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Service and Service Marketing

Service and Service Marketing Assignment / Homework Help
The term 'service' can be defined as an act of doing something for someone. Service is by far non-material and an intangible entity. So a service can easily be distinguished from a product which can be held and owned. Service cannot be owned as it is consumed at the point of purchase.

Characteristics of a Service:

  • Service cannot be owned

    Service can be experienced and not owned. Service lasts for a limited period of time. The staff at McDonald's may provide you with excellent service but we cannot own the service or the staff for ever.

  • Service is intangible

    We cannot hold, touch or feel a service with our hands. Unlike a product, service is intangible. However service may have a tangible component. For instance home insurance certificate can be touched and felt but the monetary service it provides is intangible.

  • The implications of the intangible nature of service can be the following:

    • As a result service cannot be inventoried.
    • Service cannot be patented.
    • Due to its intangible nature service cannot be easily displayed or communicated.
    • Intangible nature makes pricing difficult for service.

  • Inseparability

    Service and service providers are inseparable. On the other hand a product can be separated from its producer. A producer manufactures cycles and sells it to the buyer. The cycle no longer remains with the producer. A service for instance at a restaurant is provided by the staff in terms of hospitality, prompt delivery etc. These services are all a part of the service production process and remain at or near the point of purchase.

    Therefore service is simultaneously produced and consumed. The implications of this peculiar nature of service are:

    • Mass production of service is difficult.
    • Decentralization may be essential.
    • Customers not only participate in the transaction but also affect it.
    • Customers also affect each other.
    • Along with this employees greatly affect the service outcome.

  • Perishable

    Services do not last forever. It is unlike a product which can be owned and stored for later use. A service once bought is consumed there and then. When we buy an air ticket the service bought shall last only till the destination is reached. After that it perishes. As a result it is difficult to synchronise supply and demand with services.
    Another implication of perishability can be that service cannot be returned or resold.

  • Heterogeneous

    It is very unlikely that two service experiences will be the same. When we buy tickets to a musical concert it is not possible that the performance would be identical to the performance next day. A singer is bound to be different in each performance as he cannot standardise each note. However the service providers take great care in making the experience similar each time. The service staffs are specially trained for this effect however subtle differences always occur. A passenger travelling by the same flight will not get the same quality of service each time as the air hostess might be more or less experiences than the former.

The implications of heterogeneity can be listed as following:
  • Customer satisfaction and service delivery depends upon employee actions.
  • Many uncontrollable factors determine the quality of service provided.
  • In spite of training and planning there is no assurance that the quality of service delivered would be the same as what was planned and promoted.

The differences between product and services are summarised as below:

Product Services
Tangible Intangible
Standardised Heterogeneous
Production separate
from consumption
Simultaneous production
and consumption
Non-perishable Perishable

Examples of Service Industries
Examples of service industries are as following:

  • Health Care The health care industry includes hospitals, medical practice, dentistry, eye care etc.

  • Professional Services Accounting, legal, architectural etc are included in the category of professional services.

  • Financial Services This industry includes banking, investment, insurance, advising etc.

  • Hospitality This service industry includes restaurant, hotel, motel, bed and breakfast, ski resort, rafting etc.

  • Travel Travel industry includes airlines, travel agencies, theme parks etc.

  • Others Some other examples of service industries can be hair styling, pest control, plumbing, lawn maintenance, counselling services, health club etc.

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