Are Services Different? Really?

The widely accepted services marketing model is based on the following presumed service differences.  All of which have some credence in theory as well as limitations in logic and actual practice:

(a)  Intangibility;

(b)  Heterogeneity;

(c)  Inseparability;

(d)  Perishability;

(e)  Ownership.

Intangibility – ‘Services lack substance/tangibility’

The idea is that services are essentially intangible.  It is not possible to taste, feel, see, hear or smell services before they are purchased.  Services do not cast a shadow.

If the core of any offering is a service, then it is reasonable to suggest that it will be difficult to sell because in being intangible, it can only be imagined.  However with all service products, there must always be tangible things associated to carry and represent the service, such as a credit card, an insurance policy, people and/or premises.

Gronroos even suggests that goods are not really tangibles, at least in the perceptions of customers. Products such as tomatoes or a car are always primarily perceived in subjective and intangible ways and in terms of the services they will provide. If a restaurant provides a service is it so different to a can of precooked food? Hence, the intangibility characteristic does not distinguish services from physical goods as clearly as is usually stated in the literature.  Some products are harder to understand than others.

Heterogeneity – ‘Services lack consistency’

Services are often described as being heterogeneous – that is not having consistency or being capable of standardisation of output.  This would be explained as a service provided to one customer not being exactly the same as the same service to the next customer. The lack of homogeneity (sameness) of services can create problems in service management in how to maintain an evenly perceived quality of the services produced and rendered to customers.  It is often difficult to achieve standardisation of output in services.

This concept of course only applies to people produced services and forgets the fact that many services are provided by a range of technologies – for example ATM’s, vending machines as well as the internet and via computer software The key aspect of such services being delivered, that they are heterogeneous.  A machine could not do anything but deliver the same service.

Highly standardised human delivered services are also possible.  At McDonald’s and a range of service providers, customers receive almost exactly the same treatment.

Inseparability- ‘Services are only available directly from the provider’

It is suggested that Services often cannot be separated from the person of the provider.  A corollary of this is that creating or performing the service may only occur at the same time as full or partial consumption of it (production and consumption must be simultaneous).  It is suggested that goods are produced, sold and then consumed whereas services are sold and then produced and consumed.

Of course some services are time specific and cannot be stored (an airline flight).  Others like teaching and entertainment can be fully or partially stored (see the following) for example by recording – video tapes/DVDs even books and therefore can be separated.

Perishability – ‘Services cannot be stored’

Most texts state that Services are perishable and cannot be stored.  This directly links with what was said in the previous paragraph.  While some services are perishable many services are not and can be stored.  Service as software is an example where the original activity is stored and used many times.  There are degrees of perishability in all value offers

Ownership- ‘Services cannot be owned’

Many writers have suggested that lack of physical ownership is a basic difference between a service industry and a goods industry because a customer may only have access to or use of a service, like say a facility e.g. a hotel room or a credit card not permanent ownership.  They suggest payment is for the use of, access to or hire of items.  With the sale of a tangible good, the buyer has possession and full use of the product.

This really points out the fundamental difference in approach between the older style approach and the more modern one.  Does value acquisition (ownership) actually require physical possession?  Is the only form of value to be found in physical possession?  Not really.  Value is a perceptual factor.  People pay for the value they perceive they will get from an exchange, even if they cannot touch the resultant product of that exchange.  A very good example is people who give money to charity.  They mostly do so to feel better to have a sense of making a contribution to a better world.  They do not receive anything much more than a good feeling.  This is much the same as one looks for in purchasing anything – from a car to an accounting service.  Lack of actual ownership is not limited to services either.  Obviously the hire of car provides ownership like benefits as well.

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