Service Characteristics: Myth or Reality?

Goods and services are both areas of operations, this means that they will change the state of any input into output. In order to achieve this they will need to have a transformation process according to the type of service or goods they have to offer this is all part of satisfying customer needs.

In today’s market, it is important for us to take good care of our customers and show cause for potential customer to allow us to service their needs. In the small town of Morris Run, PA, ‘The Store’ offers convenience items, a dine-in and take out menu, as well as e-commerce products, including several specialty products sold at ‘The Store’. ‘The Store’s’ customer service policy outlines and includes store protocols, which employees must follow to deal with customers, in a manner which demonstrates the responsibility and competence of ‘The Store’. Also included in the customer service policy are details on the employee handbooks and continued education for employees on ‘The Store’s’ goals and vision; including additional

Goods-Dominated (GD) logic has been instilled in contemporary thinking since the industrial era, stemming from the fact that economic growth was achieved through a country’s ability to produce excess quantities of goods and export the excess for wealth. Although when this logic is extended into services it results in reducing service offerings into man hours, information and other ‘exchangeable’ units.

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)

THE QUESTIONS ARE FOR PRACTICE ONLY. THERE IS NO INDICATION THAT YOU WILL BE ASKED THE SAME QUESTION(S) IN THE FINAL EXAM.

Service is also very essential to our marketing mix. We will not only offer quality products but respectful, helpful and professional service. Customers that purchase knives in our store will receive lifetime cleaning and sharpening of their knives as an added service benefit. We will make it our policy to offer the best customer service to our customers, making our policies (returns, exchanges, etc.) very clear to them before they make any final purchases. It will also be our policy to provide service to our community. Employees are encouraged and given comp-time to commit and volunteer time to various non-profit organizations in the community. As part of our event and promotions activities we will commit to donating a specific

Lusch et al. (2007) describe as marketing emerged in the beginning of the 20th century, it embraced the goods-dominant (G-D) logic. The concept of the Four Ps of marketing mix – product, price, place and promotion became treated as the basic model at that time. (Grönroos, 1989) Today, this paradigm is beginning to lose its position. Service marketing is one leading new approach to marketing. Four main characteristics of services defined by Kotler et al. (2009) are intangible, perishable, variability and inseparability (see Appendix A). Thus, Booms and Bitner (1982) turn services marketing into 7Ps by adding people, physical evidence and process.

The service sector represents one of the main indicators of the global economy. In fact, there are countless companies involved in this sector that moves millions around the world.

Despite the increased importance of service, the service sector received less attention from researchers. This is due to the fact that world economies were built on manufacturing and farming sectors while the

Quality of the service is the degree of conformance of all the relevant features and characteristics of service to all the aspects of the consumers’ needs limited by the price and delivery s/he will accept. Quality can be viewed from two perspectives:

People today live in a service dominated economy. Services permeate the daily existence of every person.

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.

In an organisation there is always a need for continual improvement especially in the quality of service being rendered to the costumers. Living up to the expectations of the costumers and exceeding that expectations will make your brand a sought after brand (Gage, 2013).

The initial efforts of defining and measuring quality have primary focused on goods since the end of 1970s (e.g., Clark et al, 1987; Garvin, 1984). Crosby (1979) described goods quality as to reach or exceed standards. Garvin (1983) suggested that goods quality could be evaluated by the incidence number of failures which occur either before a product leaves the factory or after a unit is set up in the field. Compared with the discussions on goods quality, service quality had been explored rarely then (e.g., Sasser, Olsen & Wyckoff, 1978; Gronroos, 1982; Lewis & Booms, 1983).

The major differences between goods and services in operations management are their goods, inventory, customers, labor and location. One major difference in the tangibility of their output. For example, a service firm would entail consultancy, training or maintenance, this is an intangible product. These services are not tangible object, but still provide a “product” for the customer. A good would be a tangible for the consumer. A company manufactures a certain product and the consumer is able to physically receive it. For example, A manufacturer such as Coke, Nestle, Honda and BMW. Another difference between a service and goods is their inventory. Service forms do not hold inventory, they provide a service when their customers ' need it. Manufacturers produce goods which creates an inventory. Inventory levels are created through supply and demand. A lot of companies only have a certain level of inventory in order to utilize their “space”. In addition a major difference between goods and services is their customer relationship. There is a high customer contact in the service industry. The service industry caters to their clients; meaning they adjust their service to the needs of the customer. For example, a consulting firm may only need to do four hours of work with a certain customer and twelve hours with another. In manufacturing goods there is low customer contact. Manufactures can produce their customers goods without having them submit an order, because they can