6.5.3 Defining Services¶
In marketing, both products and services are defined as anything that satisfies the needs and wants of the customer. These two concepts, while related, are often viewed as opposite ends of a continuum. The key difference between the two lies in the level of service and product components they involve.
Products and Services as a Continuum¶
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Pure Product: At one end of the continuum, you have a pure product where the service component is minimal. For example, a simple wooden chair may require little to no service after purchase. Its primary function is to provide seating, and it doesn’t need complex maintenance beyond occasional polishing.
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Pure Service: On the other end, there is a pure service, where the product component is minimal or non-existent. For instance, consulting services or medical consultations are services where no physical product is involved in the transaction.
Between these two extremes, most offerings include a blend of both product and service components, with the importance of each varying based on the product’s complexity and features.
Example: Wooden Chair vs. Recliner¶
Consider the example of a wooden chair versus a recliner: - A wooden chair is a simple product that doesn’t require much service. It serves its primary function of providing seating with minimal maintenance. - A recliner, on the other hand, is a more complex product. It includes features like massage functions, remote controls, and adjustable settings. Given these complexities, a recliner requires significant service for maintenance, repairs, and warranty support.
Examples of Services¶
Services can be found in many industries, such as: - Healthcare: Hospitals and medical consultations. - Education: Schools and universities offering courses and training. - Banking: Services like loans and account management.
Definition of Services¶
American Marketing Association (AMA) Definition (1988)¶
The American Marketing Association defines services as:
"Products such as bank loans, home security that are tangible, intangible, or at least substantially so, those are the things that are called services. If totally intangible, they are exchanged directly from the producer to the user. They cannot be transported or stored and are almost instantly perishable."
This definition highlights key characteristics of services: - Intangibility: Services are significantly intangible. - Direct Exchange: They are exchanged directly from the producer to the user without being stored or transported. - Perishability: Services cannot be stored for later use; they are consumed as they are produced.
Characteristics of Services¶
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Intangibility: Unlike products (e.g., an apple), services cannot be touched or seen before they are consumed. For example, you cannot see the quality of a haircut until it is done.
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Simultaneous Production and Consumption: Services are often produced and consumed simultaneously. A haircut or a medical consultation is only realized once it is performed.
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Customer Participation: Many services require active customer participation. For example, a doctor’s consultation involves not just the doctor’s action but the patient’s interaction and feedback.
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No Ownership Transfer: Unlike physical products, services do not involve the transfer of ownership. For instance, when you buy a TV, ownership passes from the seller to you. However, when you take a flight, you don’t own the service; you simply pay for the right to experience it.
Philip Kotler's Definition of Service¶
Philip Kotler defines service as:
"Any act or performance that one party can offer to another that is essentially intangible and does not result in ownership of anything. The production may or may not be tied to a physical product."
This definition emphasizes: - Intangibility: The service itself doesn’t have a physical presence. - No Ownership: Consumers do not own the service; they only experience it. - Potential for Physical Product Ties: Services may or may not be associated with a physical product (e.g., hotel stay includes both service and accommodation).
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