Definition:

According to American Marketing Association:

“Services are the activities, benefits or satisfactions which are
offered for sale or are provide in connection with the sale of
goods”

Characteristics :
1. Intangibility:

2. Perishability:

3. Inseparability:
4. Heterogeneity:

5. Ownership:

6. Simultaneity:

7. Quality Measurement:

8. Nature Of Demand:
 Classification Of Services

1. Nature Of the Service Act

People Things

Tangible

Intangible
2. Type of Relationship that the service
organization has with its customers:

Membership No Formal
Relationship Relationship

Continuous Delivery
Of Services

Discrete transaction
3. Scope for customization and judgment in
service delivery:

High Low

High

Low
4. Nature of demand and supply for the
service:

Wide Narrow

Peak demand can

Usually be met with-
Out a major delay.

Peak demand regularly

Exceeds capacity.
5. Method of service delivery:

Single site Multiple site

Customer goes to
Service organization

Service organization
Comes to customer

Customer and service

Organization transact at
Arms length
(mail or electronic
communication)
 Differences
Physical Goods
1. Tangible
2. Homogeneous
3. Production &distribution are
separated from consumption.
4. A thing
5. Core value produced in a factory.
6. Customer do not participate in
production process.
7. Can be kept in stock.
8. Transfer of ownership
Services
1. Intangible
2. Heterogeneous
3. Production, distribution &
consumption are simultaneous
process.
4. An activity or Process
5. Core value produced in buyer-
seller interactions.
6.Customer participate in production
process.
7.Cannot be stocked.
8.No transfer of ownership
Significance
 Least possible dependence on technology:
 Paving avenues for capital formation:
 Generation and expansion of job opportunities:
 Optimum utilization of untapped resources:
 Raising the standard of living:
 Service Marketing In The Developed Countries

D e v e lo p e d D e v e lo p in g
Types Of Marketing In Service Firms
Service Firm

Internal marketing External Marketing

“enabling the promise “setting the promise”

Employees Customers

Interactive Marketing
Delivering the promise
 Richard Norman

SAS (Jan Carlzon)

Bull Fight

10 million customers- 5 SAS employees for 15 sec each

50 million moment of truth

GROONROOS
Technical Functional
 Judgment

Service Encounter
Remote Phone Face to Face
 Service Recovery:
Service recover is a term used for systematic efforts by a firm in order to
correct the problem, following the service failure and to retain a customers
goodwill. Service recovery efforts plays a crucial role in achieving or
restoring customers satisfaction .

Effective service recovery requires thoughtfull procedures for

resolving problems and handling disgruntled customers. It is
critical for the firms to have effective recovery strategies,
because even a single service problem can destroy a
customers confidence in a firm under following conditions:

1. The failure is totally outrageous

2. The problem fits a pattern of failure rather then
being isolated incident
3. The recovery efforts are weak, to compound the
original problem rather than correct it.
 W hen

A c t u a l T im e L a te r o n
R e a l T im e