Characteristics of Services

Source : Adapted from A. Parasuraman, Valerie Zeithaml, and Leonard Berry, “A Conceptual Model of Service Quality and Its Implications for Future Research,” Journal of Marketing, 49 (Fall 1985)

A service encounter is simply defined as a customer’s actual interaction with a service company. Shostack (1985) defined service encounter as the period of time that a customer interacts with a service. Merritt (1977:198), a linguistic scholar, views a service encounter as an instance of face to face interaction between a server who is ‘officially posted’ in some service area, that interaction being oriented to the satisfaction of the customer’s presumed desire for some service and the server’s obligation to provide that service. The service encounter is also known as the ‘moment of truth’ in which the customer often develops a perception about the business and often creates a differentiation from other competitors. Solomon et al (1985)

Recently there has been a shift away from the traditional product-orientated marketing perspective to a more service-orientated one which focuses on “intangible resources, the co-creation of value and relationships” (Vargo and Lusch, 2004). Merz, He & Vargo (2009) commented that goods were a “vehicle for service”, and whilst the provision of goods was still an important part of a transaction, there will always be some element of intangible service attached to each product, which develops relationships and delivers value to the consumer (Ballantyne & Varey, 2008).

The article written br Frances Frei deals with the idea that for firms to be successful, they must first realize that the customer can greatly hinder or help them succeed in their goals. Frei describes that the customer is an integral part of production in a service company and there are four elements that must be combined in order to fully succeed in customer service. Learning from the customers is one of the most important parts to succeeding and combining these elements in order to ensure this success. The problem the article addresses is how to combine these four elements in order to gain the most success out of a service business. The four elements are the offering, funding mechanism, employee management system

The concept of the service is considered to be the mutual understanding between the received nature of the nature and the provided nature of the service by the organization. In addition to that, it should also be able to summarize the information regarding the idea of the organization, the experience of the service, the outcome of the service and the operation of the service as well as the value of the service which is given below. When a customer goes out and generally considers the things around while doing routine work, it is likely to be attracted by the experience that it receives with the service provided by the organization.

Qns: Discuss the 4 major characteristics of services and the marketing strategies available for the service organization.

The efficiency in the shipping service is normally rated in terms of speed. For example, does the manufacturer or supplier’s get the order out in the same day or not? The other critical shipping factors include the packaging standards and the level of protection put in place to ensure that the product gets in to the hands of the customer safely and in good time. When it comes to quality of service. The main factor that determines a good service includes the manner and speed of response to queries. A comprehensive and easy to understand website is critical in providing good customer service; a good website should also make it easy for consumers to find and order what they want. Some e-juice websites provide an e-juice ratings list, which makes it easy for customers to find their favorite e-juices. When ranking the price of e-juice products; comparisons are normally made to check if the prices compare favorably with those of other suppliers. The other pricing factors including shipping cost and offers.

Services have traditionally been clear in terms of what goods did not represent. Goods-related industries incorporated extractive industries for example agriculture, mining, forestry and fisheries and mechanized industries for instance durable and nondurable goods industries. The remainder was characterized as services and incorporated education, health care, sharing, retailing, leisure, legal and many other arenas mainly focused on nontangible offerings or on the other hand services were nongoods. S-D logic, on the other hand, looks at the very natural history of service and for that reason defines service as a procedure or as the use of one's resources or competences for the advantage of an additional entity (Vargo and Lusch 2004a). S-D logic maintains that service is the establishment of economic activity. S-D logic focuses on the course of service versus a goods-dominant (G-D) or manufacturing logic that focuses on the production and provision of outputs. Case in point, computers, forklifts, pallets and transportation equipment are all appliances for service provision. What customers want is access to the flow of service that these goods facilitate and not necessarily the output or product that firms produce. It can be said that the transformation from G-D logic to S-D logic is the shift from seeing business as alert on things (nouns) to proceedings and processes (verbs).

Services are intangible activities or benefits that an organization provides to satisfy consumers’ needs in exchange for money or something else of value (Kerin, Hartley 322). Service are an important part in the global economy. Services are now apart of the GDP. There are four elements of services which are intangibility, inconsistency, inseparability, and inventory. Intangibility means it can not be touched, held, or seen before the purchase. These services help consumers to get information or show the benefits of their product. Inconsistency is developing, pricing, promoting, and delivering services is complicated because the quality of service is often inconsistent. This is because these services require people to do them, and different people work differently. Inseparably have problem of consistency. Consumers can not separate the delivered of the service from the service itself. The amount of interaction between consumer and the service depends on the extent to which the consumer must be physically present to review the service. Finally, there is inventory which are different from products and are perishable.

Which trend that influenced the development of services marketing concepts and strategies is illustrated here?

Secondly, products can be stored in order to sell to the customer in the next time whereas services marketing mostly are unable to be inventoried, they are perishable. Hence, the value of service always exists at the point when it is required. Therefore, it seems to be very difficult to match supply with demand in service marketing.

In managing the business which provides pure services to the customer, company need to ensure that the service delivered is meeting with expectation and satisfied the customer. The quality of services is considered to be a critical success factor for the service companies. Service is close conceptual as well as empirical link to customer satisfaction turned it into the core marketing instrument, making it the most researched area in services marketing (Fisk et al., 1995; Bolton et al., 2000). In addition, the accumulated research has linked positively the service with profitability (Fornell, 1992).

Services possess some unique characteristics which differentiate them from goods or physical products. These peculiar characteristics pose challenges in their delivery and meeting customers’ expectation. Services are characterized by intangibility, inseparability, heterogeneity or variability, lack of ownership and perishability. Due to this characteristics Kotler (1984) suggested that measuring service quality is subjective and for this reason marketers strive to put tangible cues as one of the way to address the challenges of delivering the service and to meet expectation of targeted customers.

Services are very different from products. So the marketing concepts need to be revisited while marketing a service. Services can range from financial services provided by the banks, technology services provided by the IT Company, food and ambiance as a service provided by restaurants or even a blog where an author provides a service (information presentation, interesting reading etc) to his audience. Services marketing are dominated by the 7 Ps of marketing namely Product, Price, Place, Promotion, People, Process and Physical evidence. The 7 P frameworks is one of the most popular framework for deciding a marketing strategy, right from strategy formulation to actual

2) Scurrying About (1980 to 1985) – when a rapidly growing and enthusiastic community of scholars quickly built the basic structure of services marketing;