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Definition: Activity or benefit 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

Difference between physical goods and services

Physical goods tangible homogeneous Services intangible heterogeneous

Production and distribution are separated from consumption

A thing Core value processed in factory

Production, distribution and consumption are simultaneous processes

An activity or process Core value produced in the buyerseller interaction

Customers do not participate in the production process

Can be kept in stock Transfer of ownership

Customers participate in production

Cannot be kept in stock No transfer of ownership

Characteristics of services
Intangibility --Unable to be touched or grasped;

not having physical presence Inseparability Cannot be separated from the service provider Perishability cannot be stored (eg: Hotels providing off season discount Variability quality depends on who provide the service (eg: Same group provide different service quality at different location) Ownership No transfer of ownership(eg: Buy a car ,Tv etc transfer of ownership )

The three additional Ps of Service Marketing

People Customer see company through its employees. Employees should provide competent service Physical evidence cleanliness in a Doctors clinic interior decoration in a restaurant. Comfort of the seating arrangement in

cinema theater etc Process Receive delivery of services ; how fast or easy the work gets done.

Qualities of services
Service provided is compared with the service expected.
If service provided is less than service

expected - customer gets disappointed If more customer feels satisfied Many successful firms provide additional benefits to their offering which not only satisfies customers but also delights them.

Managing Service quality

Gap between management perceptions and consumer expectations Gap between management perceptions and

service quality specifications Gap between service quality specifications and service delivery Gap between service delivery and external communication Gap between expected service and perceived service

Determinants of service quality

Reliability delivering on promises
Responsiveness willing to help Assurance inspiring trust and confidence Empathy individualising customers Tangibles- physical representation

Services Monitoring
Continuous auditing of competitor service levels versus own company
Importance - performance analysis