DISTINCTIVE CHARACTERISTICS OF SERVICE

Service, marketing academics and practitioners argued that services required special treatment as
a result of their distinctive characteristic; intangibility, inseparability, heterogeneity and perish ability.

These characteristics were outlined during the “crawling out” stage.

Intangibility refers to the fact that a large component of many service offers is immaterial or
intangible and cannot be presented in a concrete manner to consumers prior to purchase. For example,
a customer cannot touch the aerobics class prior to attending the class neither can assess the quality
without attending the class.
Inseparability refers to the notion that, in much service operation the production and consumption
cannot be separated, that is, a service is to great extent consumed at the same time as it is produced.
For example, a hairdresser may prepare in advance to carry out the service, but most of the
hairdressing service is produced simultaneously as the customer consumes the service.
 Heterogeneity is closely related inseparability as it is very difficult to apply quality standards to
services to ensure an identical service output, when so much depends on the cooperation and
participation of individual customers.
Perishability refers to the fact that unlike physical goods, services cannot be stored. An
appointment with the dentist, in contrast, at a given time on a given day, cannot be stored and offered
again to the customer.
“Scurrying About” Stage:
In the Scurrying about stage between 1980 and 1985 efforts were made to classify services more
clearly and attention focused heavily on the crucial issues of managing quality in service operations.
Zeithmal, Berry and Parasuraman developed their pioneering Gaps Model of services which
highlighted the importance of efforts made to assess the quality in services. Other topics emerged as
being particularly important to the management of service organizations, including a better
understanding of the components of service encounter, relationship marketing, internal marketing.
Booms and Bitner developed their expanded marketing mix for services which took into account
the distinctive characteristics of service identified in the “crawling out” stage. Booms and Bitner
added three more Ps to the original marketing-mix to make it more appropriate to services: People,
Process, and Physical evidence.
“Walking Erect” Stage: In the walking erect stage since 1986 there has been almost no discussion
of whether services are different from goods, but rather than the literature has focused on specific
marketing problems of service organizations.They include consideration of service encounters, Service
Design, Perceived Service quality and Customer Satisfaction, Internal Marketing and Relationship
Marketing.
“Galloping stage”: In this stage since 2000 there has been an increase in the growth of service
sector and services are the main contributors of the national GDP of any country.
A detailed insight of the distinctive characteristics of services is provided below:
1. Intangibility
2. Inseparability
3. Variability
4. Perishability
5. Simultaneity
6. Heterogeneity
7. Lack of ownership
Intangibility: Services cannot generally be seen, tasted, felt, smelt, heard before being bought.
The potential customer’s is unable to perceive the service before the service delivery. Service is totally
intangible and cannot be seen what is done.
Intangibility presents problems in the sense that the customer may experience difficulty in
knowing and understanding what is on offer before and even after in receipt of the service. The
challenge for a service provider is to make the service tangible which implies resort to make some
form of measurement and to provide tangible evidence, e.g., computerised representation of hairstyle
or a university prospectus. Service cannot be inventoried and therefore fluctuations in demand are
often difficult to manage, e.g., resort owners have same number of rooms to sell year around but
demand varies during peak and non-peak seasons. Services cannot be easily patented and new service
concepts can therefore be easily copied by customers. Services cannot be readily displayed or easily
communicated to customers, so quality may be difficult for consumers to assess. Decisions about what
to include in advertising and other promotional campaigns are challenging as is pricing. The actual
cost is difficult to be determined and so price quality relationship is complex. Levitt has suggested that
there are no so such things as service industries, only industries where the service components are
relatively greater than those in other industries. Similarly, Shostack has argued that there are few
industries or activities that are purely goods based or purely services based, and presents a continuum
from tangible dominant goods to intangible dominant services. Kotler identifies four distinct
categories of offerings, ranging from purely tangible goods, to tangible goods with accompanying
services, to a major service with some accompanying goods, to pure services.
An assessment of a random selection of service activities within a university registry allows the
overall degree of tangibility or intangibility of the services to be conceptualized and the management
implications to be more easily understood.
From this example, it would seem appropriate to consider a university registry as the provider of
predominantly intangible services with tangible aspects that demonstrate the service. Different
services carry with them greater or lesser demonstrable tangible aspects.
Activity Intangible Aspects Tangible Aspects
Maintain manual and Student records up to date and Printouts and reports, standard
computerized records for accurate, comprising basis for all or specialized
students service operations
Preparation of induction week Systems set in place for Progrmmes typed and circulated
programme enrollment/ induction of students to students and staff
Certification of student statuses Student is confirmed to be ID card or letter of enrollment
enrolled and eligible for access
to a range of internal and
external services
Issue standard fee installment Student is able to pay fees by Fee payment plan
plans installment rather than lump sum
and has full enrollment status as
a consequence
Provision of inquiry service for Information and advice given to Leaflets or notes, on occasion
students assist choice or decision- making
Certification of student status, Student provided with access to Letter confirming status
for bank account open a student bank account
Provide guidance on assessment Customer acquires knowledge/ Notes on occasion
regulations to colleagues information
Issue results for students Assessment process completed. Results sheet/transcript
Student acquires feedback on
performance and future
requirements
 Inseparability: There is marked difference between physical goods and services in terms of the
sequence of production and consumption.
SEQUENCE OF PRODUCTION AND CONSUMPTION
Physical Goods Services
Production Sale
Storage Produced and consumed at the same time
Sale
Consumption
Goods are first produced stored finally sold and consumed, whereas services are first sold then
produced and consumed simultaneously. For various services at production site customers presence is
must, e.g., counselling, rail travel, hotels, etc. Some services are produced and delivered in the absence
of customers, e.g., carpet cleaning, plumbing, etc. Whatever be the nature and extent of contact the
potential for inseparability of production and consumption remains.
The involvement of customers in production and delivery of services implies service provider
must take care in what is being produced and delivered. Proper selection and training of customer
contact personnel are necessary to ensure the delivery of quality of services. Production and
consumption are said to be separable, but for a service production and consumption are said to be
inseparable where both must meet at a time and place which is mutually convenient in order that the
producer can directly pass on service benefits, e.g., the service of the ATM machine can be realized if
