“Ours is a service economy

and it has been for some

time”
- Karl Albrecht and Ron Zemke
 Service

“A service is an act or performance offered

by one party to another”
“Although the process may be tied at
physical product, the performance is
transitory, often intangible in nature, and
does not normally result in ownership of any
of the factors of production”
Contd…

Meaning “A service is economic

activity that creates value and
provides benefits for customers at
specific times and place”
Questions to be answered

How important is the service sector

in our economy?
 Factors stimulating the
transformation of the service
economy

 Government policy
 Social changes
 Business trends
 Advances in IT
 Internationalization
 Characterizes and
Differences of Service and
Goods
Customers do not obtain ownership of
services
Service products are ephemeral and
cannot be inventoried
Intangible elements dominate value
creations
 Contd…

Customers may form part of the

product
Others people may form part of the
product
There is greater variability in
operational inputs and outputs
Many services are difficult for
customers to evaluate
Contd…
The time factor assume great
importance
Distribution channels take different
forms
What are the important
distinctions among various
types of services?

Categorizing service processes

 Who or what is the direct
recipient of the service
Possessions processing (services directed at physical
People processing ? (service directed at people‘s bodies)
possessions )
Passenger
Health care Freight transportations
Lodging Repair and maintenance
Beauty Salons Warehousing/storage
Physical therapy Office Cleaning service
Fitness center Retail distribution
Restaurants/Bars Laundry and cleaning
Barbers Refueling
Funeral Service Landscaping/gardening
Disposal/recycling

Mental stimulus processing (service directed at people Information’s processing(services directed at intangible
assets);

minds) Accounting
Banking
Data transmission
Insurance
Legal service

Advertising/PR Programming
Research
Securities investments

Arts and entertainment Software consulting

Broadcasting/cable
Contd…
 Designing the service factory
 Using alternative channels for
service delivery
 Balancing supply and demand
 When people become part of the
product
Elements of Services
marketing Mix
 Product Elements
 Place and Time
 Promotion and Education
 Price and others user outlays
 Physical Environment
 Process
 People
Contd…

Why do service business need

to integrate the marketing,
operations and Human
resources?
Contd…

Marketing of services and Marketing

through services

Creating value
Contd…

What are the major changes occurring

in the service sector? and how are
these changes affecting the nature of
service competition?