Nature of servicesServices are everywhere

Service is ‘an act or performance that one party can offer

to another;That is essentially intangible;And does not result into the ownership of

anything.Production may/may not be tied to a physical

product.

Nature of servicesService Mix

Pure tangible goods; e.g. PhenylTangible good + accompanying service; carsHybrid; restaurantsService + accompanying goods; travelPure service; education, consulting

Nature of servicesEquipment based (ATMs) / people based

(consulting, cleaning)Requires the client’s presence (brain

surgery); car washing doesn’t. Services for personal or business needs. Profit/non profit; public/private ownership.

Characteristics of ServicesIntangibility

No idea of the outcome of the service.Therefore, ‘tangibilize the intangibles’. Through physical evidence and presentation.

Place People Equipment Price Communication materials.

Characteristics of ServicesInseparability

Produced and consumed simultaneously. The client is present when the service is

produced.The provider becomes a part of the service.

VariabilityHuman behavior cant be standardized.Try to hire good people.

Characteristics of ServicesPerishability

Services can’t be storedCan’t store for peak demands

Differential pricing Reservation systems Increased consumer participation

Managing Service QualityGap 1:

Consumer expectation and management perception

Gap 2:Management Perception and service-quality

specification

Managing Service QualityGap 3:

Service quality specification and service delivery

Gap 4:Service delivery and external communications

Gap 5:Perceived service and expected service

Managing Service QualityReliability

Ability to perform promised service accurately

ResponsivenessWillingness to help customers, prompt service

AssuranceKnowledge and courtesy of employess

Managing Service QualityEmpathy

Caring, individualized attention

TangiblesAppearance of physical facilities, equipment,

personnel, etc.

Best PracticesStrategic concept: be “customer -obsessed”Top management commitmentSet high standardsSelf-service technologies (SSTs) – ATM,

IRCTCMonitoring SystemsSatisfying employees as well as customers