producer and consumer interact.
Inseparability has number of marketing implications for services. First, goods are generally first
produced then offered for sale and finally sold and consumed, inseparability causes this process to be
modified for services. Services are sold first then produced and consumed while the method of goods
produced is to a large extent of little importance to the consumer, production process are critical to the
enjoyment of services. All service encounters have similarities: The “service encounter”, the provision
and consumption of a service, is central to service experience and an understanding of service
encounters involves an appreciation of a complex set of behaviours on the part of all involved in them.
 Waiting time: time spent in queues or in-process delays;
 Personal interaction: between participants, service provider, customers and others present;
 Expectations and perceptions: of service adequacy and quality.
Five dimensions to service encounters can be conceptualized:
 Time: The temporal duration of the encounter (long/short);
 Physical proximity: The closeness of contact (direct/remote);
 Participation: Level of customer involvement in the service process (high/low);
 Engagement: Emotional attachment to or interest in the service being consumed (high/low);
 Customization: Extent to which the service is adapted for the customer (high/low).
By plotting service encounters along with these five dimensions service encounters can be
understood from a customer perspective
 Maister provides a fairly simple framework, combining degree of contact with degree of
customization, which allows service providers to develop general ideas about what might be important
for managing their services.
Standardized Process Customized Process Diagnosis
Execution/ Delivery is key Interpretation is key
High degree of customer Issuing standard fee installment Issuing non-standard fee
contact/participation. Service is plans. Certification of eligibility installment plans. Providing
rendered during interaction with for reduced council tax guidance on assessment
customer. Focus is on event payments. Provision of inquiry regulations
service for students. Administer
Exam Board meetings.
Administer enrollment of new
students. Issuing grant cheques
Low degree of customer contact/ Preparation of induction week Consider fee payment problems.
participation. Service is rendered programme. Maintain manual Assessment of student fee status
away from the client. Focus is on and computerized records for
result students issue results for
students. Prepare and issue pass
lists
This suggests that many of the services provided by a university registry, and therefore service
encounters, have a low degree of customization. For many activities the degree of physical proximity
between customers and registry personnel and customer participation are high but there exists a body
of work where this is not the case. A customer focussed assessment of service provision; identifying
areas of good performance and areas of poor performance would assist in identifying the best direction
for change, for example greater standardization or greater customization, or transfer of resources
between activities.
Variability: An unavoidable consequence of simultaneous production and consumption is
variability in performance of a service. The quality of a service may vary depending upon who
provides it as well when and how it is provided, e.g., an airline company provides on time services to
and fro, whereas some other airline provides though regular service but not on time. Within a service
provider one employee may be courteous and helpful others might be inefficient as well as rude.
Reducing variability involves determining the causes. It may be due to unsuitable personality
traits in an employee which is difficult to determine at the selection stage. There may be good sound
reasons for variations in performance, e.g., it could be due to poor training and supervision, lack of
communication and performance and also lack of general support.
For services variability impacts upon customers in terms not just of outcomes but also of process
of production. At the production stage variability pose a much greater threat for services as customers
are usually involved in the production process at the same time as they consume it so becomes
difficult for the service provider to maintain consistency of quality. Pre-delivery inspection is not
possible for the service providers as services are produced in the presence of the customer without the
possibility of intervening quality control. The variability of service output can pose problems for brand
building in services compared to tangible goods for the latter it is usually relatively easy to incorporate
monitoring and a quality control procedures into production processes in order to ensure that a brand
stands for a consistency of output. Its often difficult to obtain standardization of output in services.
 Perishability: Services cannot be stormed for later sale or use, e.g., hotel rooms not occupied ,
airline seats not purchased and college places not filled cannot be reclaimed since services are
performances, they cannot be stored. If demand exceeds supply it cannot be met as things cannot be
taken out from warehouse. Even if capacity exceeds demands the revenue value of the service is lost.
Fluctuations of demand being one of the characteristics of service organization pose a great
problem when these fluctuations are unpredictable, e.g., increase in the number of patients in any
hospital due to a sudden calamity, the hospital beds being the same. So, there should always be
strategies to provide a match between demand and supply. Services unlike goods cannot be stored. A
producer of cars which is unable to sell all its output in the current period can carry forward stocks to
sell it in the subsequent years. The only significant costs are storage, financing and possibility of loss
through obsolesce. In contrast the producer of a service who cannot sell its output cannot move it to
the subsequent years other than incurring loss. An airline which offers regular flights at 9.00 p.m. from
Delhi to Mumbai has to fly even its few seats are empty. The service offer disappears and spare cannot
be stored to meet increased demands. This characteristics of the perish ability results in greater
attention to be paid in the management of demand by evening out peaks and trough and scheduling
service production to follow this pattern as far as possible. Pricing and promotion are two of the tools
usually adopted to tackle this situation. This characteristic emphasizes that service encounters involves
individuals – service providers and consumers. Moreover, service encounters take place again and
again, at different times. As a consequence, there are likely to be variations in service provision, by
virtue of the participants, the time of the encounter or the circumstances.
Heterogeneity: To handle a service sector even though standard sectors may be used, e.g., to
book in the cab service, to quote for insurance in one’s life, etc., each unit may differ from each other
unit. Franchise operations ensure to bring a standardization but ultimately it is difficult to ensure the
same level of output in terms of quality. From customers viewpoint also it is difficult to judge quality
without using it. Capacity levels should be available on cope which surge in demand before service
levels falls. Equal attention has to be given in times of low levels of usage to manage the spare service,
e.g., different programmes can be adopted to compensate for uneven demand like theatre halls can go
for weekend specials, films festivals, dentist – family discounts, etc. This characteristic emphasizes
that service encounters involve individuals – service providers and consumers. Moreover, service
encounters take place again and again, at different times. As a consequence, there are likely to be
variations in service provision, by virtue of the participants, the time of the encounter or the
circumstances.

