List and explain the six distinguishing characteristics of service products. Then discuss some of the marketing issues and problems associated with each characteristic.

Question

What will be an ideal response?

Answer 1

Services have six basic characteristics: intangibility, inseparability of production and consumption, perishability, heterogeneity, client-based relationships, and customer contact.
Intangibility means a service is not physical and therefore cannot be touched. Pure goods, if they exist at all, are rare because practically all marketers of goods also provide customer services. Even a tangible product like sugar must be delivered to the store, priced, and placed on a shelf before a customer can purchase it. Intangible, service-dominant products such as education or health care are clearly service products. Most products fall somewhere in the middle of this continuum. Products such as a restaurant meal or a hotel stay have both tangible and intangible dimensions. Knowing where the product lies on the continuum is important in creating marketing strategies for service-dominant products.
Inseparability refers to the fact that the production of a service cannot be separated from its consumption by customers. Inseparability implies a shared responsibility between the customer and service provider. Training programs for employees in the service sector should stress the importance of the customer in the service experience so that employees understand that the shared responsibility exists.
Services are characterized by perishability because the unused service capacity of one time period cannot be stored for future use. Goods marketers can handle the supply-demand problem through production scheduling and inventory techniques. Service marketers do not have the same advantage and face several hurdles in trying to balance supply and demand. They can, however, plan for demand that fluctuates according to day of the week, time of day, or season.
Heterogeneity refers to variation in quality. Services delivered by people are susceptible to heterogeneity. Quality of manufactured goods is easier to control with standardized procedures, and mistakes are easier to isolate and correct. The quality of the service a single employee provides can vary from customer to customer, day to day, or even hour to hour. Although many service problems are one-time events that cannot be predicted or controlled ahead of time, employee training and the establishment of standard procedures can help increase consistency and reliability.
Client-based relationships refer to interactions with customers that result in satisfied customers who use a service repeatedly over time. The success of many services depends on creating and maintaining client-based relationships. Word-of-mouth (or going viral, which is the online equivalent) is a key factor in creating and maintaining client-based relationships. To ensure that it actually occurs, the service provider must take steps to build trust, demonstrate customer commitment, and satisfy customers so well that they become very loyal to the provider and unlikely to switch to competitors.
Customer contact refers to the level of interaction between a service provider and a customer that is necessary to deliver a service. Not all services require a high degree of customer contact, but many do. Employees of high-contact service providers represent a very important ingredient in creating satisfied customers. A fundamental precept of customer contact is that satisfied employees lead to satisfied customers. Employee satisfaction is one of the most important factors in providing high service quality to customers.