Services

Services are especially important because the service industry now

accounts for more than half of personal consumption expenditures. Ser-

vices have the following characteristics: intangibility, perishability, in-

separability, variability.

Goods are tangible, whereas services are intangible. Intangibility

means buyers normally cannot see, feel, smell, hear, or taste a service

before making a purchase decision. Services, then, cannot be handled,

examined, or tried out before they are purchased. This increases buyer

uncertainty and necessitates marketing strategies and tactics to “make

the intangible tangible.” Although services are intangible, the produc-

tion of a service may be linked to a tangible product. (The transportation

service an airline provides is tied to its fleet of airplanes. Renting a video-

taped movie is tied to the temporary use of the videocassette).

Services “disappear” quickly. They are perishable and cannot be

stored. If a computer salesperson loses a customer, the computer—a tan-

gible good—remains to be sold to another. If a dentist’s patient fails to

keep an appointment, that half-hour of the dentist’s time—the service

to be sold—is gone forever.

A manufactured good may be produced by one firm and marketed

by another; thus, the good can be separated from its producer. In con-

trast, the service is inseparable from its supplier. Inseparability means

producer and consumer may have to be present in the same place at the

same time for the service transaction to occur.

Most services are delivered by people. Because the quality of service

provided is closely tied to the supplier’s personal performance, there can

be great variability among services provided. Most services are delivered

by people. Because not all the same, variability among services can be

great. Dealing with a friendly workers are clerk or having other posi-

tive experiences with the people who provide the service may be a ma-

jor reason why people keep using the service. Think about your regular

hairstylist. Why do you go there rather than to another hairstylist? If you

think about hairstyling, dental care, insurance, subway and bus trans-

portation, and all the other services you buy, you will appreciate the im-

portance of services in our economy. We can subdivide the service sector

of the economy into many different service businesses: business services

(accounting, advertising, consulting), repair services, personal services

(hairstyling, maid services), travel and lodging services, entertainment

and recreation services.

In other words, service quality is characterized by variability. Services

are often heterogeneous because the quality of the service depends on

who provides it and how quickly it is provided.

Marketers of services strive to control service quality. One goal is to

standardize services to reduce variability, but this is difficult. It is not

possible to prescribe and deliver equal amounts of “smiling” by all em-

ployees at a bank. Nevertheless, companies that market services often

use employee training and incentives, such as employee-of-the-month

awards, as steps to control service quality.

If you think about a pasta dinner at a restaurant, you will realize that

it is difficult to separate goods from services entirely. This reality has

led some marketing experts to array products along a continuum from

“mostly good” to “mostly service.” A tune-up for your car provides both

a good—spark plugs and other parts—and a service—measurement, tun-

ing, and installation of the parts, as well as convenience of the location

and other aspects of the total product offering.

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