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Encyclopedia > Service (economics)
A hotel porter is an example of a service occupation.

A service is the non-material equivalent of a good. Service provision has been defined as an economic activity that does not result in ownership and is claimed to be a process that creates benefits by facilitating either a change in customers, a change in their physical possessions, or a change in their intangible assets. A good in economics is any physical object (natural or man-made) or service that, upon consumption, increases utility, and therefore can be sold at a price in a market. ... This article does not cite any references or sources. ... Customers are waiting in front of a famous fashion shop for its grand opening in Hong Kong. ... In business and accounting an asset is anything owned, whether in possession or by right to take possession, by a person or a group acting together, e. ...

By composing and orchestrating the appropriate level of resources, skill, ingenuity,and experience for effecting specific benefits for service consumers, service providers participate in an economy without the restrictions of carrying stock (inventory) or the need to concern themselves with bulky raw materials. On the other hand, their investment in expertise does require consistent service marketing and upgrading in the face of competition which has equally few physical restrictions. For other uses, see resource (disambiguation). ... A skill is an ability, usually learned and acquired through training, to perform actions which achieve a desired outcome. ... The term ingenuity or applied ideas is used in the analysis of Thomas Homer-Dixon, building on that of Paul Michael Romer, to refer to what is usually called instructional capital. ... Look up Experience in Wiktionary, the free dictionary This article discusses the general concept of experience. ... For other uses, see Stock (disambiguation). ... Invest redirects here. ... For other uses, see Competition (disambiguation). ...

Providers of services make up the Tertiary sector of the economy.


Service characteristics

Services can be paraphrased in terms of their generic key characteristics.

1. Intangiblity

Services are intangible and insubstantial: they cannot be touched, gripped, handled, looked at, smelled, tasted or heard. Thus, there is neither potential nor need for transport, storage or stocking of services. Furthermore, a service cannot be (re)sold or owned by somebody, neither can it be turned over from the service provider to the service consumer nor returned from the service consumer to the service provider. Solely, the service delivery can be commissioned to a service provider who must generate and render the service at the distinct request of an authorized service consumer. Intangible assets are defined as those non-monetary assets that cannot be seen, touched or physically measured and which are created through time and/or effort. ... Old warehouses in Amsterdam Inside Green Logistics Co. ...

2. Perishability

Services are perishable in two regards

  • The service relevant resources, processes and systems are assigned for service delivery during a definite period in time. If the designated or scheduled service consumer does not request and consume the service during this period, the service cannot be performed for him. From the perspective of the service provider, this is a lost business opportunity as he cannot charge any service delivery; potentially, he can assign the resources, processes and systems to another service consumer who requests a service. Examples: The hair dresser serves another client when the scheduled starting time or time slot is over. An empty seat on a plane never can be utilized and charged after departure.
  • When the service has been completely rendered to the requesting service consumer, this particular service irreversibly vanishes as it has been consumed by the service consumer. Example: the passenger has been transported to the destination and cannot be transported again to this location at this point in time.

3. Inseparability A business opportunity , or biz-opp , involves the sale or lease of any product, service, equipment, etc. ...

The service provider is indispensable for service delivery as he must promptly generate and render the service to the requesting service consumer. In many cases the service delivery is executed automatically but the service provider must preparatorily assign resources and systems and actively keep up appropriate service delivery readiness and capabilities. Additionally, the service consumer is inseparable from service delivery because he is involved in it from requesting it up to consuming the rendered benefits. Examples: The service consumser must sit in the hair dresser's shop & chair or in the plane & seat; correspondingly, the hair dresser or the pilot must be in the same shop or plane, respectively, for delivering the service.

4. Simultaneity

Services are rendered and consumed during the same period of time. As soon as the service consumer has requested the service (delivery), the particular service must be generated from scratch without any delay and friction and the service consumer instantaneously consumes the rendered benefits for executing his upcoming activity or task.

