Thursday, June 18, 2009

Classification of Services

Classification of services:
There are a number of ways in which services can be classified. Some of them are mentioned here.

1. On the basis of the END USER the services can be classified into following categories:
• Consumer : leisure, hairdressing, personal finance and package holidays
• Business to Business: advertising agencies, printing, accountancy, Consultancy
• Industrial: Plant Maintenance and repair, workwear and hygiene, installation and project management.

2. The DEGREE OF TANGIBILITY can be used to classify a service.
• Highly tangible: car rental, vending machines, telecommunications
• Service linked to tangible goods: domestic appliance repair, car service.
• Highly tangible: psychotherapy, Consultancy , legal services.

3. Services can be broken down into LABOR INTENSIVE (PEOPLE based) and EQUIPMENT based services. This can also be represented by degree of contact.
• People based services: high contact : education, dental care, restaurants and medical services
• Equipment based: low contact: automatic car wash, launderette, vending machine, cinema.

4. The EXPERTISE and SKILLS of the service provider can be broken down into the following categories:
• Professional: medical services, legal services, accountancy, tutoring.
• Non Professional: baby sitting, care taking, and casual labor.

5. The overall BUSINESS ORIENTATION ( PROFIT) is a recognized means of classifications:
• Not for profit: The Scouts Association, charities, and public sector leisure facilities.
• Commercial: banks, airlines, tour operators, hotel and catering services

Christopher Lovelock gives another classification of services based on the customer involvement in production process:

 People processing: tangible actions to people’s bodies, such as airline transportation, haircutting and surgery. Customers need to be physically present throughout service delivery in order to receive the desired benefits of such services. It is important to figure the process and output to identify the benefits created. Also some non- financial costs are to be identified – such as time, mental and physical effort and even tear and pain – that customers incur in obtaining these benefits.

 Possession Processing: Tangible actions to goods and other physical possessions, such as air freight, lawn mowing, and janitorial services. In these instances, the object requiring processing must be present, but the customer need not be.

 Mental Stimulus Processing: intangible actions directed at people’s mind, such as broadcasting and education. In this instance the customers must be present mentally but can be located either in specific service facility or in a remote location connected by broadcast signals or telecommunication linkages. Services that interact with people’s mind have the power to shape attitudes and influence behavior. So when the customer is in a position of dependency or there is a potential for manipulation, strong ethical standards and careful oversight is required. This type of service can easily be converted to digital bits or analog signals, recorded for prosperity, and transformed into a manufactured product, such as a compact disc, videotape, or audio cassette, which may then be packaged and marketed much like any other physical good

 Information Processing: Intangible actions directed at intangible assets, such as insurance, investment banking, and Consulting. For these services, no direct involvement with the customer may be needed, once the request for the service is initiated. Services highly dependent on effective collection and processing of information include financial services, accounting, law, marketing research, management consulting, medical diagnosis and a variety of other professional services. Tradition and a personal desire to meet the supplier than often determine the extent of customer involvement in such services more by the needs of operation process.

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