service sector and its economics

8/18/2019 Service Sector and Its Economics

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Service sector and itsEconomics


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Service?

“Services are activities, beneft orsatisaction which are oered or sale orprovided in connection with the sale ogoods”

“services represent either intangibles

yielding satisaction directly(transportation, housing or intangiblesyielding satisaction !ointly when purchasedeither with commodities or other services”


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"ntroduction #he services sector, with around $% per cent contribution

to the &ross 'omestic roduct (&' in %)*+*$, hasmade rapid strides in the past decade and a hal toemerge as the largest and one o the astestgrowingsectors o the economy-

#he services sector is not only the dominant sector in"ndia.s &', but has also attracted signifcant oreigninvestment /ows, contributed signifcantly to e0ports aswell as provided largescale employment-

"ndia.s services sector covers a wide variety o activities

such as trade, hotel and restaurants, transport, storageand communication, fnancing, insurance, real estate,business services, community, social and personalservices, and services associated with construction-


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1ar2et si3e #he services sector contributed 4S5 678 billion to the

%)*+*$ &' (at constant prices growing at 9ompound:nnual &rowth ;ate (9:&; o < per cent, aster than theoverall &' 9:&; o =-% per cent in the past our years-

>ut o overall services sector, the subsector comprising

fnancial services, real estate and proessional servicescontributed 4S5 8)$-7 billion or %)-$ per cent to the &'- #he subsector o community, social and personal servicescontributed 4S5 *77-% billion or *%-= per cent to the &'-

#he thirdlargest subsegment comprising trade, repair

services, hotels and restaurants contributed nearly eual or4S5 *76-< billion or *%-$ per cent to the &', whilegrowing the astest at **-6 per cent 9:&; over the period%)***% to %)*+*$-


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ercentage contribution o dierentsectors o "ndian Economy over the years

Sector 1950-51 1990-91 1990-2000

:griculture $$-+ 8)-< %$-$

1anuacturing 8*-7 %$-+ %%-*

Services *%-7 +8-6 $%-+

Source@ "ndia #oday, %))*


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&rowth o Service Sector;A in " or :nnual ;eport or the year %)))

)* has divided the sector into ew subsectors- :nd gave their respectivecontribution in the gross domestic producto "ndia- :s per the report, the contributiono services sector in "ndia.s &' has been$+-*B-

Services sector$+-*B

#rade,hotels,restaurants,transportstorage andcommunication

Cinancing,insurance,real estateandbusinessservices

9ommunity,and socialandpersonalservices

9onstruction


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:ccording to 9": Cac2boo2 sector wise "ndian &'composition in %)*+ are as ollows @ :griculture(*6-


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Service businesscharacteristics&reater intangibilityerishability

Simultaneous production and delivery o

servicesIeterogeneity

ariability in customer e0pectation


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Service customerclassifcation

Services businesses use certain parameters orclassifcation o services customers- #heycould be@

"ncome

&ender

9ustomer category

Ceatures

:geproession


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Service mar2eting mi0hysical evidencehysical evidence is the environment in which the service

is delivered and where the frm and the customer interactand any tangible component that acilitates perormanceor communication o the service

rocess #he actual procedure mechanism and /ow o activities by

which the service is deliveredJthe service delivery andoperating systems

eople

:ll human actors who play a part in service delivery andthus in/uence the buyer.s perceptions@ namely, the frm.spersonnel, the customer and the customers in the serviceenvironment-


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Service ;ecovery

"t is important to 2now that even i a frmma2es its service delivery as aultless andas perect as possible, mista2es can becommitted due to heterogeneous nature o

services-


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1oving towards servicerecovery

Kerodeects is an unattainable goal inserviceoriented organisations because ons are the rule the nature o services in

which service uality variations are the rule

rather than e0ception-

"t has been seen that frms that recoverbrilliantly rom service disasters, moreoten than not, have done the things thatare described below-


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Cost of Eective service recovery:Encouraging customer inputs:

Anticipate needs for recovery:

Fast and prompt action:Training and empowering of employees

Closing the loop


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'iscussion

service sector and its economics

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