Nature and classification of service

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C V C I T C
Cagayan Valley Computer & Information Technology College, Inc.
SERVICES MARKETING
CLIENT WILLIAM M. MALINAO
INSTRUCTOR

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C V C I T C
At the end of the session students
will be able to:
• Define what is service
• Explain the nature of Services
• Differentiate classification of services
• Realize the importance of services

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C V C I T C
SERVICE

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C V C I T C
• It is an activity or a series of activities of more or
less intangible nature that normally, but not
necessarily, -take place in interaction between
the customer and service employees and/or-
physical resources or goods and/or systems of the
service provides, which are provided as a solution
to customer problems. (KOTLER)
• It is an act or performance that one party can
offer to another that is essentially intangible and
does not result in the ownership of anything. Its
production may/may not be tied to a physical
product.

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C V C I T C
NATURE AND CHARACTERISTICS
• Intangibility
• Inseparability
• Heterogeneity
• Perishability
• Performances rather than
object
• Created and consumed
simultaneously
• Quality and essence of
service vary from producer,
customer to customer, and
from day to day. The result
of human interaction.
• Cannot be stored

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C V C I T C
INTANGIBILITY
• PHYSICAL INTANGIBILITY
- Cannot be touched.
• MENTAL INTANGIBILITY
-Cannot be stored, thus, cannot be patented legally,
hence can be easily copied by competitors
-Difficult assessing quality

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C V C I T C
INSEPARABILITY
• Inseparability of production and consumption
-customer has to be present during service production
-Customers frequently interact with service providers,
influence them
-Service Producers play an important role as part of the
product itself, as well as essential ingredient in the service
experience for consumer
-Centralized mass production is difficult

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C V C I T C
• Customers experience depend upon the
interactions
• Operations need to be decentralized so that
services can be delivered directly to
consumers at convenient locations
• Involvement of customers in the production
process is important

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C V C I T C
PERISHABILITY
• Cannot be stored and then sold at a later date as
they perish.
• Thus,
-Have a short live value
-Cannot be Inventoried
-Time pressure for sale of service is extremely high
Capacity of services is infinite

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C V C I T C
VARIABILITY/HETEROGENEITY
• Difficult of achieving uniform outputs (Labor intensive
services)
• Performance vary among service workers
• There is
-Difficulty in achieving standardization
-Difficulty in setting quality control
-Determination of quality is possible only after performance of
service
-Difficulty in communicating to the clients what they would get

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C V C I T C
CLASSIFICATION

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C V C I T C
Classification based on Degree of
Involvement of the Customer
 People Processing:- The customer is highly involved
in the services process & needs to be physically
present in order to experience the service. Ex. School
or training centers.
 Possession Processing:-the customer doesn't require
to be present but has to submit his property to the
service provider. Ex car
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C V C I T C
Classification based on the Service
Tangibility
 Highly Tangible:- the customer obtains a tangible Product in hand.
As cell phone on rent.
 Service Linked to tangible goods:- some organization offer on
warranty period to customer who purchase products from them. As
photocopying machine.
 Tangible goods linked to Services:- some service offer a tangible
product along with the service requested by the customer. As
Airlines services offer food & magazines to passengers.
 Highly intangible:- the services which do not provide customers
with any tangible product. As massage parlor
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C V C I T C
Classification based on Skills & Expertise
Required
Professional Services:- the service provider to
be formally trained to deliver the service. Ex
Doctor, Pilot.
Non Professional services:- these Service do not
require the service provider to undergo any
training to deliver the service.
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C V C I T C
Classification based on Business
Orientation of Service Provider
Not-for-profit organization:- the main objectives
of the service providers is to serve society & not
to make profits. Ex. Government schools,
Social service organizations.
Commercial organization:- the main objectives of
the service provider is to earn revenues & make
profits. Ex Airlines Insurance firms.
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C V C I T C
Classification based on Type of End-User
 Consumer services:- purchased by individuals
customer for their own consumption. Ex Beauty
Care, Hair Cutting.
 Business to Business:- These service are purchased
by the organization. Ex Market research, Advertising.
 Industrial services:- Based on a contract between
organization & service providers. Ex Machine
installation, plant maintances.
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