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Meaning of services:

Intangible products such as accounting, banking,

cleaning, consultancy, education, insurance, expertise, medical treatment,

or transportation.

Sometimes services are difficult to identify because they are closely associated with a good;

such as the combination of a diagnosis with the administration of a medicine.

No transfer ofpossession or ownership takes place when services are sold, and they (1)

cannot be stored or transported, (2) are instantly perishable, and (3) come into existence at

the time they are bought and consumed.

A type ofeconomic activity that is intangible, is not stored and does not result in ownership.

A service is consumed at the point of sale. Services are one of the two key components

ofeconomics, the other being goods. Examples of services include the transfer of goods,

such as the postal service delivering mail, and the use of expertise or experience, such as

a person visiting a doctor.

Services are actions or an action that someone does for you. Services are intangible

property since you dont receive anything solid and you dont obtain ownership of the

actions taken. The purchaser of a services gets something needed but does not own any

tangible, solid or fixed property.

Difference between goods and services

There are five essential differences between services and goods.

1. intangible process that cannot be weighed or measured, whereas a good is a tangible

output of a process that has physical dimensions. This distinction has important businessimplications since a service innovation, unlike a product innovation, cannot be patented.Thus, a company with a new concept must expand rapidly before competitors copy itsprocedures. Service intangibility also presents a problem for customers since, unlike with aphysical product, they cannot try it out and test it before purchase.

2. Service requires some degree ofinteraction with the customerfor it to be aservice. The interaction may be brief, but it must exist for the service to be complete.

Where face-to-face service is required, the service facility must be designed to handle thecustomer's presence. Goods, on the other hand, are generally produced in a facility

separate from the customer. They can be made according to a production schedule that isefficient for the company.

3. Services, with the big exception of hard technologies such as ATMs and informationtechnologies such as answering machines and automated Internet exchanges, areinherently heterogeneousthey vary from day to day and even hour by hour as a functionof the attitudes of the customer and the servers. Thus, even highly scripted work such asfound in call centers can produce unpredictable outcomes. Goods, in contrast, can beproduced to meet very tight specifications day-in and day-out with essentially zerovariability. In those cases where a defective good is produced, it can be reworked orscrapped.

4. Services as a process areperishable and time dependent, and unlike goods, they can't bestored. You cannot come back last week for an air flight or a day on campus.

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5. The specifications of a service are defined and evaluated as apackage of features thataffect the five senses. These features are

Supporting facility (location, decoration, layout, architectural appropriateness,supporting equipment).

Facilitating goods (variety, consistency, quantity of the physical goods that go with theservice; for example, the food items that accompany a meal service).

Explicit services (training of service personnel, consistency of service performance,availability and access to the service, and comprehensiveness of the service).

Implicit services (attitude of the servers, atmosphere, waiting time, status, privacy andsecurity, and convenience).

Service marketing environment

Political environment legal environment:

Political Environment

This includes the political system, the government policies and attitude towards the

business community and the unionism. All these aspects have a bearing on the

strategies adopted by the business firms. The stability of the government also

influences business and related activities to a great extent. It sends a signal of

strength, confidence to various interest groups and investors. Further, ideology of thepolitical party also influences the business organisation and its operations. You may

be aware that Coca-Cola, a cold drink widely used even now, had to wind up

operations in India in late seventies. Again the trade union activities also influence

the operation of business enterprises. Most of the labour unions in India are affiliated

to various political parties. Strikes, lockouts and labour disputes etc. also adversely

affect the business operations. However, with the competitive business environment,

trade unions are now showing great maturity and started contributing positively to the

success of the business organisation and its operations through workers

participation in management.

Legal Environment

This refers to set of laws, regulations, which influence the business organisations

and their operations. Every business organisation has to obey, and work within, the

framework of the law. The important legislations that concern the businessenterprises include :

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1. Companies Act, 1956

2. Foreign Exchange Management Act, 1999

3. The Factories Act, 1948

4. Industrial Disputes Act, 1972

5. Payment of Gratuity Act, 1972

6. Industries (Development and Regulation) Act, 1951

7. Prevention of Food Adulteration Act, 1954

8. Essential Commodities Act, 2002

9. The Standards of Weights and Measures Act, 1956

10. Monopolies and Restrictive Trade Practices Act, 1969

11. Trade Marks Act, 1999

12. Bureau of indian Standards Act, 1986

13. Consumer Protection Act, 1986

14. Environment Protection Act

15. Competition Act, 2002

Economic Environment

The survival and success of each and every business enterprise depend fully on its

economic environment. The main factors that affect the economic environment are:

(a) Economic Conditions: The economic conditions of a nation refer to a set of

economic factors that have great influence on business organisations and their

operations. These include gross domestic product, per capita income, markets for

goods and services, availability of capital, foreign exchange reserve, growth of

foreign trade, strength of capital market etc. All these help in improving the pace of

economic growth.

(b) Economic Policies: All business activities and operations are directly influenced

by the economic policies framed by the government from time to time. Some of the

important economic policies are:

(i) Industrial policy

(ii) Fiscal policy

(iii) Monetary policy

(iv) Foreign investment policy

(v) ExportImport policy (Exim policy)

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The government keeps on changing these policies from time to time in view of the

developments taking place in the economic scenario, political expediency and the

changing requirement. Every business firm has to function strictly within the policy

framework and respond to the changes therein.

Social and culture Environment

It refers to peoples attitude to work and wealth; role of family, marriage, religion and

education; ethical issues and social responsiveness of business. The social

environment of business includes social factors like customs, traditions, values,

beliefs, poverty, literacy, life expectancy rate etc. The social structure and the values

that a society cherishes have a considerable influence on the functioning of businessfirms. For example, during festive seasons there is an increase in the demand for

new clothes, sweets, fruits, flower, etc. Due to increase in literacy rate the

consumers are becoming more conscious of the quality of the products. Due to

change in family composition, more nuclear families with single child concepts have

come up. This increases the demand for the different types of household goods. It

may be noted that the consumption patterns, the dressing and living styles of people

belonging to different social structures and culture vary significantly.

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Growth of service marketing

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