5. Variability

Each service is unique. It is one-time generated, rendered and consumed and can never be exactly repeated as the point in time, location, circumstances, conditions, current configurations and/or assigned resources are different for the next delivery, even if the same service consumer requests the same service. Many services are regarded as heterogeneous or lacking homogeneity and are typically modified for each service consumer or each new situation (consumerised). Example: The taxi service which transports the service consumer from his home to the opera is different from the taxi service which transports the same service consumer from the opera to his home - another point in time, the other direction, maybe another route, probably another taxi driver and cab.

Each of these characteristics is retractable per se and their inevitable coincidence complicates the consistent service conception and make service delivery a challenge in each and every case. Proper service marketing requires creative visualization to effectively evoke a concrete image in the service consumer's mind. From the service consumer's point of view, these characteristics make it difficult, or even impossible, to evaluate or compare services prior to experiencing the service delivery. Creative Visualization refers to the practice of seeking to affect the outer world via changing ones thoughts. ...

Mass generation and delivery of services is very difficult. This can be seen as a problem of inconsistent service quality. Both inputs and outputs to the processes involved providing services are highly variable, as are the relationships between these processes, making it difficult to maintain consistent service quality. For many services there is labor intensity as services usually involve considerable human activity, rather than a precisely determined process; exceptions include utilties. Human resource management is important. The human factor is often the key success factor in service economies. It is difficult to achieve economies of scale or gain dominant market share. There are demand fluctuations and it can be difficult to forecast demand. Demand can vary by season, time of day, business cycle, etc. There is consumer involvement as most service provision requires a high degree of interaction between service consumer and service provider. There is a customer-based relationship based on creating long-term business relationships. Accountants, attorneys, and financial advisers maintain long-term relationships with their clientes for decades. These repeat consumers refer friends and family, helping to create a client-based relationship. A public utility is a company that maintains the infrastructure for a public service. ... Organizational studies - an overview Organizational development Management development Mentoring Coaching Job rotation Professional development Upward feedback Executive education Supervisory training leadership development leadership talent identification and management individual development planning 360 degree feedback succession planning Skills management performance improvement process improvement job enrichment Training & Development managing change and also change... ... Market share, in strategic management and marketing, is the percentage or proportion of the total available market or market segment that is being serviced by a company. ... In economics, the demand curve can be defined as the graph depicting the relationship between the price of a certain commodity, and the amount of it that consumers are willing and able to purchase at that given price. ... This article or section is in need of attention from an expert on the subject. ... This article is about the concept of time. ... The business cycle or economic cycle refers to the fluctuations of economic activity about its long term growth trend. ... A service provider is an entity that provides services to other entities. ...

Service definition

The generic clear-cut, complete and concise definition of the service term reads as follows:

A service is a set of singular and perishable benefits

  • delivered from the accountable service provider, mostly in close coaction with his service suppliers,
  • generated by functions of technical systems and/or by distinct activities of individuals, respectively,
  • commissioned according to the needs of his service consumers by the service customer from the accountable service provider,
  • rendered individually to an authorized service consumer at his/her dedicated request,
  • and, finally, consumed and utilized by the requesting service consumer for executing and/or supporting his/her day-to-day business tasks or private activities.

Service specification

Any service can be clearly, completely, consistently and concisely specified by means of the following 12 standard attributes which conform to the MECE principle (Mutually Exclusive, Collectively Exhaustive) This article does not cite any references or sources. ...

  1. Service Consumer Benefits
  2. Service-specific Functional Parameter(s)
  3. Service Delivery Point
  4. Service Consumer Count
  5. Service Readiness Times
  6. Service Support Times
  7. Service Support Language(s)
  8. Service Fulfillment Target
  9. Maximum Impairment Duration per Incident
  10. Service Delivering Duration
  11. Service Delivery Unit
  12. Service Delivering Price

The meaning and content of these attributes are:

1. Service Consumer Benefits describe the (set of) benefits which are callable, receivable and effectively utilizable for any authorized service consumer and which are provided to him as soon as he requests the offered service. The description of these benefits must be phrased in the terms and wording of the intended service consumers.

