Classification of Services
One of the better
known service classification is come from the analysis of what is being
processed. In some cases, customer’s presence is important as the service is
processed on them, while in some other cases customer’s possessions are
processed. Some services require a lot of input from customers and some are
conducted with less or no input from customers. There are different level of
participation also. Christopher Lovelock
has identified four broad categories of services – people processing,
possession processing, mental stimulus processing and information processing.
These categories are defined on a two dimensional matrix;
- Who or what is the direct recipient of the service
- Nature of the service act
People Processing
Common belief
about services is that the services are directed to customers. Number of very
popular services like airlines, beauty treatments, health care and hospitality
are people processing where, to receive the service
customer must enter the service operation. According to Lovelock, these service
facilities are service factories, where production and consumption happens
simultaneously. For such services, customers need to cooperate actively with the
service operation and required to give
more time and efforts
For effective marketing in
people processing services, marketers should think about process and output
from the customer’s perspective and needs to identify benefits created and
non-financial costs: Time, mental and physical effort
Possession Processing
In such services,
people’s possessions are processed. Services like car repairs, house cleaning,
pest control, laundry are of such type where, production and
consumption are separable. Customer involvement is limited as they explain the
problem and drop off the item that requires repair or service.
In some cases like
landscaping, servicing of heavy equipment, the service factory has to go to the
customer. Usually there is a tangible enhancement to the item being processed
Mental Stimulus Processing
These are the services that interact with
peoples mind like education, news and information, professional advice,
psychotherapy, entertainment etc. These services can be ‘inventoried’ and can
be easily converted into digital formats. Customer’s physical presence may not
be required at the time of production.
Marketers should maintain ethical
standards required and should not manipulate customers as core content of
services is information-based.
Information Processing
This is the most intangible form of service. May be transformed into
enduring forms of service output. It may be transformed into
tangible forms represented by reports, books, tapes, disks. Strictly speaking
personal contact is not needed in this case.
Examples of
such services are, financial services, professional services like accounting,
law, market research, management consulting, medical diagnosis etc.
Characteristics of Services
The very basic difference between
services and physical products is that the very intangible nature of services.
Service marketers face a number of challenges due intangibility and several
other service characteristics that makes services different from physical
goods.
Intangibility
As discussed,
intangibility is a unique service characteristics. Most Services are experienced
that cannot be seen. They can only be used. For example, a taxi ride or hotel
stay. Marketers are very concerned about this aspect as it increases the
customer perceived risk. Thus they provide number of physical evidences (also known
as servicescape) to enhance the experience. The service environment covers up
for intangibility and reduces the perceived risk.
According to Berry,
Walls and Lewis, in interaction with services, customers consciously or
unconsciously filter experience clues – something that customer perceived by its
presence or absence. These clues are:
- Functional clues – technical quality of the offering – service reliability
- Mechanical clues – technical quality of the offering
- Humanic clues – behaviour and appearances of service providers.
Inseparability
Services are produced
and consumed simultaneously and hence cannot be transferred from place of
production to place of consumption. Some services like house cleaning, pest
control and some medical and nursing service comes at customers door step, but
they last only till the service provider is present.
To overcome such limitations,
service firms can offer its customer some tangible clues like souvenir and
gifts. McDonald’s Happy Meal toys are very popular amongst children. Jet
airways gives miniature aircraft toy to children traveling with them. Some
beauty parlours, gives a gift hamper. Hotels in Goa give a local wine bottle as
souvenir to its customers.
Variability
In services, human
element plays an important role. Service quality is based on performance of
service employees. Due to this human element, services cannot be standardised.
There is always variability from one service product to other. To deal with
this issue, service firms can;
- Standardise the repetitive process.
- Invest in technology to enable standardization
- Train employees using hard measures of service quality
- Offer service guarantees to reduce customer perceived risk.
Perishability
Since services are
intangible, they cannot be stored for future consumption. Most services are
actions, performances and an experience that lasts only till the services is
delivered. Service product is essentially intangible (though in some cases some
services include use of physical products like meals in restaurant), thus
perish after consumption.
Service firms need to
manage demand and supply by create rate fences and buckets and by using
differential pricing.
Lack of ownership
Since
services are perishable and inseparable, customers do not own anything but
avail an experience only. The implication is that the customers feel hesitant
to spend a big amount as it does not accumulate as a wealth like in case of
many physical products. To overcome this limitation service marketers stress on
advantages of services and encourage customers to spend by providing easy
payment schemes, offers and discounts.
The Service Triangle
The 3 vertices of the triangle are the company,
customers and the providers (employees). The sides joining these vertices are external
marketing, internal marketing and interactive marketing.
External Marketing Efforts
This is about making promises, i.e., efforts the
firm engages in to set up its customer’s expectation and makes promises to
customers regarding what is to be delivered.
Interactive Marketing
This is about keeping promises. Here is where the
promises are kept or broken by the firm’s employees or agents.
Internal Marketing
This tangent is enabling promises, i.e. the activities
firm engages in to aid the providers in their ability to deliver on the
service: recruiting, training, motivating, rewarding and providing equipment
and technology.
