Table of Contents
- Characteristics of Services
- 1. Intangible nature
- 2. Simultaneous production and distribution
- 3. Loss due to lack of sales cannot be recovered
- 4. Fluctuating demand
- 5. Lack of uniform performance standards
- 6. Irrelevance of certain marketing functions/activities
- 7. Direct distribution
- 8. Heterogeneous nature of service
- 9. Personal relationship between the service provider and the client
- 10. Skill orientation
Characteristics of Services
The following are the important characteristics of services in business.
1. Intangible nature
As mentioned earlier, services are intangible or invisible. One cannot see, feel, taste or smell it. A business marketing service is actually selling an idea and not a product.
In promoting sales the business will face the following problems:
- Demonstration or display cannot be done.
- No samples can be given.
- No containers can be shown to the buyers.
The intangible nature of service brings the following advantages also for the marketers:
- There is no need for a warehouse as there is nothing to store.
- Transportation costs are totally avoided.
- There is no problem of unsold stock.
- There is no loss on account of pilferage, deterioration in quality, evaporation and so on.
2. Simultaneous production and distribution
In the case of marketing of goods, production and distribution need not be done at the same time. But in the marketing of most services, both production and distribution will have to be done simultaneously. Provision of electricity offers a good example. In the case of banking, insurance, educational and legal services too, there is nothing that can be physically stored now and delivered later.
As a result, there is no need for a long chain of middlemen comprising the wholesalers, retailers and so on in the marketing of services. In certain cases, agents are employed to procure clients for the business, e.g., Insurance.
3. Loss due to lack of sales cannot be recovered
A product that is not sold today can be sold tomorrow. This is not possible in the case of service marketing. For example, if 25 seats are empty in cinema hall for a show, the resulting loss of revenue is a loss for ever. Loss on account of empty seats in a bus, train or plane cannot be made good. Similarly, electricity once produced has to be distributed at once. If not, it becomes a waste.
4. Fluctuating demand
The demand for services, in most cases, is of fluctuating nature. For example, telephone service is active during day time compared to night hours. The number of people using the telephone during night hours is much less. It is for this reason that the telephone department is coming out with certain concessions for using the STD or ISD facilities during night hours. Likewise, although we have 24-hours hospital service, 24-hours banking and so on, the number of clients is not much during night time.
People visiting hill stations prefer summer season to any other season. As a result, most of the lodges and travel organizations doing business in hilly regions will have to go without many clients during off-season.
5. Lack of uniform performance standards
The quality of service varies not only between business units in the same industry but also between one transaction to another. The basic reason for the variation in quality is the involvement of the human factor. For example, it may take 10 minutes for a client to get things done in a bank. It may take half an hour or so for another customer for a similar transaction.
6. Irrelevance of certain marketing functions/activities
Some of the marketing functions/activities, which are very much relevant in the marketing of tangible goods, are irrelevant in service marketing. These include transportation, grading, standardization, storage, inventory control, branding, packing, labeling and so on.
7. Direct distribution
The marketers of most services resort to direct distribution. The wholesalers, retailers and dealers, who are normally seen in product marketing, are absent in service marketing. In certain cases, the service marketer may rely on agents, e.g., Insurance business.
8. Heterogeneous nature of service
Two or more units of a product are similar and give the same satisfaction to the buyer. But it is not so in the case of service. For example, a client may be praising a doctor while another person may be cursing him. A surgery might have been successfully done today. An identical surgery to be done a few days later may prove to be a failure.
The heterogeneous nature of service brings certain advantages also for the marketer. It provides greater flexibility for the marketer in performing his task, For example, the marketer can ascertain the individual needs of the client and try to offer the service in a manner suitable to his tastes and preferences.
9. Personal relationship between the service provider and the client
There is no personal relationship between a seller of goods and the buyer. It is not so in most of the cases of service marketing. For example, a patient has to take the doctor into confidence and abide by the advice of the latter. It is true in the case of a lawyer-client relationship also.
10. Skill orientation
A product is bought more for its utility value than for the skill of the marketer to sell. In the case of service marketing, it is the skill of the service provider which determines the fate of the business. The efficiency of the individuals plays a crucial role in service marketing. The quality of the product is the main deciding factor in product marketing.