2. Service-specific Functional Parameters specify the functional parameters which are essential and unique to the respective service and which describe the most important dimension of the servicescape, the service output or outcome, e.g. maximum e-mailbox capacity per registered and authorized e-mail service consumer.

3. Service Delivery Point describes the physical location and/or logical interface where the benefits of the service are made accessible, callable, receivable and utilzable to the authorized service consumers. At this point and/or interface, the preparedness for service delivery can be assessed as well as the effective delivery of the service itself can be monitored and controlled.

4. Service Consumer Count specifies the number of intended, identified, named, registered and authorized service consumers which shall be and/or are allowed and enabled to call and utilize the defined service for executing and/or supporting their business tasks or private activities.

5. Service Readiness Times specify the distinct agreed times of day when

  • the described service consumer benefits are
    • accessible and callable for the authorized service consumers at the defined service delivery point
    • receivable and utilizable for the authorized service consumers at the respective agreed service level
  • all service-relevant processes and resources are operative and effective
  • all service-relevant technical systems are up and running and attended by the operating team
  • the specified service benefits are comprehensively delivered to any authorized requesting service consumer without any delay or friction.

The time data are specified in 24 h format per local working day and local time, referring to the location of the intended service consumers.

6. Service Support Times specify the determined and agreed times of day when the usage and consumption of commissioned services is supported by the service desk team for all identified, registered and authorized service consumers within the service customer's organizational unit or area. The service desk is/shall be the so called the Single Point of Contact (SPoC) for any service consumer inquiry regarding the commissioned, requested and/or delivered services, particularly in the event of service denial, i.e. an incident. During the defined service support times, the service desk can be reached by phone, e-mail, web-based entries and/or fax, respectively. The time data are specified in 24 h format per local working day and local time, referring to the location of the intended service consumers.

7. Service Support Languages specifies the national languages which are spoken by the service desk team(s) to the service consumers calling them.

8. Service Fulfillment Target specifies the service provider's promise of effective and seamless delivery of the defined benefits to any authorized service consumer requesting the service within the defined service times. It is expressed as the promised minimum ratio of the counts of successful individual service deliveries related to the counts of requested service deliveries. The effective service fulfillment ratio can be measured and calculated per single service consumer or per consumer group and may be referred to different time periods (workday, calenderweek, workmonth, etc.)

9. Maximum Impairment Duration per Incident specifies the allowable maximum elapsing time [hh:mm] between

  • the first occurrence of a service impairment, i.e. service quality degradation or service delivery disruption, whilst the service consumer consumes and utilizes the requested service,
  • the full resumption and complete execution of the service delivery to the content of the affected service consumer.

10. Service Delivering Duration specifies the promised and agreed maximum period of time for effectively delivering all specified service consumer benefits to the requesting service consumer at the currently chosen service delivery point.

11. Service Delivery Unit specifies the basic portion for delivering the defined service consumer benefits. The service delivery unit is the reference and mapping object for all cost for service generation and delivery as well as for charging and billing the consumed service volume to the service customer who has commissioned the service delivery.

12. Service Delivering Price specifies the amount of money the service customer has to pay for the distinct service volumes his authorized service consumers have consumed. Normally, the service delivering price comprises two portions

  • a fixed basic price portion for basic efforts and resources which provide accessibility and usability of the service delivery functions, i.e. service access price
  • a price portion covering the service consumption based on
    • fixed flat rate price per authorized service consumer and delivery period without regard on the consumed service volumes,
    • staged prices depending on consumed service volumes,
    • fixed price per particularly consumed service delivering unit.

Service delivery

The delivery of a service typically involves six factors:

  • The accountable service provider and his service suppliers (e.g. the people)
  • Equipment used to provide the service (e.g. vehicles, cash registers, technical systems, computer systems)
  • The physical facilities (e.g. buildings, parking, waiting rooms)
  • The requesting service consumer
  • Other customers at the service delivery location
  • Customer contact

The service encounter is defined as all activities involved in the service delivery process. Some service managers use the term "moment of truth" to indicate that defining point in a specific service encounter where interactions are most intense.

