A service is a deed that can’t be physically possessed. The U.S. service sector accounts for around 80 percent of its economic output. Technology, financial services, healthcare, educational institutions, and retail are just a few of the service-oriented industries that contribute to economic output.
While it can be helpful to compare goods and services marketing, it is difficult to differentiate between service and manufacturing firms.
Many manufacturing companies get success because of their service and after-sale service facilities. Television, washing machines, photocopy machine, car, bikes companies get success because they provide repair and maintenance services to their clients.
However, services are different from goods in that they have unique characteristics. Marketing strategies must be modified to reflect these unique characteristics.
Four distinctive characteristics that distinguish services from goods are: intangible, inseparable, heterogeneous, perishable.
Services and goods are fundamentally different. Services are intangible and cannot be touched, felt, tasted, heard, or smelled in the same way as goods.
It is more difficult to evaluate the quality and value of services before or after purchasing them as compared to goods. This is because services are less searchable quality than goods. Search quality refers to a characteristic that is easily assessed prior to purchase, such as the color of an automobile or appliance. Services tend to have higher credence and experience.
Experience quality can only be evaluated after the experience, such as the service of a restaurant’s meal. Credence quality is something that consumers might have difficulty assessing, even after purchasing. This happens because they lack the knowledge and experience. Credence qualities can be found in services such as consulting and medical services.
Marketers find it more difficult to communicate the value of intangible services than they do with tangible goods. Marketers often use tangible cues in order to communicate the service’s quality and nature. Travelers Insurance Company, for example, uses an umbrella symbol to remind customers of the insurance’s protection.
Customers visit the facilities where services are delivered. This is a crucial part of the service offering. Customers can communicate their opinions about the organization through elements such as the decor, cleanliness, or manners of staff members, as well the dress of the staff.
Because guests are quick to form opinions, hotels know this and are willing to share them with their customers within 15 minutes. Hotels go to great lengths in order to make guests feel at home.
Four Seasons, for example, ensures that no plumbing touches concrete in its hotels to create quiet rooms. All employees, from parking attendants to managers, have the authority to respond immediately to guests’ requests. Four Seasons can offer exceptional personalized service from check-in to check out.
Goods can be produced, sold, and consumed. Services, on the other hand, are sold, produced, then consumed simultaneously. Their production and consumption, therefore, are not separate activities.
This means that consumers are involved in the production and consumption of services such as haircuts or surgery because they must be present. This type of consumer involvement in goods manufacturing is uncommon.
Simultaneous consumption and production also mean that services cannot be produced at a central location and consumed in decentralized places, like goods. From the standpoint of the service provider, services are inseparable. The quality of the service firms is dependent on the quality and availability of their employees.
McDonald’s has a great reputation for consistency. Customers know exactly what they will get, no matter if they order a Big Mac from Chicago or Seattle. Many service providers don’t have this luxury. Services are more heterogeneous than goods, which means they have greater variability in inputs and outputs.
This makes them less standardized and uniform. In other words, the technical and interpersonal skills of barbers at a barbershop or physicians working in a group can differ between each group. Consistency and quality control are difficult to achieve because services tend to require a lot of labor and production and consumption can be interconnected.
Standardization and training can help improve consistency and reliability. There are many certification programs available in the information technology industry to ensure that technicians can work on complex enterprise software systems.
Professional certifications for big-data engineers, such as those from Microsoft, SAS, and INFORMS, ensure that there is consistency in knowledge and ability among individuals who have passed these rigorous exams.
The fourth characteristic of services is their perishability. Perishability is the inability to store, warehouse, or inventory services. A vacant hotel room or plane seat does not generate any revenue. Revenue is lost. During peak times, service companies are often forced to refuse full-price customers.
In many service industries, one of the biggest challenges is synchronizing demand and supply. Many hotels offer deep discounts during weekends and off-season, based on the belief that some revenue is better than no revenue at all.
Service quality is harder to measure and define because of its four distinctive characteristics than the quality of tangible goods. Improvement of service quality is a top priority for business executives.
Ability to provide the service reliably, accurately, and consistently. It is the ability to perform the service correctly the first time. This is the most important component for consumers.
Being able to respond quickly to customer needs. You can respond quickly by calling back the customer, serving fast lunch to someone in a hurry, and mailing a transaction slip right away.
Offering service 24 hours a day, seven days is the ultimate in responsiveness. The global business of Priceline Group, which has operations in over 220 countries and territories, is responsive to customers by having people who can answer phones in many languages.
Employees’ knowledge and kindness, as well as their ability to build trust. Skilled employees who treat customers with respect, and make customers feel they can trust the companies, are an example of assurance.
Customer care is personal and caring. Employees who are able to recognize and respond to customers’ needs and provide empathy are the best. LUX Resorts, a Mauritius-based hospitality company, has recently launched a company-wide plan for personalized, creative service.
LUX’s CEO realized that scripted employees can be less able to understand customer needs and created an educational program to help employees anticipate and understand guest priorities.
Employees’ potential for great service was maximized by learning more about customers’ needs and wants. Two years after the program started, half of TripAdvisor’s Top 10 Mauritius List was filled with LUX properties.
The tangible evidence of the service. Physical evidence of a service includes the facilities, tools, equipment, and appearance of the personnel.