Services – An Overview

1

Learning Objectives

To understand basic service terms

To understand features specific to services

To know the difference between goods and services

2

What are Services

• Cleaning Service• Auto repair• Rock Concert• Massage• Air Travel• Bungy jump• Haircut• Exercise class

• Pest control• Sports match• Restaurant• School• Electrician

3

Why Study Services?

Society has changed

Prevalence of services have increased

The goods mental model is dominant

Services differ significantly from goods4

5

Services as Processes

Goods – are a resource – something you get

Services – are a process – activities that happen over time

6

Customer as Co-producer

Goods – you are not involved in the production process

Services – you may be involved in the production process

7

Simultaneity

Goods – can be produced, then consumed later

Services – are often produced and consumed at the same time

8

Perishability

Services – Cannot be stored – lost opportunities are lost forever

Goods – can be stored – for sale later

9

Implication of Perishability

Services – Customers are ‘stored’ when there is too little capacity

Goods – Inventory is a buffer between production and demand

10

Intangibility

Goods – Are often tangible so can be tried before buying

Services – Intangible services cannot be tried out before buying

11

Heterogeneity

Goods – are focused on things and are alike

Services – are focused on people and vary from customer to customer

12

Value in Use

Goods – Customers use goods to make their own value

Services – Customer and service provider make value jointly

Dimensions of Services

Services have a process AND an outcome

13

Service Process Matrix

14

Degree of Specialisation/Customisation

Low High

Degree of C

ustomer C

ontact

Low Car wash Pest control

High

School Physician