Many business theorists view service provision as a performance or act (sometimes humorously referred to as dramalurgy, perhaps in reference to dramaturgy). The location of the service delivery is referred to as the stage and the objects that facilitate the service process are called props. A script is a sequence of behaviors followed by all those involved, including the client(s). Some service dramas are tightly scripted, others are more ad lib. Role congruence occurs when each actor follows a script that harmonizes with the roles played by the other actors. This is an annotated list of important business theorists. ... Dramaturgy is the art of dramatic composition and the representation of the main elements of drama on the stage. ... This article does not cite any references or sources. ... This article or section does not adequately cite its references or sources. ... This article does not cite any references or sources. ... For other uses, see Drama (disambiguation). ... Ad libitum is Latin for at ones pleasure, often shortened to Ad lib. ... Actors in period costume sharing a joke whilst waiting between takes during location filming. ... This article is about the sociology term. ...

In some service industries, especially health care, dispute resolution, and social services, a popular concept is the idea of the caseload, which refers to the total number of patients, clients, litigants, or claimants that a given employee is presently responsible for. On a daily basis, in all those fields, employees must balance the needs of any individual case against the needs of all other current cases as well as their own personal needs.

Under English law, if a service provider is induced to deliver services to a dishonest client by a deception, this is an offence under the Theft Act 1978. English law is a formal term of art that describes the law for the time being in force in England and Wales. ... Dishonesty is a term which in common usage may be defined as the act of being dishonest; to act without honesty; a lack of probity, to cheat, lying or being deliberately deceptive; lacking in integrity; to be knavish, perfidious, corrupt or treacherous; charlatanism or quackery. ... The Theft Act 1978 supplemented the earlier deception offences in English law contained in sections 15 and 16 of the Theft Act 1968 by reforming some aspects of those offences and adding new provisions. ...

Service-Goods continuum
Service output in 2005

The service-goods continuum

The dichotomy between physical goods and intangible services should not be given too much credence. These are not discrete categories. Most business theorists see a continuum with pure service on one terminal point and pure commodity good on the other terminal point.[citation needed] Most products fall between these two extremes. For example, a restaurant provides a physical good (the food), but also provides services in the form of ambience, the setting and clearing of the table, etc. And although some utilities actually deliver physical goods — like water utilities which actually deliver water — utilities are usually treated as services. This article does not cite any references or sources. ... For other uses, see Restaurant (disambiguation). ...

In a narrower sense, service refers to quality of customer service: the measured appropriateness of assistance and support provided to a customer. This particular usage occurs frequently in retailing. Customer service (also known as Client Service) is the provision of service to customers before, during and after a purchase. ... Retail redirects here. ...

List of economic services

In 2005, USA was the largest producer of services followed by Japan and Germany, reports the International Monetary Fund. Services accounted for 78.5% of the U.S. economy in 2007[1], compared to 20% in 1947. IMF redirects here. ... The economy of the United States has been the worlds largest national economy since the late 1890s;[1] its gross domestic product (GDP) was estimated as $13. ...

The following is an incomplete list of service industries, grouped into rough sectors. Parenthetical notations indicate how specific occupations and organizations can be regarded as service industries to the extent they provide an intangible service, as opposed to a tangible good. A profession is an occupation, vocation or career where specialized knowledge of a subject, field, or science is applied. ... For other uses, see Organization (disambiguation). ...

