This document discusses the key characteristics of services: 1. Intangibility - Services cannot be seen, felt or tested which creates uncertainty. Marketers use physical evidence to communicate quality. 2. Inseparability - Production, delivery and consumption occur simultaneously through customer interaction. Technology can reduce direct interaction. 3. Variability - It is difficult to standardize services as no two experiences will be the same due to different customers and circumstances. The document examines these and other characteristics including perishability, customer participation, time importance, and different distribution channels for services compared to goods. Services are difficult for customers to evaluate and involve customers in co-production.

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Dr. Amitabh Mishra
MARKETING OF SERVICES
CHARACTERISTICS/ NATURE
OF SERVICES

2. CHARACTERISTICS/ NATURE
OF
SERVICES
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3. CHARACTERISTICS OF SERVICES
• There are six main characteristics of services:
i. Intangibility
ii. Inseparability
iii. Variability
iv. Perish ability
v. Customer Participation
vi. No Ownership
vii. Etc.
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4. 1- INTANGIBILITY
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5. 1- INTANGIBILITY
 Services can not be touched, seen, felt, smelt,
heard or tested.
– This is because services are performances and acts
not objects.
• It creates feeling of uncertainty about the outcome
of services.
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6. • This characteristics of services make the buyer
look for evidence of quality in the services.
• Marketers use Physical Evidences and other things
to communicate about quality. Like-
• Location.
• Physical setting.
• Employees.
• Hardware, tools, and equipments.
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7. 2- INSEPARABILITY
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8. 2- INSEPARABILITY
• Services can not be separated from the services
provider.
• The production, delivery, and consumption of
services take place simultaneously in the buyer
seller interaction.
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9. • It creates problem to marketer specially during
market expansion.
• At every place provider has to offer the same quality.
• With the use of technology service provider can reduce
direct interaction. Such as-
– ATM for banks,
– E- ticketing for rail reservation.
– Online courses from IIT’s, IIM’s and other
institutions (MOOC’s).
– Etc.
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10.  Most services are sold first and then produced
and consumed simultaneously.
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11. 3- VARIABILITY
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12. 3- VARIABILITY
• It is almost impossible to have the same service
from the same seller the second time.
– The experience of the bus traveler varies with the seat
he occupy.
– The receptionist of a hotel can not extend the same kind
of smile to the consumers during all her working hours.
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13. • It creates major problem in standardizing, and
communicating the service standard.
• It can be used as opportunity also, since service
provider can customize the services.
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14. No two services will be precisely alike. It may
be because no two customers are precisely
alike.
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15. 5- CUSTOMER PARTICIPATION
• Customers are co-producer of services
• Production quality of services generally depends
on ability, skill and performance of employees as
well as customers
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16. 4- PERISH-ABILITY
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17. 4- PERISH-ABILITY
• Services perish, they can not be stored, saved,
resold or returned.
• An un-utilised service capacity can not be used
further.
– A train that leave railway station half-full, means that
the services of half empty remains unused.
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18. • Indian railways has started upgrading reservations to
maximize satisfaction of travelers. i.e., if seats are empty a
passenger of non AC can be transferred to AC.
• Service firm may face problem when demand is
fluctuating.
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19. • Service company should take necessary steps to
train customers, to provide quality experience of
services.
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20. 6- NO OWNERSHIP
• Since services are intangible and perishable, consumers
will have only experience but not ownership.
• Convincing the consumer with an tangible goods on which
he will have ownership is easier than selling services
which result in feeling and experiences which arise after
consumption.
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21. • Exception:
– Food services.
– Installation of spare parts during delivery of repair
service.
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22. 7- Many Services are Difficult for Customers
to Evaluate
• There are three properties of products-
i. Search property.
ii. Experience property.
iii. Credence property.
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23. i. Search Property of Product
• A Customer can evaluate prior to purchase it. As:
– Color
– Shape
– Price
– Fit and feel
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24. • Can be evaluated only after purchase or during
consumption. As:
– Taste
– Wear ability
– Ease of handling
– Quietness
ii. Experience Property of Product
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25. • Consumers find difficult even after consumption, because
customers are purchasing expertise in area in which they
are not very knowledgeable themselves. As:
– Surgery.
– Professional Services (Accounting, Advocate, etc.).
– Many technical repairs.
iii. Credence Property of Product
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26. 8- Time Factor Assumes Great Importance
• Many services are delivered in real time while customers
are physically present.
• There are limit as to how long people are willing to spend
at the service factory.
• Some people are willing to pay more for faster services.
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27. • Busy customer expect services to be available at time
when it suit them rather it suit the service company.
» 24 x 7 services.
• Speed is often seen as a key element in good services
and as a way to attract new customers.
• Service marketer need to understand customer’s time
constraint.
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28. 9. Distribution Channel Takes Different Form
• Manufacturer usually requires physical distribution
channel to move goods from factory to consumers.
• Service organization combine the service factory, retail
outlet, and point of consumption at a single location.
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29. In LOVELOCK’S words..
 Most services can not be inventoried
 Intangible elements dominate the value creation
 Services are usually difficult to visualize and
understand
 Customers may be involved in co-production
 People may be part of service experience
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30.  Operational inputs and outputs tend to vary
widely
 Time factor assumes great importance
 Distribution may take place through nonphysical
channel
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31. Discussion
“Services involve a form of rental”- Christopher Lovelock
 Service customers obtain benefit of renting the right to-
 To use a physical object (Car rental, House rental, etc.).
 To hire the labor and expertise of personal. (Surgeon,
Lawyer, Teacher, etc.)
 To pay for the access to facility or network. (network of
metro, Telecommunication, Resorts, etc.)
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