities.
  12. Comparison between services& goods Basis of Comparison Goods Services Nature Tangible Intangible Transfer of Ownership Possible Not Possible Separable Goods can be separated from the seller Services cannot be separated from the service provider Storage Goods can be stored Services cannot be stored Perishable Not all goods are perishable Services are perishable Production and Consumption Goods have a significant time gap between production and consumption Services are produced and consumed together
  13. Comparison b/w service and customer service Services are produced by companies and individuals for sale such as training services , teaching services , repair and maintenance , consultancy and etc. but customer service is not service for sale but in support of company’s care product like answering customer question , taking orders , dealing with billing issue , handling complaints and etc.
  14. Service Marketing Perception of service marketing focuses on selling the services in the best interest of users/customers . Marketing a service is meant marketing something intangible . It is marketing a promise and more selling your self. It is managerial process of managing the services . It is an organized effort for providing a sound foundation for the development of the organization .
  15. Lesson Summary This lesson has summarized an introduction to service management such definition of service , characteristics of service , importance of service sector , comparison of service and goods and difference between service and service marketing .