Heterogeneity clearly has wide-ranging implications for the operational side of service provision:
 Service personnel: service delivery and customer satisfaction are highly dependent upon the
activities and actions of those members of staff in the “front-line”, who actually perform, and
are seen to perform, services. Service personnel must therefore be competent to perform
services. They must be made aware of service standards and be able, or enabled, to achieve
those standards.
 Service standards: must be established and made clear, to assist quality control and more
effective management of service encounters, in particular evenness and equity of service
delivery.
 Lack of ownership: Lack of ownership is the basic difference between a service industry and a
product industry as a customer gets an access for a service after paying for it but not owns it, e.g.,
hotel rooms, hospitals beds, etc. So, service industry should put a stress on easier payment terms in
order to facilitate better growth of service sector. Ownership relates to the notion that the consumers of
services do not own them overall, but only have temporary access to them. Consumers of services may,
however, acquire ownership of aspects of service as follows:
 Tangible items which demonstrate the service
 Benefits accruing from the service, rather than the service itself
Thus, again using the example of a university registry, it is possible to cite examples.
Service provided Tangible items Benefit
(not owned) (owned) (owned)
Certification of eligibility Certificate/letter Savings
for council tax exemption
Enrollment ID Card Receipt for fees Access to buildings for period
of enrollment
Provision of information on Lists or reports Knowledge of students enrolled
enrolled student numbers

Again, this notion is linked to the notions of inseparability and perishability, as the finite nature
of service indicates absence of ownership.
It should be noted, however, that customers may hold different relationships with service
providers which impact upon degrees of access to services, albeit not ownership:
 Membership status: provides customers with recurrent access to service, which may involve
discrete transactions or a continuous, regular delivery;
 Casual status: provides the customer with access to ad hoc, irregular services.
For a university registry, the majority of customers, students and members of staff, have
membership status. A smaller number of customers, such as enquirers and external bodies, have casual
status.
GOODS SERVICE CONTINUUM
Sugar

Softdrink

Mobiles

Automobile
Restaurant

Restaurant
Train

Advertising
Agency

Airlines