What is a Service?

 

Service is a performance. Goods are produced and services are performed. Service can be defined as an act of performance offered by one party to another. Services are economic activities that create value and provide benefits for customers at specific time and places as a result of bringing about a desired change in or on behalf of recipient of services.

 

GATS (General Agreement of Trade in Services) identified as many as 155 activities as services and classified them into 11 major categories:

• Business Services

• Communication

• Construction and Engineering

• Distribution

• Education

• Environment

• Finance

• Health

• Tourism

• Recreation

• Transport

 

A service is a period of time during which a customer interacts with the service provider. In some instances, a customer has a single encounter with the service provider and in other instances a customer has a number of encounters with the service provider.

 

Based on the number of encounters, the services are classified into:

• High-Contact Services

• Medium-Contact Services

• Low-Contact Services

 

High Contact services tend to be those in which the customers visit the service facility in person. Customers are actively involved with the service organization and it’s personal throughout service delivery. All people-processing services other than home deliveries are high contact.

 

Medium contact services entail less involvement with service providers. They involve situations in which customers visit the service provider’s facility but do not stay for long through out the service delivery. The purpose of such contacts is often limited to establishing a relationship and defining a service need.

 

Low contact services involve very little, of any physical contact between customers and service providers. Instead, contact takes place through the medium of electronic and physical distribution channels.