015aa02 Nature Of Services

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015aa02 Nature Of Services

  1. 1. Amity Business School MBA Class of 2010, Semester III Nature of Services Prof. P K Bansal
  2. 2. What Forms the Basis of Exchange in Marketing? <ul><li>Value </li></ul><ul><li>Tangible good </li></ul><ul><li>Intangible service </li></ul><ul><li>Idea </li></ul><ul><li>A mix of some of the above </li></ul>
  3. 3. Service: An Act, Deed or Performance that Creates Customer Satisfaction <ul><li>Services are intangible </li></ul><ul><li>A performance that satisfies </li></ul><ul><li>Cannot be owned </li></ul><ul><li>Non-transfer of ownership </li></ul><ul><li>Examples: Lawyers, entertainment, healthcare, hair stylist, image consultants, railways, telecommunication, hotels, theme parks. </li></ul>
  4. 4. Tangibility–Intangibility Continuum
  5. 5. Nature of Market Offer
  6. 6. Characteristics <ul><li>Intangibility – Cannot be touched, seen and smelt </li></ul><ul><li>Inseparability – Producer cannot be separated from </li></ul><ul><li>production </li></ul><ul><li>Variability – Lack of standardisation of service </li></ul><ul><li>output </li></ul><ul><li>Perishability – Cannot be stored </li></ul>
  7. 7. Intangibility – Consequences <ul><li>Difficult to understood and grasp mentally </li></ul><ul><li>Difficult to demonstrate </li></ul><ul><li>Difficult in definition </li></ul><ul><li>Difficulty in protecting through patents </li></ul><ul><li>Pricing difficulty </li></ul>
  8. 8. Inseparability – Consequences <ul><li>Customer present in service factory </li></ul><ul><li>Simultaneity of production and consumption </li></ul><ul><li>Impact of atmospherics </li></ul><ul><li>Unprogrammable situations </li></ul><ul><li>Shared experience </li></ul>
  9. 9. Variability – Consequences <ul><li>Inconsistent service output </li></ul><ul><li>Technical and functional aspects </li></ul><ul><li>Subjective judgment by customer </li></ul><ul><li>Quality implementations and control difficult </li></ul><ul><li>‘ How’ aspect of service delivery </li></ul>
  10. 10. Perishability – Consequences <ul><li>Intangible output </li></ul><ul><li>Lack of inventories </li></ul><ul><li>Loss of opportunity and revenue </li></ul><ul><li>Customer waits and queues </li></ul><ul><li>Excess capacity situations </li></ul>

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