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2. Nature of services
 Services are everywhere
 Service is
 ‘an act or performance that one party can offer to
another;
 That is essentially intangible;
 And does not result into the ownership of anything.
 Production may/may not be tied to a physical product.

3. Nature of services
 Service Mix
 Pure tangible goods; e.g. Phenyl
 Tangible good + accompanying service; cars
 Hybrid; restaurants
 Service + accompanying goods; travel
 Pure service; education, consulting

4. Nature of services
 Equipment based (ATMs) / people based (consulting,
cleaning)
 Requires the client’s presence (brain surgery); car
washing doesn’t.
 Services for personal or business needs.
 Profit/non profit; public/private ownership.

5. Characteristics of Services
 Intangibility
 No idea of the outcome of the service.
 Therefore, ‘tangibilize the intangibles’.
 Through physical evidence and presentation.
 Place
 People
 Equipment
 Price
 Communication materials.

6. Characteristics of Services
 Inseparability
 Produced and consumed simultaneously.
 The client is present when the service is produced.
 The provider becomes a part of the service.
 Variability
 Human behavior cant be standardized.
 Try to hire good people.

7. Characteristics of Services
 Perishability
 Services can’t be stored
 Can’t store for peak demands
 Differential pricing
 Reservation systems
 Increased consumer participation

10. Managing Service Quality
 Gap 1:
 Consumer expectation and management perception
 Gap 2:
 Management Perception and service-quality
specification

11. Managing Service Quality
 Gap 3:
 Service quality specification and service delivery
 Gap 4:
 Service delivery and external communications
 Gap 5:
 Perceived service and expected service

12. Managing Service Quality
 Reliability
 Ability to perform promised service accurately
 Responsiveness
 Willingness to help customers, prompt service
 Assurance
 Knowledge and courtesy of employess

13. Managing Service Quality
 Empathy
 Caring, individualized attention
 Tangibles
 Appearance of physical facilities, equipment, personnel,
etc.

14. Best Practices
 Strategic concept: be “customer -obsessed”
 Top management commitment
 Set high standards
 Self-service technologies (SSTs) – ATM, IRCTC
 Monitoring Systems
 Satisfying employees as well as customers