GOODS AND SERVICES

GOODS TANGIBLE. Goods are objects, which can be seen, felt, sensed easily. SERVICES INTANGIBLE. Services are performance or actions, which cannot be tasted, felt, touched. E.G. health care services. (Treatment, surgery) HOMOGENOUS/STANDA RDISED Goods have their own standards & many goods are alike. HETEROGENOUS. Services are frequently produced by human beings so no two services will be alike. E.G. two different clients have different service experience from the same tax accountant. PRODUCTION AND DISTRIBUTION ARE SEPERATED FROM CONSUMPTION Goods are produced first, then sold, then consumed. SIMULTANEOUS PRODUCTION AND CONSUMPTION. Most services are sold first and then produced and consumed simultaneously. E.G. restaurant services are sold first dinning experience is produced and consumed. NON-PERISHABLE. Goods can be stored in inventory or resold or even returned. CORE VALUE PRODUCED IN FACTORY CUSTOMERS DO NOT PARTICIPATE IN PRODUCTION PROCESS. TRANSFER OF OWNERSHIP A THING PERISHABLE. Services cannot be saved, stored or returned. E.G. bad haircut. COREVALUE PRODUCED IN BUYER SELLER INTERACTIONS. CUSTOMERS PARTICIPATE IN THE PRODUCTION. NO TRANSFER OF OWNERSHIP.ANACTIVITY/PROCESS It is difficult to synchronize supply and demand in services. Right quality has to be delivered in the first instance. RESULTING IMPLICATION Services cannot be inventoried. It cannot be patented nor readily displayed or communicated. Pricing of services is very difficult. Service delivery and customer satisfaction depends on employee actions. Service quality depends on many uncontrollable factors. There is no sure knowledge that the service delivered matches what is planned. Customers participate in & affect the transaction. customers affect each other. Employees affect the service outcome. Decentralization may be essential. Mass production is difficult.

SERVICE MANAGEMENT Service Management is : 1) 2) 3) 4) To understand the utility the customers rceicve by consuming or using the service offering of the organization To understand how the organization (personnel, technology, physical resources, systems and customers)will b able to produce and deliver this utility To understand how the organization should be developed and managed so that the intended quality can be achieved To make the organization function so that this quality can be delivered on a continuous basis

SOME DEFINITIONS :

** American Marketing association has defined services as activities, benefits or satisfactions, which are offered for sale or provided in connection with sale o goods. This definition took a limited view of services as it proposed that services are offered only in connection with sale of goods. ** Robert Judd defined services as a market transaction by an enterprise or entrepreneur, where the object of market transaction is other than the transfer of ownership of a tangible commodity This recognised three broad areas of services The right to possess and use a product (rented goods service) The customs creation, repair, or improvement of a product (owned goods service) No product elements but rather experience or what might be termed as experiential possession (non-goods service)

** Blois defines services, as a service is an activity offered for sale which yields benefits and satisfactions without leading to physical change in the form of a good ** Kotler and Bloom defines services as an activity or benefit that one party can offer to another that is essentially intangible and dos not result in the ownership of any thing. Its production may not my not be tied up to a physical product. ** Gummesson says, Services is something which can be bought and sold but which you cannot drop on your foot.

** According Gronross a service is an activity or series of activities of more or less intangible in nature that normally, not necessarily, take place in interactions between the customer and the service employees and/or physical resources or goods and/or system of the service provider, which are provided as solution to customer problems. From this it follows that Services are by and large activities, or a series of activities rather than things As a result they are intangible They take place in interaction between the customer and service provider which means that services are produced and consumed simultaneously Customer has a role to play in the production process as services are provided in response to the problems of customers as a solution. 1.8 Characteristics of Services and its Marketing Implications The main Characteristics of Services are : Intangibility Inseparability Heterogeneity Perishability

Intangibility Services are actions and hence they are intangible. Due to this it is not possible to stock services and hence fluctuations in demand becomes difficult to manage. Hotels have same number of rooms all through the year but the customers requiring the room are always varying with some months seeing very few customers while other months seeing a rush of customers. Further services cannot be patented and any new concept can be easily copied by competitors. These cannot be readily displayed or easily communicated, and hence it will be difficult for the consumers to assess the quality. This also creates a problem for what to include in advertisements and promotional materials. Further the actual cost of unit service is difficult to determine and hence pricing becomes difficult. Inseparability Services are generally created or supplied simultaneously. They are inseparable. For e.g., the entertainment industry, health experts and other professionals create and offer their service at the same given time. Services and their providers are associated closely and thus, not separable. Donald Cowell states Goods are produced, sold and then consumed whereas the services are sold and then produced and then consumed.

