The service industry interacts with our lives on a daily basis. Services can be defined as deeds, processes and performances. When considering the differences between products and services, intangibility and the fact that a service cannot be touched, tasted, viewed or tried on are terms often used (McColl-Kennedy & Kiel 2000). Services differ from goods in essentially four ways: (1) intangibility; (2) inseparability; (3) heterogeneity; (4) perishability (Kotler, Brown, Adam, Burton, Armstrong 2006). To deliver a quality service, managers also pay attention to the importance of tangibles that support service delivery as well as service delivery blueprinting. Managers must also accept that service failures occur and be able to
Gilmore (2003) describes a service organisation as one where the perceived value of the offering to the buyer is determined more by the service rendered than the product offered. Gilmore goes on to say customer service used within the service organisation is an act, process or performance. The service can be intangible, such as legal services, health care and cleaning services. Or it can be an element of a tangible product, like restaurants and retail outlets. The customer service used in service organisations are a series of customer experiences designed individually by the organisation to create customer satisfaction and retention.
In the manufacturing company of Wrangler Jeans (manufacturing environment), the output is better described as goods. These goods have a tangible sense to them. These goods to a consumer can be felt, seen, touched and manipulated as desired. However, with the services environment consumers are more of an intangible product offered. Plainly put these explanations give us the distinct difference between these two environments with regards to how the consumer is able to see these products. As an example with these companies Wrangler Jeans manufacturers pants that are worn by a consumer, whereas Verizon provides services for consumers including television and cell service.
Tangible goods, or rather manufactured goods, have been the dominant medium of exchange for centuries. However, recent decades have proved that it is no longer the case as there has been a prevalence of being service oriented (Vargo and Lusch, 2004:1-2). Services, as defined by Vargo and Lusch (2004), are “the application of specialized competences (knowledge and skills) through deeds, processes, and performances for the benefit of another entity or the entity itself (p.2).” Utilizing services gives businesses an edge, a competitive advantage, particularly in an evolving competitive market, something which Metalfrio is definitely part of (Vargo and Lusch, 2004:9). Those businesses that learn to adapt tend to do well. In addition, Vargo and Lusch (2004) write this shift to services is also a shift from producer perspective to a customer perspective (p.2). Thus, it leads to more of a collaborative effort where co-creation leads to adding value to the service rather than a product having value (Vargo and Lusch, 2004:6). Also, customers rather develop relationships with those that can provide a range of related services over an extended period of time, thus allowing businesses retain their clients for the long term (Vargo and Lusch, 2004:13). Overall, service oriented marketing is a direction that businesses should be headed towards to ensure that they can remain relevant and competitive in the
There are several major elements of the service process. These elements are strong leadership, effective complaint handling, good training, good support for internal and external customers and having a strong strategy that is definitively based on whether a good or service
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 service industries have a long history of serving customers domestically as well as globally. Services are intangibles and they cannot be inventoried. This is a headache for services managers in organizing their business and making profits. In other hand, the managers look at these circumstances as a challenging.
Qns. Using a service example of your choice, explain how the service company can deal with intangibility, inseparability, variability and perishability.
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.
On the other hand is about exchange for the customer money, time, and effort, service customers expect to obtain value from access to goods, labor, facilities, environments, professional skills, networks, and systems; but they do not normally take ownership of any of the physical elements involved.
In service industry, where organizations directly interact with customers, innovation becomes very important. If organizations provide same kind of service over a long period of time, then either customers will move on to a different service provider to get change or they will start availing services less.
Products are tangible and can be touched, felt, heard, seen and tasted and can be easily compared and quality assessed. Services are intangible and don’t have physical existence.
Service is simply helping someone for profit or nonprofit. Service is intangible product. It means that there is no physical appearance of the object in the process. “A service is the action of doing something for someone or something. You cannot touch it. You cannot see it. You cannot taste it. You cannot hear it. You cannot feel it. It is largely intangible”. Introduction to Services Marketing - Marketing Teacher. (n.d.). Retrieved November 25, 2014, from http://www.marketingteacher.com/introduction-to-services-marketing/. Marketing is the coordination of 4Ps of product, place, price and promotion. It is the exchanging, communicating, delivering of the product. The marketing manager must show the elements of ideas to the audience to prove that intangible product is worth the purchase. Service is the performance of the product and selling that is Service marketing. Therefore, the new term ‘Quality’ is very important to service businesses.
Our focus and marketing message will be the services offered. We will develop our message, communicate it, and fulfill our commitment to excellence.
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.