What are services?

kid reading a book
Last Updated: January 2, 2022

“Get closer than ever to your customers. So close that you tell them what they need well before they realize it themselves.” – Steve Jobs

Services are the non-physical, intangible parts of our economy, as opposed to goods, which we can touch or handle. Services involve a form of rental, offering benefits without transfer of ownership.

let’s take some examples to simplify:

Rent a car, rent a snow removal company or while we rent a condo we pay a rental fee but we don’t have the ownership of the apartment. These are all services but when it comes to restaurants most people usually get confused.

What do you think a restaurant is?

Yes! you are right it’s a service. You can get a service of a table, clothes, food of your choice, high-class/low-class hospitality, and you may even be able to cook by yourself, but it’s a service.

Hiring an accountant to file your taxes is again a service you opt in for a certain period of time every year. If you’re satisfied you come back next year if not you search for another. Who is your telecom partner Bell, Rogers, Videotron, or Telus? Your bank financial advisors and your stockbroker are all services.

A service product comprises all the elements of the service performance, both tangible and intangible, that creates value for customers.

A core service product is the primary service or product a company offers. Let’s make it clear with an example here. What’s the core service of an airplane? It’s not the coffee or wine they provide, it’s not the leg space between seats or it’s not the kind of movie or size of the screen. The core service is the seat airline’s ability to take us from point ‘A’ to Point ‘B’. We can say core service is the central component that supplies the principal, problem-solving benefits that we as customers seek.

Supplementary services are the one that facilitates core service. They are the extras that augment the core product, facilitating its use and enhancing its value and appeal. Companies either communicate core services or supplementary services through promotions. Again let’s take an example: the core service of an airline is to travel from point ‘A’ to ‘B’ but they usually promote comfort, hospitality, brand legacy, food or VIP treats to passengers.

Below is a short (60 seconds) Air Canada advertisement that takes us through different supplementary services they address to augment their core service (i.e. travel). Satisfaction and loyalty are two major factors that make a customer a repeat customer which is related to supplementary services. Air Canada communicates its airline’s business class service.

How do services contribute to the economy?

Service dominates the country’s economy and is growing heavily. Almost all economies have substantial service sectors. A service economy is an economy where the primary economic activity is the provision of services rather than the production of goods.

As per Canada, guide today more than 75 % of people in Canada work in the service sector of the economy, while only a small portion works in farms or factories. The service sector of the Canadian economy is extremely vast and diverse and involves non-physical work that deals with helping people, rather than making products or growing things. Most Canadians who live in large cities like Toronto, Vancouver, or Montreal work in the service sector.

Also, read Digital Marketing for Banks Logic by bpandey.com

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