A service is produced when it is consumed eg. a dinning experience. Thus the customers re present when the service is produced thus other customer play an important role in satisfaction. The service producer also plays an important role in quality. Thus mass production is impossible, it is not possible to get economy of scale by centralisation, operations has to be decentralised to deliver to the consumer directly at convenient locations. A problem customer can result in disruption of service production process creating a dissatisfaction for himself, other customers and also to the service producer.
Heterogeneity

As services are produced by humans, hence no two services can be identical. Further no two customers are precisely alike and hence their experiences of the same service are different. Even the same customer can be with different frame of mind at different times which results in differing satisfactions from the same service at different times. Eg. A tax consultant may provide different a service experience to two different customers on the same day depending upon their needs and on whether the consultant is meeting the customer when he is fresh in the morning or tired at the end of the day. Because of this ensuring a consistent quality becomes a challenging job. The quality depends upon a number of factors like the customer, service provides, other customers (their presence or even absence) etc., hence the service provider cannot know if the service is delivered in a manner which has been originally planned and promoted. Sometimes services are provided by a third party further increasing the heterogeneity. Perishability Services cannot be stored, saved, resold or returned. A bad haircut cannot be returned or resold to another customer. Hence demand forecasting and creative planning to meet the demand is a problem. Further one has to be right the first time or if things go wrong one should have strong recovery strategies to retain the customer goodwill.

TEN SUCH QUALITIES WHICH INFLUENCE THE EVALUATION OF SERVICES (Quality Dimensions of Services)

CONSUMERS

Consistency: - it involves consistency and reliability of performances and dependability. It means that the firm performs the service right the first time. It also means that the firm honours its promises especially in terms of accuracy in billing, record keeping and performing the service at the designated time. Concern:-it is the willingness or responsiveness of employees to provide the service. It involves timeliness of service or giving prompt service, calling the customer back quickly or mailing the transaction slip immediately. Competence: - it means having the required skills and knowledge to perform the service. It involves knowledge and skill of the contact personnel, knowledge and skill of operating support personnel and research capability of the organization. E.g. securities brokerage firm. Contact:- it involves approachability, access and ease of contact. It means that the service is easily accessible by telephone; waiting time to receive the services is not extensive, convenient hours of operation and convenient location of service facility. Courtesy:- it involves politeness, report, consideration and friendliness of contact personnel. It includes consideration for the consumers property. Clean and neat appearance of public contact personnel. E.g. no muddy shoes on the carpet, proper telephone operators etc. Communication:- it means keeping consumers informed in a language that they can understand and listen to them. It may mean that the company has to adjust its language for different consumers increasing the level of sophistication with a well educated consumer and speaking simply and plainly with a novice. It involves explaining the service itself and how much the service will cost explaining the trade-off between service and cost and assuring the customer that a problem will be handled. Credibility: - it involves trustworthiness, believability, honesty. It involves having the customers best interest at heart thus contributing to credibility, company name and reputation, personal characteristics of the contact personnel and degree of hard sell involved in interaction with the customer. Confidentiality: - the security and the freedom from risk or doubt, involving physical safety, financial security or confidentiality. Customer knowledge: - it involves making the effort to understand the customers needs, i.e. learning the customers specific requirements, providing individualized attention and recognizing the regular customer.

Tangibles: - it includes physical evidence of the service, physical facilities, and appearance of personnel tools or equipments used to provide the service, physical representations of the service such as a plastic credit card or a bank statement and other customers in the service facility.

REASONS FOR THE GROWTH OF SERVICE INDUSTRY

It is obvious that the growth in the services sector has been substantive. The reasons for this growth are quite a few, some of which are summarized as follows.

Affluence: - The increase in per capita income from Rupees 238.8 in 1950 to Rupees 11,934.5 in 1998 is an indicator of he increase in general affluence has given rise to service like pest-control, personal security, interior designer, etc. Leisure time: - People do get some time to travel and holiday and therefore there is a need for travel agencies, resorts, hotels, and entertainment. There are others who would like to utilize this time to improve their career prospects and therefore there is a need for adult education/distance learning/part time courses. Life expectancy: - The health programmed have significantly contributed to an increase in life expectancy given rise to services like old age homes, nursing homes, health care, etc. Working wives: - As more and more women have started working, the need for day care for children has increased, and so is the care with packed food and home delivery. Product complexity: - A large no. of products are now being purchased in households which can be serviced only by specialized persons like water purifies, micro wave ovens, home computers, etc. giving rise to the need for services like after sales service agents for durables, maintenance service providers, etc. Life complexity: - As the daily routine gets busier, individuals find it difficult to manage things on their own. Their leads to an obvious need for tax consultants, legal advisors, property advisers, etc. Resource scarcity and ecology: - As the natural resources are depleting and need for conservation is increasing, we have seen the coming up of service providers like pollution control agencies, car, pools, water management, etc. New products: - the development in information technology has given rise to services like PCOs, Pager service providers, Web Shoppe, etc