Every business house needs some type of service which can be made available only by the service sector. Thus service management is important not only in the services sector but also in every business enterprise - enterprise which is also dealing in physical products and some services being an integral part of business operations. This aspect focuses on the demand side of services which encourages service providers to provide quality service. 

Service industries are quite varied. The government sector, with its courts, employment services. hospitals, loan agencies, military services, police and fire departments, post office, regulatory agencies, and schools, are in the service business. The private non-profit sector, with its museums. charities, churches, colleges, foundations, and hospitals, are in the service business. 

A good part of the business sector, with its airlines, banks, computer-service bureaus, hotels, insurance companies, law firms, management-consulting firms, medical practices, motion-picture companies, plumbing-repair companies, and real-estate firms, are in the service business. Many workers in the manufacturing sector, such as the computer operators, accountants, and legal staff are really service providers. 

In fact, they make up a "service factory" providing services to the "goods factory". Not only are there traditional service businesses, but also new types keep popping up to serve the needs of a changing population. 

Service Management encompasses fundamental understanding of services marketing and covers wide scope such as financial services, banking and insurance services, tourism and hotel industries, health care and hospital industries, education industries etc.