Meaning of Service in Marketing
Services are the intangible products offered by the company to its clients for the satisfaction of their needs. It can be any type of benefit or activity that is provided by one party to another party and does not involve any transfer of ownership. Service is inseparable in nature and can’t be separated from its provider. It is must for every service provider to be present at the point of consumption for fulfilling the needs of customers as services are created via direct interaction between two. Services essentially do not have any physical existence, unlike tangible goods that can be seen and touched by people. These economic activities create value for customers by facilitating such outcomes that they are willing to attain without involving themselves in specific risks and costs. Services cannot be stored in advance of their requirement and are consumed at the point of their production only. These intangible products may or may not be tied to physical products for making sales. A wide range of services offered by business enterprises is teaching, medical treatment, transportation, banking, telecom, courier, and DTH services.
8 Characteristics of Services
Services are intangible in nature and do not have any physical existence, unlike tangible goods. These non-physical products cannot be seen, touched, tasted, or smelled by customers. Service is an abstract phenomenon where clients experience some benefits by consuming them. Businesses cannot give demonstrations or samples of these intangible products to customers.
This is one of the most important characteristics of intangible goods. Service is highly perishable in nature and cannot be stored for later use like in the case of perishable products. It can’t be saved, returned, or resold once they are rendered by the business to customers. Services need to be compulsorily consumed within a particular time period and if not used timely lost forever.
Services are highly variable in nature their quality differs from one provider to another. These are great variations in service quality depending upon by whom it is provided, where, when, and in what manner. Features of service cannot be standardized like tangible goods where a person gets an equal level of satisfaction every time he/she consumes it.
Lack of ownership
There is no transfer of ownership in case of sales of services to clients. Services cannot be owned by customers nor they cannot be transferred to another person. These are actually used at a particular period of time or hired for some time by clients.
Services and their provider are inseparable and cannot be separated from one another. These are produced and consumed at the same point in time. The service provider needs to be contacted every time the consumer is willing to avail of the services. The presence of these providers is a must for delivering services to clients.
Services have a high degree of fluctuations in their demands. The demand for these intangible products rises abnormally during the peak season and is low during the off-periods. These fluctuations in demand cannot be seasonal or by weeks, days, and hours.
Difficult to measure quality attributes
Quality of services cannot be measured statistically like in the case of tangible goods. Here, quality attributes cannot be put into the form of data for carrying out analysis. Services cannot be taken by quality specialists for doing inspections and making observations in a laboratory due to a lack of physical attributes.
Direct interaction between producer and customer
There is a direct interaction between the producer of the service and the customer in the case of services. The producer develops a personal relationship with clients where they offer services as per the needs of people. Whereas in the case of tangible items, goods reach customers via intermediaries and there is no direct interaction with the producer.
Classification of Services
The classification of services is mainly made on 2 bases which are discussed below: –
- The classification made on the basis of tangible action
- The classification made on the basis of intangibility
Service classification based on tangible action
These are the type of services provided in which people or products are directly involved. These services are one which is delivered either for people or for physical products.
- Services for people: Such services are delivered by people to people and include a wide range such as saloons, restaurants, healthcare, teaching services, etc.
- Services for products: These include those services which are given by people for objects or products such as repair, maintenance, dry cleaning, transportation, etc.
Service classification based on Intangibility
These are the services that involve various intangible aspects that cannot be physically quantified.
- Services directed at people’s mind: Services that are sold via influencing the human’s creativity are classified on an intangibility basis.
- Services directed at intangible assets: These are services that are difficult to quantify or prices like legal services, insurance services, and banking services.