Introduction

Services play a vital role in the economy. Advanced economies of the world are dominated by services. Services has become a critical success factors for all the companies. Even the product selling companies are now developing services as their core competency to compete in the market.

With the ever growing importance of services and the challenges which today’s managers are facing everyday, it becomes imperative to understand and appreciate the fundamentals of services. Service Marketing is different from the Product Marketing because of the unique characteristics of services. Everyday the service managers face different challenges to provide higher value to their customer, to retain them with the company and to grove their customer base.

Everyday we deal with services, whether take a taxi to office, go to a beauty parlor for hair cutting and grooming, talk to air phone, use our debit/credit cards for making payments, go to a doctor for medical examination, orders a food with a restaurant, send a document/gift through courier, access internet for browsing or go to a multiplex. We interact with services every none and then. It has  become the part and parcel of our life. Hence, we cannot avoid ourselves to expose with  services of  any kind in our day to day life.

As India moves increasingly toward a services economy, marketers need to know more about marketing service products. On a simplistic note, one can say that services are activities or benefits that one party can offer to another that are essentially intangible and do not result in the ownership of anything. Thus we see how services are different from goods.

During the past decade services have increasingly assumed an important role in the Indian economy. Ever since this trend was set in the nineties, services have gained dominance. The competition, simultaneously, in service organisations, is becoming intense and severe. As a result these organisations have to have a more professional approach to managing their businesses. Perhaps it is in this context that the role of marketing is gaining importance in service organisations. In this unit, you will be introduced to the concept of services.

What are Services?

Most organizations provide a service of some sort or other. For organizations such as airlines, trains, universities, car rentals, etc., service represents a major part of  what they have to offer. They are known as service organizations. Others who are in manufacture of products service is of lesser importance albeit significant importance. There are particular problems in services industries namely – tangibility, inseparability, variability, and perishability. Services have to be contended with uncertainties over customer involvement and what they expect. A service is an activity or series of activities of more or less intangible nature that normally, but not necessarily, take place in interactions between the customer and the service employee and/or physical resources or goods and/or systems of the service provider, which are provided as solutions to customer problems.

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 is essentially intangible and does not lead to ownership of any of the factors of production.

Put in most simple terms services are deeds, processes and performances. Services include all economic activities whose output is not a physical product or construction is generally consumed at the time it is produced and provides added value in forms that are essentially intangible concerns of its first purchases. It encompasses a wide range of industries. e.g., are transportation and public utilities, hotels, personal services, etc.

Definition of service marketing

According to American Marketing Association (1960), “Services are activities, benefits, or satisfactions which are offered for sale, or provided in connection of sale of goods”.

Robert  Judd  defined  service  as  “a  market  transaction  by  an  enterprise  or  entrepreneur  where  the  object  of  the  market  transaction  is  other  than  the  transfer  of  ownership  of  a  tangible commodity”. 

In  1973  Bessom  proposed  that  “for  the  consumer,  services  are  activities  offered  for  sale  that provide valuable benefits or satisfactions; activities that he cannot perform for himself or that he chooses not to perform for himself”. 

Another  definition  given  by  Blois  in  1974  says  that,  “a  service  is  an  activity  offered  for  sale  which  yields  benefits  and  satisfactions  without  leading  to  a  physical  change  in  the  form of a good”. 

Stanton  proposed  a  definition  in  1974  and  defined  service  as  “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”.

Kotler  and  Bloom  in  1984,  defined  service  as,  “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”. 

Gronroos defined a service as “an activity or series of activities of more or less intangible nature  that  normally,  not  necessarily,  take  place  in  interactions  between  the  customer  and  service  employees  and/or  physical  resources  or  goods  and/or  systems  of  the  service  provider, which are provided as solution to customer problems”. 

We may conclude service as, “an activity or series of activities rather than things which has some element of intangibility associated with it, which involves some interaction between the customer and the service provider, and does not result in a transfer of ownership.  Customer has a vital role to play in the production process as the services are provided in response to the problems of customers as solution.  The production of the service may or may not be closely associated with a physical product”.