Management consultant redirects here. ... Customer service (also known as Client Service) is the provision of service to customers before, during and after a purchase. ... This article is about human resources as it applies to business, labor, and economies. ... Childcare (also written child care[1] and babycare) is the act of caring for and supervising minor children. ... “Cleanup” redirects here. ... Maintenance, Repair and Operations or Maintenance, Repair and Overhaul (MRO), is fixing any sort of mechanical or electrical device should it get out of order or broken (repair) as well as performing the routine actions which keep the device in working order (maintenance) or prevent trouble from arising (preventive maintenance). ... A janitor is a person who takes care of a building, such as a school, office building, or apartment block. ... A gardener is any person involved in the growing and maintenance of plants, notably in a garden. ... Look up Mechanic in Wiktionary, the free dictionary. ... For other uses, see Construction (disambiguation). ... A carpenter is a skilled craftsman who performs carpentry -- a wide range of woodworking that includes constructing buildings, furniture, and other large objects out of wood. ... For theatrical electricians, see Electrician (theater). ... A plumber wrench for working on pipes and fittings A complex arrangement of rigid steel piping, stop valves regulate flow to various parts of the building. ... For the thrash metal band, see Coroner (band). ... For other uses, see Cadaver (disambiguation). ... This article or section does not cite its references or sources. ... It has been suggested that Adjudication be merged into this article or section. ... Arbitration is a legal technique for the resolution of disputes outside the courts, wherein the parties to a dispute refer it to one or more persons (the arbitrators or arbitral tribunal), by whose decision (the award) they agree to be bound. ... A trial at the Old Bailey in London as drawn by Thomas Rowlandson and Augustus Pugin for Ackermanns Microcosm of London (1808-11). ... For other uses, see Law (disambiguation). ... For the purposes of Public International Law and Private International Law, a state is a defined group of people, living within defined territorial boundaries and subject, more or less, to an autonomous legal system exercising jurisdiction through properly constituted courts. ... This article is about negotiations. ... The examples and perspective in this article or section may not represent a worldwide view. ... For the fish called lawyer, see Burbot. ... Advocacy is the act of arguing on behalf of a particular issue, idea or person. ... For statistical mediation, see Mediation (Statistics). ... For other uses, see Negotiation (disambiguation). ... Julio Pérez Ferrero Library - Cúcuta, Colombia A modern-style library in Chambéry A library is a collection of information, sources, resources, and services: it is organized for use and maintained by a public body, an institution, or a private individual. ... For other uses, see Museum (disambiguation). ... Students in Rome, Italy. ... A stilt-walker entertaining shoppers at a shopping centre in Swindon, England Entertainment is an activity designed to give pleasure or relaxation to an audience (although in the case of a computer game the audience may be only one person). ... Gamble redirects here. ... A typical multiplex (AMC Promenade 16 in Woodland Hills, Los Angeles, United States). ... This article is about motion pictures. ... Whore redirects here. ... Dry cleaning is any cleaning process for clothing and textiles using an organic solvent other than water — generally known as dry cleaning fluid, and typically this is tetrachloroethylene. ... Financial services is a term used to refer to the services provided by the finance industry. ... Accountancy (profession)[1] or accounting (methodology) is the measurement, statement, or provision of assurance about financial information primarily used by managers, investors, tax authorities and other decision makers to make resource allocation decisions within companies, organizations, and public agencies. ... For other uses, see Bank (disambiguation). ... A building society is a financial institution, owned by its members, that offers banking and other financial services, especially mortgage lending. ... Real estate is a legal term that encompasses land along with anything permanently affixed to the land, such as buildings. ... A Stock broker sells or buys stock on behalf of a customer. ... Taxes redirects here. ... The foodservice (or food service) industry generally encompasses those places, institutions, and companies responsible for any meal eaten away from home. ... A domestic cat grooming itself by licking its fur clean Personal grooming, sometimes called preening, or simply grooming, is the art of cleaning, grooming, and maintaining parts of the body. ... Sascha Konietzko of KMFDM with a fanned Mohawk bleached blond. ... Long, manicured nails are a fashion statement. ... A Dental hygienist attends to a patient A dental hygienist is a licensed dental auxiliary who specializes in preventive dental care, typically but not limited to focusing on techniques in oral hygiene . ... For other uses, see Health care (disambiguation). ... The hospitality industry is a 3. ... For other uses, see Data entry clerk. ... This article is principally about managing and structuring the collections of data held on computers. ... For other uses, see Interpretation (disambiguation). ... Look up translate in Wiktionary, the free dictionary. ... For non-business risks, see risk or the disambiguation page risk analysis. ... The Metropolitan Life Insurance Company is one of the largest New York based life insurance companies Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss. ... For other uses, see Security (disambiguation). ... Social Workers are concerned with social problems, their causes, their solutions and their human impacts. ... A public utility is a company that maintains the infrastructure for a public service. ... For delivered electrical power, see Electrical power industry. ... For other uses, see Natural gas (disambiguation). ... Copy of the original phone of Alexander Graham Bell at the Musée des Arts et Métiers in Paris Telecommunication is the assisted transmission of signals over a distance for the purpose of communication. ... For the company, see Waste Management, Inc. ... Categories: Stub | Water | Sewerage | Industries ...

