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  • Topic 2 Fundamental Differences Between Goods and Services

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    Polban MPI-A '17
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    There are four key differences between goods and services: 1) Services are intangible, inseparable from their providers, heterogeneous in quality, and perishable. 2) Goods are tangible, can be separated from their producers, are homogeneous, and can be stored. 3) Due to their intangible and inseparable nature, services are more difficult to inventory, standardize, patent, and assure quality control of. 4) The marketing and delivery of services depends more on human actions and factors that are difficult to control compared to goods.

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    There are four key differences between goods and services: 1) Services are intangible, inseparable from their providers, heterogeneous in quality, and perishable. 2) Goods are tangible, can be separated from their producers, are homogeneous, and can be stored. 3) Due to their intangible and inseparable nature, services are more difficult to inventory, standardize, patent, and assure quality control of. 4) The marketing and delivery of services depends more on human actions and factors that are difficult to control compared to goods.

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    14 views11 pages

    Topic 2 Fundamental Differences Between Goods and Services

    Uploaded by

    Polban MPI-A '17
    There are four key differences between goods and services: 1) Services are intangible, inseparable from their providers, heterogeneous in quality, and perishable. 2) Goods are tangible, can be separated from their producers, are homogeneous, and can be stored. 3) Due to their intangible and inseparable nature, services are more difficult to inventory, standardize, patent, and assure quality control of. 4) The marketing and delivery of services depends more on human actions and factors that are difficult to control compared to goods.

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    © All Rights Reserved
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    of 11

    Topic 2

    Fundamental Differences Between


    Goods and Services

    The Services Characteristics


    Four/Five Differences
    The majority of these differences are
    primarily attributed to four unique
    characteristics intangibility,
    inseparability, heterogeneity, and
    perishability and ownership.
    Intangibility Inseparability
    Services cannot be seen, Services cannot be
    tested, felt, and heard. separated
    or smelled before purchase
    from their providers.

    Variability
    Quality of services depends Services Perishability
    on who provides them and
    Services cannot be stored
    when, where, and how.
    for later sale or use.

    Non-Ownership
    Services cannot be owned
    even after use and
    consumption.
    Services marketing as a facilitating medium

    Production

    Marketing as a
    Marketing as an

    Production
    facilitating
    exchange medium
    medium

    Consumption
    Consumption
    9
    Goods Services Resulting implications

    Tangible Intangible Services cannot be inventoried


    Services cannot be patented
    Services cannot be readily displayed or
    communicated.
    Pricing is difficult.
    Homogeneous / Heterogeneous / Service delivery & customer satisfaction depends
    Standardized Variability on employee actions.
    Service quality depeneds on many uncontrolloble
    factors.
    There is no sure knowledge that the service
    delivered matches what was planned and
    promoted.
    Seperability Inseperability Customers participate in and affect the transaction.
    Customers affect each other.
    Employees affect the service outcome.
    Decentralisation may be essential
    Mass production is difficult
    Nonperishable Perisability It's difficult to synchronize supply & demand with
    the services.
    Services cannot be returned or resold
    Ownership Non-ownership
    22
    Classification of services
    1. Degree of Tangibility of Service Process
    2. Who or what are the direct recipient of
    Service Process
    3. Customization Vs. Standardization
    4. Nature of relationship with the customers
    5. Extent to which demand and supply are in
    balance
    6. Extent to which facilities, equipment, and
    people are part of the service experience
    1. Degree of Tangibility of Service Process
    NATURE OF THE RECEIPIENT OF THE ACT
    ACT
    Service directed at Service directed at
    physical possession

    TANGIBLE
    Health Care Freight transportation
    ACTION Hair cutting Industrial equipment
    Passenger Transportation maintenence
    Restaurant Laundry and dry cleaner
    Veterinary care
    Service directed at Service directed at
    Intangible Assets
    INTANGIBLE
    ACTION Education Banking
    Broadcasting Legal service
    Information services Security
    Theatres Insurance
    Museums
    2. Relationship with customer
    NATURE OF TYPE OF RELATIONSHIP

    Non formal Relshp


    SERVICE
    DELIVERY Membership relation

    CONTINUOUS
    Cable TV Radio Station
    DEL. OF Mutual Fund Police production
    SERVICE Telephone Light house
    Banking Public highway
    College Enrollment

    Long distance phone call Car rental


    DISCRETE Theatre season ticket Mail service
    Commuter ticket Toll bridge/way
    Restaurant
    Pay phone
    3. Customisation
    EXERCISE OF
    JUDGEMENT BY EXTENT OF CUSTOMISATION
    CUSTOMER

    High Low
    CONTACT
    PERSON

    Legal Services
    High Health Care
    Education: Large classes
    Preventive health care
    Taxi Service
    Beautician
    Tutorials

    Telephone service Public Transmission


    Routine appliance
    Low Hotel service
    maintenance
    Retail banking
    Movie Theatre
    4. Nature of Demand relative to Supply
    EXTENT TO EXTENT OF DEMAND FLUCTUATION OVER TIME
    WHICH SUPPLY

    Narrow
    IS CONSTRAINED
    Wide

    Natural gas Insurance


    Peak demand
    Telephone Banking
    CAN be met
    Hospital Dry cleaner
    without delay
    Tourist lodging

    Accounting -do- with less base


    Peak demand
    Electricity level capacity
    regularly
    exceeds Theatres
    capacity
    5. Method of Service Delivery
    NATURE OF AVAILABILITY OF SERVICE OUTLET
    INTERACTION

    Multiple Site
    WITH CUSTOMER
    Single Site
    Haircutting
    Customer goes Bus service
    Beauty Saloon
    Fast food chain
    Theatre

    Service Taxi Mail delivery


    Provider
    Comes

    Credit Card National radio


    Local Radio Station Telephone Company

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