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Transportation & public utilities, Hotels and other lodging places, Rail-road
transportation, Personal services, Local and inter-urban passenger transit,
Business services, Trucking and warehousing, Auto repair, services and
garages, Water transportation, Miscellaneous repair services, Air
transportation, Motion pictures, Pipelines except natural gas, Amusement and
recreation services, Health service, Communication, Legal services,
Telephone and telegraph, Educational services, Radio and television
broadcasting, Social services and membership organizations, Electricity, Gas,
Sanitary services, Miscellaneous professional services, Wholesale trade,
Private household services, Retail trade, Finance, insurance, and real estate,
Banking, Military, Credit agencies other than banks, Government enterprises
Security & commodity brokers, Local government, Real estate, Education,
Holding and other investment companies and Other services.
The classification of services based on various criteria is shown in Figure 1.1
Figure 1.2 suggests that there are three types of marketing that must be
successfully carried out for a service organization to succeed, and that all of
them revolve around making and keeping promises to customers. On the right
side of the triangle are the external marketing efforts that the firm engages in
to set up its customers expectations and make promises to customers
regarding what is to be delivered. Anything that communicates to the
customer before service delivery can be viewed as part of this external
marketing function.
In service firms there are many factors that communicate to customers
beyond the traditional elements of advertising, special promotions, sales, and
public relations, for example, the firms personnel and the physical facilities
themselves. On the bottom of the triangle is what has been termed interactive
marketing, or what some refer to as real-time marketing. Here the actual
service delivery takes place-the firms employees interact directly with
customers.
It is at this point that the promise is delivered (or not delivered). Having a
positive link between what is promised through external marketing and what is
delivered through interactive marketing is critical. All the external marketing in
the world is useless if promises cannot be kept. The left side of the triangle
suggests the critical role played by internal marketing, which enables
employees to keep the promises that have been made to customers.
Internal marketing refers to the activities the firm must carry out to train,
motivate, and reward its employees. Unless service employees are able and
willing to deliver on the promises made, the firm will not be successful in
keeping its promises and the services marketing triangle will collapse. Internal
marketing hinges on the assumption that employee satisfaction and customer
satisfaction are inextricably linked.
Service management:
Service management draws insights from business practice and from
marketing, operations, human resources, service quality management,
organizational theory and economics.
Its five key facets are:
An overall perspective that guides decisions in all areas of management,
Customer focus,
A holistic approach to cross-functional collaboration,
An emphasis on quality and
Internal development personnel. Service management is:
To understand the utility customers receive by consuming or using the
offerings of the organization and how services alone or together with physical
goods or other kinds of tangibles contribute to this utility, that is, to understand
Product elements.
Place and time.
Process.
Productivity and quality.
People.
Promotion and education.
Physical evidence.
Price and other costs of service.
There are more workers in the manufacturing sector now than there were
twenty years ago, and total industrial production has grown as well. Second,
much of the employment in the service sector is linked directly to
manufacturing; there has been an increasing need for services in support
functions (that is, to hire someone outside the firm to provide services that
used to be provided by company employees) will result in continued growth of
services in support of manufacturing, but not at the expense of manufacturing.
How should the firm be organized so that good strategic and tactical decisions
are made when a decision in any of the functional areas of marketing,
operations, and human resources may have significant impact on the other
two areas?
How can the balance between standardization and personalization be
determined to maximize both the efficiency of the organization and the
satisfaction of its customers?
How can the organization protect new service concepts from competitors
when service processes cannot be legally patented?
How does the firm communicate quality and value to consumers when the
offering is intangible and cannot be legally patented?
How can the organization ensure the delivery of consistent quality service
when both the organizations employees and the customers themselves can
affect the service outcome?
Old Services:
Demand will continue to fall (e.g. public transport, laundries). However
because these services have a fairly small share in service consumption and
output they will have little influence upon services as a whole.
New Services:
Demand will be fairly close to the trend of output and income in the overall
economy (e.g. health, education, tourism). Private consumer demand for
leisure and recreation-related services may tend to increase faster than
personal income if the economy is growing.
The resources devoted to new services that are publicly provided (e.g. health
and education) will be influenced by political decisions. The complexion of the
government in office will clearly influence what share of resources will be
devoted to public services, although this decision in turn will be influenced by
factors like the general health of the economy and general demographic
trends (e.g. the increasing numbers of old people).
Complementary Services:
Demand for these will be influenced by the health of the sectors which use
them. If the fortunes of the manufacturing sector improve then intermediate
services will grow (e.g. computing, finance, research). If on the other hand
manufacturing continues to stagnate, then intermediate services will suffer
too. Generally they have growth faster than manufacturing in the past but it is
unlikely that under stagnant conditions in the 1980s they could continue to
enjoy such exceptional growth.
As far as internationally traded services are concerned (e.g. tourism, financial
services) their growth is less constrained and could continue to develop but
would be particularly influenced by two factors:
(a) Competition
(b) Exchange Rates
A. External Forces:
Some constraints on growth include:
1. Customers can perform services themselves. The degree of essentiality of
service purchases varies (e.g. people can eat at home instead of eating in
restaurants);
2. Manufactured goods will be produced which replace service roles (e.g. TV
replaces cinemas, tools replace the service of skilled labour, like carpenters,
easy-care fabrics replace cleaning and laundry services);
3. Manufactured goods will be produced which require less service attention
(e.g. cars with longer service intervals, equipment with throwaway replaceable
parts).
B. Internal Forces:
Some internal constraints on growth include:
1. The small size of the average service firm;
2. The shortage of people with certain special skills (e.g. doctors);
equipment, mutter about poor value and sigh as they are forced to wait for
service or stand in queues almost everywhere they go.
Suppliers of services often seem to have a very different set of concerns.
Many complain about how difficult it is to make a profit, how hard it is to find
skilled and motivated employees, or how difficult to please customers have
become. Some firms seem to believe that the surest route to financial success
lies in cutting costs and eliminating unnecessary frills.
Happily, in almost every field of endeavour there are service suppliers who
know how to please their customers while also running a productive, profitable
operation, staffed by pleasant and competent employees. The growth of the
services economy is shown in Table 1.2.
Services usually refer to processes and not physical products. Some services may
include people whereas other services (like online services) may including objects
which are managed by people.
Examples of services which include people can be a hair salon, education, theater,
restaurants, public transportation. On the other hand services that
include objects include repairs and maintenance, dry cleaning, banking, legal
services, insurance, etc.
The service processes can be either manual or mechanized or both.
It is possible to carry out a classification of services based on two general
dimensions such as what is being processed, whether is it a person or an object,
and how is it being processed? In other words, what is the nature of the process
(tangible or intangible actions).
In terms of the people processing activities, the level of involvement of the people
can vary significantly. Managers must think about processes/outputs in terms of
what happens to customers and what is being created. For pricing this category of
services, the non-financial costs, time mental effort as well as fear and pain level
must be identified.
Having your computer broken and taking it to a repair facility is one example of
service included in this category. Customers are less physically involved in this
category of services and usually there is no real need for them to enter the service
once he requested the service, explained the problem and pays the respective
service.
Classification of services can be done on the basis of two points. These two points
or factors, are further sub divided into 2 further variables. All in all, service
classification considers four types of people or objects.
http://www.marketing91.com/wp-content/uploads/2015/07/Classification-of-services1.jpg
Business services.
Communication services.
Construction and related engineering services.
Distribution services.
Educational services.
Environmental services.
Financial services.
Health-related and social services.
Tourism and travel-related services.
Recreational, cultural, and sporting services.
Transport services.
Other services not included elsewhere.