Below is a complete, detailed, exam-oriented answer on Classification of Services, written in long, clear paragraphs with examples and covering all major classifications exactly as required.
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? CLASSIFICATION OF SERVICES (DETAILED)
Services differ widely across industries, customers, skills, and delivery methods. Therefore, services are often classified into different types to understand how they function, how they are delivered, and how they create value. Classification helps marketers design strategies, manage service quality, identify target customers, and allocate resources effectively.
Broadly, services can be classified on the basis of market segments, tangibility, skills of service providers, goals/objectives, labour intensiveness, and customer contact level. Each classification highlights a different dimension of how services operate in the economy.
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? 1. Classification of Services by Market Segment
Services can be segmented based on the type of market they serve. Broadly, the two major segments are:
(A) Consumer Services
These are services provided directly to individual customers for personal use.
Examples:
Healthcare (hospitals, clinics)
Education (schools, coaching centres)
Personal grooming (salons, spas)
Entertainment (cinemas, OTT)
Hospitality (hotels, restaurants)
Retail and e-commerce (Amazon, Flipkart)
Such services aim to fulfill personal needs, comfort, lifestyle, and convenience.
(B) Industrial or Business Services
These services are provided to organizations, companies, and institutions to support business operations.
Examples:
Banking and financial services (corporate loans)
IT services (cloud services, software development)
Advertising agencies
Logistics and transportation (cargo, warehousing)
Consultancy services (management consultants)
Legal and professional services
Industrial services help companies increase productivity, efficiency, and operational capacity.
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? 2. Classification by Degree of Tangibility
Services range from totally intangible to services that include a mixture of tangible and intangible elements.
(A) Pure Services
These involve no tangible product.
Examples:
Teaching
Medical consultation
Insurance
Legal advice
Counselling
The customer receives only the experience, knowledge, or expertise.
(B) Product-Based Services (Mixed Services)
These services include both physical goods and service elements.
Examples:
Restaurants (food + serving experience)
Hotels (room + hospitality)
Airlines (transportation + in-flight services)
Automobile servicing (spare parts + repair service)
In these services, the tangible component supports the overall service experience.
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? 3. Classification by Skills of the Service Provider
Services can be classified based on whether they require skilled, semi-skilled, or unskilled labor.
(A) Skilled Services
These require high technical knowledge, specialized training, or professional degrees.
Examples:
Doctors
Lawyers
Chartered Accountants
Architects
Software engineers
Pilots
Customers pay for the provider’s expertise and judgement.
(B) Semi-Skilled Services
These require moderate training or operational knowledge.
Examples:
Electricians
Plumbers
Drivers
Retail staff
Medical assistants
They rely on experience and practical training but not highly advanced education.
(C) Unskilled Services
These services require basic physical effort or simple tasks.
Examples:
Housekeeping
Delivery staff
Security guards
Office helpers
These services focus on execution rather than professional expertise.
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? 4. Classification by Goals of the Service Provider
Different service organizations operate with different objectives or motivations.
(A) Profit-Oriented Services
These services aim to earn profit and operate commercially.
Examples:
Uber, Ola
Private hospitals
Airlines
Private schools
Hotels and resorts
They rely on customer satisfaction for financial returns.
(B) Non-Profit or Social Services
These services operate for social welfare, charity, or community development, not for profit.
Examples:
Government hospitals
NGOs
Public schools
Charitable trusts
Community centers
Their objective is public service, not revenue.
(C) Government/Public Services
These are services provided by government bodies to ensure public welfare and security.
Examples:
Police
Fire services
Water supply
Public transportation
Municipal services
These services may or may not charge fees.
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? 5. Classification by Degree of Labour Intensiveness
This classification is based on the extent of human involvement required.
(A) High Labour-Intensive Services
These require a large number of human resources and depend heavily on human performance.
Examples:
Restaurants
Hotels
Teaching
Hospitals
Beauty salons
Tourism services
Quality depends on staff behavior, skill, and interaction.
(B) Low Labour-Intensive Services
These services rely more on technology, automation, and machines.
Examples:
ATMs
Online banking
Self-checkout systems
Automated toll booths
Streaming platforms
Here, technology reduces human involvement and increases consistency.
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? 6. Classification by Degree of Customer Contact
This classification is based on how much interaction customers have with the service provider during the service process.
(A) High Customer-Contact Services
Customers must be physically present or highly involved.
Examples:
Hospitals
Salons
Restaurants
Education (classroom)
Hospitality services
Banking (branch services)
The customer is part of the service production, influencing service quality directly.
(B) Low Customer-Contact Services
Little or no physical presence of the customer is required.
Examples:
Online shopping
OTT platforms
Electricity supply
App-based food delivery (customer only orders)
Cloud services
Insurance processing
Customer involvement is minimal; technology manages most tasks.
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? Additional Classifications (Optional for Full Marks)
These classifications help understand services more broadly.
1. Personal vs. Professional Services
Personal services: salon, gym, repair work
Professional services: legal, medical, consultancy