See also

For the magazine, see Marketing (magazine). ... Services marketing is marketing based on relationship and value. ... Borderless Selling is the process of selling services to clients outside the country of origin of services through modern methods which eliminate the actions specifically designed to hinder international trade. ... The Experience Economy, according to B. Joseph Pine II and James H. Gilmore in their 1999 book of the same name, is an advanced service economy which has begun to sell mass customization services that are similar to theatre, using underlying goods and services as props. ... Customer service (also known as Client Service) is the provision of service to customers before, during and after a purchase. ... Humankind benefits from a multitude of resources and processes that are supplied by natural ecosystems. ... IT Service Management (ITSM) is a discipline for managing large-scale information technology (IT) systems, philosophically centered on the ITSM stands in deliberate contrast to technology-centered approaches to IT management and business interaction. ... Software as a service (SaaS) is a model of software delivery where the software company provides maintenance, daily technical operation, and support for the software provided to their client. ... This article does not cite any references or sources. ... This article or section does not cite any references or sources. ... Service economy can refer to one or both of two recent economic developments. ... ≠A service system (or value co-creation system) is a configuration of technology and organizational networks designed to deliver services that satisfy the needs, wants, or aspirations of customers. ... Service design can be both tangible and intangible. ...

Finding related topics

This is a list of over 200 articles on marketing topics. ... This is a list of articles on general management and strategic management topics. ... This aims to be a complete list of the articles on economics. ... Topics in finance include: // Finance an overview Arbitrage Capital (economics) Capital asset pricing model Cash flow Cash flow matching Debt Default Consumer debt Debt consolidation Debt settlement Credit counseling Bankruptcy Debt diet Debt-snowball method Discounted cash flow Financial capital Funding Financial modeling Entrepreneur Entrepreneurship Fixed income analysis Gap financing... Organizational studies - an overview Organizational development Management development Mentoring Coaching Job rotation Professional development Upward feedback Executive education Supervisory training leadership development leadership talent identification and management individual development planning 360 degree feedback succession planning Skills management performance improvement process improvement job enrichment Training & Development managing change and also change... Following is a list of accounting topics. ... Management information systems an overview E-business Intranet strategies Database management system Data warehousing Data mining Document warehousing Customer relationship management (CRM) Sales force management system Enterprise resource planning (ERP) Human Resource Management Systems (HRMS) Business performance management Project management software Integration management Middleware Groupware and collaborative systems RSA Computer... This is a list of business law topics within the field of commercial law. ... Manufacturing and manufacturing systems manufacturing factory Craft system English system of manufacturing American system of manufacturing Mass production Batch production Just in time manufacturing Toyota Production System Lean manufacturing Computer-aided manufacturing (CAM) Mass customization Theories of production Taylorism Fordism Theory of constraints Productivity Productivity benchmarking cost accounting experience curve... See business ethics, political economy and Philosophy of business for an overview. ... This is an annotated list of important business theorists. ... This is an alphabetical list of notable economists, that is, experts in the social science of economics. ...


  1. ^ CIA World Factbook: https://www.cia.gov/library/publications/the-world-factbook/fields/2012.html

Regarding Service Characteristics
SERVQUAL or RATER is a service quality framework. ...



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