And also check out this article about the top 15 service businesses for 2022. Start here and read about on-demand service companies and how services-and apps-are changing the industry. As a marketer, understanding services and their business models is critical. Think about it-services like Uber didn’t exist 20 years ago. It categorizes industries and provides interesting statistics on employment.Ĭompanies are launching new services every day. If you’d like more insight into service industries, check out the US Bureau of Labor Statistics website. Service Industry Stats and a Changing Industry Some examples of information processing services are things like meeting with your financial advisor regarding investment advice, legal services, and banking. Information processing is the most intangible form of service, although it can be transformed into a tangible service output like reports, books, letters, DVDs, etc. The key here is that services rendered in this category are intangible. Other examples include psychotherapy or counseling services. What you’re doing right now-reading this textbook-is a prime example of mental stimulus processing. Time and mental effort are required from the customer to receive this type of service. In its simplest explanation, mental stimulus processing is when the services interact with your mind rather than your body. These services are tangible because the direct recipient is one of your possessions rather than you as a person. Similarly, once you’ve dropped your clothes off at the dry cleaner’s, you don’t need to be physically present when the cleaning process is performed. For example, once you have taken your car in for an oil change, you do not need to be physically at the location for the oil change to occur. Your only involvement is dropping off the item that requires service or repair and explaining the problem. In other words, production and consumption are separate. The difference between people processing and possession processing is that the service is directed toward the customer’s physical possessions. Consider examples of services where you must be present in the service facility in order to interact with the service provider and receive the service, such as barbershops or hair salons, physical therapists’ offices, or restaurants. In people processing services, the customer is a direct recipient of the service, and the production and consumption of the service are simultaneous. We’ll expand on this in the following sections. The first two categories (people processing and possession processing) involve tangible actions directed toward a person’s physical body or property, whereas mental stimulus processing and information processing involve intangible actions directed toward a person’s mind or information. Let’s look at each of these categories in more depth. Start by reading his Wikipedia page to learn about his academic background and achievements. You can run a search on for his books or a search in your browser for articles and more information. If you plan to continue toward a marketing degree, you’ll want to familiarize yourself with Christopher Lovelock’s work. And within those classifications, there are subcategories (see Figure 11.3). Services are classified as people-based services or equipment-based services. Yet it’s just as crucial for organizations that provide services to build brand awareness and brand loyalty. Think about it: you can’t take a service out for a test drive the way you might if you were buying a new car. A consumer can’t touch or see the service before they purchase, so it’s difficult to examine or evaluate benefits. Based on the fact that the majority of contributions to the GDP in the United States are services, and more than half of the country’s workforce is employed in producing “intangibles,” it’s critical to understand this important sector from a marketing perspective.Ĭonsider the challenges to marketers when selling services as opposed to products. The service sector also includes things like banking, medical treatment, transportation, insurance, and many more categories. Do you realize that, as you read this textbook, you’re participating in the services sector of the economy? That’s because education is considered part of the service sector. On the other hand, physical goods are the things we can touch or handle, commonly called tangibles. In a nutshell, services are the nonphysical, intangible economic activities. Figure 11.2 Percentages Added by Industry to the US GDP in 2020 (data source: BEA US Department of Commerce attribution: Copyright Rice University, OpenStax, under CC BY 4.0 license)
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