Page 69 - DMGT522_SERVICES MANAGEMENT

Services Management

Notes

Note If the information centre looks shabby and disorganised, or if the website is difficult
to navigate with broken links, then users may assume that the services provided by the
centre are slapdash.

3.1 Types of Services

As our knowledge of the characteristics of services grows, so does our ability to deal with them
from both an economic and marketing perspective. Services are intangible, inseparable, variable,
and perishable. Each characteristic poses problems and requires strategies to deal with those
problems.
Core Services: A service that is the primary purpose of the transaction. For example a haircut or
the services of lawyer or teacher
Supplementary Services: Services that are rendered as a corollary to the sale of a tangible product.
E.g.: Home delivery options offered by restaurants above a minimum bill value.

3.1.1 Difference between Goods and Services

Given below are the fundamental differences between physical goods and services:
Table 3.1: Difference between Goods and Services

Goods Services
A physical commodity A process or activity
Tangible Intangible
Homogenous Heterogeneous
Production and distribution are separation Production, distribution and consumption are
from their consumption simultaneous processes
Can be stored Cannot be stored
Transfer of ownership is possible Transfer of ownership is not possible

3.2 Nature/Characteristics of Services

“You cannot market a bank account by applying same rules that are used for the marketing of a
can of Campbell’s soup”. This logic resembles the statement that apples are just like oranges
except for their ‘appleness’” (Shostack, 1977).

Unified Services Theory “With service processes, the customer provides significant inputs to
the production process. With manufacturing processes, groups of customers may contribute
ideas to the design of the product, but individual customers’ only participation is to select and
consume the output. All managerial themes unique to services are founded in this distinction”
Sampson (2001). Service processes are distinguished from non-service processes only by the
presence of customer inputs and implications thereof. For those familiar with business
management in general, understanding those additional issues unique to managing services
requires only understanding the implications of customer inputs. Customer inputs are the
root cause of the unique issues and challenges of services management. Sampson and Froehle
(2006).

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