Characteristics of Services

A service is a deed, performance, activity, or effort. The person who provides the services is called the service provider and the person availing the services is called the client or customer.

Characteristics of Services

We often go to parlors, hotels, coachings, and service centers of automobile companies to avail of services. And there are some noticeable characteristics of services, which we will discuss over here:

Intangibility

With services, there is always a lack of physicality. One cannot see, taste, feel, hear or smell services before it is actually bought. Hence, the prospective customer cannot perceive it before and in some cases during and after the service is being rendered. This makes it difficult and risky for the customer in deciding whether to avail of the services or not.

Let us take the example of car repair which is fully intangible as we cannot see or evaluate what is done.

Implications

It results in customers:

• Having difficulty in evaluating competing services
• Placing too much stress on personal information
• Using price as a factor to assess quality.
• Perceiving a high degree of risk.
• There is no patent.
• No display available

Management Strategies

The management can reduce these difficulties through:

• Focusing on tangible cues
• Facilitating word-of-mouth recommendation
• Laying emphasis on service quality
• Reducing the complexity of services

Inseparability

It is also one of the characteristics of services. Physical goods and services are noticeably different from one another in terms of a sequence of production and consumption. Goods are produced and then stored. After that, it is sold and consumed. But in the case of services, they are sold first. Then, they are produced, distributed, and consumed at the same time.

For the production of a number of services, the customer must be present in person like in case of counseling, hairdressing, rail travel, etc. What this means is that the customer is an inseparable part of the production of services and in all the above cases requires the active participation of the customer during the process of service delivery.

So, it leaves little to no room for mistakes and errors on the part of the service provider. In fact, if a mistake occurs the customers identify it in no time.

However, there are some services that can be produced and delivered in the case where the presence of a customer is not necessary.

For example
Laundry services, plumbing, interior, gardening, etc.

There are some services that depend on written communication like distance learning courses. But, no matter what the nature and degree of contact, the potential for the inseparability of production and consumption is always there.

Implications

This leads the customers to:

• Become co-producers of the service as customers also participate at the time of production.
• Mass production is not possible
• Turn out as co-consumers of services with other consumers
• Have to travel to the point where the service is being provided

Management Strategies

• Try to separate the production and consumption
• Manage consumer and producer interaction
• Selection and training of contact person
• Improve service delivery system.

Variability

Services provided today may not be the same as the services provided yesterday. This is because there is the involvement of human beings in the process. Variability in rendering services is an inevitable outcome of continuous production and consumption. The service quality differs on the basis of:

1. Who is providing the services – Service Provider
2. When the services are provided – Timing
3. How the services are provided – Procedure

Every client receives different services relying upon the time on which service is provided during the day, the mood of the service provider, and other factors.

Have you been to a salon where one employee is very soft-spoken and calm while talking to you when you are taking the services. At the same time, the other employee of the same salon doesn’t talk much. Hence, there can be variations in the performance of services over the course of the day by the same employee.

Implications

• Difficulty in standardization
• Difficulty in quality control

Management Strategies

Reduction in variability is possible when one can determine the causes. The cause can be the personality and attitude of the employee. The management can do nothing about it except when the employee himself resigns from the job. Alternatively, the cause can be poor training and supervision, lack of communication and information, lack of support, etc.

Experts argue that the replacement of labor with automation and a production line approach to provide services can reduce variability to a great extent. As this will lead to a reduction in the discretion of the employees and an increase in the standardization of procedures.

In such a case – the pizza restaurant model is considered ideal.

Perishability

We cannot store service for using them afterward. Imagine a situation – Can you occupy hotel rooms, railway berth, etc? They can’t be reclaimed.

Because services are rendered, one cannot store them. What this implies is that the production of service products in advance for a week or month is not possible. Therefore, if the demand is far more than the supply, such as in the case of goods, you cannot bring them from your warehouse.

For example

An automobile producer is not able to sell the stock due to lack of demand and can carry forward the stock to sell in the subsequent year. And all it would take is storage, financing, and loss due to obsolescence. But this is not possible with services, as he cannot carry forward the product to next year for sale.

Just like if there is a train from Indore to Bhopal at 9:00 PM and 50% of the seats are empty. So the railway department cannot sell those seats once the train departs.

Implications

• No inventorization
• Fluctuation in demand is a feature of service-based firms. It often calls for challenges when the fluctuations is not predictable.

Management Actions

For overcoming the problem of demand fluctuations, the management can formulate strategies to match demand and supply.

Heterogeneity

Irrespective of the use of standard systems for handling flight reservations, or booking a taxi, each service unit differs from other units. Franchise operations look forward to making certain that there is a standard of conformity. However, there is no guarantee that the same level of output with regard to quality will be generated every time.

From the point of view of customers, one cannot evaluate the quality of the service before it is purchased. This characteristic applies to some product marketing too.

Implications

• Standard greatly depends upon who and when the services are provided
• Variations in quality

Management Strategies

• Careful selection and training of manpower can ensure standards in service delivery and quality.

Lack of Ownership

Though we are discussing it in the end it is one of the important characteristics of services. The primary difference between products and services is the lack of ownership. This is because the customer can only access or use the facility like hotel rooms, airline services, credit card facilities, etc. The client pays money to use, have access to or hire the services. When a customer buys a good, the buyer can make complete use of the product, but this is not in the case of services.

With services you only purchase the right to temporarily access or use the service product. But at the same time, you cannot claim its ownership, no matter how much price you have paid to avail the service.

For example
When you go to a theatre to watch a movie, you only purchase the right to watch the movie while sitting in the allocated place or seat. You do not own the seat.

Implications

• Customers can only have access to but not ownership of the facility.

Management Strategies

• Focus on the benefits of non-ownership to convince customers.

Wrap Up

All in all, it is not easy to define, display and communicate services. Hence, customer faces many difficulties in determining the right price that he/she can pay for it. With the help of understanding the characteristics of services, one can easily grasp its concept.