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8/4/2019 Classification of Services 2010
http://slidepdf.com/reader/full/classification-of-services-2010 1/17
CLASSIFICATION OF
SERVICES
8/4/2019 Classification of Services 2010
http://slidepdf.com/reader/full/classification-of-services-2010 2/17
CLASSIFICATION OF SERVICES
• Classification of services enables a betterunderstanding of the particular service under
consideration.
• It highlights the similarities and differencesbetween the service being classified and
other services
• It can assist in the development of marketingstrategies and tactics as services in the same
category will face some similar challenges
8/4/2019 Classification of Services 2010
http://slidepdf.com/reader/full/classification-of-services-2010 3/17
Selected Ways of Classifying
Services
• Degree of tangibility/intangibility of service processes
• Who or what is direct recipient of service process
– customers
– possessions belonging to customers
• Place and time of service delivery
• Customization vs. standardization
• Nature of relationship with customers
• Extent to which demand and supply are in balance
• Facilities, equipment, people as part of the service
8/4/2019 Classification of Services 2010
http://slidepdf.com/reader/full/classification-of-services-2010 4/17
Classification on the basis of the Nature of the
Service Activity
• Based on differences in nature of service act(tangible/intangible) and who or what is direct
recipient of service (people/possessions), there
are four categories of services: – People processing
– Possession processing
– Mental stimulus processing – Information processing
8/4/2019 Classification of Services 2010
http://slidepdf.com/reader/full/classification-of-services-2010 5/17
Four Categories Of Services
Information
processing
(services directed at
intangible assets):
Accounting
Banking
Nature of the Service Act
People Possessions
Tangible ActionsPeople processing
(services directed at
people’s bodies):
Barbers
Health care
Who or What Is the Direct Recipient of the Service?
Possession processing
(services directed at
physical possessions):
Refueling
Disposal/recycling
Mental stimulus
processing (services directed at
people’s minds):
Education
Advertising/PR
Intangible Actions
8/4/2019 Classification of Services 2010
http://slidepdf.com/reader/full/classification-of-services-2010 6/17
People Processing
• Customers must:
– Physically enter the service
factory – Co-operate actively with the
service operation
• Managers should think about
process and output fromcustomer’s perspective
– To identify benefits createdand non-financial costs:
• Time, mental, physical effort
Four Categories Of Services
8/4/2019 Classification of Services 2010
http://slidepdf.com/reader/full/classification-of-services-2010 7/17
Possession ProcessingPossession Processing
Customers are less
physically involved
compared to peopleprocessing services
Involvement is limited
Production and
consumption areseparable
8/4/2019 Classification of Services 2010
http://slidepdf.com/reader/full/classification-of-services-2010 8/17
Mental Stimulus ProcessingMental Stimulus Processing
Ethical standards required
when customers who depend
on such services canpotentially be manipulated
by suppliers
Physical presence of
recipients not requiredCore content of services is
information-basedCan be “inventoried”
8/4/2019 Classification of Services 2010
http://slidepdf.com/reader/full/classification-of-services-2010 9/17
Information ProcessingInformation Processing
Information is the most
intangible form of service
outputBut may be transformed into
enduring forms of service
output
Line between informationprocessing and mental
stimulus processing may be
blurred.
8/4/2019 Classification of Services 2010
http://slidepdf.com/reader/full/classification-of-services-2010 10/17
Classification of services:
By nature of service
• Healthcare
• Passenger transportation
• Beauty saloons
• Exercise clinics
• Restaurants
• Hairdressers
• Freight transportantion
• Industrial equipment repair
• Laundry and dry cleaning• Lawn care
• Veterinary care T a n g i b l e
a c t i o n s
People Things
Service directed at
people’s bodies:
Service directed
at goods:
8/4/2019 Classification of Services 2010
http://slidepdf.com/reader/full/classification-of-services-2010 11/17
Classification of services:
By nature of service
• Education
• Broadcasting
• Information services
• Theaters
• Museums
• Banking
• Legal services
• Accounting
• Securities
• Insurance I n t a n g i b l e
a c t i o n
s
People Things
By C. Lovelock
Service directed at
people’s minds:
Service directed
at intangible assets:
8/4/2019 Classification of Services 2010
http://slidepdf.com/reader/full/classification-of-services-2010 12/17
Implications of Different Service Processes:
Design of the Service Factory
People-processing servicesrequire customers to visit the“service factory,” so:
– think of facility as a “stage” for
service performance
– design process around customer
– choose convenient location
– create pleasing appearance,avoid unwanted noises, smells
– consider customer needs--info,
parking, food, toilets, etc.
8/4/2019 Classification of Services 2010
http://slidepdf.com/reader/full/classification-of-services-2010 13/17
Implications of Different Service
Processes:Alternative Channels for Service
DeliveryFor possession-processing, mental-stimulus
processing, or information processing services,alternatives include:
1. Customers come to the service factory2. Customers come to a retail office
3. Service employees visit customer’s home or workplace
4. Business is conducted at arm’s length through
- physical channels (e.g., mail, courier service)- electronic channels (e.g., phone, fax, email, Web
site)
8/4/2019 Classification of Services 2010
http://slidepdf.com/reader/full/classification-of-services-2010 14/17
Implications of Different Service Processes:
Applying Technology to Service Processes
All services can benefit from IT,but mental-stimulus processingand information-processingservices have the most to gain:
• Remote delivery of information- based services “anywhere,anytime”
• New service features through
Web sites, email, and internet(e.g., information, reservations)
• More opportunities for self-service
• New services can be offered
8/4/2019 Classification of Services 2010
http://slidepdf.com/reader/full/classification-of-services-2010 15/17
Strategic Service Classification (Relationship with
Customers/ Nature of Service Delivery)
Type of Relationship between Service Organization & CustomersNature of
Service Delivery “Membership” relationship No formal relationship
Insurance Radio station
Telephone subscription Police protectionContinuous delivery Electric Utility Public Highway
of service Banking
Long-distance phone calls Restaurant
Theater series tickets Pay phone
Discrete transactions Transit pass Toll highway
Sam’s Wholesale Club Movie theater
Airline frequent flyer Public transportation
8/4/2019 Classification of Services 2010
http://slidepdf.com/reader/full/classification-of-services-2010 16/17
Strategic Service Classification (Customization
and Judgment)
Extent to Which Service Characteristics AreCustomized
Extent to Which High Low
Personnel High Surgery Education
Exercise Judgment Taxi services (in large classes)
in Meeting Customer Gourmet restaurant Family restaurant
Needs
Telephone service Public transportation Hotel services Spectator sports
Low Retail banking Movie theater
Cafeteria Institutional food service
Classification of services: By method of service
8/4/2019 Classification of Services 2010
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Classification of services: By method of service
delivery
Customer goes to service
organization
Service organization comes to
customer
Customer and service organization
transact remotely (mail or electronic
communications)
Drama Theater
Barbershop
Bus service
Fast-food chain
Lawn Care
Mobile car
wash
Credit card company
Local TV station
Mail delivery
Broadcast network
Telephone company
Type of Interaction between Customer
and Service Organization
Single Site Multiple
Sites
Availability of Service Outlets