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Characteristics of services

Inseparability Perishability


Difference between physical goods and services

Physical goods Services

homogeneous Production and distribution are separated from consumption

heterogeneous Production, distribution and consumption are simultaneous processes

A thing
Core value processed in factory Customers do not participate in the production process

An activity or process
Core value produced in the buyer-seller interaction Customers participate in production

Can be kept in stock Transfer of ownership

Cannot be kept in stock No transfer of ownership

Services could meet

Personal needs haircuts, tution, massage parlours
Business needs courier services, office cleaning

services, delivering fresh flowers

Marketing Implications of Eight differences between Services Marketing and Goods

Difference:-Most service products cant be inventoried

Customers may be turned away or have to wait.

Marketing Related tasks:-

1)Smooth demand through dynamic pricing and reservations. 2)Work with operations to adjust capacity.

Difference:-Intangible elements usually dominate

Value creation. Implications:Its harder to evaluate services and distinguish from competitors as the customers cant taste, smell or touch. Marketing Related tasks:1)Make services tangible through emphasis on physical clues. 2)Employ vivid images in advertising, branding.

Services are often difficult to visualize and understand. Implications:-

Customers perceive greater risks and uncertainty.

Market-Related Tasks:-

1)Educate customers to make good choices, explain what to look for.

Customers may be involved in co-production. Implications:-

Customers interact with providers equipment , facilities , and system.

Market-Related Tasks:-

1)Develop user friendly equipments and systems. 2)Train customers to perform effectively.

People may be the part of the service experience. Implications:-

Appearance , attitude and behavior of service personnel and other customers can shape the experience and affect satisfaction.
Market-Related Tasks:-

1)Recruit,Train and Reward the employee. 2)Target the right customers at the right time.

Operational inputs and outputs tend to vary more


Its harder to maintain consistency , reliability and service quality

Market-Related Tasks:-

1)Set quality standards based on customer expectations , redesign product elements for simplicity.

Time factor often assumes great importance. Implications:-

Customers see time as a scarce resource and dislike wasting time waiting.
Market-Related Tasks:-

1)Find ways to compete on speed of delivery. 2)Minimize burden of waiting.

Distribution may take place through nonphysical


Information based services can be delivered through electronic channels such as the Internet or voice telecommunication
Market-Related Tasks:-

1)Seek to create user-friendly , secure web -sites and free access by telephone.

Goods-Services Continuum
Goods and Services are intermingled in different

proportions. The goods and services continuum enables marketers to see the relative goods/services composition of total products.

Tangible goods:-FMCG. Services with Tangible goods:-FMCD. Goods and services in equal proportion:-

Hospitality industry.
Services accompanied by minor goods:-Airlines Pure services:-Consultancy services.