Page 7 - DMGT522_SERVICES MANAGEMENT

Services Management

Notes of America (USA) was the first economy declared as service economy way back in 1948. Most of
the economies in the world now became service economies. India became service economy in
the year 2000-01.
To understand the concept of services better let us analyse the following definitions:
The American Marketing Association (1960): Services are “activities, benefits or satisfactions
which are offered for sale or provided in connection with the sale of goods.”
This definition provides limited view of services. However, this was the first major attempt to
identify services differently in valuing the output of a society. The definition does to provide or
valuing services involved in producing the tangible goods.
William L. Stanton (1974): Services are “separately identifiable, intangible activities which
provide want satisfaction when marketed to consumers and/or industrial users and which are
not necessarily tied to the sale of a product or another service”. This definition focuses upon
several issues for recognition. They are:
1. Services are those activities that are identifiable separately.

2. Services are intangibles that provide want satisfaction to consumers.
3. Services are marked directly to consumers and also to the industrial users.
4. Services may or may not be tied with the sale of goods.

5. A service may be or may not be tied with the sale of another service.
Philip Kotler and Bloom (1984): Service is “any activity or benefit that one party can offer to
another that is essentially intangible and does not result in the ownership of anything. Its
production may or may not be tied to a physical product.” This definition more or less follows
the earlier ones. The focus was given to the absence of ownership as a special feature of services
which has significantly business implications.
Christian Gronroos (1990): Service is “an activity or series of activity or series of activities of
more or less intangible nature that normally, not necessarily take place in interacting between
the customer and service employee and/or physical resources or goods and/or systems of the
service provider, which are provided as solutions to customer problems.” This is the definition
in which an attempt was made to include all important issues relating to services management
and marketing.

Zeithmal VA and Mary Jo Bitner (1996): “Services are deeds, processes and performances.”
Although it seems that the definition is more precise, it provides marketing orientation to the
services concept. It gives an understanding that the consumer is interested in deeds, processes
and performances in perceiving the value of the service.
Christopher Lovelock: He described services through two different approaches. A service is an
act or performance offered by one party to another. Although the process may be tied to a
physical product, the performance essentially intangible and does not normally result in
ownership of any of the factors of production. Services are economic activities that create value
and provide benefits from customers at specific times and places as a result of bridging about a
desired change in – or on behalf of – the recipient of the service. The definition given by
marketing experts clearly establishes the scope of services. The scope of services marketing
includes marketed and marketable services. The shortest definition to services marketing is
“meeting service needs of the consumers at a profit”.

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